Pie-Crust Promises: Competition Bureau’s Anti-Greenwashing Guidance Combats Empty Environmental Claims

The Competition Bureau (the “Bureau”) began its greenwashing update to the Competition Act (the “Act”) starting June 2024 and the second phase of amendments to the Competition Act will come into force on June 20, 2025. The changes seek to address business claims related to environmental protection or being eco-conscious that are false or unfounded, commonly referred to as “greenwashing”.

Provisions to Address Greenwashing

The Act previously had provisions that addressed false or misleading representations and product performance claims. The Bureau updated its guidance on these provisions in relation to greenwashing.

With the June 2024 amendments, the additional provisions address greenwashing where businesses make environmental claims regarding their product or the products performance. With the June 2024 amendments, the Competition Bureau added two new provisions regarding claims about the environmental benefits of a product and claims about the environmental benefits of a business or business activity.

Environmental Benefits of a Product

Set out in paragraph 74.01(1)(b.1) of the Act, this provision requires that any claims about the environmental benefits of a product be evidence-based. These are claims where the product has a benefit to protecting or restoring the environment or mitigating environmental, social and ecological causes. The claim must be properly tested and supported by evidence.

Environmental Benefits of a Business

Set out in paragraph 74.01(1)(b.2) of the Act, this provision concerns representations to the public regarding the business or business activities for environmental benefits. If such representations are made, they must be substantiated with internationally recognized methodology, and the business would need to have proof for their statements.

Amendments to Private Access Rights

The right to private access means that a private party may apply for leave to bring a matter to the Tribunal. With the implementation of amendments in June 2024, businesses were given about a one-year period to address any existing false or misleading statements, warranties, or guarantees regarding their products, product performance, or their business or business activities.

Scope of Private Access

The previous private access right was only available for a refusal to deal with another business, and exclusive dealing, tied dealing and market restrictions. The amended right expands the scope to include cases of deceptive marketing practices and violations of the civil provisions dealing with anti-competitive agreements.

Who Can Apply Directly to the Competition Tribunal

Only a business whose entire operations were directly and significantly impacted by the alleged anti-competitive could previously apply directly for private access. This has now been broadened to allow any private party (individual or entity) to bring an application to the Competition Tribunal, provided they meet the leave to apply test below.

Leave to Apply Test

Prior to the amendments, the Commissioner would only intervene and hear applications in exceptional circumstances, considering whether there are significant competition issues raised and whether it is in the public interest for the Commissioner to intervene.

With the amendments, the test has been eased to be if the Commissioner has reason to believe that the applicant’s business is directly and substantially affected by conduct (refusal to deal with a business; exclusive dealing, tied selling and market restriction; a monopoly; or an anti-competitive agreement). The Commissioner may also hear an application if it is satisfied that it is in the public interest to do so.

Direct Award

This is a new provision that allows the Tribunal to order those who contravene to make monetary payments to persons affected by anti-competitive conduct.

Conclusion

The amendments to the Act may open up more applications to the Tribunal as the criteria has opened to allow more parties to bring applications. However, businesses have been given a year of time to ensure that they are compliant with the amendments from June 2024 and following the Bureau’s guidelines.

The amendments should not deter business from continuing to commit to environmental protection with their products and business activities, but should reinforce the importance of making representations that truthful, factual, and substantiated. Failure to comply with such requirements, can result in both civil and criminal consequences for businesses.

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This blog post is for information purposes only and is not a substitute for legal advice. Readers are cautioned to not rely on or take any action based on the information provided. If you have any questions regarding the above amendments or business marketing, please reach out to James Struthers or Desmond Wang for a complimentary consultation. You can book a consult on www.macushlaw.ca through our booking system or call 604-900-7611.