As Canada braces for a trade war spurred by 25 per cent tariffs from the United States, there is a growing push to “buy Canadian” to support the local economy.
But looking at labels might feel confusing — what does it mean if something is “Made in Canada” vs. a “Product of Canada?”
Prime Minister Justin Trudeau has urged Canadians to pick local over U.S. options, from Canadian rye to a summer vacation in Canada, and Google searches for “buy Canadian” jumped on Feb. 1 when Trump announced the tariffs.
“Now is also the time to choose Canada,” Trudeau said in his remarks Saturday when announcing counter-tariffs on the U.S.
“There are many ways for you to do your part. It might mean checking the labels at the supermarket and picking Canadian-made products. It might mean opting for Canadian rye over Kentucky bourbon or forgoing Florida orange juice altogether.”
U.S. tariffs on Canadian goods will go into effect on Tuesday, as will retaliatory tariffs on dozens of American goods.
Buying local products amid the trade war can help support Canada’s economy, experts say, as Canadian businesses are bracing for the impact of 25 per cent tariffs across the board, with 10 per cent on energy.
“I think we’re seeing a really big ‘Buy Canadian’ movement, which is great and I think it is going to help support the Canadian economy during these tariff tensions,” said Melissa Tehrani, partner and leader of national advertising and product regulatory group at Gowling WLG.
“I also think it’s going to encourage Canadian companies to source more raw material from Canadian sources to hopefully mitigate the impact of the tariffs on their business,” she told Global News in an interview.
Daniel Trefler, professor of economics and international trade and competitiveness at the University of Toronto, said buying a product that is made in Canada will help Canadian manufacturers and farmers.
“Otherwise those goods are going to sit on a shelf and with inventories growing, workers are going to be laid off,” which is a “bad news story all around,” he said.
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“The extent that we can do anything, let’s try and chip in by making those ‘made in Canada’ and ‘products of Canada’ choices,” Trefler said.
Made in Canada vs. Product of Canada
When buying locally, some products are labelled “Made in Canada” and others as “Product of Canada.” So, what is the difference, and how can you tell what you are buying is actually Canadian?
The difference is in the amount of Canadian content that goes into each.
For non-food items, Canada’s Competition Bureau places a “higher threshold of Canadian content” at 98 per cent for anything labelled as “Product of Canada.”
Meanwhile, “Made in Canada” claims for non-food items are subject to a 51 per cent threshold of Canadian content “but should be accompanied by a qualifying statement indicating that the product contains imported content,” the bureau states in its guidelines from 2009.
“In both cases, the last substantial transformation of the product must have occurred in Canada,” it adds.
Corporations or individuals who are found making “false or misleading representations” could be subject to penalties in the form of fines or prison time.
For food products, the Canadian Food Inspection Agency (CFIA) has its own guidelines for “Product of Canada” and “Made in Canada” claims, which are voluntary.
The CFIA says that “a food product may use the claim ‘Product of Canada’ when all or virtually all major ingredients, processing, and labour used to make the food product are Canadian.”
“This means that all the significant ingredients in a food product are Canadian in origin and that non-Canadian material is negligible,” CFIA says on its website.
The label of “Canadian” and “Product of Canada” are interchangeable and mean the same thing.
A food product labelled as “Made in Canada” with a qualifying statement means “the last substantial transformation of the product occurred in Canada, even if some ingredients are from other countries.”
Tehrani said brands and retailers should ensure that their suppliers are complying with these rules before adding a “Made in Canada” or “Product of Canada” type claim to certain products.
“There are various levels of compliance to consider,” she said.
“It’s not as simple as just assessing internally that you feel like you meet that criteria for a ‘Made in Canada’ claim and then adding an 11-point maple leaf on your product label.”
How to check labels
When it comes to food, the labelling is “pretty clear,” Trefler said.
Mike von Massow, a food economist at the University of Guelph, said if the label reads “Product of Canada” that means “it’s almost entirely made and produced in Canada.”
If shoppers really want to go the extra step, “there’s all sorts of small details on the back of the packaging” that they can look for, von Massow said.
The labels on grocery items also include “the final stage of assembly,” Trefler said.
For example, if blueberry plants came from Oregon, but they were planted in Canada, then that is a “Product of Canada,” Trefler explained.
“So, you can quickly see in that instance how complicated this thing this can get.”
He advised Canadians to not “try to get it perfect” and look for words like made in or product of Canada.
“If I were a consumer, I would say that the perfection is the enemy of the good. Whether it says ‘Made in Canada’ or a ‘Product of Canada,’ that should be good enough for you.”
–with files from Global News Sean Previl
Are you changing your spending habits, either to buy Canadian or try to save more in case of hard economic times ahead? Email us at [email protected] about how your spending is changing because of the tariffs, and we may be in touch for future stories.