Last year, we discussed the ever-increasing interest in green branding and how marketing claims related to the environment are receiving increased scrutiny by Canadian regulatory authorities.
It should therefore come as no surprise that the Government of Canada recently gave the “green light” to new amendments to the federal Competition Act explicitly targeting greenwashing.
Key amendments to the Competition Act
On June 20, 2024, certain amendments to Canada’s Competition Act came into force specifically addressing greenwashing, a term often used to describe a deceptive marketing practice where a business or a product is claimed to be “greener” than it actually is.
These amendments reinforce the importance of providing truthful information regarding the environmental benefits of a product, service or business as part of a green branding strategy. The following is a summary of the key amendments to the Competition Act:
1. New provisions targeting deceptive environmental claims: Under the new provisions, it is now a “reviewable conduct” to make a representation to the public:
a. in the form of a statement, warranty or guarantee of a product’s benefits for protecting or restoring the environment or mitigating the environmental, social and ecological causes or effects of climate change that is not based on an adequate and proper test, the proof of which lies on the person making the representation; and
b. regarding 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 that are not based on adequate and proper substantiation in accordance with internationally recognized methodology, the proof of which lies on the person making the representation.
2. Expanded private rights of action: The amendments allow for a new “public interest” criterion, effective June 20, 2025, which will allow for private access to the civil deceptive marketing provisions if the Competition Tribunal rules that it is in the public interest to grant such access. Prior to these amendments, the Competition Act afforded only restricted private rights of action regarding criminal conduct. These new amendments may open the door to private enforcement of Canada’s greenwashing laws through private litigants, such as deceived or misled consumers.
3. New provisions creating a certification regime that protects environmental collaborations from certain legal challenges under the Competition Act: The amendments also empower the Commissioner of Competition to certify private agreements that are intended to protect the environment and unlikely to prevent or lessen competition. With some limitations, this certification offers to a party or parties an exemption from the Competition Act's criminal conspiracy or civil competitor collaboration provisions.
Moving forward
The Bureau has received a significant number of requests for guidance on the interpretation of these new provisions.
As a result, the Bureau has released a new bulletin from the Commissioner of Competition on environmental claims and has launched a public consultation to develop further guidance.
The new bulletin includes the Bureau’s recommendations for making accurate environmental claims:
a. be truthful, and not false or misleading
b. ensure claims are properly and adequately tested
c. when making comparisons, be specific about what is being compared
d. avoid exaggeration
e. avoid vague environmental claims in favour of clear and specific ones
f. avoid aspirational claims about the future.
These recommendations highlight the care that must be taken to avoid deceptive marketing practices related to environmental claims.
Still, there are lingering concerns regarding how and when the Bureau may take action against claims deemed to be greenwashing. The Bureau’s public consultation seeks input from Canadian stakeholders to better understand and address these concerns. The Bureau’s recent news release invites interested parties to submit their views on the new provisions before September 27, 2024.
When deploying green branding strategies, companies should undertake a thorough review of their environmental claims to ensure their strict compliance with these new provisions of the Competition Act.
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