The alterations to Canada’s regulations against greenwashing have been positively received by corporations but have sparked worry among environmental advocates.
The laws pertaining to greenwashing, which involves making false or misleading claims about a product’s environmental benefits, will be maintained; however, the Liberal government intends to revise them to offer businesses more clarity on what constitutes a violation of the law.
The proposed adjustments are outlined in Bill C-15, a comprehensive bill aimed at implementing specific aspects of the 2025 Budget. While businesses will still be required to prove the validity of their product claims, they will no longer be obligated to adhere to international standards for verification. This global benchmark was deemed ambiguous by businesses, leading to concerns that some companies might abandon valuable eco-friendly initiatives due to the high and unclear burden of proof.
David Pierce, the Canadian Chamber of Commerce’s vice president of government relations, expressed relief on behalf of the business community, citing the lack of clarity surrounding the international benchmark. Environmentalists, however, are now sounding the alarm over the absence of criteria to evaluate whether Canadian corporations are fulfilling their commitments, such as reducing greenhouse gas emissions.
As consumer awareness of their environmental impact has heightened, numerous companies have made assertions regarding the sustainability of their products. In 2024, the Trudeau government passed Bill C-59, which included modifications to regulations on deceptive advertising, affecting retailers, energy firms, and financial institutions that have been touting carbon-neutral claims.
Following the rollout of the Trudeau-era regulations by Ottawa and the overseeing body, the Competition Bureau, the business sector pushed back against the changes. Some companies abandoned their plans to achieve net-zero greenhouse gas emissions, attributing their actions directly to the law. Notably, the Canada Pension Plan Investment Board retracted its commitment to achieving net-zero operations by 2050, with analysts suspecting a link to Bill C-59.
The recent budget implementation act tabled by the Liberal government aims to enhance market certainty by proposing the removal of certain sections of the Competition Act while preserving safeguards against false claims. Environmental groups are emphasizing the need for domestic benchmarks in addition to international standards for substantiating greenwashing cases, particularly in greenhouse gas emissions reporting.
Concerns have also been raised about the reliance on the Competition Bureau to handle complaints, with fears that cases may slip through the cracks due to capacity limitations. Nevertheless, a Competition Bureau spokesperson indicated plans to update business guidance post-implementation. Despite concerns from corporate entities about potential frivolous claims, legal experts stress that claimants could face substantial legal costs if their claims are unsuccessful, serving as a deterrent against baseless allegations.