In April 2024, the Canadian Association of Physicians for the Environment (CAPE), Ecojustice, Équiterre, and the Quebec Environmental Law Centre (CQDE) requested that the Standing Senate Committee on National Finance amend Bill C-59 to enhance the Competition Act’s effectiveness against greenwashing.
On June 20th, the bill received royal assent to move forward with the amendments, but what does this mean for Canadian companies currently making sustainability claims or planning on doing so in the future?
Let’s start with the basics: what is “greenwashing”?
Greenwashing is the act of making misleading sustainability claims and misguiding consumers into believing and trusting companies that say their product or business operations are restoring the environment or mitigating negative environmental impacts. Companies have used greenwashing as a tactic to stay competitive within their respective industry and leverage sustainability to promote or attract more business.
What were the proposed amendments to the Bill C-59?
Bill C-59’s proposed s.236 amendments sought to tackle greenwashing by requiring “adequate and proper tests” for environmental claims about products. However, this amendment was deemed insufficient and four key improvements were suggested:
Expand Scope: Amend s.236 to encompass all environmental claims, not just those related to products but also activities, brands, and entities. This broadens the scope to cover most greenwashing practices.
Public Access to Proof: Require companies to publicly disclose the evidence supporting their environmental claims to allow for easy verification by consumers, competitors, and regulators.
Broaden Claim Types: Ensure s.236 covers a wide range of environmental claims, including those about causes of climate change and overall environmental impacts, not just the effects or protection measures. This prevents narrow interpretations that could exclude significant greenwashing practices.
Disclose Negative Impacts: Mandate the disclosure of all material negative environmental impacts associated with the advertised product, activity, brand, or entity. This prevents companies from highlighting minor positive attributes while concealing major negative ones.
What are the results of the proposed amendments to Bill C-59?
Canada’s Bill C-59 received royal assent on June 20, 2024 and officially became a law. Below, we outline the significant amendments to the Competition Act, focusing on environmental claims and greenwashing. The provisions include:
Requirements of Evidence: Businesses must substantiate any environmental claims about products, practices, or overall business activities with adequate and proper tests or internationally recognized methodologies. This places the burden of proof on businesses, not the enforcement agency.
Private Enforcement: Effective June 20, 2025, private parties can seek leave from the Competition Tribunal to enforce the Act’s provisions, including new greenwashing rules, without needing to prove personal loss or damage.
Penalties Against New Greenwashing Provisions: Failure to comply with the new requirements related to sustainability and environmental claims can result in significant monetary penalties.
These amendments aim to curb misleading environmental marketing practices, ensuring transparency and accountability. However, they present challenges, such as determining the adequacy of tests and navigating evolving environmental standards. There is concern that these stricter requirements may discourage businesses from making environmental claims or innovations, but we argue that with support from reputable and reliable third-party services that are staying up to date with the evolving standards and expectations, businesses have the opportunity to stand out against their peers and properly display their commitments to sustainability to consumers if they’re willing to do so.
What should Canadian companies be doing?
Whether you’re a Canadian company that has made sustainability claims or are planning to do so, Carbonhound has created a checklist to prepare for the implementation of the newly amended Bill C-59.
Download the checklist by filling out the form below!
