The phrase comes from the United States, where many states have explicit "cottage food laws". In Canada it is used loosely for the same idea: a narrow allowance to sell certain home-made products without a commercial kitchen. What is allowed is set where you live, so the useful question is never "is cottage food legal in Canada" but "what does my own province permit, and up to what limit".
Four provinces publish something concrete. Quebec permits home production for sale but caps it at 100 kilograms of food handled per month, direct to consumers only, and requires the operator to have completed its food establishment manager training. Nova Scotia exempts some low-risk foods and holds that all other foods offered for sale must be prepared in a permitted food establishment. Newfoundland and Labrador’s Food Premises Regulations carry an exemption for home-based food preparation at section 3(c), subject to conditions on product types and safety standards. Alberta allows low-risk home-prepared foods that do not require refrigeration to be sold from home, at special events and at farmers’ markets.
Anywhere else, check before you plan. Summaries of home-food rules circulate widely online, and some describe proposed legislation that was never passed — a bill that reached first reading is not a law, however confidently it is quoted. Verify against the regulation actually in force with your own regulator, including before you rely on this page.
The limits usually bind in the same places: anything needing refrigeration, anything canned or acidified, meat, wholesale accounts, and sales outside your province. That is where most home businesses move into a licensed commercial kitchen rather than argue the exemption.
