In the wake of recent news regarding potential U.S. import tariffs on Canadian goods, many Canadian consumers are seeking to support local businesses by buying “Canadian” products. As a result, various sources made information available to assist companies and consumers in determining whether products available in stores can be accurately labeled as "Canadian."
While the Competition Bureau’s Enforcement Guide[i] provides a comprehensive explanation of how it applies the prohibition against ‘false and misleading claims’ under the Competition Act[ii] and other related Acts[iii] to “Made in Canada” and “Product of Canada” claims, some uncertainty remains. For instance, the Competition Bureau states that “Product of Canada” claims can only be made for products where at least 98% of the direct costs of production are Canadian. In contrast, “Made in Canada” claims require that at least 51% of the direct costs of production be Canadian.[iv]
In either case, the last substantial transformation of the product must occur in Canada. The Competition Bureau defines a substantial transformation to mean that products “undergo fundamental change in form, appearance or nature such that the [products] existing after the change are new and different [products] from those existing before the change”.[v] This can sometimes be confusing, as the scope and limitations of a ‘last substantial transformation' can vary by product.
Ad Standards Canada also released its Advisory[vi] guidance to the advertising industry to help ensure various types of “Canadian” claims complied with the provisions of the Canadian Code of Advertising Standards.[vii] The Advisory gave examples of non-compliant “Canadian” claims made in past advertisements and cautioned the industry against being misleading and inaccurate. The additional guidance is welcome, but businesses and consumers can still find themselves overwhelmed with further complications when other local and regulatory regimes are considered.
For instance, a business may look for ways to distinguish themselves as Canadian, adding a small Canadian flag might seem to be an easy way to achieve this but the use of this symbol is broadly protected under the Trademarks Act.[viii] No person can adopt, use or apply to register, as a trademark or otherwise, "any mark consisting of, or something so nearly resembling as to be likely to be mistaken for" the Canadian flag.[ix] Requests to use the Canadian flag or the stylized 11-point maple leaf must be submitted to the Government of Canada.[x]
The current landscape appears to be incentivizing both consumers and businesses to focus on their Canadian identity. Nevertheless, it is important that all claims are accurate and truthful. Clear labeling empowers consumers to make informed decisions, while businesses can build consumer trust and establish strong reputations through accurate representation of their production processes.
[i] Government of Canada, “ “Product of Canada” and Made in Canada” Claims” (December 2009), online: Competition Bureau <https://competition-bureau.canada.ca/en/how-we-foster-competition/education-and-outreach/publications/product-canada-and-made-canada-claims#enG-2-4> [Competition Bureau].
[ii] R.S.C., 1985, c. C‑34.
[iii] Consumer Packaging and Labelling Act, R.S.C., 1985, c. C‑38 and Textile Labelling Act, R.S.C., 1985, c. T‑10.
[iv] Competition Bureau, supra note i.
[v] Ibid.
[vi] Ad Standards, “Advisory on the Meaning of “Made in Canada” and Similar Claims under the Canadian Code of Advertising Standards” (n.d.), online: Ad Standards <https://adstandards.ca/code/ad-standards-advisories/advisory-on-the-meaning-of-made-in-canada-and-similar-claims-under-the-canadian-code-of-advertising-standards/>.
[vii] Ad Standards, “The Canadian Code of Advertising Standards” (July 2009), online: Ad Standards <https://adstandards.ca/code/the-code-online/>.
[viii] R.S.C., 1985, c. T-13.
[ix] Trademarks Act, R.S.C., 1985, c. T-13, s. 9(1)
[x] Government of Canada, “Commercial Use of Canadian Symbols” (July 2023), online: Canada <https://www.canada.ca/en/canadian-heritage/services/commercial-use-symbols-canada.html>.
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