In June of 2024, Canada amended its Competition Act with Bill C-59. This amendment introduced major restrictions on how companies can message and market around sustainability issues. It created new significant legal risks and fines as high as $10 million CAD for a first offense and $15 million CAD for subsequent offenses. Rather than lead to more evidence-based sustainability claims, companies went quiet on sustainability. This left investors with a lack of information and transparency, making sustainable investing harder. The Canadian Competition Bureau sought to alleviate these issues with more robust guidance. However, the core problems still remained. Now, Canada is considering scaling back its greenwashing restrictions with more Competition Act amendments. Responsible Investor reports:
“To provide ‘more certainty’ to the marketplace, the government said it intends to propose legislative amendments to remove some aspects, ‘while maintaining protections against false claims’.
Specifically, it has proposed removing the requirement for businesses to substantiate their environmental benefit claims based on internationally recognised methodology standards and the ability for third parties to bring cases directly to the Competition Tribunal.”
Removing these provisions may weaken Canada’s greenwashing enforcement, but it might help bring company sustainability efforts out of the shadows. Removing the ability for third parties to challenge company claims at the Competition Tribunal may help lower litigation risk and make companies feel more comfortable sharing information. The amendments are part of Canada’s 2025 budget proposal which must still be passed by Canada’s parliament before becoming effective.
Our members can learn more about greenwashing here.
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