Competition Act amendments welcome but room for improvement, say environmental groups

OTTAWA/TRADITIONAL, UNCEDED TERRITORY OF THE ALGONQUIN ANISHINAABEG PEOPLE — Ecojustice and the Canadian Association of Physicians for the Environment (CAPE) have called proposed amendments to the federal Competition Act a step in the right direction but believe that, without doing more to address greenwashing, they will fail to shift the landscape to address this problem.

Greenwashing is misleading, untrue, or unsupported statements about a product or company’s environmental or climate benefits. For example, claiming to be environmentally-friendly or a climate leader, when their actions and investments continue to threaten the environment and worsen climate change.

Greenwashing represents a particularly significant barrier in the necessary transition to a sustainable economy. It can delay policy action by misleading consumers and unduly influencing decision-makers. It can lead to consumers being duped into spending money, potentially even a premium, in false hope of lessening their own environmental or climate impact.

At a time when both affordability and climate impacts are top concerns for Canadians, the federal government must ensure that the rubber hits the road and tackle greenwashing head-on.

Last week, in the federal fall economic statement, Minister Freeland announced that the government would be making changes to protect consumers and the environment by prohibiting misleading greenwashing claims through competition law. This week, the proposed changes to the Competition Act were disclosed in a large omnibus bill. Currently, the Competition Act is completely silent on climate change, the environment and sustainability.

The greenwashing amendment would require businesses who claim a product has environmental protection or climate change benefits to base their statements on an adequate and proper test.

Another amendment would allow individuals and environmental organizations to challenge deceptive marketing, like greenwashing, before the Competition Tribunal directly. This is a key step to empowering people to challenge greenwashing practices

Other sustainability-related changes would allow businesses working together to protect the environment to get assurance that they will not be prosecuted for conspiracy or other anti-competitive practices, as well as increasing consumers’ right to repair products and access replacement parts.

While a welcome improvement, these changes must be accompanied by enforcement capacity, more specific rules, guidance and enforcement. CAPE and Ecojustice recommend the following:

  1. Strengthen the greenwashing amendment in the Competition Act. The provision should:
    • Be extended to apply to non-product statements, like a company’s net zero commitments and plans. These types of commitments and plans should be supported with modeling, and
    • Require all tests and modeling to be made publicly available so consumers and the competition regulator can easily see the company’s proof of its green marketing claims.
  2. Developing regulations under the Act that outline clear prohibitions against specific forms of greenwashing. Other jurisdictions, such as the European Union, are moving in this direction — being upfront about what exactly is prohibited, instead of relying on a generic ban on deceptive marketing.
  3. Publish guidance on greenwashing. The Competition Bureau should publish advice to help businesses and financial institutions understand the standards and meet necessary requirements.
  4. Establish a dedicated sustainability unit within the Competition Bureau that has specialized expertise to tackle greenwashing and ensure Canada is a leader and not a laggard on green competition issues. This would be like the United Kingdom´s Sustainability Taskforce or a sustainability focused version of the Digital Intelligence Unit that already exists in the Bureau.

The changes to the Competition Act are likely going to pass quite quickly as part of the omnibus bill, but there is still time to make these important amendments referenced above before this happens. New regulations, greenwashing guidance, and the creation of a sustainability unit can wait until after the bill is passed, but we seek a commitment from Minister Champagne that he will make these happen.

Further recommendations to address greenwashing and incorporate sustainability into competition law in Canada can be found in the submissions made by Ecojustice and CAPE earlier this year.

Tanya Jemec, Ecojustice lawyer, said:

“Addressing greenwashing should not be controversial. It does not require businesses to do anything but ensure that they are telling the truth.

“This is the time to amend our deceptive marketing regime to provide clear and strong standards that require companies and financial institutions to be honest and transparent in their climate claims. There is no reason that Canadian consumers and investors should have less information and protection from greenwashing than others around the world.

“The stability of our health, lives and livelihoods depend on swiftly addressing the climate crisis. Tackling greenwashing is one step to get us there.

Leah Temper, PhD, Health and Economic Policy Program Director at the Canadian Association of Physicians for the Environment, said:

“Companies’ rampant greenwashing harms our health, our wallets, and our future. The federal government’s proposed changes to the Competition Act could signal a turning point – but only if the government follows up with strong regulations and other necessary measures. It’s time to crack down on the lies.”

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About:

Ecojustice uses the power of the law to defend nature, combat climate change and fight for a healthy environment. Its strategic, public interest lawsuits and advocacy lead to precedent-setting court decisions, law and policy that deliver lasting solutions to Canada’s most urgent environmental problems. As Canada’s largest environmental law charity, Ecojustice operates offices in Vancouver, Calgary, Toronto, Ottawa and Halifax.

The Canadian Association of Physicians for the Environment (CAPE) is a physician-directed non-profit organization working to secure human health by protecting the planet. Since its founding in 1994, CAPE’s work has achieved substantial policy victories in collaboration with many partners in the environmental and health movements. From coast to coast to coast, the organization operates throughout the country with regional committees active in most provinces and all territories.

For media inquiries:

Sean O’Shea, communications strategist | Ecojustice
416-368-7533 ext. 523, soshea@ecojustice.ca

Reykia Fick, Communications Director, Canadian Association of Physicians for the Environment (CAPE), 647-762-9168, media@cape.ca

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