Emerging Canadian designers oftentimes target the Canadian market before venturing off into more lucrative international pastures. Pulling on the patriotic heartstrings of Canadian consumers can be a useful marketing strategy: “support Canadian talent, buy Canadian fashion”. This is all fair and valid…but it is important to know that the Canadian Competition Bureau is watching you.
The Competition Bureau is an independent law enforcement agency that governs competition in the marketplace. It wants to make sure that everybody is playing fair. The Competition Bureau has taken it upon itself to ensure that Canadian product claims are valid. Last year the Competition Bureau issued guidelines (“Made in Canada Claims” and “Enforcement Guidelines Relating to ‘Product of Canada’”). These guidelines kick in only when you start to claim and promote that your merchandise is from Canada. If you don’t make any country of origin claims, these guidlines do not apply. Also, these guidelines only relate to non-food products.
There are two possible patriotic claims, “Made in Canada” and “Product of Canada”, which have different thresholds to satisfy.
Made in Canada:
The requirements to make this claim are easier to satisfy:
a) the last substantial transformation of the goods must have occurred in Canada; and
b) at least 51% of the costs of producing or manufacturing the goods have occurred in Canada.
If you claim that your product is “Made in Canada”, a qualifying statement must also be included. For example: “Made in Canada with imported materials”.
If you do not expressly include the term “Made in Canada”, the Competition Bureau may interpret suggestive marketing ploys to insinuate that the product was Made in Canada, such as pictures of the Canadian flag or the maple leaf. Thus, these criteria apply.
Product of Canada:
This claim has a higher threshold to satisfy:
a) again, the last substantial transformation of the goods must have occurred in Canada; and
b) at least 90% of the costs of producing or manufacturing the goods have occurred in Canada.
Breaking This Down
The “last substantial transformation” means that the goods are fundamentally changed in form, nature or appearance so that they appear new.
“Costs of producing or manufacturing” includes labour costs and costs to produce the materials. It generally does not include overhead costs.
What Happens if you Don’t Comply?
The Competition Bureau can enforce the guidelines. If you insinuate that your product is Canadian when it does not comply with these guidelines, the Competition Bureau can look to the Competition Act for enforcement. False or misleading representations in relation to product advertising can elicit substantial monetary fines and, in some instances, criminal liability.