Maple-Washing: Regulatory and Civil Liability Risks of Calling a Product Canadian

Canadian consumers have become increasingly supportive of buying homegrown products, scrutinizing product labels like never before. At the same time, Canadian businesses are working tirelessly to satisfy the surging demand for products made in Canada. While making origin claims about products is generally voluntary, there can be significant legal risks from both regulators and civil claimants if those claims are false or misleading.

Regulation of Canadian Content Claims for Non-Food Products

In 2009, the Competition Bureau (Bureau) issued its “Product of Canada” and “Made in Canada” Claims Enforcement Guidelines (Guidelines). The Guidelines set out how the Bureau will evaluate country-of-origin related claims under the Competition Act, the Consumer Packaging and Labelling Act and the Textile Labelling Act. It is important to note that none of these statutes contain provisions relating to claims about a product’s country of origin. Rather, the Guidelines reflect the Bureau’s interpretation of the general obligation not to make claims that are false or misleading.

If businesses elect to claim that a product is from Canada, the Guidelines state that:

• “Product of Canada” claims can only be made for products where at least 98% of the total direct production or manufacturing costs have been incurred in Canada
• “Made in Canada” claims can only be made for products where at least 51% of the total direct production or manufacturing costs have been incurred in Canada, and there is an accompanying qualification (e.g., “Made in Canada with domestic and imported parts”)
• In both cases, the last substantial transformation of the product must have occurred in Canada

In recent years, there has only been one enforcement action brought by the Bureau regarding a “Made in Canada” claim. In 2016, the Bureau filed an application with the Competition Tribunal (Tribunal) alleging that Moose Knuckles had marketed their winter parkas as “Made in Canada,” when they were actually imported from Asia in nearly finished form, only to be finalized with zippers, snaps, fur trims and labels in Canada. Moose Knuckles settled the action by, among other things, agreeing to donate C$750,000 over five years to charity and to clarify that some of its parkas are made with Canadian and imported components. While Moose Knuckles remains the only reported action before the Tribunal, Ad Standards Canada, the advertising industry self-regulatory body, has also issued multiple decisions regarding Canadian claims, following consumer complaints.

Importantly, starting on June 20, 2025, private parties, with leave of the Tribunal, will be able to bring claims for alleged breach of many of the Competition Act’s civil deceptive marketing practices provisions. This includes the general prohibition against false or misleading representations, upon which the Guidelines rely. The potential consequences are the same as if the Bureau brings a case, namely a prohibition order, corrective notice, administrative monetary penalty (AMP) and restitution. The maximum AMP is the greater of (1) C$10-million (C$15-million for subsequent contraventions), and (2) three times the value of the benefit derived from the deceptive conduct, or, if that cannot be reasonably determined, 3% of global revenues.

Regulation of Canadian Content Claims for Food Products

As with non-food products, country of origin claims are voluntary on most foods. The Bureau Guidelines do not apply to food products since the Canadian Food Inspection Agency (CFIA) has developed its own similar, but not identical, guidance on Canadian origin claims. For example, the CFIA does not explicitly require that at least 51% of the total direct production or manufacturing costs have been incurred in Canada in order to make a “Made in Canada” claim but does include additional requirements regarding qualifying statements and what is considered the last substantial transformation of the product. The CFIA guidance also provides examples of when other claims may be more appropriate or can be made without qualification as to the origin of the ingredients, such as “packaged in Canada” or “prepared in Canada.”

Similar to the Bureau’s Guidelines, the CFIA guidance reflects the CFIA’s interpretation of the general obligation not to make claims that are false or misleading under the Food and Drugs Act as well as the Safe Food for Canadians Act. However, notwithstanding the different regulators and guidelines for food and non-food products, as of June 20, 2025, private parties will also be permitted to bring to the Tribunal claims for false and misleading advertising in relation to food products.

Civil Liability for Maple-Washing

Regulatory proceedings are not the only risk facing businesses alleged to have engaged in maple-washing (sometimes also termed “maple glazing”). Consumers may also allege through individual or class action claims that the Canadian content of a product was misrepresented.

Section 52 of the Competition Act prohibits any person from knowingly or recklessly making a representation to the public that is false or misleading in a material respect. Section 36 creates a private cause of action available to any person who has suffered loss or damage as a result of any breach of this prohibition. While the Guidelines discussed above are not binding on a court adjudicating a civil claim, a court may consider them when deciding whether a product was falsely or misleadingly labelled as “Canadian.”

Provincial consumer protection legislation similarly prohibits deceptive, false, or misleading representations to consumers, in addition to prohibiting unconscionable or unfair trade practices. Consumers may also allege negligent misrepresentation with regard to false or misleading statements about the origin of a product.

Proposed class actions alleging breach of the Competition Act, breach of consumer protection legislation and negligent misrepresentation are relatively common in Canada, particularly in the context of consumer claims. Plaintiffs in these class actions typically seek an award of aggregate damages or class-wide loss for all claimants. While the damages recoverable by any individual might be insignificant, the aggregate across the class could be substantial if damages were to be awarded on an aggregate basis, increasing potential exposure in the event of a class action claim. A business that mislabels a good as being Canadian could face liability to all purchasers through a class action brought on their behalf.

While civil claims for misrepresenting the Canadian content of goods have not yet been advanced in reported common law court decisions, claims regarding other country-of-origin descriptions have been advanced in Quebec, which is known for its consumer-friendly class action regime.

With respect to country-of-origin descriptions, the Quebec consumer misrepresentation regime was recently applied by the Superior Court of Québec in authorizing a class action against a pasta maker (Knafo c. Barilla Canada inc.). The box of pasta at issue included the statement “Italy’s #1 brand of pasta” along with a depiction of the Italian flag. Despite the box also including the statement “Product of the United States,” the authorization judge ruled in favour of the plaintiff. Indeed, the judge considered that a consumer could have arguably believed that the pasta was Italian in origin and would not have purchased the product at the same price had they known this was not the case. In so ruling, the judge authorized the class action to proceed on the merits, where the pasta maker will be free to raise various defences, including that the consumer suffered no compensable damages.

Key Takeaways

1. Businesses making Canadian-origin claims on products should ensure compliance with the Competition Bureau’s guidelines for non-food products and the CFIA’s guidelines for food products. “Maple-washing” claims may lead to enforcement actions, monetary penalties, or reputational harm.
2. Starting June 20, 2025, private parties will be able to bring claims for false or misleading marketing of food and non-food products before the Competition Tribunal. This increases legal risk exposure for businesses that misrepresent Canadian-made products.
3. Actions may be commenced by consumers or competitors pursuant to the Competition Act or by consumers under provincial consumer protection laws, with the potential for substantial financial liability.

For more information, please contact the authors or any member of our Competition & Antitrust, Marketing & Advertising or Litigation & Dispute Resolution groups.