New greenwashing amendments to Competition Act risk chilling open debate on environmental policy
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Most Canadians might not pay much attention to the Competition Act, but recent changes made by the federal government should be a concern for everyone. The amendments impact how businesses operate and influence the information Canadians receive.
One critical area affected is environmental claims made by companies. All organizations in Canada must provide accurate and reliable data to back up their environmental promises and should not knowingly mislead the public.
However, within the federal government’s budget implementation bill, also known as Bill C-59, parliamentarians inserted last-minute changes to the Competition Act to stop businesses from making false environmental claims, known as “greenwashing.” While the goal was to protect consumers, these changes only created significant complexity and uncertainty. Companies now face steep penalties for mistakes, with fines starting at either $10 million or three percent of their annual revenue – whichever is higher.
The federal government implemented these sweeping changes without consulting key stakeholders, leading to legislation that significantly alters how businesses can communicate their environmental commitments. Without clear guidance, companies are left struggling to comply with the new rules, facing added pressure and uncertainty.
There are four fundamental flaws within these amendments:
First, the government has taken a reverse onus approach. If a complaint is made, the target company bears the burden of proof; those making the complaint don’t have to prove the claims are misleading. That, paired with an exceptionally low threshold required for filing a complaint, means companies and organizations can easily be dragged into time-consuming, costly, and potentially baseless legal processes.
Second, a law must provide a clear line of sight to compliance, but the new and vague anti- “greenwashing” amendments do not. The risk began the moment the law was passed, with no guidance provided on how to comply with the new rules, no phase-in period for the implementation, and no consultation with stakeholders.
The Competition Act itself already has rules in place to protect Canadians from false advertising. In addition, a number of jurisdictions have regulatory reporting requirements for the disclosure of sustainability and climate-related information. The new amendments are an unnecessary layer of rules on top of those already in use by federal and provincial regulatory organizations, such as the Canadian Securities Administrators or the Canadian Accounting Standards Board.
Third, the amendments add another layer of complexity and risk for those who want to build projects in Canada, further impeding our ability to attract investment. Instead of enabling open discussion on environmental goals – and progress – these new laws significantly limit businesses’ ability to engage with Canadians and build support for projects, particularly for those focused on reducing emissions.
Fourth, this legislation and its threat of large penalties limits the ability of Canadians to participate in meaningful discourse around climate and environmental policy. If the intent of the new rules is to create a more transparent, measured, and factual discourse, it’s essential that everyone is held to the same standards – including climate advocacy groups.
What we need is fairness across industries, sectors, and organizations when applying the legislation, clarity on compliance guidelines, and alignment with existing environmental disclosure rules and requirements.
In its current state, the effect of this legislation is to silence the energy industry, and those that support it, while clearing the field of debate and promoting the voices of those most opposed to Canada’s energy industry.
Canada’s Competition Bureau is taking its own consultation seriously. We hope the bureau’s upcoming guidance can restore confidence, ensure organizations can continue to speak with Canadians about their environmental commitments and foster the open discussion needed to address the complex challenges we face in the years ahead.
Lisa A. Baiton is President and CEO of the Canadian Association of Petroleum Producers.
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