CANADA Law and Practice Contributed by: Martha Harrison, Nikiforos Latrou, Eugenia (Evie) Bouras and Marissa Caldwell, McCarthy Tétrault
the Competition Act, advertisers must now substanti - ate such claims with clear evidence, such as domes - tic production thresholds or sourcing documentation. This heightened enforcement reflects both a political and economic imperative to protect Canadian indus - tries and ensure transparency in origin-based market - ing.
overall impression conveyed to the average consumer rather than the advertiser’s intent or technical legality. 2.2 Regulation of Advertising Claims In Canada, all advertising claims – express and implied – are subject to regulation under the Competition Act, consumer protection statutes and the Code. The key standard is whether a representation is false or mis - leading in a material respect, meaning that it could influence a consumer’s decision to purchase or use a product or service. Express claims are considered direct statements made in advertising (eg, “100% Canadian”) while implied claims are those inferred from the overall impression created by an advertisement, including visuals, layout, imagery, third-party logos and context (eg, using the maple leaf symbol and/or the Canadian flag throughout an advertisement to suggest that a product is Canadian). The legal standard used to assess any form of rep - resentation is the consumer’s general impression of the advertisement and its claims. It focuses on how a credulous and inexperienced consumer would inter - pret a claim – not just its literal meaning but also its overall context, including layout, visuals and disclaim - ers. 2.3 Substantiation of Advertising Claims Claims that are objectively measurable – such as per - formance, medical benefit, environmental benefit or origin – must be supported by empirical evidence or testing based on industry-recognised methodologies. This testing must be adequate and proper or compe - tent and reliable in relation to the claim being made, so that the claim is unlikely to be considered false or misleading. The Competition Bureau has intention - ally maintained flexibility in the definition of adequate and proper substantiation for objective claims in order to respond to a wide diversity of industry standards. That said, the overarching requirements for any test - ing mean that it must: • be conducted before the claim is made; • be performed under controlled conditions to elimi - nate external variables; • minimise bias;
2. Advertising Claims 2.1 Deceptive or Misleading Claims
In Canada, advertising claims are assessed for decep - tion or misleading content under both the civil and criminal provisions of the Competition Act, as well as under the Code. The key legal standard is whether a representation is false or misleading in a material respect, meaning that it could influence a consumer’s decision to purchase or use a product or service. It is the overall general impression of the advertisement that must be considered to assess whether a repre - sentation is false or misleading. A claim or representa - tion may be considered deceptive if it is: • literally false; or • creates a misleading general impression. The Competition Bureau enforces the prohibition on false or misleading representations and evaluates claims across all media formats – including print, digi - tal, audio-visual and oral communications. Specific practices that are targeted include: • drip pricing (advertising unattainable prices due to hidden fees); • greenwashing (environmental claims not backed by proper testing); • fake sale prices (inflated “regular” prices to exag - gerate discounts); • unsubstantiated performance claims; and • false “Made in Canada” origin claims. The same standards under the Competition Act are mirrored in the consumer protection statutes across Canada. In addition, Ad Standards applies Clause 1 (Accuracy and Clarity) of the Code. This clause focuses on the
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