On April 26, 2016, Canada’s Competition Bureau filed an application with the Competition Tribunal alleging that Moose International Inc., carrying on business as Moose Knuckles, engaged in deceptive marketing practices and that the “Made in Canada” claims associated with certain of its parkas and other apparel are false and misleading.
Under the Competition Bureau’s Enforcement Guidelines for “Product of Canada” and “Made in Canada Claims”, the use of a “Made in Canada” claim requires three conditions to be met:
- the last substantial transformation of the good occurred in Canada;
- at least 51% of the total direct costs of producing or manufacturing the good have been incurred in Canada; and
- 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”.
The Guidelines are not a legal document but rather represent the Competition Bureau’s view of how the Competition Act should be interpreted. It is up to the Competition Tribunal to determine whether the claims violate the Competition Act.
The Competition Bureau alleges that Moose Knuckles failed to meet all three conditions and seeks an order requiring, among other things, Moose Knuckles to pay an administrative penalty of $4 million and a form of reasonable restitution to customers. The Competition Bureau’s media release can be found here.
Moose Knuckles stated in its responding press release that it “vigorously rejects” the allegations made by the Competition Bureau.