Market Research Series: "Made in Canada" - What to Know Before Labeling Your Product
August 4, 2020
Market Research Series
Made in Canada?
Let’s say a big client of yours is planning for expansion into Canada. Their preliminary research shows that Canadians have more affinity for Canadian brands, so they’d like to move part of their production to Canada and tag their products with a made in Canada stamp. Can they do this? What are the regulations? Are there even any?
Yes. Any business can claim their product as “Made in Canada” or “Product of Canada”. The Competition Bureau of Canada provides regulations for these titles but doesn’t require any submittal or certification. The only way you or your client could get in trouble is if the bureau or anyone else notices your dishonest claim and conducts an investigation resulting in fines or even business suspension.
Because the Competition Bureau relies on a reactive approach rather than a proactive one, you want to be very well informed on the rules before you claim any titles. We ran into this situation with a client and spent a good amount of hours researching so you don’t have to.
First off, understand that you do not have to claim a product as originating from Canada. These titles are completely optional. If you do claim a title, you’ll have to abide by the rules laid out by the Competition Bureau linked here.
From that link, you can see that they distinguish 2 types of claims: “Product of Canada” and “Made in Canada”. A product of Canada is the most demanding title in that it requires 98% of the costs incurred for production and manufacturing to have taken place in Canada. Also, the last substantive change must have occurred there.
The “Made in Canada” title is a bit more lenient in that, at minimum, 51% of the incurred costs must have occurred in Canada as well as the last substantive change. The additional rule for this claim is that it must be accompanied by a qualifying statement such as “…with imported materials” or “…with 60% imported and 40% Canadian goods”.
There are endless possibilities of qualifying statements that reflect each specific situation but they all serve the same purpose: protection. These minor statements protect you from possible investigations because you have clarified exactly what aspect is made in Canada. The only downside is that most brands like the easy marketability of “Made in Canada” claims and dislike the clutter of qualifying statements. So how do you better consult them?
Here are our 3 tips:
1) Study the guidelines and definitions: The Competition Bureau is nice enough to add their definitions in their texts. These are extremely helpful in determining what counts as an “incurred” cost and what constitutes a “substantive change”.
2) Inform them of the risks: Sometimes a client is adamant about using a certain claim regardless of the risks. It’s your job to make sure they’re aware of possible consequences. If they’re comfortable with the claim and feel as though they do qualify, inform them on the standards for record-keeping in the Canada Consumer Product Safety Act. This adds another layer of protection to their case.
3) Reach out to professionals or seek legal counsel: The Competition Bureau has a hotline that was remarkably helpful in our research. They can provide specific information on a case by case basis that is extremely beneficial and time-saving in the long run. Just make sure you know the guidelines and have your content ready beforehand so you know what questions to ask.
That’s it! We hope this guide helped you as much as it would’ve helped us.