The federal government of Canada is once again seeking ways to regulate and, some argue, overreach. They now appear to target greenwashing, defined as businesses making false claims about the sustainability of a product or service. This effort comes through a so-called “sneaky amendment” to the Competition Act, which surprised even the head of the Competition Bureau when he appeared before the House of Commons Committee to discuss Bill C-59, an omnibus bill with hundreds of proposed amendments. This “omnibus” approach is widely viewed as a government “grab bag” to secure amendments without meaningful consultation with industry.

This move may relate to a recent article in the Ottawa Citizen noting that total employment in federal public administration and separate agencies increased by 43% (from 257,000 to 368,000) from 2015 to 2024, even as the actual level of work in departments declined by double digits during the same period.

As Perrin Beatty, head of the Canadian Chamber of Commerce, noted in a National Post article on August 16 regarding the greenwashing amendment, “The most recent instance was a two-paragraph addition quietly slipped into page 429 of Bill C-59, the omnibus bill implementing last fall’s economic update. The amendment’s proponents say it was designed to combat corporate ‘greenwashing,’ a practice of falsely claiming that a company’s products or activities will protect the environment or combat climate change.”

This situation exemplifies the government’s willingness to accept demands from the environmental nongovernmental organization (ENGO) community, regardless of credible scientific evidence to support such claims. This approach has gained traction in Ottawa in recent years but has now reached its apex.

The federal government maintains that it is taking this action to ensure honesty in advertising, essentially arguing that industry cannot be trusted. The government expects businesses to prove that any green-related statements about their products are “based on adequate and proper substantiation in accordance with internationally recognized methodology.” However, the meaning of this is unclear, as various standards and definitions exist for terms like “green,” “net zero” and “sustainable.” This could affect every business activity, large or small, potentially capturing many credible Canadian small and medium enterprises (SMEs).

If passed, the amendment would grant the Competition Bureau the authority to begin an investigation “as it sees fit” if six individuals request that the president of the Bureau investigate a complaint. However, there is no requirement to disclose the identities of those individuals. The government will likely have no trouble finding six willing participants, as 20 well-staffed and well-funded ENGO organizations exist in Canada, some of which receive government funding. These groups may take turns challenging the industry, often without justification beyond sensational claims of greenwashing. If the claims are found to be false, those making them will bear no responsibility for the costs, disruption, or loss of business incurred. This could lead to millions of dollars in lost revenue and potentially substantial legal costs. Worse, it could tarnish the brand reputations of longstanding, credible companies for product lines that were not targeted, while those pointing fingers remain hidden behind closed doors.

Given the challenges businesses in Canada face today—particularly with the worst productivity levels in 20 years and a per capita GDP among the lowest of the top 40 OECD countries—one must question whether greenwashing is so widespread that it poses a genuine threat to human health and the environment. The answer seemed clear from the head of the Competition Bureau himself when confronted with the greenwashing proposal in the House of Commons. He stated, “What I can say is that if there is a move to have very prescriptive rules about what a company can and can’t say regarding environmental claims, or what a company must disclose in relation to environmental claims, I would suggest that the Competition Act probably isn’t the right vehicle for that kind of regulation or legislation.” Most would agree that other existing laws related to false advertising, whether green or otherwise, could be employed.

Why would companies establish or expand production in Canada if they could face such unfounded and damaging charges? Is the federal government’s own “Greening Government Strategy” based on solid, scientific claims about what it plans to achieve for Canadians? Would any of those claims withstand scrutiny for being “based on adequate and proper substantiation in accordance with internationally recognized methodology?” Or are they merely aspirational once again?

For more information, e-mail Gary LeRoux at gleroux@canpaint.com.