Budget 2025 – Proposed Amendments to the Greenwashing Legislation

On November 4, 2025, the federal government released Budget 2025, which included a statement that the new greenwashing provisions under the Competition Act have "created investment uncertainty" and in some cases, "slowed or reversed efforts to protect the environment". Accordingly, the government announced its intention to update the greenwashing provisions under the Competition Act to: (a) remove the requirement for businesses to substantiate their environmental benefit claims based on internationally recognized methodology standards; and (b) remove the ability for third parties to bring cases directly to the Competition Tribunal (Tribunal) for greenwashing complaints.

Unfortunately, the proposed legislative amendments tabled in Parliament on November 4, 2025 in Bill C-15, entitled Budget 2025 Implementation Act, No. 1, were much narrower than the description of the proposed changes in Budget 2025. Specifically:

• Section 74.01(1)(b.2) is proposed to be updated to remove the words "in accordance with internationally recognized methodology", with no other changes; and
• the proposed exemption from the private access provisions will only apply to section 74.01(1)(b.2) and not to greenwashing complaints generally.

Positive Attributes of the Proposed Amendments

"Internationally Recognized Methodology" Substantiation Will No Longer Be Required 

Removing the vague phrase "in accordance with internationally recognized methodology" is a welcome amendment. While environmental representations must still be substantiated with competent evidence that is "suitable", "appropriate and relevant", sufficiently rigorous" and "scientific in nature", they do not need to follow some vague and uncertain methodology that was designed for a different purpose. 

Without this phrase, companies have much greater certainty that they can rely on methodologies required or recommended by federal, provincial or territorial regulatory requirements to substantiate their environmental representations.

The removal of this phrase is particularly helpful for companies that are developing new and emerging technologies that, in their early stages of development, are not currently supported by an international recognized methodology. 

Exemption from Private Access to the Tribunal 

The proposed exemption of section 74.01(1)(b.2) from the private access provisions is also a significant positive change. This exemption takes away the option for private complainants to use the private access provisions solely for the purpose of ensuring their voices and narrative are made public (whether or not there is merit to the claim). We anticipate the Competition Bureau (Bureau) will adopt a measured approach to enforcement of Section 74.01(1)(b.2) to weed out costly nuisance claims made by private complainants.  

While the new greenwashing guidelines are not binding on the Bureau, the Bureau is much more likely to follow its own guidelines when determining whether or not to take enforcement action.

Uncertainties Remain

Despite these positive attributes, we question whether the proposed amendments to section 74.01(1)(b.2) are sufficient to address the many concerns raised by industry during the greenwashing guideline consultation process that took place between the time the greenwashing provisions were first implemented and when the Bureau published the final greenwashing guidelines on June 5, 2025.  Examples of some remaining concerns and uncertainties include those set out below.

Environmental Claims That Are True May Still Violate the Competition Act

An environmental representation does not need to be false or misleading in a material respect, or at all, to violate section 74.01(1)(b.2) of the Competition Act. An environmental representation can be true but still violate this provision unless the company making the representation can establish that such representation was adequately and properly substantiated before it was made. The onus is on the company to prove the violation did not occur.   

Private Companies Are Held to a Different Standard Than Public Companies

In the greenwashing guidelines, the Bureau states that the greenwashing provisions are not intended to apply to environmental representations made by publicly traded companies under "evolving frameworks for the voluntary and mandatory communication of certain environmental information to current and prospective securities investors". However, there is no equivalent non-enforcement policy for private companies that also wish to communicate environmental information to their current and prospective investors. As such, private companies will be subject to the stricter greenwashing provisions of the Competition Act.  This means that private companies making environmental representations to their investors and potential investors as to current initiatives and environmental mitigation targets, as well as future plans and other forward-looking information, will be subject to a much different and stricter disclosure regime than publicly traded companies. 

There are No Safe Harbours for Forward-Looking Information 

While Canadian securities laws include certain safe harbours for forward-looking information, there are no such safe harbours under the Competition Act. The greenwashing guidelines make it clear that companies should avoid making aspirational representations related to the environment, and that environmental representations made about the future must be well-founded and adequately and properly substantiated before they are made, with: (i) a clear understanding of what needs to be done to achieve what is being claimed; (ii) a concrete, realistic and verifiable plan to accomplish the objective, with interim targets; and (iii) meaningful steps underway to accomplish the plan.  

The General Impression Test Still Applies

The "general impression" test will still apply, so that even where each "fact" of an environmental claim is adequately and properly substantiated, if the collection of facts gives a different "general impression" to a "credulous" (i.e., naïve) consumer and the "general impression" is not also substantiated, the environmental representation may still violate section 74.01(1)(b.2). Examples of this may include a representation that over-emphasizes reductions in emissions intensity when absolute emissions are increasing, or one that emphasizes investments in clean technology when the investment is very small relative to the aggregate capital budget; such a claim may give a credulous consumer the impression that the company is doing more for the environment than it actually is.

Takeaways

If the purpose of the updates to the new greenwashing provisions under the Competition Act were designed to mitigate "investment uncertainty" and accelerate "efforts to protect the environment", they have done so only in limited part.  Certainly, the proposed amendments address two of the most significant concerns expressed by industry.  However, as we note above, the proposed amendments leave several uncertainties still in play No changes have been made to the significant administrative penalties for violating section 74.01(1)(b.2), which may be up to 3% of a company's worldwide gross revenues. Companies will need to balance these significant penalties against the remaining uncertainties found in section 74.01(1)(b.2).   

If you have any questions about making environmental claims within the Competition Act legislative framework, please contact any member of our Competition Law or Business Law group, or if your business is the subject of a greenwashing claim, contact any member of our Litigation group.