Marketers could soon have more leeway to make claims about the environmental benefits of products. The newly released federal budget announces the Canadian government’s intention to revise instructions guiding how the Competition Tribunal assesses what constitutes greenwashing in marketing messaging.
Proposed future amendments to the Competition Act will remove the requirement for businesses to prove that claimed environmental benefits can be validated through internationally recognized standards and methodologies. As well, it’s proposed that third parties not competitively affected by a company’s marketing efforts would lose their current ability to bring cases to the Competition Tribunal to dispute environmental claims.
“These ‘greenwashing’ provisions are creating investment uncertainty and having the opposite of the desired effect with some parties slowing or reversing efforts to protect the environment,” the budget document states.
A coalition of 25 Canadian industry and business associations voiced their opposition to those two provisions during the 2024 public consultations prior to their enactment. The group — which included representation from the oil and gas, agriculture, food and forestry sectors, along with the Canadian Roofing Contractors Association, the Canadian Chamber of Commerce and the Business Council of British Columbia — argued that there is no single set of international standards that can be used to gauge the accuracy of claims, and that the requirement does not allow for emerging innovation. They also expressed concern about the “reverse onus” aspect of allowing third parties to initiate proceedings without necessarily having a meritorious case, suggesting that it leaves businesses open to harassment.
Environmental advocacy groups such as the David Suzuki Foundation and Environmental Defence have reacted negatively to the budget announcement — calling it a “step in the wrong direction” that would “weaken environmental standards.”
“We are well aware that industry has been lobbying against these rules because they are effective at stopping companies from making unbacked claims,” submits Keith Brooks, programs director with Environment Defence. “The government should hold firm rather than bow to industry pressure.”
