Canadian Competition Bureau Releases Final Guidance on Environmental Claims
The Canadian Competition Bureau (Bureau) recently released the final version of its guidance titled Environmental claims and the Competition Act (Guidelines). The Guidelines follow draft guidance, released in December 2024, and incorporate certain feedback received from the subsequent public consultation. (For additional discussion on these topics, see our previous article discussing the draft guidance, as well as our firm's submission to the public consultation.)
Background
In June 2024, amendments to the civil misleading representation provisions of the Competition Act (Act) contained two new provisions that introduced specific standards for supporting certain types of environmental claims:
- The first provision applies to product-specific claims (which include claims about services). It prohibits representations to the public in the form of statements, warranties or guarantees of a product’s or service’s “benefits for protecting or restoring the environment or mitigating the environmental, social and ecological causes or effects of climate change” that are not based on an “adequate and proper test” (the “Product Claim” provision).
- The second provision applies to claims about businesses and their business activities more broadly, prohibiting representations to the public relating 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” unless such representations are based on “adequate and proper substantiation in accordance with internationally recognized methodology” (the “Business Claim” provision).
The introduction of these provisions generated significant public criticism and a “large number of requests for guidance” from the Bureau, driven mainly by the requirement in the Business Claim provision for substantiation in accordance with an internationally recognized methodology, which is not defined or used elsewhere in the Act. The Bureau quickly launched an initial public consultation to inform its enforcement guidance, followed in December 2024 by the draft guidance released for further public consultation and in June 2025 with the final Guidelines.
Unpacking the Guidelines
Notably, in the Guidelines the Bureau has maintained its high-level, principles-based approach to guidance on environmental claims, without engaging in a detailed discussion of how businesses advertising in Canada should or could substantiate common environmental claims. This approach is disappointing, particularly when contrasted with the far more detailed U.S. “Green Guides” and the Bureau’s prior, now-archived environmental guidance. However, the principles-based guidance is consistent with the Bureau’s recent approach to providing compliance guidance in other areas. In the Backgrounder released concurrently with the Guidelines, the Bureau acknowledges that many responses to the public consultation asked for guidelines that “tell businesses exactly what environmental claims they can make in their marketing material, and when they can make them”; nonetheless, the Bureau notes that “the Act does not create rules about when a particular environmental claim can be made to the public” but instead “allows businesses to make whatever environmental claims they wish, as long as those claims are not false or misleading” and are properly substantiated when required.
With that caveat, the Guidelines helpfully provide some clarity on key aspects of the Bureau’s approach to the new provisions.
Approach to Statements for Non-Promotional Purposes. The draft guidelines provided helpful clarification that the Bureau’s enforcement focus is on “marketing and promotional representations made to the public, rather than representations made exclusively for a different purpose, such as to investors and shareholders in the context of securities filings.” In the Guidelines, the Bureau maintains this distinction and more broadly segregates from the Bureau’s enforcement focus representations “that are regulated by other government agencies”. In the context of securities filings in particular, examples of representations that are outside the Bureau’s enforcement focus include both voluntary and mandatory communications to current and prospective securities investors.
Note, however, that this limitation applies only to representations made “exclusively” for other purposes. For example, if an environmental claim is made in a securities filing but repeated prominently on a consumer-facing website, it may fall within the Bureau’s enforcement focus. In addition, as discussed further below, this limitation (and the Guidelines more generally) relates to Bureau enforcement only and it will be up to the Competition Tribunal (Tribunal) to confirm whether, in the context of private actions, statements made for non-promotional purposes are nonetheless subject to the Act’s environmental claims provisions.
Criteria for a “Recognized” Methodology. In the Guidelines, the Bureau has maintained that it “will likely consider a methodology to be internationally recognized if it is recognized in two or more countries.” The Guidelines further clarify that it will consider a methodology to be “recognized” where it is “acknowledged as valid.” This recognition “can come from a variety of sources, including but not limited to standards-setting bodies, regulatory authorities, or even industries or other entities using methodologies that are commonly accepted internationally.”
