Summary
- Canada’s Competition Act includes anti-greenwashing provisions requiring businesses to substantiate any environmental claims they make about their products or operations.
- Claims must meet a standard of “adequate and proper substantiation,” backed by objective, verifiable evidence before being made public.
- Private parties can bring product-related greenwashing cases directly to the Competition Tribunal. Business-level claims are overseen by the Competition Bureau.
- Non-compliance can result in penalties of up to $10 million for a first offence, $15 million for subsequent offences, or up to 3% of annual worldwide gross revenues — whichever is greater.
- Companies making sustainability claims should ensure their data supports what they are saying publicly.
Overview
Canada’s Competition Act includes dedicated rules around environmental and sustainability claims. The provisions were first introduced under Bill C-59, which received Royal Assent on June 20, 2024, and refined under Bill C-15, which received Royal Assent on March 26, 2026, coming into effect immediately.
Together, they establish the framework Canadian businesses must follow when making environmental claims in order to prevent greenwashing.
What is Greenwashing?
Greenwashing is the act of making misleading sustainability claims, misguiding consumers into believing that a company’s products or operations are more environmentally beneficial than they actually are.
The Competition Act’s anti-greenwashing provisions exist to address this directly, protecting consumers and ensuring businesses that invest in genuine sustainability practices are not disadvantaged by those that do not.
What claims are covered by this legislation?
The Competition Act establishes two categories of environmental claims, each with its own requirements:
- Environmental claims about products. Claims about the environmental performance or benefits of a product must be substantiated with adequate and proper testing before being made public.
- Environmental claims about a business or its activities. Claims about a company’s overall sustainability efforts or operations must meet a standard of “adequate and proper substantiation,” backed by objective, verifiable evidence directly linked to what is being claimed. Note: when Bill C-59 was introduced in 2024, this required substantiation “in accordance with an internationally recognized methodology.” That requirement was removed under Bill C-15 in March 2026.
Note: when Bill C-59 was introduced in 2024, this required substantiation “in accordance with an internationally recognized methodology.” That requirement was removed under Bill C-15 in March 2026.
What are the penalties for non-compliance?
Non-compliance can result in administrative monetary penalties of up to $10 million for a first offence and $15 million for each subsequent offence, or up to 3% of annual worldwide gross revenues — whichever is greater.
Where the benefit derived from the deceptive practice exceeds those amounts, penalties can also be set at up to three times that value. Prohibition orders can additionally be issued, requiring a company to cease making the relevant claims.
Who can enforce these provisions?
Enforcement works through two channels:
- The Commissioner of Competition (Competition Bureau) can investigate environmental claims about both products and business activities.
- Private parties, including competitors, consumers, and environmental groups, can bring cases directly to the Competition Tribunal, but only for environmental product claims and materially false or misleading claims. Prior to Bill C-15, private parties could also bring business and business activity claims to the Tribunal. As of March 26, 2026, that avenue is no longer available.
What should companies be doing?
Whether your company has already made sustainability claims or is planning to, here is what the current framework requires:
- Audit your existing environmental claims. Review everything communicated publicly — websites, social media, investor materials and marketing — and assess whether the data exists to support each claim. The burden of proof sits with the company.
- Substantiate before you publish. Claims must be backed by evidence before they go public, not assembled after the fact in response to a complaint.
- Be careful with forward-looking claims. Net-zero targets and reduction commitments must be supported by a realistic, verifiable plan with interim milestones and demonstrable progress.
- Be specific, not vague. Avoid broad terms like “eco-friendly” or “sustainable” unless they can be substantiated across the full scope of what is being claimed. The general impression a claim leaves with consumers is taken into account, not just the literal wording.
- Watch for Bureau guidance. The Competition Bureau has committed to updating its guidelines following Bill C-15. Companies should revisit their compliance practices once published.
- Consider your international footprint. If you operate or market in the EU, UK, or Australia, the Canadian framework provides no protection. Those regimes have their own, often stricter, requirements.
Link to government guidance: https://competition-bureau.canada.ca/en/how-we-foster-competition/education-and-outreach/publications/environmental-claims-and-competition-act
(Note: yet to be refreshed with respect to March 26 updates however key source of guidance produced by government).
Need support substantiating your sustainability claims?
Whether you’re a Canadian company that has made sustainability claims or are planning to do so, Carbonhound has created a one-pager to prepare for the newly amended Bill C-59.
Download the checklist by filling out the form below!