Fix the Label: How Smarter Product Transparency Can Enhance Canada’s Consumer Economy
July 24, 2025
Canada’s economy is deeply reliant on consumer spending, yet policy tools for guiding that spending toward national priorities remain underdeveloped. While billions are allocated annually to industrial subsidies and export strategies, one simple and often overlooked tool could play a larger role — product labeling.
Canada’s current “Made in Canada” designation no longer meets today’s needs. The threshold for claiming Canadian origin is low, the criteria are opaque, and the rules tend to advantage multinationals optimized for global supply chains. As a result, consumers who intend to support domestic industry are often misled, while Canadian-owned businesses face competitive disadvantages under a system that rewards optics over contribution.
In this paper, we argue that federal labeling standards are a critical — and currently underused — element of economic infrastructure. We outline where the current approach falls short, examine public demand for greater transparency, and propose a modernization agenda to strengthen consumer trust, reward domestic investment, and align purchasing behaviour with national goals.
Fixing this gap would enable consumer choice to function as a lever for economic resilience — with minimal cost and significant long-term return.
The Consumer Economy as Strategic Infrastructure
Roughly 58% of Canada’s GDP comes from household consumption. When Canadians spend, they shape not just markets, but also the structure of the economy itself: which firms grow, where jobs concentrate, and how capital is reinvested.
Governments routinely invest in this structure through grants, procurement, tax credits, and trade strategy. But the most direct economic actor - the consumer - is under-supported by current policy frameworks. While Canadians express a clear preference for buying Canadian, especially in sectors like food, personal care, and household goods, they often lack the information needed to act on that intent in a meaningful or consistent way.
In short: consumer preference exists. Consumer tools do not.
The Current Labeling Framework Undermines Market Integrity
Federal guidelines permit a product to be labeled “Made in Canada” if at least 51% of its direct production costs are incurred domestically and the final substantial transformation occurs in Canada. These thresholds were designed to reflect manufacturing inputs — not ownership, sourcing, or economic impact.
As a result:
- A foreign firm can import all inputs, simply assemble those inputs in Canada, and still earn the same label as a Canadian-owned, locally sourced product.
- Profits and decision-making can remain entirely outside the country, while appearing domestically grounded.
- Firms that invest in Canadian jobs and supply chains receive no recognition beyond what’s available to those that do not.
This isn’t simply a branding issue — it’s a misalignment between what the label claims and what the public assumes. That gap erodes trust, distorts consumer choice, and undermines the very behaviours policymakers hope to encourage.
Other jurisdictions have already taken steps to improve transparency. The EU has strict country of origin labeling for key product categories, and Australia’s labeling system distinguishes between made, packed, and sourced products, even showing the proportion of domestic ingredients. While these systems do not yet address corporate ownership, they demonstrate how layered and more informative labeling can give consumers greater clarity. Canada has yet to adopt comparable measures, leaving consumers with less transparency than in many peer jurisdictions.
A Civic Signal: What Canadians Do When They’re Told the Truth
Despite these structural limitations, many Canadians are trying to shop with intent. They are reading labels more closely, researching ownership, and adjusting their purchases — often without institutional support.
In response, independent tools have emerged. The CANADA List, for instance, is a civic-led project that evaluates products based on ownership, manufacturing location, sourcing, and domestic employment footprint. Built without public funding, it offers searchable data and transparent scoring to help consumers act on values that current labeling obscures.
It is not a replacement for regulation — but it offers a proof of concept grounded in real consumer behaviour. It shows that even without government mandates, transparency can shift purchasing patterns (and that demand for such clarity is both real and growing).
Build a Smarter Transparency Framework
Canadians clearly want better information about the products they buy, but the current labeling approach is too limited to meet that demand. A modernized framework should focus on three practical steps:
A. Signal Differentiation
The existing “Made in Canada” designation offers a binary signal that misses key economic realities. A more useful system would distinguish between:
- Ownership – whether a brand is Canadian-controlled
- Manufacturing – where primary transformation occurs
- Sourcing – the proportion of Canadian inputs
- Employment footprint – the extent of domestic jobs supported
These distinctions could be communicated through simple on-pack indicators, QR-linked details, or integration into retailer digital platforms. This approach would give consumers clearer choices without requiring a wholesale overhaul of existing regulations.
B. Increase Ownership Transparency
Many consumers equate “Made in Canada” with Canadian ownership, but there is no requirement to disclose who actually controls a brand. A voluntary, standardized registry of beneficial ownership tied to consumer-facing brands could close this gap. Integrating such data into digital retail environments and aligning it with existing sustainability and procurement frameworks would make corporate ownership more transparent, at minimal cost and with minimal regulatory burden.
C. Leverage Civic Innovation
Projects like The CANADA List demonstrate what is possible when motivated citizens gather and share ownership and sourcing data. Rather than treating these initiatives as peripheral experiments, government could view them as partners in building a stronger transparency ecosystem. Early-stage support — including priority funding or technical collaboration — could help such projects scale and evolve into a comprehensive, authoritative registry over time. Working with civic innovators at the outset would accelerate development while ensuring that public interest and trust remain central to future transparency frameworks.
A Phased Approach
This does not require sweeping new regulation overnight. Government could start by:
- Maintaining the current “Made in Canada” definition but allowing optional qualifiers for ownership and sourcing.
- Piloting the ownership registry and testing how tiered indicators perform in digital retail environments.
- Evaluating integration with ESG and public reporting frameworks as the system matures.
These steps would move Canada toward a smarter, layered transparency framework: one that rewards genuine domestic contribution, builds consumer trust, and better aligns individual purchasing decisions with national economic goals.
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