"Product of Canada" and "Made in Canada" claims—Frequently asked questions

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What are the changes in the Competition Bureau's Guidelines?

The new Enforcement Guidelines on "Product of Canada" and "Made in Canada" Claims introduce a distinction between "Product of Canada" and "Made in Canada" claims. Product of Canada claims will be subject to a higher threshold of Canadian content (98%), while Made in Canada claims will remain subject to a 51% threshold of Canadian content. Made in Canada claims should be accompanied by a qualifying statement indicating that the product contains imported content. In both cases, the last substantial transformation of the product must have occurred in Canada.

A "Product of Canada" claim will not be challenged by the Bureau provided that:

  • 1) the last substantial transformation of the good occurred in Canada; and
  • 2) 98% of the total direct costs of producing or manufacturing the goods have been incurred in Canada.

A "Made in Canada" claim will not be challenged by the Bureau provided that:

  • 1) the last substantial transformation of the good occurred in Canada;
  • 2) at least 51% of the total direct costs of producing or manufacturing the goods have been incurred in Canada; and
  • 3) the "Made in Canada" representation is accompanied by an appropriate qualifying statement, such as "Made in Canada with imported parts".

While the Bureau will use the above factors in determining whether there is a potential concern, a mere deviation from the Guidelines may not, in and of itself, represent a contravention of the statutes under the Competition Bureau's jurisdiction. Each situation will be evaluated on a case-by-case basis in order to determine whether potential issues are raised under the laws in question.

As always, the Bureau will not hesitate to take appropriate enforcement action if it is warranted.

Why did the Bureau change its Guidelines?

The Guidelines introduce a distinction between "Product of Canada" and "Made in Canada" claims for non-food products, which is consistent with the treatment of food products by the Canadian Food Inspection Agency (CFIA). In December 2008, guidelines on the use of Canadian Content Claims such as "Product of Canada" and "Made in Canada" on food products were introduced by the CFIA and included a distinction between "Product of Canada" and "Made in Canada" claims.

The Guidelines provide industry with useful information that will help them to ensure that they are in compliance with the false or misleading representations provisions of the Competition Act, the Consumer Packaging and Labelling Act and the Textile Labelling Act, when making claims about the Canadian origins of their products.

The Guidelines will also benefit consumers by helping to ensure that they have access to clear, truthful and accurate information that will assist them in making informed purchasing decisions.

Do I have to put "Made in Canada" or "Product of Canada" labelling on my product?

It is important to note that the Competition Act, the Consumer Packaging and Labelling Act and the Textile Labelling Act do not require that the country of origin of a product be identified. Accordingly, businesses that do not make a "Made in Canada" or "Product of Canada" claim are not affected by the new Guidelines.

However, if a business chooses to make such a claim, the Bureau will apply the approach described in the Guidelines when assessing "Product of Canada" and "Made in Canada" claims under the false or misleading representations provisions of the Competition Act, the Consumer Packaging and Labelling Act and the Textile Labelling Act.

Since there was no distinction under the Bureau's former Guide between a "Made in Canada" and a "Product of Canada" claim, businesses using the term "Product of Canada" should review the claims being made to ensure they comply with the new 98% cost of production threshold. Businesses that already make "Made in Canada" claims should alter their claims to include an appropriate qualifying statement.

Please note that paragraph 11(1)(c) of the Textile Labelling and Advertising Regulations requires that any textile product that is represented as containing imported fabric or fibre, should also indicate the country of origin of that fabric or fibre. In such a case, if a company makes a "Made in Canada" claim, the claim would need to include a qualifying statement that:

  • clearly indicates that the textile product includes imported fabric or fibre; and
  • clearly identifies the country of origin of that fabric or fibre.

Why is the Bureau releasing guidelines? Why not enact legislation and make the proposed changes mandatory?

