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May 20, 2010

New rules for Canadian origin claims on non-food products come into force July 1^st

The Competition Bureau further clarified last week its enforcement approach to "Made in Canada" and "Product of Canada" claims.

In December 2009, the Bureau released its revised Enforcement Guidelines for "Product of Canada" and "Made in Canada" Claims. The Guidelines describe the Bureau's approach to assessing "Product of Canada" and "Made in Canada" claims for non-food products under the false or misleading representations provisions of the Competition Act, the Consumer Packaging and Labelling Act and the Textile Labelling Act. The Guidelines take effect on July 1, 2010.

In order to ensure an effective and fair industry transition, and consistent with past practice when introducing new enforcement guidelines, for the six-month period following the July 1, 2010 implementation date, the Bureau confirms that it will only consider enforcement action in circumstances of bad faith.

Specifically, in that transitional period, the Bureau confirms that, in the absence of bad faith, the Bureau will limit its response in cases of apparent non-compliance to education and warning letters consistent with the options outlined in the Bureau's Conformity Continuum.

The new Guidelines introduce a distinction between "Product of Canada" and "Made in Canada" claims. "Product of Canada" claims will be subject to a higher threshold of Canadian content (98%), while "Made in Canada" claims will remain subject to a 51% threshold of Canadian content but should be accompanied by a qualifying statement indicating that the product contains imported content. In both cases, the last substantial transformation of the product must have occurred in Canada.

Further details are available on the Competition Bureau's website.