Overview
Made in Canada and Product of Canada claims can set your product apart. Knowing the rules around their use and how to obtain them could provide the marketing and advertising edge your business needs.
Consumers can be overwhelmed with the amount of choices for even the most ordinary of products, so it’s important for products to stand out. That’s why businesses take steps to ensure their products bear a “Made in Canada” or “Product of Canada” claim.
In an economy with more competition than ever alongside global supply chains and manufacturing, experts agree that consumers use this information to inform their purchases.
Making the claim: What are the rules?
Although producers and providers are not required to use Product of Canada or Made in Canada in most cases, there is a clear benefit to doing so: consumer surveys disclose that about 80% of Canadians are more likely to buy a Canadian-made food product of equal quality and similar price as compared to an American product, and about 45% of Canadians try to buy “Made in Canada” products whenever possible.
These claims are regulated in Canada by a number of laws, including the federal Competition Act and Food and Drug Act, and are overseen by Canada’s Competition Bureau. This is the federal advertising, marketing and competition enforcement agency that stops false claims in commercials and product tags, among other things.
Made in Canada
In order to qualify for the “Made in Canada” certification, there are three conditions that must be met. The Competition Bureau will look to see that:
- the last substantial transformation of the product must occur in Canada;
- at least 51% of the total direct costs of making the product were incurred in Canada; and
- any appropriate qualifying statements are on the Made in Canada claim, such as “Made in Canada with imported parts.”
For further clarity, “substantial transformation” means a fundamental change of form, appearance or nature that makes the product new and different from what it was previously.
Product of Canada
In order to earn the Product of Canada claim and ensure your product is in compliance with the law, these conditions must be met:
- the last substantial transformation of the good happened in Canada; and
- at least 98% (“virtually all”) of the total direct costs of production or manufacturing were in Canada.
For further clarity, “substantial transformation” means a fundamental change of form, appearance or nature that makes the product new and different from what it was previously.
Goods and Products
The Competition Bureau has noted what it will analyze to verify a claim as true or false as outlined above. Additionally, the Competition Bureau will analyze the general impression of the claim, as demonstrated by the product’s combination of words, visual elements, design, and layout.
What if our product is close to meeting the requirements?
If a company or producer can’t meet the standards required, claiming a product is Made in Canada or a Product of Canada is fraught with legal jeopardy. Instead, the Competition Bureau recommends these companies use a different description: one that is accurate to the actual process used to make the product. For instance, those producers could use: “Assembled in Canada with parts from [country].”
Additionally, companies should be careful about using words that essentially mean the same thing as “Made”; a general term that is synonymous with “made” may run afoul of the law because consumers would see it as having the same meaning. When these companies are unsure about their claim, a qualifying statement is likely the way to go.
A safe bet for producers who are unsure about the totality of their product’s origin is maintaining that an aspect of the product (e.g., the motor in a motorboat) was “Made in Canada” — as long as the statement is accurate.
Food Products
For food goods and products, there is a more involved process that takes place under the authority of the Food and Drugs Act. Their review is separate from the review process described above. Nevertheless, regulators may use the Competition Bureau’s “Made in Canada” parameters if they see fit to do so.
Food “Product of Canada”
If a food is labelled Product of Canada, similar requirements are in effect as those applied to non-food products. The item must have virtually all (98%) of its ingredients, production, processing, and labour come from Canada. Further, the Canadian Food Inspection Agency says that the adjective “Canadian” means the same thing as Product of Canada — for individual ingredients and the food product as a whole.
In short, all of the ingredients in the product must be Canadian in origin to support the claim.
Food “Made in Canada”
Food that is claimed to be Made in Canada faces more obligations than non-food products to support the claim. If this claim is applied to food, the last substantial transformation must have occurred in Canada. In addition, there must be a qualifying statement regarding whether the food is:
- made in Canada from imported ingredients; or
- made in Canada from a combination of domestic and imported ingredients.
Qualifying statements are much more restricted for food products claiming to be a Product of Canada. As the regulators wish to prevent misleading consumers, statements such as “Product of Canada and France” are prohibited regardless of the entirety of their history. As outlined previously, this is where made in Canada may be applicable and more accurate, provided that the last substantial transformation was in Canada.
Special Cases
It’s imperative to remember that there are certain requirements for specific types of food products, like meats, poultry, dairy, eggs, and more. There are also restrictions around the use of certain official marks including the Canadian flag and the maple leaf. It’s important to get advice and avoid any issues before designing your Canadian product or its packaging.
Fillmore Riley’s Intellectual Property Practice
Our Intellectual Property lawyers can provide guidance to ensure you make the best use of a Canadian origin claim on your product, and do it right the first time. Please contact one of our lawyers for more information.