Canadian consumer groups are urging the government not to alter its new "product of Canada" and "made in Canada" food labelling rules as Ottawa considers exempting some ingredients.

Two years ago, Prime Minister Stephen Harper announced new rules for labelling. Products had to contain 98 per cent Canadian ingredients to be considered a "product of Canada."

But food processors across Canada have complained that it's almost impossible to comply.

For example, Chapman's Ice Cream, located in Markdale, Ont., has Canadian employees, uses packaging made in Canada and milk from Canadian cows.

But company president Penny Chapman still can't put a "product of Canada" label on her wares because she uses some imported ingredients.

"You cannot in Canada buy [domestic] cocoa beans to make chocolate, we got refined sugar, we don't have [Canadian-grown] pineapple," she said. "It's just plain old stupid."

Dave Shambrock of the Canadian Council of Food Processor said Chapman is not alone in her frustrations with the regulations.

"More and more companies have simply taken the "product of Canada" designation off their label," he said.

In response to those concerns, the federal government is reviewing the regulations and floating the idea of exempting sugar, salt and vinegar from the rules.

Bruce Cran is with the Consumers Association of Canada, which originally lobbied for the 98 per cent standard, and said the government is caving in to food processors.

"It was quite obvious that [food processors] had a preference for cane sugar bought from Third World countries over anything that might be produced in Canada. We do produce sweeteners in Canada but they're expensive and that's why we want a made-in-Canada label."

Chapman said using homegrown sugar along with Canadian milk would price her ice cream out of the market.

The government's review should be completed by the end of June.