Canada's New Anti-Greenwashing Provisions: What Does This Mean for Companies and Consumers?
Danielle Girard
Canada's 2024 anti-greenwashing provisions require businesses to substantiate environmental claims with proper testing and recognized methodologies. While the Competition Bureau has adopted a flexible approach, questions remain whether these rules will clean up green marketing tactics or inadvertently lead companies to be more hesitant about making environmental claims due to regulatory concerns.
Image: United Soybean Board
Making environmentally friendly choices as a consumer is hard enough given financial and ethical considerations, and the sheer number of options available. Add to this the abundance of competing and often contradictory environmental claims made to grab our attention, and it can be nearly impossible to distinguish genuine sustainability efforts from marketing tactics, unless we're prepared to make it our full-time job. Companies frequently employ phrases that, upon examination, ring hollow or are meaningless. "This product is eco-friendly." "Our packaging is 100% natural." "Carbon neutral delivery."
First coined by environmentalist Jay Westerveld in 1986, the term "greenwashing" was used to describe the hotel industry's campaigns to promote towel reuse as an environmental strategy when, in reality, these programmes primarily generated cost savings.[1] More broadly, "greenwashing" refers to the practice of misleading consumers into believing that a company, product, or service is more environmentally friendly than it actually is.
In June 2024, the House of Commons passed Bill C-59, an omnibus bill containing many reforms to implement the 2023 Fall Economic Statement. A key area of the bill that all political parties could comfortably stand behind focused on amendments to competition regulations. These amendments aimed at reducing "corporate concentration in Canada, rising prices and the disproportionate powers of corporate giants," and specifically to curb greenwashing practices.[2] Liberal, NDP and Bloc Quebecois parties joined forces in what NDP MP Don Davies described as "violent agreement."[3] Conservative MPs also voted in favour, despite concerns about some of the other provisions in the bill.[4]
Bill C-59: A New Framework
Prior to Bill C-59, environmental claims could be investigated by the Competition Bureau if they were false or misleading, but such investigations were few and far between. Only three cases appear on the Competition Bureau’s website, the earliest of which dates to 2016.[5] Despite these enforcement capabilities, this framework lacked clear guidance on how the Bureau would evaluate environmental claims and what methodologies companies could use to justify them.
The Competition Act now includes two new provisions to fill this gap:
74.01(1)(b.1) prohibits making representations about a product's benefits for protecting or restoring the environment or mitigating climate change effects that are not based on adequate and proper testing.
74.01(1)(b.2) prohibits making representations about the environmental benefits of a business or business activity that are not based on adequate and proper substantiation in accordance with internationally recognised methodology.[6]
The Competition Bureau also drafted Guidelines in clear language – oriented not only to large businesses with legal teams but also to small-and-medium enterprises (SMEs) with less capacity – detailing how the law would be interpreted and the requirements expected of companies making environmental claims.
General Impressions Test
The Guidelines clarify that the Bureau’s assessment continues to rely on the general impressions test from the existing Competition Act framework. This standard looks at the "general impression that is conveyed to consumers by the claim",[7] ensuring the focus is on how a consumer would interpret the claim in context, not just the literal meaning of the text.
Stakeholders seeking detailed instructions on permissible and impermissible environmental claims may be disappointed that the Competition Bureau seems to purposely avoid prescriptive rules. Instead, the approach taken by the Bureau makes it harder for companies to circumvent the essence of the obligations, as "the Act sets out a general framework that does not prevent businesses from making whatever environmental claims they wish, as long as those claims are not false or misleading."[8]
Substantiating Environmental Claims
Recognizing the challenge of substantiating environmental claims, for example for new technologies for which there are no established evaluation methodologies or for SMEs without the resources to conduct large-scale studies, the Guidelines support a generally flexible approach. For example, they allow companies to combine methodologies without needing to follow specific standards.[9] Further, the Guidelines distinguish between product-specific claims requiring “adequate and proper testing” and corporate environmental claims that must follow “internationally recognized methodology”. For the latter, the Bureau defines this standard as approaches accepted in two or more countries – though not necessarily by governments.[10]
Crucially, all substantiation must be completed before claims are made, and must be "adequate and proper" for the context of the claim. What is essential throughout is that companies do not make claims they cannot substantiate.[11]
Public Consultation and Responses
Not Restrictive Enough?
During consultations, some environmental and public interest groups advocated for stricter requirements for companies, including positive duties to report or warn consumers. Such requirements more closely align with the EU Corporate Sustainability Reporting Directive's mandatory detailed reporting framework.[12]
The Centre for Health Science and Law advocated for the Competition Act to be interpreted in line with the Common Law duty to warn. Citing Supreme Court precedents like Hollis v. Dow Corning Corp, they argued that manufacturers have “a duty in tort to warn consumers of dangers it knows or ought to know are inherent in the product's use.”[13] They proposed extending this principle to environmental harms, which would require disclosure of significant environmental impacts even in the absence of specific green claims.
While these proposals called for stricter requirements, concerns were also raised about the undue administrative burden on SMEs, as described in the Hansard debates.[14] The eventual compromise requires companies to produce testing documentation “only if challenged by the Bureau, rather than making them available at the time of the claim.”[15]
Overly Restrictive?
