From Confusion to Clarity? Feds Rethink Controversial Greenwashing Laws

On June 20, 2024, Canada amended the Competition Act to address greenwashing. The federal government described the changes as “improvements” aimed towards curbing “unsupported environmental claims”; however, the rollout was anything but smooth.

Public reaction was sharply divided. The Competition Bureau (the Bureau) received over 400 submissions during its consultation process – after the amendments were already in force. Environmental groups largely welcomed the changes, while industry stakeholders expressed concern over legal uncertainty.

Two provisions drew the most criticism:

1. The requirement to substantiate environmental claims using “internationally recognized methodology”, a term many found vague and impractical; and
2. The introduction of private rights of action, allowing individuals and organizations to bypass the Bureau and bring greenwashing complaints directly to the Competition Tribunal.

Since the introduction of the new rules, businesses have struggled to interpret and apply them. Some companies removed environmental claims from their websites altogether, while others paused ESG reporting to avoid potential liability.

Proposed Amendments in Budget 2025

On November 4, 2025, the federal government released Budget 2025, which includes a significant shift in approach. The budget acknowledges that the greenwashing provisions have “created investment uncertainty” and, in some cases, “slowed or reversed efforts to protect the environment.” Accordingly, the government announced its intention to amend the Competition Act to:

1. Remove the requirement for environmental claims to be substantiated using internationally recognized methodology; and
2. Eliminate the ability for third parties to bring complaints directly to the Competition Tribunal, restoring the Bureau’s gatekeeping role.

The government emphasized that protections against false or misleading claims will remain intact.

Moving Forward

The timeline for these legislative amendments is unclear, as is the corporate response, however, we remain committed to keeping our clients apprised of any developments. 

If you have questions about how these changes may affect your business, please reach out to our Competition Law or Business Law group.