Canadian Competition Bureau releases much anticipated guidance on greenwashing provisions

On June 5, 2025, following extensive consultation, the Competition Bureau published the Environmental Claims and the Competition Act (the “Guidelines”) providing much anticipated guidance to businesses.

The Guidelines follow sweeping amendments to the Competition Act, passed in June 2024. These amendments ushered in a “green wave” of new laws for businesses’ environmental operations and messaging, including strict rules targeting deceptive or misleading environmental advertising——commonly known as “greenwashing”.

The Competition Act and environmental claims in a nutshell

The Competition Act (the Act) contains civil and criminal provisions that prohibit persons from making materially false or misleading representations to the public to promote a product or business interest. For years, the Bureau has relied on these general provisions to enforce environmental claims.

The Act also requires that performance claims—statements, warranties or guarantees of the performance, efficacy or length of life of a product—are based on adequate and proper testing. The Bureau has previously applied this to claims about recyclability and other environmental considerations.

The 2024 amendments introduced two additional reverse-onus provisions. They prohibit claims about the environmental benefits of:

• products that are not based on adequate and proper testing, and
• businesses or business activities that are not substantiated in accordance with an “internationally recognized methodology”.

These amendments sparked confusion and controversy. The Guidelines are welcome because they articulate the Bureau’s enforcement priorities and perspectives. They embrace a practical approach and encourage businesses to be truthful, avoid exaggeration, and to limit claims to those that are supported by appropriate evidence.

While the Guidelines are not legally binding on courts or the Competition Tribunal (or even the Commissioner of Competition), they are expected to carry persuasive weight.

Significant insights in the guidelines

Important insights in the Guidelines include the following:

Determining whether methodology is internationally recognized: For a methodology to be “internationally recognized,” the Bureau considers that it must “be acknowledged as valid”. Recognition may originate from standards-setting bodies, regulatory authorities or industry, provided that they are commonly accepted internationally. The Guidelines suggest that if a methodology has been recognized in two or more countries (and not necessarily by the governments of those countries) it will generally be considered by the Bureau to be internationally recognized. Methodologies required or recommended by federal, provincial or territorial government programs in Canada for the substantiation of environmental claims will also ordinarily be assumed consistent with internationally recognized methodologies.

Assessment of proper substantiation: It is not sufficient for a business to rely on use of a methodology that is internationally recognized – the business must also “adequately and properly substantiate” any claimed environmental benefits of a business or business activity. According to the Guidelines, this means that substantiation needs to be “reputable and robust” and “suitable, appropriate and relevant to the claim, and sufficiently rigorous”; in practice, this will often require scientific substantiation. The Canadian context (such as geography and climate) should also be considered when selecting the methodology.

Substantiation for environmental claims need not be made public until challenged: In a contested proceeding before a court or the Tribunal, the Commissioner need only show that the nature of the representation engages the greenwashing provisions – it then falls to the entity which made the representation to establish with evidence that the representation had appropriate testing or substantiation at the time it was made. The Guidelines confirm that such evidence does not have to be disclosed to the public at the time of the representation but only if and when the environmental claim is challenged in a proceeding. 

Statements made in the sale of securities: The Guidelines indicate that voluntary and mandatory statements made by publicly traded companies under securities regulations will be not reviewed by the Bureau. However, The Bureau indicates that it will “apply the Act as appropriate” where a business “reuses any of the environmental claims for the purpose of promoting a product or business interest outside the sale of securities”.

Greenwashing provisions apply to wide range of businesses: The Guidelines confirm the broad scope of businesses to which the greenwashing provisions apply: charities, not-for profits, and foreign businesses marketing in Canada. The law applies equally to small and large organizations.

Bureau clarifies approach to future claims: Where a business makes an environmental claim about the future it must be supported by substantiation and a clear plan. The Guidelines soften the approach suggested by the Bureau in its July 2024 edition of the Deceptive Marketing Practice’s Digest where it generally discouraged “aspirational claims about the future”. The Guidelines signal that claims about the future can be considered greenwashing “if they represent little more than wishful thinking”. Before a future claim is made a business should have: a clear understanding of what needs to be done to achieve what is being claimed; a concrete, realistic and verifiable plan to accomplish the objective, with interim targets; and meaningful steps underway to accomplish the plan.

Key implications for businesses

The Guidelines provide clarity and insight for businesses and stakeholders, but uncertainty remains. The Bureau reserves a “broad discretion” in determining whether to proceed with enforcement action in a particular case. It is ultimately up to a court or the Tribunal to determine whether a particular environmental claim runs afoul of the Act.

Businesses should establish or update compliance programs to effectively manage environmental marketing and related representations. This includes ensuring that all claims are appropriately substantiated and suitable for public communication. While the Guidelines offer a useful starting point, seeking internal or external legal advice can help ensure that compliance programs are aligned with the Act, suitably robust, and tailored to the organization’s specific risks. An effective compliance program may support a due diligence defence, limiting the risk of substantial fines or other penalties for non-compliance.

Beginning June 20, 2025, the Competition Tribunal may grant leave to private parties seeking to bring applications under the new greenwashing provisions—and other civil deceptive marketing provisions of the Competition Act—where it determines that doing so is in the 'public interest.' This development could significantly expand enforcement activity. Indeed, private advocacy groups and other parties may pursue cases that the Bureau has chosen not to. While the Guidelines are not binding on private litigants or the Tribunal, they are expected to serve as a reference point in these proceedings, potentially shaping how environmental claims are assessed and challenged.

If you have questions about environmental claims, developing or updating a compliance program, or other issues under the Competition Act, please contact one of the authors.