Updating our January 31, 2025, blog regarding Environmental Claims and the Competition Act, the Competition Bureau Canada (the Bureau) has released the final version (June 5, 2025) of its guidelines on “Environmental Claims and the Competition Act” (The Act).
In general, these “anti-greenwashing” provisions prohibit businesses from making representations about the environmental benefit of a product, business, or business activity that are not based on “adequate testing.” Importantly, business activity includes charitable or non-profit activities.
From the Bureau, “The Act was amended to include two new provisions that explicitly address environmental claims. These new provisions build on the provision of the Act that requires that certain claims be evidence-based. The Bureau is therefore taking this opportunity to describe our approach to environmental claims specifically as they relate to the deceptive marketing provisions of the Act. However, readers are reminded that other laws enforced by the Bureau, including the Consumer Packaging and Labelling Act and the Textile Labelling Act, also prohibit certain types of deceptive representations, and may be relevant to environmental claims.”
The Competition Act: Two New Provisions
From a blog by Davies Ward Phillips & Vineberg (Davies)
The first provision applies to product-specific claims (which include claims about services). It prohibits representations to the public in the form of statements, warranties, or guarantees of a product’s or service’s “benefits for protecting or restoring the environment or mitigating the environmental, social and ecological causes or effects of climate change” that are not based on an “adequate and proper test” (the “Product Claim” provision).
The second provision applies to claims about businesses and their business activities more broadly, prohibiting representations to the public relating to the “benefits of a business or business activity for protecting or restoring the environment or mitigating the environmental and ecological causes or effects of climate change” unless such representations are based on “adequate and proper substantiation in accordance with internationally recognized methodology” (the “Business Claim” provision).
Consumers often appreciate when companies practice environmental stewardship. However, with the amendments to the Competition Act, companies should be cautious about their “green claims” (Photo by Henri Buenen on Unsplash).
Qualitative Guidelines
If you are looking for hard and fast quantitative guidelines for greenwashing, you will likely be disappointed. The guidelines are, by and large, qualitative and subjective.
In their Backgrounder, the Bureau addressed this desire for more certainty. “We heard that the guidelines should tell businesses exactly what environmental claims they can make in their marketing material, and when they can make them. However, the Act does not create rules about when a particular environmental claim can be made to the public. Instead, the Act allows businesses to make whatever environmental claims they wish, as long as those claims are not false or misleading, and as long as those claims are adequately and properly tested or substantiated where required.”
In discussing the guidelines, the Davies blog includes, “This approach is disappointing, particularly when contrasted with the far more detailed U.S. ‘Green Guides’ and the Bureau’s prior, now archived environmental guidance.”
As stated in the Introduction, “The Bureau is concerned with representations made to the public for the purposes of marketing and promotion, rather than representations made solely for other purposes or that are regulated by other government agencies” (e.g., security filings)
According to the June 5, 2025, posting, the following four provisions of the Act are most relevant to environmental claims.
- False or misleading representations
- Product performance claims
- Claims about the environmental benefits of a product
- Claims about the environmental benefits of a business or business activity
“Substantial Compliance Risk”
From Norton Rose Fulbright, “The greenwashing provisions create substantial compliance risk for businesses operating in Canada that make environmental claims about their products, services, or business activities. While the Bureau’s guideline sheds some light on the Bureau’s enforcement approach, it does not change the broad language of the law.”
From a recent blog by the law firm McMillan, “While some argue that compliance with the greenwashing provisions is relatively straightforward, this position ignores the issues and risks facing businesses seeking to be transparent about their environmental actions and goals arising from the greenwashing provisions enacted under the June 20, 2024, amendments.”
Private Litigants
As we discussed in our July 15, 2024, blog, private litigants can bring applications before the tribunal regarding deceptive marketing practices.
From the Justice Laws Website, “Any six persons resident in Canada who are not less than eighteen years of age and who are of the opinion that
(a) a person has contravened an order made pursuant to section 32, 33 or 34, or Part VII.1 or VIII,
(b) grounds exist for the making of an order under Part VII.1 or VIII, or
(c) an offence under Part VI or VII has been or is about to be committed.”
Substantial Penalties
While we did cover the penalties in our previous blog, it’s worth a reminder. The penalties for making statements ruled to be “greenwashing” are severe. This includes an administrative monetary penalty that is the greater of:
- $10 million ($15 million for repeat conduct), or
- Three times the value of the benefit derived from the deceptive conduct, or, if that amount cannot be reasonably determined, 3% of worldwide gross revenues.
If you have not already done so, you might want to review all your consumer-facing material, including websites, social media posts, and printed promotional material. You might also want to engage your legal counsel to provide a review.
Environmental Assistance
If you need assistance with an environmental matter, including environmental assessments, remediation, permitting, management, etc., we can help. Contact Christopher Paré, P.Geo, at 519-948-7300, Ext. 114 for more information.
Alan Hahn drafted this blog. Alan has an undergraduate degree in Environmental Studies and completed a graduate program in Environmental Management. He has worked in environmental management for more than 45 years. He has written hundreds of blogs and articles. His published work includes HazMat Magazine, BizX Magazine, Michigan Lawyers Weekly, GreenStone Partners, Manure Manager Magazine, and Progressive Dairy.
Christopher Paré, P.Geo, reviewed this blog. Chris is a senior geoscientist and manager of Dragun’s Windsor, Ontario, office. Chris has more than 30 years of experience on projects ranging from environmental site assessments (Phase One/Two ESA), excess soils, remedial investigations, soil and groundwater remediation, Permits to Take Water, Records of Site Conditions, vapour intrusion, and site decommissioning. Chris is a frequent speaker, author, and expert witness. See Chris’ bio. Follow Dragun Corporation on LinkedIn, X, or Facebook.
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