Competition Bureau alleges that proudly Canadian company Moose Knuckles may not be so Canadian
June 16, 2016

by Andrea Kroetch

The Competition Bureau has taken action against Canadian outerwear company Moose Knuckles for allegedly falsely claiming that their premium winter jackets are “Made in Canada”.  In the application filed with the Competition Tribunal, the Bureau claims that the company has engaged in deceptive marketing practices under the Competition Act by marketing their premium winter jackets as “Made in Canada” when in fact the jackets are substantially made in Vietnam and other Asian countries. According to the Bureau, only the finishing details were completed in a Canadian manufacturing facility. The Bureau states that such practices are harmful to consumers who are willing to pay a premium for "Made in Canada" products, and is seeking an end to the company’s use of its “Made in Canada” claims, an administrative penalty of four million dollars, and restitution to affected customers. 

The Competition Bureau and country of origin claims

The Competition Bureau assesses country of origin claims under the false and misleading representation provisions of three federal acts under its jurisdiction, namely: (a) the Competition Act; (b) the Consumer Packaging and Labelling Act (as it relates to non-food products); and (c) the Textile Labelling Act (collectively, the “Acts”).   

With respect to origin in Canada claims specifically, in July 2010 the Competition Bureau clarified its approach to enforcing “Product of Canada” and “Made in Canada” claims with the release of its Enforcement Guidelines Relating to "Product of Canada" and "Made in Canada" Claims ("Guidelines") which provide guidance on the Bureau’s approach in assessing whether such a claim is false or misleading under the Acts.  The following is a brief summary of the Bureau’s approach.  

(a)    “Product of Canada” and “Made in Canada” claims

Under the Guidelines, the Bureau distinguishes between two types of origin in Canada claims – “Product of Canada” claims and “Made in Canada” claims – and the Guidelines make clear that a “Product of Canada” claim will require a greater degree of “in Canada” production or manufacturing of the product than would be required for a “Made in Canada” claim. 

With respect to “Product of Canada” claims, the Bureau will not challenge the representation if:  

  1. the last substantial transformation of the good occurred in Canada; and
  2. all or virtually all (at least 98%) of the total direct costs of producing or manufacturing the good were incurred in Canada.

In contrast, a “Made in Canada” claim is unlikely to raise concerns under the false or misleading representations provisions of the Acts if:

  1. the last substantial transformation of the good occurred in Canada;
  2. at least 51% of the total direct costs of producing or manufacturing the good have been incurred in Canada; and
  3. the “Made in Canada” representation is accompanied by an appropriate qualifying statement, such as “Made in Canada with imported parts” or “Made in Canada with domestic and imported parts”. This could also include more specific information such as “Made in Canada with 60% Canadian content and 40% imported content”.

When assessing whether an origin in Canada claim is false or misleading, the Bureau will consider the general impression conveyed by the representation, including any pictorial representation (e.g., logos, pictures, or symbols such as the Canadian flag or maple leaf), as well as the literal meaning.  This means, that a “Made in Canada” claim may be considered to have been made due to the presence of a pictorial representation on the product or packaging, such as the presence of a Canadian flag or the image of a maple leaf.  Therefore, if such pictorial representations would reasonably lead a consumer to falsely conclude that the product was “Made in Canada”, such a claim may constitute a violation of the Acts unless the product meets the conditions for “Made in Canada” claims.

With respect to enforcement, the Guidelines state that the "Bureau has several instruments at its disposal to promote and achieve compliance with the Acts”.  For example, under the Competition Act’s civil false and misleading provisions, a corporation can be ordered to pay a penalty of $10,000,000, with a $15,000,000 penalty for breaches thereafter, in addition to restitution to purchasers.  Under the Competition Act’s criminal provisions, a person may be liable for a maximum fine of $200,000 or imprisonment for one year.

(b)    Application of the Guidelines to the Mooseknuckles “Made in Canada” claims

In the application filed against Moose Knuckles under the civil false and misleading representation provisions of the Competition Act, the Bureau alleges that the company failed to meet all three conditions set out in the Guidelines for substantiating “Made in Canada” claims: Moose Knuckle’s winter jackets were imported from Asian manufacturers in a nearly finished form comprised of materials sourced from outside of Canada, with only the finishing touches to the jackets (e.g. adding the trim, zippers and snaps) done in Canada.  

Notably, the Bureau’s complaint relies, in part, on the company’s use of “Canadian” images and symbols (e.g. the company’s logo contained the image of a red maple leaf on a moose, as well as a hockey player dressed in red with a maple leaf on his jersey), which the Bureau claims reinforced the false and misleading idea that the Moose Knuckles winter jackets were “Made in Canada”.  


The Bureau’s action against Moose Knuckles serves as a strong warning to businesses in Canada that a company which seeks to use its ties to Canada as part of its advertising campaigns must ensure that its representations regarding its Canadian origins claims are not misleading.  Businesses are therefore strongly encouraged to familiarize themselves with the Guidelines and to obtain expert advice to ensure that any claims with respect to origin in Canada are accurate.

For more information about this matter, or Canadian marketing, advertising and regulatory issues, please contact our firm’s Marketing and Advertising Group.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.

web design toronto Rebel Trail