# Product of Canada vs Made in Canada: Cost Content Calculator

> Source: https://netray.co/tools/product-of-canada-vs-made-in-canada-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Enter the Canadian and foreign direct costs of a product to test it against the 51 percent Made in Canada and 98 percent Product of Canada thresholds.

## Category

compliance-legal

## Region

Canada

## Audience

- Compliance manager
- Cost accountant
- Marketing
- Exporter

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Direct materials bought or made in Canada

**Key:** mat_ca

**Type:** number

**Default:** 42000

**Min:** 0

**Step:** 500

**Unit:** per batch

**Help:** Raw materials and components with Canadian cost content.

#### Direct materials imported

**Key:** mat_fx

**Type:** number

**Default:** 31000

**Min:** 0

**Step:** 500

**Unit:** per batch

**Help:** Imported materials and components, including duty if you cost them that way.

#### Direct labor in Canada

**Key:** lab_ca

**Type:** number

**Default:** 24000

**Min:** 0

**Step:** 500

**Unit:** per batch

#### Direct labor outside Canada

**Key:** lab_fx

**Type:** number

**Default:** 3000

**Min:** 0

**Step:** 500

**Unit:** per batch

**Help:** Any outsourced operations performed abroad.

#### Other direct costs in Canada

**Key:** oth_ca

**Type:** number

**Default:** 6000

**Min:** 0

**Step:** 500

**Unit:** per batch

**Help:** For example tooling consumed, direct energy, subcontract work done in Canada.

#### Other direct costs outside Canada

**Key:** oth_fx

**Type:** number

**Default:** 1500

**Min:** 0

**Step:** 500

**Unit:** per batch

#### Last substantial transformation in Canada?

**Key:** lst

**Type:** select

**Default:** 1

**Options:**

##### Yes

**Value:** 1

##### No

**Value:** 0

**Outputs:**

#### Total direct cost

**Key:** total

**Expr:** mat_ca + mat_fx + lab_ca + lab_fx + oth_ca + oth_fx

**Format:** currency

#### Direct cost incurred in Canada

**Key:** ca_cost

**Expr:** mat_ca + lab_ca + oth_ca

**Format:** currency

#### Canadian content of direct cost

**Key:** ca_pct

**Expr:** ca_cost / total * 100

**Format:** percent

**Primary:** true

**Description:** Share of total direct costs of producing the product that were incurred in Canada.

#### Made in Canada test (1 = meets, 0 = does not)

**Key:** made_in

**Expr:** if(and(gte(ca_pct, 51), eq(lst, 1)), 1, 0)

**Format:** integer

**Primary:** true

**Description:** Needs at least 51 percent Canadian direct cost and last substantial transformation in Canada, plus a qualifying statement.

#### Product of Canada test (1 = meets, 0 = does not)

**Key:** product_of

**Expr:** if(and(gte(ca_pct, 98), eq(lst, 1)), 1, 0)

**Format:** integer

**Description:** Needs at least 98 percent Canadian direct cost and last substantial transformation in Canada.

#### Canadian cost still needed for 98 percent

**Key:** gap_98

**Expr:** max(0, 0.98 * total - ca_cost)

**Format:** currency

**Description:** Imported cost that would have to move to Canadian suppliers or work, holding total constant.

**Chart:**

#### Canadian content as imported materials change

**Type:** line

**X:** mat_fx

**From:** 0

**To:** 120000

**Steps:** 25

**Series:**

- ca_pct

**Disclaimer:** General guidance based on the Competition Bureau's published approach to Made in Canada and Product of Canada claims for non-food goods. Food claims follow separate CFIA rules. This is not legal advice: confirm your cost definitions and claim wording with counsel before labeling.

## Content

**Intro:** For most non-food goods, Product of Canada needs at least 98 percent of total direct costs incurred in Canada, while Made in Canada needs at least 51 percent plus a qualifying statement such as 'Made in Canada with imported parts'. Both also require the last substantial transformation of the product to happen in Canada. This calculator tests your cost split against both.

**Sections:**

#### How to use the calculator

**Body:** Take the bill of materials and routing for one batch or one unit, and split every direct cost into Canadian and foreign. Direct materials, direct labor and other costs directly tied to production count. Enter each pair of values, say whether the last substantial transformation happens in Canada, and read the two pass/fail outputs and the Canadian content percentage. The chart shows how quickly Canadian content falls as imported materials rise.

#### The rules behind each claim

**Body:** The Competition Bureau treats these as representations about origin that must not be false or misleading. The thresholds below are the Bureau's published guidance for non-food products.

**Bullets:**

Product of Canada: at least 98 percent of total direct costs of producing or manufacturing the good incurred in Canada, and the last substantial transformation in Canada.

Made in Canada: at least 51 percent of total direct costs incurred in Canada, last substantial transformation in Canada, and a qualifying statement such as 'Made in Canada with imported parts' or 'with domestic and imported parts'.

Made in Canada without a qualifier is only appropriate where the content is virtually all Canadian, which the Bureau treats as the Product of Canada standard.

Verbs such as produced in or prepared in Canada are origin claims too, and are judged against the same expectations.

#### Worked example

**Body:** With the default values, Canadian direct cost is 42,000 plus 24,000 plus 6,000, which is 72,000 out of 107,500, or about 67 percent. The product clears the 51 percent test and the last transformation is in Canada, so a qualified Made in Canada claim is supportable. It is far from 98 percent: Product of Canada would need roughly 33,000 more cost moved into Canada, shown in the last output. Overhead, marketing, profit and freight are not direct costs, so they do not move the percentage.

#### Common mistakes and food products

**Body:** The usual errors are using total selling price instead of direct cost, counting overhead as Canadian content, forgetting that an imported subassembly carries foreign labor, and omitting the qualifying statement. Keep the costing file that supports the claim, since you may need to show it. Food products follow Canadian Food Inspection Agency rules, where Product of Canada generally means all or virtually all the food, ingredients, processing and labor are Canadian, so do not use this calculator for food.

**Cta:** If your BOM and routing costs sit in an ERP, we can build a private tool that pulls Canadian and foreign content per item straight from it and flags products whose claim is at risk.

**Faq:**

#### What is the difference between Product of Canada and Made in Canada?

**Answer:** Product of Canada is the stricter claim: at least 98 percent of direct production costs must be Canadian. Made in Canada needs at least 51 percent plus a qualifying statement about imported content. Both need the last substantial transformation to occur in Canada.

#### Can I say Made in Canada if my product has imported parts?

**Answer:** Yes, if at least 51 percent of total direct costs are Canadian, the last substantial transformation is in Canada, and the label carries a qualifier such as 'Made in Canada with imported parts'. Below 51 percent, the claim is generally not supportable.

#### Are overhead and profit included in the percentage?

**Answer:** No. The test looks at direct costs of producing or manufacturing the good, mainly materials and direct labor. Marketing, administration, profit and similar indirect amounts are generally outside it. Check your own definitions with counsel for borderline items.

#### Do the same rules apply to food?

**Answer:** No. Food is covered by Canadian Food Inspection Agency guidance. Product of Canada for food generally requires that all or virtually all of the food, processing and labor be Canadian, and Made in Canada food claims need a statement about domestic and imported ingredients.

## Search terms

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