Surge in Complaints Over Misleading "Product of Canada" Labels Reflects Growing Consumer Scrutiny

In recent months, the Canadian Food Inspection Agency (CFIA) has reported a notable increase in complaints regarding food products mislabeled as "Product of Canada" or lacking clear information about their country of origin. This spike in concerns has emerged amid a heightened sense of nationalism, as Canadians increasingly rally behind local businesses to mitigate the impact of threatened U.S. tariffs. The CFIA, the federal body responsible for enforcing labeling standards, confirmed that the majority of these complaints have been filed in recent months, but it is still in the process of reviewing them. At this stage, it is too early to determine whether these instances constitute non-compliance with labeling regulations.

Julia Kappler, a Montreal-based partner at the law firm Gowling WLG, was not surprised by the surge in complaints. She observed that the current political climate has turned a product’s Canadian origins into a significant selling point, prompting consumers to pay closer attention to labeling claims. “People are scrutinizing product origin claims much more closely now than they were previously,” Kappler explained. She added that the issue has become deeply emotional for many Canadians, motivating some to report unclear or inaccurate labeling to regulators, even if they might not have paid much attention to such details in the past.

The High Bar for "Product of Canada" Labels

The "Product of Canada" designation comes with strict and ambitious criteria, making it challenging for companies to meet. According to the CFIA, for a product to be labeled as "Product of Canada," virtually all of its ingredients, processing, and labor must be Canadian. This high threshold means that many products may have some Canadian elements but still fall short of qualifying for the label. Kappler noted that “there will likely be many cases in which a part of the product or some of its ingredients have Canadian roots, but other countries also played a role.” As a result, companies must carefully evaluate whether their products meet the necessary standards before applying the label.

Interestingly, while the "Product of Canada" label has been a focal point for complaints, other labeling terms have not generated the same level of concern. The CFIA has not received any complaints regarding mislabeling under the "Made in Canada" designation or false claims of being "100% Canadian." A "Made in Canada" label is only permissible if the last substantial transformation of the product occurred within Canada, such as when imported ingredients are processed into a final product domestically. Similarly, a "100% Canadian" claim requires that all ingredients, processing, and labor are entirely Canadian.

Enforcement of Labeling Standards and Penalties for Non-Compliance

The enforcement of labeling standards in Canada is shared between the CFIA and the Competition Bureau. While the CFIA oversees food products, the Competition Bureau is responsible for ensuring compliance with labeling standards on non-food items. For non-food goods, the "Product of Canada" label can only be used if at least 98% of the production or manufacturing costs were incurred in Canada. Meanwhile, a "Made in Canada" claim requires that at least 51% of the production or manufacturing costs are domestic.

The Competition Bureau receives numerous complaints about labeling each year, though it does not disclose specific figures or trends due to confidentiality requirements. If the CFIA or the Competition Bureau finds merit in complaints, they have the authority to impose significant penalties. For food products, the CFIA can order companies to stop selling non-compliant items, issue recalls, or levy monetary fines. In cases where labeling is misleading but does not pose a safety risk, the agency may allow companies to sell existing stock within a reasonable timeframe.

Dara Jospé, a Montreal-based partner at the law firm Fasken Martineau DuMoulin LLP, noted that the CFIA may take more drastic measures in response to misleading labels, especially given the heightened sensitivity around Canadian-origin claims. Under the Food and Drugs Act, violations can result in fines of up to $250,000 and imprisonment for up to three years. For non-food items, the Competition Act imposes even stricter penalties, with companies facing fines of up to $10 million, three times the value of the benefit derived from the misconduct, or three percent of their annual global revenue, whichever is greater.

The Emotional and Economic Weight of "Canadian" Claims

The resurgence of pride in Canadian-made products has elevated the importance of accurate labeling in the eyes of consumers. This shift has made companies more accountable for ensuring the validity of their claims. Kappler emphasized that businesses would do well to prioritize compliance with labeling regulations from the outset, rather than facing the repercussions of non-compliance later. “This is very much a situation where an ounce of prevention is worth a pound of cure,” she said.

As the CFIA continues its review of the complaints, one thing is clear: the emotional and economic weight of "Canadian" claims has never been greater. Consumers are more vigilant than ever, and regulators are under pressure to ensure transparency and accuracy in labeling. For businesses, navigating this landscape requires careful attention to detail and a commitment to honesty. For Canadians, it reflects a deeper connection to supporting local industries and upholding the integrity of the "Product of Canada" label.