2018-05-10 12:46:59 Growing a Business English Learn about the "Made in Canada" claim and find out whether or not you can legally use it on your product packaging. Learn what... https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2018/04/Label-On-The-Inside-Of-A-Sweater.jpg https://quickbooks.intuit.com/ca/resources/growing-business/label-canadian-made/ Can You Use the "Made in Canada" Claim on Your Label?

Can You Use the "Made in Canada" Claim on Your Label?

2 min read

“Made in Canada” — three little words that can make a big impact on your bottom line. Chances are, your customers are hungry to support businesses in their home country, even at a higher cost. In fact, according to the Business Development Bank of Canada, 30% of consumers in Canada are willing to pay more for products that are made locally. If you can make this claim, you could see increased sales and a boost in profits. To stay legal, make sure your products fit into the Competition Bureau’s guidelines.

What products qualify as “Made in Canada”?

Before you can use the “Made in Canada” claim, your products need to meet two qualifications. First, the last “substantial transformation” — the last time your products changed from one form to another — must have happened in Canada. If you sell cookies, it’s when you combine ingredients and bake them; if you sell clothing, it’s when you sew fabric pieces together to make a shirt.

You might hear the second qualification called the “51% rule”: at least 51% of the money that you spend to make or produce your products must be spent in Canada. That could include the materials you buy, the machinery you use, or the labour costs that you pay to hire your employees.

Adding Qualifying Statements

What if only 50.5% of your production costs are in Canada — does 1/2 of a percent put you out of the running for “Made in Canada?” Technically, yes, but there’s another great option. As long as your products are transformed in Canada, you can use “Made in Canada” by adding a qualifying statement. If you make toys and some of your parts come from China, you could say, “Made in Canada with domestic and imported parts.” If all of your parts come from China, you can legally claim, “Made in Canada from imported parts.”

How is “Made in Canada” different from other claims?

“Made in Canada” is only one type of Canada-focused marketing claim that you can put on your label. The holy grail of claims is “Product of Canada.” This claim is similar to “Made in Canada,” except instead of 51%, you must spend 98% of direct costs in Canada.

Do you sell food products? If so, you can take advantage of other claims to help your customers understand where your products are made. Some examples are:

  • Distilled in Canada
  • Roasted in Canada
  • Produced in Canada
  • Packaged in Canada

Implying “Made in Canada” on Your Labels

Saying “Made in Canada” isn’t the only way you can make a claim. Well-known symbols, such as the Canadian flag and the maple leaf, communicate the same thing. When you use these symbols on your packages, it’s what the Competition Bureau calls an implicit declaration — in other words, you’re implying that your products are made in Canada. That’s fine, as long as they meet the “Made in Canada” requirements. If they don’t, you could be accused of misleading consumers. To stay safe, it’s a good idea to add qualifying statements.

The “Made in Canada” claim is a great way to set your products apart. By staying up-to-date on labelling rules and following them carefully, you can bring in local-minded consumers and increase your sales in Canada.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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