The Canadian Food Inspection Agency says it’s seen an increase in complaints about items mislabelled as products of Canada or missing information about their country of origin.
The federal organization enforcing labelling standards on food products told The Canadian Press in an email late Tuesday that the rash of complaints have come in the last few months, when Canadians were increasingly supporting local businesses to fend off threatened tariffs from the U.S.
The CFIA is still reviewing the complaints it has received related to such labels and says it’s “too early” to tell if there has been non-compliance.
The spike was no surprise to Julia Kappler, a Montreal-based partner at law firm Gowling WLG, because she’s seen a product’s Canadian-ness become a selling point in the current political environment.
“People are scrutinizing product origin claims much more closely now than they were previously,” she said in an email.
“The issue has also become more emotive for many Canadians, such that someone who may not have paid much attention to these claims in the past may now feel compelled to complain to the regulator if they feel that an indication of origin is unclear or inaccurate.”
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The product of Canada designation can be hard for companies to meet because it comes with both strict and lofty criteria. To call an item a product of Canada, the CFIA says all, or nearly all, of the food, processing and labour used to make the item must be Canadian.
“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,” said Kappler.
While product of Canada labels have been a lightning rod for complaints, the CFIA said many of the other terms that crop up on domestic items haven’t generated the same reaction.
It has not received any complaints about manufacturers mislabelling their products as made in Canada or incorrectly claiming they are 100 percent Canadian.
A made in Canada label can only be applied to items when the last substantial transformation of the product occurred in Canada, like when imported ingredients are transformed into an item in Canada.
A 100 percent Canadian claim means an item must have entirely Canadian ingredients, processing and labour.
The Competition Bureau enforces the use of these terms on non-food items.
The product of Canada label can only be used on non-food items when at least 98 percent of the costs of producing or manufacturing the good have been incurred domestically. Products advertised as made in Canada had at least 51 percent of their production or manufacturing costs come from the country.
Each year, the Competition Bureau receives “numerous” complaints about labelling, senior communications advisor Marianne Blondin said in a late February email, when asked whether the organization had seen a spike recently linked to items with Canadian claims.
“As the Bureau is required by law to conduct its work confidentially, I am unable to provide information regarding complaint volumes or trends related to Made in Canada or Product of Canada claims, specifically,” she said.
If the CFIA finds merit in the complaints it received, Dara Jospé, a Montreal-based partner at the Fasken Martineau DuMoulin LLP law firm, said the agency can force a company to stop selling the items in question, recall them or even, levy monetary penalties for non-compliance.
In the case of a misleading label which does not impact safety, she suspects the CFIA would allow the manufacturer to sell off existing stock within a reasonable period of time.
But the weight Canadian claims are carrying with consumers these days, may cause the agency to be more dramatic and speedier.
“The CFIA may require immediate recall and cessation of the claims,” Jospé said in an email.
The Food and Drugs Act allows for fines of up to $250,000, and imprisonment for up to three years, said Kappler.
Under the Competition Act, which applies to non-food items, misuse of Canadian labels can result in companies having to pay the greater of $10 million, three times the value of the benefit derived from the conduct, or, if that amount cannot be reasonably determined, three percent of the corporation’s annual worldwide gross revenue.
“This is very much a situation where an ounce of prevention is worth a pound of cure,” Kappler said.
“Businesses will be well-served to confirm that these claims are compliant before going to market with them, rather than later trying to deal with the repercussions.”
