Let’s delve into amendments made to the Competition Act and brought into force via Bill C-59 (which received royal assent last June). Many amendments targeted ‘greenwashing,’ or misleading environmental claims about products and business practices. The changes were more targeted, broadened the means of enforcement, and as outlined by Gowlings, covered the following:
- Deceptive environmental claims – these types of claims must be based on “adequate and proper tests” or “internationally recognized methodologies.” While there is some ambiguity about these standards, the Competition Bureau is monitoring the situations in the US and the EU, and will develop its own guidance in the near future.
- Expanded rights for private legal action, which includes a “public interest” criteria that will likely see more greenwashing claims brought by competitors, consumers, and environmental groups, potentially in class action form.
- A certification regime to “protect environmental collaboration from legal challenges” as long as they don’t prevent competition.
The changes were made due to an increase in greenwashing claims. However, the law’s ambiguity has concerned some business sectors in Canada. As per Gowlings:
In the absence of clear guidelines on what qualifies as an “internationally recognized methodology,” and with expanded private access to the Competition Tribunal, green marketing in Canada may carry heightened risks, potentially leading to a chilling effect known as “greenhushing.” Businesses are encouraged to conduct internal audits of their claims, including those on product packaging, advertisements and statements about their environmental practices, to ensure they are substantiated and aligned with international standards. Businesses may also wish to provide submissions to the Competition Bureau as it conducts public consultation in respect of potential revised environmental guidance on the new provisions aimed at greenwashing.
Foreign businesses who offer environmental products or services in Canada will want to familiarize themselves with these laws. We recommend consulting legal professionals well versed in this matter – and follow this blog for additional updates.
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