OVERVIEW OF JUNE 20, 2024
COMPETITION ACT AMENDMENTS
On June 20, 2024, Bill C-59 was passed (the Fall Economic Statement Implementation Act, 2023), which introduced the third of three significant rounds of amendments to Canada’s federal Competition Act in two years (together with Bill C-19 and Bill C-56). For more information, see: Competition Act Amendments.
The June 2024 round of amendments to the Competition Act completed a sweeping overhaul of the Competition Act across virtually all key provisions of Canada’s competition legislation. These amendments were also the most significant changes to Canadian competition law since the modern Competition Act came into effect in 1986 replacing the former Combines Investigation Act.
The Bill C-59 amendments, among other things, strengthened the Competition Bureau’s powers to enforce key deceptive marketing provisions of the Competition Act (e.g., relating to drip pricing, performance claims and ordinary selling price (OSP) claims), strengthened private party rights to seek Competition Tribunal remedies (e.g., for civil deceptive marketing and violations of the civil agreements provisions of the Act), introduced new penalties (e.g., administrative monetary penalties for violating the civil agreements provisions of the Act and for reprisal actions penalizing individuals for complying with the Act) and introduced a new clearance regime for environmental protection related agreements.
OVERVIEW OF THE NEW
ENVIRONMENT-RELATED PERFORMANCE CLAIMS
PROVISIONS UNDER THE COMPETITION ACT
In addition to the above amendments passed on June 20, 2024, two specific new environment-related performance claims provisions were added to Canada’s Competition Act relating to product-related environmental claims (section 74.01(1)(b.1)) and business-related environmental claims (section 74.01(1)(b.2)) (discussed in more detail below).
These two new environment-related performance claim provisions were added to the already existing general standalone civil provision of the Competition Act that prohibits product performance claims that are not based on an “adequate and proper test” (section 74.01(1)(b)). In this regard, the Competition Act prohibits representations made to the public, in the form of a statement, warranty or guarantee, of the performance, efficacy or length of life of a product that is not based on an adequate and proper test, the proof of which lies on the person making the claim.
For more information about performance claims under Canada’s Competition Act, see: Performance Claims.
Product-Related Environmental Claims
The first new performance claim provision (section 74.01(1)(b.1)) applies to representations to the public for the purposes of, directly or indirectly, promoting the supply or use of a product or any business interest in the form of a statement, warranty or guarantee of a product’s benefits for protecting or restoring the environment or mitigating the environmental, social and ecological causes or effects of climate change that is not based on an adequate and proper test (the proof of which lies on the person making the representation).
This new performance claim provision may apply to environmental performance claims relating to a specific product and includes the same testing requirement (an “adequate and proper test”) to substantiate claims as the existing general performance claim provision of the Competition Act (section 74.01(1)(b)). For this reason, existing case law with respect to what constitutes an “adequate and proper test” may remain helpful in interpreting this new environment-related performance claim provision.
Business-Related Environmental Claims
The second new performance claim provision (section 74.01(1)(b.2)) applies to representations to the public for the purposes of, directly or indirectly, promoting the supply or use of a product or any business interest 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).
This new performance claim provision may apply to environmental performance claims relating to the benefits of a business or business activity in general (for example, that a brand, compared to a particular product, is “carbon neutral” or “net zero”).
This second new business-related performance claim provision also introduced a new testing requirement for substantiating these types of environmental claims, namely “adequate and proper substantiation in accordance with internationally recognized methodology”. The Competition Act, however, does not define “internationally recognized methodology”.
JUNE 2025 COMPETITION BUREAU
ENVIRONMENTAL CLAIMS GUIDELINES
On June 5, 2025, the Competition Bureau, following extensive public consultations, issued final Guidelines on Environmental Claims Under the Competition Act (Environmental Guidelines). For the Bureau’s related News Release, see: Competition Bureau Issues Final Guidelines Regarding Environmental Claims.
While not law, the Bureau’s new Environmental Guidelines provide guidance related to the new environment-related performance claims provisions that were passed in June 2024, including that they:
- Discuss the civil provisions of the Competition Act that can apply to environmental claims (sections 74.01(1)(a) (the general civil misleading advertising provision), 74.01(1)(b) (the general performance claims provision), 74.01(1)(b.1) (product related environmental claims) and 74.01(1)(b.1) (business related environmental claims).
- Define, from the Competition Bureau’s perspective, key terms in the new provisions, both which have been interpreted by the Competition Tribunal and Canadian courts and those that remain subject to jurisprudence, including the following: “product”, “adequate and proper”, “testing”, “benefits”, “environment”, “protecting”, “restoring”, “mitigating”, “environmental”, “social”, “ecological”, “climate change”, “business activity”, “substantiation”, “methodology”, “recognized” and “internationally recognized”
- Discuss the Competition Bureau’s enforcement position relating to environmental claims.
- Provide a number of hypothetical environmental claim related examples, relating to both product-related and business-related types of environmental claims.
The Competition Bureau’s new Environmental Guidelines are in addition to a variety of prior guidance that it has provided related to environmental claims and “greenwashing”. For more information, see: Environmental Claims and Greenwashing.
IMPLICATIONS
In general, Canada’s new specific environment-related performance claim provisions under the Competition Act give the Competition Bureau and private parties additional avenues to challenge environmental claims related to products, businesses or brands (in addition to under the existing general civil and criminal misleading advertising and general performance claim provision of the Act).
In this regard, on June 20, 2025, further amendments came into force that allow private parties, in addition to the Competition Bureau, to make applications to the Competition Tribunal for alleged violations of the civil deceptive marketing practices provisions of the Competition Act (under Part VII.1), including the performance claims provisions. For more information, see: Expanded Private Access to the Competition Tribunal Now in Force for Deceptive Marketing and Civil Agreements Under the Competition Act.
Given, however, the lack of jurisprudence relating to key terms set out in the new provisions, as well as the new performance-related test introduced for business-related performance claims, these new provisions practically mean that there is increased uncertainty and risk for companies and others making environment-related performance claims. In this regard, some stakeholders have commented that it would have been helpful if the Bureau had provided increased practical guidance.
In any event, it will remain to be seen how the Competition Bureau enforces these two new environment-related performance claim provisions and how Canada’s Competition Tribunal and courts will interpret their application.
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