The Competition Bureau (the Bureau) published finalized guidelines on the anti-greenwashing provisions of the Competition Act (the Act) on June 5, 2025. While they do not change significantly from draft guidelines the Bureau released for comment in late 2024, they provide helpful incremental guidance.
What you need to know
- Last June, the Competition Act was amended to require that certain environmental representations be supported by an "adequate and proper test" or an "internationally recognized methodology". The amendments led to considerable concern that mandatory or voluntary sustainability disclosure could contravene the Act unless it met the stringent new standards, and uncertainty as to what those standards required.
- The final guidelines confirm that the Bureau is focused on marketing and other promotional representations. According to the guidelines, the Bureau is not concerned with "representations made solely for other purposes or that are regulated by other government agencies".
- The guidelines further clarify the Bureau's views on when a methodology is "recognized" internationally, and when a claim about a product must be "tested".
- The guidelines set out the Bureau's enforcement approach; they are not binding on courts or the Competition Tribunal, and do not limit the interpretive arguments that might be advanced by private parties. Businesses should be mindful of that risk when relying on the guidelines.
The changes
Representations regulated by other government agencies
The guidelines confirm that the Bureau is focused on marketing and other promotional representations, which have historically been under the deceptive marketing provisions of the Act. According to the guidelines, the Bureau is not concerned with "representations made solely for other purposes or that are regulated by other government agencies". As an example, the guidelines indicate the Bureau will not be concerned with the communication of environmental information to current and prospective investors where such communications are regulated by securities laws. This strongly suggests that sustainability disclosure that is regulated by other agencies will not be the focus of Bureau enforcement considerations.
To be clear, however, there could be liability if businesses reuse environmental representations made in securities filings or other regulated disclosures for promotional purposes. In other words, the Bureau could still take an interest in environmental claims that are regulated by another government agency if they are also used in marketing and promotional activities.
Other changes
The guidelines include several other incremental changes:
- The Bureau considers a methodology to be "recognized" if it is acknowledged to be valid. Such acknowledgment can come from a variety of sources, including standards-setting bodies, regulatory authorities or industries or other entities that commonly accept the methodology internationally.
- The Bureau will assume that methodologies required or recommended by federal, provincial or territorial programs in Canada are consistent with internationally recognized methodologies. As such, it is unlikely the Bureau will pursue enforcement action if an advertiser has followed such a methodology, even if it is on its face "domestic", provided the methodology is adequate and proper to substantiate the claim.
- The Bureau clarifies that only specific environmental representations are covered by the new law. For example, according to the guidelines, a limited claim that a product contains "20% recycled content" (without more) would not be a covered environmental claim. This is because the Bureau does not consider such a claim to be about (i) a product's performance or efficacy; (ii) a product's benefits for protecting or restoring the environment or mitigating the environmental, social and ecological causes or effects of climate change; or (iii) a claim about a business or business activity.
Next steps
After June 20, 2025, private litigants will be able seek leave to bring an application to the Tribunal if it is in the public interest to do so. While the Bureau's guidelines provide reasonable and practical interpretations of the anti-greenwashing provisions, they do not constrain private litigants, nor do they bind the Competition Tribunal or courts. It remains to be seen, for example, whether environmental activist groups could successfully pursue enforcement action against businesses for representations that were not intended for promotional purposes, including any such representations in sustainability disclosures. The Bureau plans to publish new guidelines regarding this private right of access, which will help inform whether it will make submissions in response to an application for leave by a private applicant, and whether it will intervene if leave is granted. While interpretive jurisprudence around the new greenwashing provisions develops, it will be prudent for businesses to be informed by, but not rely exclusively on, the Bureau guidelines when considering how to substantiate their environmental claims.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
