In the October 2008 issue of the Osler Advertising and Marketing Review, we reported on the Canadian Food Labelling Initiative (CFLI). The initiative included a plan to update the guidelines for the use of “Product of Canada” and “Made in Canada” claims on food labels and advertising. These guidelines came into effect December 31, 2008 under the enforcement of the Canadian Food Inspection Agency. On July 10, 2009, the Competition Bureau, which enforces the Consumer Packaging and Labelling Act (CPLA) only as it relates to non-food products, issued its draft Enforcement Guidelines relating to “Product of Canada” and Made in Canada” Claims (Draft Guidelines). The consultation period on the Draft Guidelines closed on October 8, 2009 and the final version is expected to be released sometime in the New Year.
The Draft Guidelines describe the Bureau’s approach to assessing “Product of Canada” and “Made in Canada” claims for non-food products under the false and misleading representations provisions of the Competition Act, the CPLA and the Textile Labelling Act. They will replace the Bureau’s current Guide to “Made in Canada” Claims, which has been in place since the early 1980s. The objective of the Draft Guidelines is to ensure greater consistency and transparency with respect to these claims. They are intended to provide guidance to businesses in developing policies to prevent contravention of the false or misleading representations provisions of the above-mentioned statutes.
Canadian Content Thresholds
Of particular significance are the Canadian content thresholds established for “Product of Canada” claims and “Made in Canada” claims. A product may be labelled “Product of Canada” only if it meets the threshold of 98% Canadian content, whereas a “Made in Canada” claim requires that a 51% Canadian content threshold be met and that the claim be accompanied by a qualifying statement (e.g., “Made in Canada with imported parts”). For either claim to be made, the last substantial transformation of the product must have occurred in Canada.
The Draft Guidelines contain a more restrictive approach to “Made in Canada” claims than does the CFLI. Whereas the Draft Guidelines require a minimum of 51% Canadian content for such a claim to be made, the CFLI permits a food product to be labelled “Made in Canada from domestic and imported ingredients” even if the Canadian content is minimal. This inconsistency between the respective approaches to food and non-food products may cause confusion among consumers. Further, the requirement under the Draft Guidelines of a qualifying statement for “Made in Canada” claims will result in many Canadian businesses having to change their existing packaging to include such a statement. The Bureau has not indicated whether businesses would be provided with a significant grace period during which they could continue to use their existing packaging.