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What "Made in Canada" Actually Means on a Hoodie

Canadian law doesn't require a hoodie tag to name its origin. Here's what "Made in Canada" means, the 51% and 98% tests, and how to read a label.

Turning a hoodie inside out to read the tag before buying is a reasonable habit. But the label has a smaller legal job than most people think, and "Made in Canada" has a specific meaning that isn't written on it. Here's what the rules say, who enforces them, and where the gaps are.

What the label has to say, and what it doesn't

The Textile Labelling and Advertising Regulations, made under the Textile Labelling Act, set out what a consumer textile label must carry. The Competition Bureau enforces them, and its textile labelling requirements page sums up the core: the generic name of each fibre present at 5% or more, and the dealer's name and place of business, or a CA identification number.

Country of origin isn't on that list. The Bureau says the law "does not require that the name of the country of origin be included on the label unless the dealer chooses to identify the item as being imported." That exception comes from paragraph 11(1)(c) of the regulations. If a label says the article, or any fabric or fibre in it, is imported, it has to name the country.

So under textile law alone, a hoodie sewn in Montreal doesn't have to say so, and a label silent on origin isn't breaking that law.

Why most imported hoodies still say where they're from

The "Made in" line on an imported hoodie usually comes from customs law. The Canada Border Services Agency's Memorandum D11-3-1, Marking of Imported Goods lists the goods that must be marked with their country of origin when imported. Apparel is one of six product categories, and the schedule includes item 5(8), knitted garments, and item 5(10), apparel made substantially or wholly of natural or synthetic textile fibres. A fleece hoodie fits both.

The marking must be legible, sufficiently permanent, easy to see during normal handling, and in English or French for most countries. For apparel, the CBSA accepts the origin on the label the Textile Labelling Act already requires. There are 21 listed exemptions, but apparel is squarely on the list.

How customs decides the country is its own question. For goods from a non-CUSMA country, origin is where the major part of production took place, weighing accumulated costs of material, labour and overhead. Goods from the United States or Mexico follow separate technical marking rules, including whether foreign materials went through a specific tariff classification change.

What "Made in Canada" means to the Competition Bureau

Nobody is obliged to make a Canadian origin claim. Once a brand chooses to, the Bureau's enforcement guidelines, "Product of Canada" and "Made in Canada" Claims, dated March 7, 2025, set out when it will generally not challenge the claim. There are two tiers.

  • Product of Canada. The last substantial transformation happened in Canada, and at least 98% of the total direct costs of producing the good were incurred in Canada.
  • Made in Canada. The last substantial transformation happened in Canada, at least 51% of total direct costs were incurred in Canada, and the claim carries a qualifying statement such as "Made in Canada with imported parts" or "Made in Canada with domestic and imported parts".
  • Anything less. The Bureau recommends a narrower claim that matches what was done here. Its own textile example is "Sewn in Canada with imported fabric". A footnote adds that a claim like that on a textile label must also name the country of origin.

Two definitions do most of the work. A substantial transformation is a fundamental change in form, appearance or nature, so that what comes out is a new and different good. Direct costs are materials and the labour reasonably allocated to making the good. General overhead isn't usually counted, though overhead tied directly to production can be.

"Produced in Canada" and "manufactured in Canada" are likely to be read as "Made in Canada", so they should meet the same test. Narrow process claims, like "Designed in Canada", are fine if they're accurate and people would read them as covering only that one step.

A worked example, with made-up numbers

These figures are invented to show the arithmetic, not taken from any real garment. Say a hoodie's direct costs come to $40.

  1. Knitted fleece, bought from abroad: $18.
  2. Rib, drawcord and thread, also imported: $2.
  3. Cutting and sewing labour in Canada: $20.

Canadian share: $20 of $40, or 50%. One point short of 51%, so under the guidelines this hoodie shouldn't be called "Made in Canada", qualifier or not. "Sewn in Canada with imported fabric", naming the fabric's country, describes it accurately. Move a dollar of cost onto Canadian soil and the answer changes. Here the fleece is the largest cost, so where the cloth was knitted decides the claim.

What the rules don't settle

The guidelines give no garment-specific ruling on whether cutting and sewing imported fleece counts as a last substantial transformation. Turning flat cloth into a hoodie looks like a change in form, and the Bureau's sewing example sits under "other claims" because of the cost share, not because sewing is ruled out. But that's a reading of the text, not a published decision. Anyone who says sewing alone always or never qualifies is going further than the document.

The guidelines also aren't law. They say they're not a binding statement of how the Commissioner will act, and a mere deviation from them might not mean a claim breaks the Act. The Bureau's Made in Canada claims page adds that it does not approve or certify such claims. No government stamp sits behind a maple leaf on a tag.

The maple leaf itself counts. The guidelines treat flags, maple leaves and similar images as implied origin claims that can be as forceful as words. If the overall impression is "made here", the product should meet the "Made in Canada" test, and any qualifying text has to be prominent enough that people notice it.

Where a claim is false or misleading, the penalties are real. Under the Textile Labelling Act, a dealer faces a fine of up to $5,000 on summary conviction or $10,000 on indictment. Under the civil provisions of the Competition Act, a corporation faces up to $10 million for a first violation, or more in some cases.

How to read a hoodie tag in under a minute

  • A plain "Made in" plus a foreign country is usually the customs marking. It tells you where the main manufacturing happened, not where the cotton grew.
  • "Made in Canada" with no qualifier is weaker than it looks. The Bureau's test asks for a statement about imported content alongside it.
  • "Sewn in Canada", "Cut and sewn in Canada" or "Designed in Canada" each describe one step. Check whether another country is named for the fabric.
  • A CA number identifies a Canadian dealer, not the factory. The CA Identification Number program is open to Canadian manufacturers, processors, finishers, importers and sellers, so an importer can hold one. The Bureau runs a public search to see whose number it is.
  • The fibre line names the cloth by generic fibre, for anything at 5% or more. It says nothing about where those fibres came from, or how they were spun. That's covered in ring-spun vs open-end cotton.

Four questions to put to a brand

The tag gives you a sentence. These questions get the rest, and each one maps to a line in the rules above.

  1. Where was the fabric knitted? In the worked example the cloth was the biggest single cost, and that one answer decided the claim.
  2. Where was it cut and sewn? That's the step most likely to be the last substantial transformation, and it can happen in a different country from the knitting.
  3. Does the Canadian share of direct costs clear 51%, or 98%? The first supports a qualified "Made in Canada". The second supports "Product of Canada".
  4. Whose CA number is on the label? It may belong to the brand, an importer or a contractor. The Bureau's search will tell you.

A straight brand can answer all four. Origin also says nothing about build quality, which is its own check, set out in how to tell if a hoodie is well made. Our own thinking on how pieces get made is on the story page.

Sources

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