Last September, when we first looked at Ottawa’s anti-greenwashing law, we noted:
“It’s clear the law (Bill C-59, amendments to the Competition Act) would apply to companies claiming, for example, that their production processes or new technologies will reduce greenhouse gas emissions.
“However, the Competition Bureau conveniently will not have to prove that the claims are false or misleading. The new law instead requires the accused company or agency to prove their innocence.
“The penalties can be severe, with fines of up to $10 million ($15 million for repeat offenders) or as much as three times the benefit derived from the misrepresentation. If that benefit cannot be reasonably determined, the penalty could be up to three percent of the company’s annual worldwide gross revenues.”
And we concluded: “Under this new law, you’re guilty unless you prove your innocence to some back-room bureaucratic body. That’s simply not a Canadian concept, nor a Liberal one. This new law needs to be changed or repealed.”
The feds now have issued some final (their word) new “guidelines”— but to us the law remains a confusing mess.
For one thing, the original bill said the “truth” of a green claim must be proven to the satisfaction of a federal bureaucracy — by way of “an adequate and proper test” or “adequate and proper substantiation in accordance with internationally recognized methodology.”
But those tests and methodologies were not defined or announced, meaning a federal bureaucrat was empowered to review such climate statements and claims, and to compel court proceedings if they deemed them not to meet the ambiguous criteria.
Now, as national law firm MacMillan LLP says: “The final guidelines . . . clarify that a ‘recognition’ can come from a variety of sources, including but not limited to standards-setting bodies, regulatory authorities, or even industries or other entities using methodologies that are commonly accepted internationally.”
But what does ”commonly accepted” mean?
MacMillan LLP notes: “The final Guidelines also confirm that the Bureau will assume that methodologies required or recommended by federal, provincial or territorial government programs in Canada are consistent with internationally recognized methodologies.”
But the lawyers add: “The wording of the statute does not give great comfort to businesses who rely on Canadian-only methodologies, even if endorsed by government officials.
“The final guidelines also remind businesses that having a green claim properly substantiated is not the entirety of compliance: the general impression must not be false or misleading in a material respect.”
And among other things, there now is a new right of “private enforcement,” which would seem to mean that any old green group, private party, or a business competitor or enemy, can use the law to challenge the veracity of a company’s claim to reduce greenhouse-gas emissions.
In the first such case, eight residents of northeast BC have filed a formal application for inquiry with Canada’s Competition Bureau, calling for an investigation into the David Suzuki Foundation’s (the Foundation) use of “false and misleading imagery in its anti-energy campaigns.”
In a nutshell, the new guidelines say environmental claims should be truthful, and not false or misleading. Environmental benefits of a product and performance claims should be adequately and properly tested. Comparative environmental claims should be specific about what is being compared. Environmental claims should avoid exaggeration. Environmental claims should be clear and specific – not vague. And environment claims about the future should be supported by substantiation and a clear plan.
But the government’s uncertain wording tends to remind us of Humpty Dumpty: “When I use a word, ‘it means just what I choose it to mean — neither more nor less.”
Also noted by MacMillan LLP:
- “The breadth and uncertainty of the language included in the greenwashing provisions, including using terminology that does not have a defined meaning and that has not been considered by the courts, with the result that businesses arguably do not have the tools to comply with the new greenwashing provisions.
- “The absence of any transition period to allow businesses to develop policies and practices to comply prior, meaning that the public disclosure of businesses as at June 20, 2025 was subject to the new substantiation provisions, which provisions are broader than simply making truthful claims and require a business to conduct substantiation prior to making the disclosure.
- “The new right of private enforcement, effective June 20, 2025 (for disclosure made as early as June 20, 2024), meaning that the Bureau will no longer be the gatekeeper of challenges alleging greenwashing.
- “Strictly, the Guidelines will not be binding on the Bureau, the Competition Tribunal or the courts, and cannot restrict private parties seeking to take action against businesses. . . . Accordingly, an element of uncertainty will remain until case law has been developed.
- Notwithstanding the Bureau’s approach to limit its role policing environmental communications, the Guidelines now caution that if the “business reuses any of the environmental claims for the purposes of promoting a product or business interest outside of the sale of securities, the Bureau will apply the Act as appropriate.”
And the law firm concludes: “The Competition Act greenwashing provisions are complex and uncertain, and failure to comply with these provisions may have a significant impact on businesses. Accordingly, to identify potential concerns and mitigate liability under these new provisions, businesses should assess and potentially modify their existing environmental statements and establish processes to be followed when making new environmental statements.”
The law firm of Denton’s (the world’s largest law firm) also weighed in: “The industry is left in a wait-and-see period of uncertainty, where only time (and case law) will tell what types of environmental claims will be the focus of enforcement and what manner of evidence will or will not be considered adequate and proper to support these claims.”
In our first look at the law, back in September 2024, we asked if Justin Trudeau, then prime minister, could be nailed under the anti-greenwashing law:
“Prime Minister Justin Trudeau hailed the go-ahead decision by the Cedar LNG project, majority-owned by the Haisla First Nation in B.C. He said it will be ‘the world’s lowest carbon footprint LNG facility.’ So does the prime minister now have to ‘prove’ that Cedar LNG is the world’s lowest carbon footprint LNG facility?”
We never got an answer.
And now we have Tim Hodgson, federal energy and resources minister, saying Canada’s $60-billion LNG industry produces the cleanest LNG. Is he going to have to prove that to some backroom bureaucrat in Ottawa?
Now we have a new Liberal government, and it needs to take another shot at making this red-tape law understandable and usable — or simply to scrap it.
• Meanwhile the European Commission intends to withdraw a proposal aimed at combating “greenwashing”: https://ow.ly/bnWc50WeICi
• Europe backs off anti-greenwashing rules — Canada should take note. From Resource Works: https://ow.ly/ELea50WiAeg
The Centennial Flame at the Parliament Buildings in Ottawa