As described above, there was broad political consensus on the issue, however, industry representatives raised multiple concerns during the consultation period. These included the high expectations created by the provisions, and the lack of clarity on how they would be implemented.
The Canadian Chamber of Commerce, for example, raised the possibility of “greenhushing” – i.e. companies foregoing environmental claims altogether for fear of regulatory scrutiny.[16] While initially less concerning than false or misleading claims, the impact of greenhushing would be very real, resulting in the loss of valuable environmental information for consumers, undermining their ability to make truly informed choices and potentially slowing environmental innovation across industries.
The submission of these concerns through the public consultation helped to inform the greenwashing Guidelines published in December 2024. At least some of the concerns appear to have been addressed, particularly as the Bureau considered the implications for SMEs and new technologies. Following the publication of the Guidelines, the Competition Bureau again sought input through a consultation period ending in February 2025, the results of which, when published, may help to reshape the approach.[17]
Conclusion
As companies begin to implement the Guidelines, and as the Competition Bureau reviews cases of potentially false or misleading claims, we will be able to get a fuller picture of the impact of the greenwashing provisions and whether they are having the effects intended by the legislators.
Will they help consumers navigate the overwhelming sea of environmental claims and make more informed choices? Could the Canadian approach eventually evolve toward more standardised disclosure as practices mature and companies see the benefits of transparency?
The early political consensus suggests cause for optimism, but the real test will be in implementation, and whether consumers are better equipped in their decision making.
Danielle Girard is a 1L student at McGill University Faculty of Law. She holds an undergraduate degree in Environmental Studies and a Master's in Urban Planning. Before law school, she worked in policy in federal government and international agencies, and her interests centre on the role of law in addressing global food and environmental challenges. Special thanks to Harriet Crossfield for her support with this article!
[1] Karen Becker-Olsen & Sean Potucek, "Greenwashing" in Samuel O Idowu et al, eds, Encyclopedia of Corporate Social Responsibility (Berlin: Springer, 2013) 1318.
[2] Canada, Senate, Debates of the Senate, 44th Parl, 1st Sess, Vol 153, No 214 (18 June 2024), online: <sencanada.ca/en/content/sen/chamber/441/debates/214db_2024-06-18-e> [Senate Debates].
[3] Carl Meyer, "Three MPs set politics aside for a cross-party effort against corporate greenwashing", The Narwhal (26 November 2024), online: <thenarwhal.ca/mps-greenwashing-competition/>.
[4] Ibid.
[5] Competition Bureau Canada. "Keurig Canada to Pay $3 Million Penalty to Settle Competition Bureau's Concerns over Coffee Pod Recycling Claims." Government of Canada, 6 Jan. 2022, www.canada.ca/en/competition-bureau/news/2022/01/keurig-canada-to-pay-3-million-penalty-to-settle-competition-bureaus-concerns-over-coffee-pod-recycling-claims.html.; Competition Bureau Canada. "Up to $290.5 Million in Compensation for Canadians in Volkswagen, Audi and Porsche Emissions Case." Government of Canada, 12 Jan. 2018, www.canada.ca/en/competition-bureau/news/2018/01/up_to_290_5_millionincompensationforcanadiansinvolkswagenaudiand.html;
Competition Bureau Canada. "Volkswagen and Audi to Pay up to $2.1 Billion to Consumers and $15 Million Penalty for Environmental Marketing Claims." Government of Canada, 19 Dec. 2016, www.canada.ca/en/competition-bureau/news/2016/12/volkswagen-audi-pay-up-2-1-billion-consumers-15-million-penalty-environmental-marketing-claims.html.
[6] Competition Act, RSC 1985, c C-34, ss 74.01(1)(b.1)-(b.2).
[7] Competition Bureau Canada. "Environmental Claims and the Competition Act." Government of Canada, 23 Dec. 2024, online: <https://competition-bureau.canada.ca/en/how-we-foster-competition/consultations/environmental-claims-and-competition-act>.
[8] Ibid.
[9] Ibid.
[10] Ibid.
[11] Ibid.
[12] European Commission. "Corporate sustainability reporting" (last modified 26 February 2025), online: European Commission <finance.ec.europa.eu/capital-markets-union-and-financial-markets/company-reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en>.
[13] Centre for Health Science and Law. "Comments of the Centre for Health Science and Law on the New Greenwashing Provisions of the Competition Act: Regulating the Labelling Food from Ruminant Animals as a Litmus Test for the Implementation of New Restrictions on Greenwashing" (27 September 2024), online: Competition Bureau Canada <competition-bureau.canada.ca/sites/default/files/documents/GW-Centre-Health-Science-Law.pdf>.
[14] Senate Debates, supra note 2.
[15] Senate Debates, supra note 2.
[16] Canadian Chamber of Commerce. "Written Submission for the Consultation on Competition Acts' New Greenwashing Provisions." Competition Bureau Canada, 27 Sept. 2024, online: < https://competition-bureau.canada.ca/sites/default/files/documents/GW-Canadian-Chamber-of-Commerce.pdf>.
[17] Competition Bureau Canada. "Competition Bureau seeks feedback on its new guidelines regarding environmental claims" (23 December 2024), online: Government of Canada <www.canada.ca/en/competition-bureau/news/2024/12/competition-bureau-seeks-feedback-on-its-new-guidelines-regarding-environmental-claims.html>.