“Made in Canada” vs “Product of Canada”: what the labels really mean

A maple leaf on a jar of hand cream is a strong pull for a lot of Canadians. But “Made in Canada” and “Product of Canada” aren’t interchangeable, and neither one is a quality stamp. Both have specific meanings set out by the Competition Bureau, the federal agency that polices false and misleading advertising. Here’s how to read them.

Who decides what these claims mean?

For non-food products, including cosmetics, soaps and household products, origin claims fall under three federal laws: the Competition Act, the Consumer Packaging and Labelling Act and the Textile Labelling Act. All three ban false or misleading representations. None of them sets a number for what counts as Canadian.

So the Competition Bureau publishes guidelines. They describe the conditions under which it will generally not challenge an origin claim. The Bureau is careful to say the guidelines aren’t the law itself, and each case is judged on its facts. In practice, they’re the rulebook most companies follow.

Food is different. The Canadian Food Inspection Agency has its own guidance for “Product of Canada” and “Made in Canada” on food labels, so the numbers below don’t apply to groceries.

“Product of Canada”: the 98% rule

A non-food product can say “Product of Canada” when two things are true:

• The last substantial transformation of the product happened in Canada.
• At least 98% of the total direct costs of producing or manufacturing it were incurred in Canada.

That’s the “all or virtually all” standard. No qualifier is needed, because almost nothing is imported. Goods that are wholly obtained or produced in Canada, like harvested or mined materials, meet the transformation test automatically.

“Made in Canada”: the 51% rule, with a qualifier

“Made in Canada” sets a lower bar, and asks for honesty about the rest:

• The last substantial transformation happened in Canada.
• At least 51% of the total direct costs were incurred in Canada.
• The claim comes with a qualifying statement, such as “Made in Canada with imported parts” or “Made in Canada with domestic and imported parts”.

The Bureau also gives an example with numbers: “Made in Canada with 60% Canadian content and 40% imported content.” Words like “manufactured in Canada” or “produced in Canada” are treated the same as “Made in Canada” and need the same qualifier.

More specific claims are allowed when they’re accurate, for example “Designed in Canada” or “Assembled in Canada with foreign parts”. These tell you about one step, not the whole product.

What counts as “costs” and “transformation”?

Two ideas do the heavy lifting.

Total direct costs means the money spent on materials, on the labour that goes into production, and on overhead that relates directly to production and can reasonably be allocated to it. General overhead usually isn’t counted.

Substantial transformation means the goods undergo “a fundamental change in form, appearance or nature” so that what comes out is a new and different product. For a cream or a soap, the question is where the product itself was actually made, and the Bureau looks at each case on its own facts.

Why does the Bureau spell all this out? Its stated aim is informed consumer choice: truthful, accurate origin claims so that you can understand what you’re paying for.

Pictures count too

A claim doesn’t have to be in words. The Bureau’s guidelines say images such as the Canadian flag or a maple leaf can suggest that a product was made here. If a product doesn’t meet the thresholds, any text qualifying the image has to be prominent enough that you’ll actually notice it.

The Bureau’s advice to shoppers is blunt: don’t assume a product is Canadian because it has red colours or a maple leaf design.

What the labels say about quality: nothing

This is the part worth holding onto. Both claims are about where the money and the work went. They say nothing about how well a product works, whether its ingredients suit your skin, or how safe it is.

• Safety rules don’t depend on origin. Health Canada requires every manufacturer and every importer to notify it within 10 days of first selling a cosmetic in Canada, including the product’s ingredients and their concentrations. A cream made in Montréal and one made overseas answer to the same Food and Drugs Act and Cosmetic Regulations.
• Origin isn’t required on the label. The Competition Bureau notes the law doesn’t require non-food products to state a country of origin. Health Canada’s labelling guide requires the name and address of the company responsible; an imported cosmetic can show the foreign company, say “imported by” before the Canadian one, or state where it came from.
• Nobody pre-approves the claim. The Bureau says it doesn’t approve or certify origin claims. It looks at the general impression a claim creates and acts on complaints.

So a “Product of Canada” body wash can be a great choice or a poor fit for your skin, exactly like an imported one. If supporting Canadian jobs matters to you, the label is useful. If you’re choosing for sensitive skin, the ingredient list and any DIN or NPN matter far more. And if a product irritates your skin, stop using it and see a pharmacist or doctor if it doesn’t settle, wherever it was made.

If a claim looks off

If you think a product’s origin claim is false or misleading, you can report it to the Competition Bureau through its online complaint form. The Bureau says it treats all complaints confidentially. It’s also fair to ask the company or the seller directly what the claim is based on; the Bureau suggests checking with them.

The takeaway: “Product of Canada” means at least 98% Canadian direct costs, and “Made in Canada” means at least 51% plus a qualifier about imported content, both with the last major transformation done here. They’re honest-advertising rules about origin. For what a product will do on your skin, keep reading past the maple leaf.