Bill C-59 – Greenwashing Amendments
In June, Bill C-59, the Fall Economic Statement Implementation Act, 2023, received Royal Assent, making significant amendments to the Competition Tribunal Act and Competition Act.
Bill C-59 News
One of these amendments explicitly targets “greenwashing” by requiring businesses to have testing or substantiation to support certain environmental claims.[1] This has caused some confusion and concern as there is ambiguity surrounding the new rules. For example, the Act mandates “adequate and proper substantiation in accordance with internationally recognized methodology” but does not define “internationally recognized methodology”.[2] It is important that these ambiguities are addressed as the legislation places the burden of proof on the entity making the environmental claim to demonstrate compliance with the provision, this is a major change. [3] [4]
These changes also mean that companies in violation of the new greenwashing rules may be subject to administrative monetary penalties (AMP) in the magnitude of greater of $10 million for the first order and $15 million dollars for any subsequent order, and 3% of the corporation’s annual worldwide gross revenues.
The other very significant change that C-59 brings is it enables private parties (like climate change activists and advocacy groups) to bring cases for deceptive advertising practices directly before the Competition Tribunal as of mid-2025.[5]
There is a fear that C-59 will result in companies not publicly disclosing their environmental efforts or “greenhushing” as this legislation makes communicating about environmental initiatives and commitments riskier for companies.[6] It may also negatively impact the initiatives and commitments themselves.[7] Some companies have proactively removed public facing information about their environmental efforts from their websites as a precaution.
In response to industry confusion and outcry, in July, the Competition Bureau launched a public consultation on the new provisions aimed at greenwashing that will inform its future enforcement guidance about environmental claims. It has invited interested parties are to provide comments by September 27, 2024 (For more information LINK) .
[1] Public consultation on Competition Act’s new greenwashing provisions (canada.ca)
[2] Bill C-59 Enacted: New Laws Targeting Greenwashing | BD&P (bdplaw.com)
[3] Bill C-59 Enacted: New Laws Targeting Greenwashing | BD&P (bdplaw.com)
[4] False advertising and greenwashing: Bill C-59 changes to Competition Act | BLG
[5] False advertising and greenwashing: Bill C-59 changes to Competition Act | BLG
[6] What is ‘greenhushing’ and is it really a cause for concern? | World Economic Forum (weforum.org)
Oil and Gas Sector
It has been alleged that C-59 targets the oil and gas sector. The Alberta government described C-59 as “draconian legislation that will irreparably harm Canadians’ ability to hear the truth about the energy industry and Alberta’s successes in reducing global emissions.” Smith went on to say that “Bill C-59, when it receives royal assent, will prevent private entities from sharing truthful and evidence-based information that happens to oppose the extreme and untruthful oil and gas narrative of the federal NDP and Liberals. This is being done to intentionally intimidate boards and shareholders, silence debate, and amplify the voices of those who oppose Canada’s world leading energy industry.”
The oil and gas industry itself has also raised objections to the new legislation as it is not clear how the government will enforce this law or how the new legislation will be interpreted. Pathways Alliance, which includes Canadian Natural Resources Ltd., Cenovus Energy Inc., ConocoPhillips Canada, Imperial Oil Ltd., MEG Energy Corp. and Suncor Energy Inc., has removed all content from his website and social channels and replaced it with a statement about Bill C-59 has created uncertainty and is awaiting clarity from the Competition Bureau before resuming public communications.
Appendix – Amendments
- 74.01 (1) A person engages in reviewable conduct who, for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest, by any means whatever,
- (b.2) makes a representation to the public with respect to the benefits of a business or business activity for protecting or restoring the environment or mitigating the environmental and ecological causes or effects of climate change that is not based on adequate and proper substantiation in accordance with internationally recognized methodology, the proof of which lies on the person making the representation;