Overall, the Guidelines take a fairly broad approach to defining “internationally recognized methodology.” However, it is important to note the Bureau’s caution that, even where a methodology meets these thresholds, substantiation must also be “adequate and proper” and the claim must not be false or misleading, so the methodology in addition to being “recognized” should be “reputable and robust having regard to the claim.”
Scope of “Benefits” to the Environment. The Guidelines now provide some guidance on when a claim will relate to a “benefit” for the environment, such that the new environmental claims provisions would apply. To explore this point, the Guidelines consider the example of a straightforward claim that a product uses 20% recycled content, which the business substantiates by tracking source material. The Guidelines state that
[The] limited claim that the product contains “20% recycled content” (without more) would not likely be treated as a claim about the performance or efficacy of a product, and therefore would not require testing under paragraph 74.01(1)(b) of the Act. The claim would also not appear to be a statement of a product’s benefits for protecting or restoring the environment or addressing climate change, so in the Bureau’s view, it would not require testing under paragraph 74.01(1)(b.1) of the Act either [Emphasis added].
This example is helpful in clarifying that, in the Bureau’s view, a claim of recycled content (without more) is not a claim of a product’s environmental benefit. However, Canadian businesses that wish to use this type of factual claim as part of a broader claim of environmental impact should continue to ensure that they have appropriate substantiation for the claimed impact (i.e., the benefit). Furthermore, note that factual claims continue to be covered by the general misleading advertising provisions.
- Recognition of Canadian Methodologies. Compared to the draft guidance, the Guidelines now take a stronger view that methodologies required or recommended by all levels of Canadian government will be presumed to meet the requirement of substantiation in accordance with an internationally recognized methodology, provided that the chosen methodology adequately and properly substantiates the claim made.
Combined with the Bureau’s position (summarized above) that representations regulated by other government agencies are not an enforcement priority for the Bureau, this clarification may reduce the instances of conflicting reporting obligations for Canadian businesses, at least insofar as they relate to potential Bureau enforcement. Examples of Acceptable Substantiation. The Bureau has added two examples of claims it would consider appropriately substantiated in accordance with internationally recognized methodology. Together, the examples refer to ISO standards for measurement of nutrient concentration and the GHG Protocol for Project Accounting for the measurement of greenhouse gas emissions. The examples contemplate measurements taken in accordance with these methodologies before and after the implementation of a new policy to confirm its claimed effect. These examples are not exhaustive and should not be controversial in terms of the nature of the referenced standards and the use of testing to confirm the effect of a particular action. We assume that these examples are intended to respond to calls from commentators for the Bureau to identify protocols/standards that it would find to be acceptable.
Continued Uncertainty for Canadian Businesses
As of June 20, 2025, private parties are able to seek leave from the Tribunal to commence actions under the Act’s civil misleading representation provisions, including the environmental claims provisions. In order to obtain leave under these provisions, private parties will need to demonstrate that the private action is in the “public interest.” (For a discussion of the new private rights of action, see our recent article.)
While private applicants may consider the Guidelines when deciding whether to commence an action, the Guidelines will not be binding on private applicants or on the Tribunal (although the Tribunal may choose to consider the approach proposed in the Guidelines as part of its assessment of the substantive tests under the provisions or as a consideration in the test for granting leave). The Bureau may intervene in private applications, and the Guidelines indicate that the Bureau will refer to its Guidelines if it makes submissions in response to an application for leave by a private applicant, or if it intervenes in circumstances where leave has been granted.
As a result, although the Guidelines provide helpful insight into the Bureau’s enforcement approach, it remains to be seen how private enforcement related to these provisions will evolve. If and when private actions relating to environmental claims reach the Tribunal, we will be looking for additional clarity on the interpretation of the misleading advertising provisions and the test for leave. In the interim, Canadian businesses making environmental claims should carefully consider the Bureau’s Guidelines, while also assessing the risks and likelihood of a challenge to their claims from private parties.
