New Rules for “Made in Canada” and “Product of Canada” Claims

(Lexology – Stephen I. Selznick and Elizabeth Sinnott, Cassels Brock & Blackwell LLP)

In continuing efforts to ensure truth in advertising and to provide manufacturers, importers and retailers with timely compliance guidance, the Competition Bureau1 (the “Bureau”) has introduced new Enforcement Guidelines relating to “Product of Canada” and “Made in Canada” Claims (the “Guidelines”) applicable to non-food products. The Guidelines, which are effective July 1st, 2010, and supersede the former Guide to “Made in Canada” Claims (the “Former Guide”), describe the Bureau's approach to assessing claims under the false or misleading representation provisions of the Competition Act (Canada), the Consumer Packaging and Labelling Act (Canada) (with respect to non-food products only) and the Textile Labelling Act (Canada) (collectively, the “Acts”). The publication of the Guidelines in the Summer of 2009 with an effective date one year later, is a clear signal to industry that territorial source of origin claims should be revisited and re-examined with the Guidelines in mind well before the Summer of 2010 effective date, in order to avoid attracting scrutiny from the Bureau and in deflecting potential consumer complaints.

The Acts administered by the Bureau all prohibit the making of false or misleading representations.2 As such, when a business chooses to make a “Made in Canada” or “Product of Canada” claim, it should do so in accordance with the Guidelines. The Bureau relies on the Guidelines when determining whether it should investigate a consumer claim or whether it should undertake appropriate enforcement action for non-compliance.
As a significant change from the past, the Guidelines create a clear distinction between “Product of Canada” and “Made in Canada” claims.

In order to be properly identified as a “Product of Canada,” items will now have to meet two conditions. First, the last substantial transformation of the goods must have occurred in Canada.3 Second, at least 98% of the total direct costs of producing or manufacturing the goods must have been incurred in Canada. Read more here.