The Bureau is a federal law enforcement agency, and as such, does not enact legislation. Rather, it is responsible for the administration and enforcement of the statutes under its jurisdiction, namely, the Competition Act, the Consumer Packaging and Labelling Act (non-food products), the Textile Labelling Act and the Precious Metals Marking Act.

Guidelines provide additional clarity for both businesses and consumers. The development of guidelines can reduce concerns that businesses may have, and clearly lay out where those practices may conflict with the law.

In this case, while the law has not changed, the new Guidelines provide businesses and consumers with clear guidance on how the Bureau will regard "Product of Canada" or "Made in Canada" representations when enforcing the false or misleading representation provisions of the laws under its jurisdiction.

Why did the Bureau adopt the 98% threshold requirement for "Product of Canada" claims?

The 98% threshold for "Product of Canada" claims is consistent with the treatment of food products by the CFIA, which has also created a distinction between "Product of Canada" and "Made in Canada" claims.

The Bureau expects that the distinction between "Made in Canada", with its 51% threshold, and "Product of Canada", with its 98% threshold, will be an important and helpful consideration for many consumers who are seeking more information about the Canadian content of products to inform their purchasing decisions.

Why is the Bureau keeping the 51% Canadian content threshold for Canadian direct costs for "Made in Canada" products?

The 51% Canadian content threshold for Canadian direct costs has been applied to "Made in Canada" claims since the mid-1980s and it continues to be effective. It assures consumers that a majority of the direct costs of production have been incurred in Canada when a product is marketed as "Made in Canada".

By preserving this threshold, we are allowing businesses that met the previous criteria for a "Made in Canada" claim to continue to do so, provided that they also develop a qualifying statement for foreign parts or ingredients. One of the Bureau's main goals was to make the process as simple as possible for those businesses that were already in compliance with the previous requirements for "Made in Canada".

If the 51% threshold was dropped, companies could make "Made in Canada" claims about any product for which the last substantial tranformation occurred in Canada, even if all its components were imported and most of the labour took place outside Canada. We believe that allowing this latitude would be confusing to consumers and would not provide them with accurate and meaningful information on which to base their purchasing decisions.

Can I make a "Made in Canada" claim without including a qualifying statement?

According to section 3.2.2 of the Guidelines, a "Made in Canada" representation will generally not be challenged if, among other things, it is accompanied by an appropriate qualifying statement.

The purpose of the qualifying statement is to provide greater clarity to consumers to enable them to make informed purchasing decisions.

While it is up to the business to make the claims it deems appropriate, it should be noted that use of a "Made in Canada" claim without a qualifier could result in consumers or competitors filing complaints with the Competition Bureau, and an investigation into the accuracy of such claims.

What if my product does not meet the 51% threshold? Can I still make a Canadian origin claim?

Yes, provided it is an accurate claim. In the case of products that do not meet the criteria for "Product of Canada" or "Made in Canada" claims, alternative language can be used. A business may choose to use more specific terms, such as, "Assembled in Canada with foreign parts" or "Sewn in Canada with imported fabric". Additionally, the Bureau is unlikely to have concerns if a company specifies that a particular manufacturing process, or any other process, was performed in Canada, such as "Designed in Canada".

Do other claims also have to be accompanied by a qualifying statement?

The Bureau encourages the use of qualifying statements with any claims where the additional information provided is accurate, relevant, useful, and does not give a false or misleading impression.

Where can I go to obtain information about US customs requirements for country of origin labelling?

Information about U.S. country of origin requirements is available on the US Customs and Border Protection Web site, at: http://www.cbp.gov.

In particular, businesses may wish to consult the brochure entitled "Marking of Country of Origin on U.S. Imports: Acceptable Terminology and Methods for Marking", which is available at: http://www.cbp.gov/.

If a business has questions or concerns relating to the acceptability of country of origin terms by U.S. Customs, it is suggested that the business contact U.S. Customs and Border Protection directly, at: 703-526-4200.

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