Competition Bureau Releases Long-Awaited Greenwashing Guidelines

Important legislative amendments to the Competition Act (the “Act”) enacted in June 2024 have had a significant impact on the legal and enforcement risks associated with environmental claims in Canada, as reported in our June 2024 bulletin. On June 5, 2025, the Competition Bureau (the “Bureau”) issued guidelines to address the Act’s new prohibitions on greenwashing (the “Guidelines”).  These guidelines incorporate changes from the Bureau’s draft greenwashing guidelines issued on December 23, 2024 (the “Draft Guidelines”). An explanation of the amendments and the Guidelines follows below.

The recent amendments expanded the Act’s civil deceptive marketing regime, codifying two additional prohibitions for representations made to the public in relation to the environment:

1. claims concerning a product or service’s environmental benefits must be based on an “adequate and proper test”; and
2. claims with respect to the “benefits of a business or business activity” for the environment must be based on “adequate and proper substantiation in accordance with internationally recognized methodology.” In the absence of clear guidance from the Bureau or courts, these greenwashing amendments—particularly the requirement that substantiation be in accordance with an internationally recognized methodology—introduced considerable uncertainty among businesses and other stakeholders as they prepared for the potential for expanded enforcement risks arising from the amended regime.  

While the Guidelines provide welcome clarity in several respects regarding the Bureau’s position, the most important of which we discuss below, they are considerably less prescriptive than guidance documents released by peer agencies, such as the US Federal Trade Commission’s Green Guide and the UK Competition & Markets Authority’s Green Claims Code. With a broad and flexible approach, the Bureau retains its ability to assess environmental claims on a case-by-case basis. In so doing, however, the Guidelines inevitably fail to address certain of the concerns raised by stakeholders during the various consultation periods leading up to the publication of the Guidelines.

For example, the Bureau’s guidance does not address whether investment funds and private equity firms may rely on the environmental disclosures made by underlying portfolio companies to satisfy the new substantiation requirements—a question raised by a number of stakeholders in their submissions to the Bureau. Despite certain continuing grey areas, the Guidelines provide much needed clarity, namely with respect to the scope of the new greenwashing provisions; the interpretation of “internationally recognized methodologies”; and whether a business could be the target for Bureau enforcement for claims made before the new provisions came into effect.

With specific respect to the newly issued Greenwashing Guidelines, the following takeaways are of key significance:

Key Takeaway 1: The Bureau’s focus is on marketing and promotional representations

The Guidelines make clear that the Act’s deceptive marketing provisions, including the new greenwashing provisions, are intended to capture marketing and/or promotional representations made to the public “for the purpose of promoting a product or business interest”, which is consistent with the statutory language. In other words, where a representation is made “exclusively for other purposes”, such as in the voluntary and mandatory communication of certain environmental information to current and prospective securities investors, the Bureau is of the view that such claims fall outside the purview of the Act’s deceptive marketing provisions.

While helpful in principle, especially for companies with mandatory securities law disclosure requirements, there will inevitably be grey areas. For example, the Bureau has made clear that where information contained in regulatory disclosures is then used in a business’s promotional or marketing materials, such claims will fall within the Bureau’s likely enforcement scope. While details of the Bureau’s deceptive marketing investigations are not typically made public, the way the Bureau classifies such marketing and promotional materials will affect the enforcement risks for many companies moving forward.

Key Takeaway 2: Methodology recognized in two or more countries will generally be considered by the Bureau to be “internationally recognized”, as will all levels of Canadian government-approved methodologies

With respect to representations about the environmental benefits of a product, the Guidelines adopt the principles established by the courts and previous Bureau guidance with respect to performance claims, which must similarly be adequately and properly tested prior to the claim being made. In contrast, the requirement to substantiate claims promoting the “benefits of a business or business activity” with an “internationally recognized methodology” was an entirely new concept that had never been subjected to judicial interpretation. The Bureau’s Guidelines are therefore the first and only interpretative guidance regarding this new requirement.

By way of summary, the Guidelines provide that:

• A methodology that has been recognized in two or more countries will generally be considered by the Bureau to be “internationally recognized”, provided it results in adequate and proper substantiation. However, the Bureau does not interpret the Act as requiring that the methodology be recognized by the governments of two or more countries.
• For a methodology to be recognized, it needs to be acknowledged as valid. Such “recognition” can come from a variety of sources, including standards-setting bodies, regulatory authorities, or even industries and entities using methodologies that are commonly accepted internationally.
• While the Act does not require third party verification, “internationally recognized methodologies often require third party verification.”
• The Act does not require businesses to use the “best methodology available” to substantiate claims and, where more than one internationally recognized methodology is available, any such methodology will meet the requirements of the provision. However, the internationally recognized methodology should be reputable and robust.
• If no testing methodology exists for a particular claim, advertisers and businesses may rely on two or more internationally recognized methodologies that “together can create substantiation for the claim, or that are used for substantiating similar claims.” Where a business concludes that there is no way to substantiate a claim, “it should avoid making that claim, and instead make claims that it can back up.”
• For methodologies required or endorsed by a Canadian federal, provincial or territorial government, the Bureau will assume that such methodologies are consistent with internationally recognized methodologies. Where these methodologies are followed, the Guidelines state it is unlikely the Bureau will pursue enforcement action provided the chosen methodology provides adequate and proper substantiation of the claim. However, the Bureau is of the view that this presumption does not absolve companies from taking the necessary steps to ensure any claim does not convey a general impression that is false or misleading in a material respect.

These details provide a useful indication of how the Bureau is likely to examine the internationally recognized methodology concept in active enforcement cases, and underscore the continuing importance for companies to ensure that their substantiation efforts are grounded in reputable metrics and/or standards prior to making any promotional statements.

Key Takeaway 3: New greenwashing provisions do not apply to representations made before June 20, 2024

The Guidelines confirm that the Bureau will not seek to enforce against any individual or entity for breaches of the new greenwashing provisions prior to their enactment, and provide some guidance to businesses for forward-looking claims.

The reassurance that the Bureau will not apply the new provisions retroactively provides no comfort with respect to the other provisions of the deceptive marketing regime. Those provisions, especially the general provisions relating to materially false and misleading statements and the requirement for adequate and proper testing to support performance claims, have been in force for many years, and the Bureau could enforce against claims made prior to June 2024 on that basis; indeed, those provisions were the basis for its greenwashing enforcement activity until Bill C-59 was enacted. While this remains a risk that cannot be discounted, we anticipate that the Bureau’s enforcement priority will be on utilizing its codified powers relating to environmental claims, which would mean a focus on claims made since June 2024. 

Key Takeaway 4: Additional guidance regarding forward-looking claims

With respect to forward looking claims, the Guidelines emphasize the need for realistic, actionable plans to support environmental goals.

For example, a claim that a company “will replace, starting in 2025, [its] delivery fleet with zero-emission vehicles to reduce greenhouse gas emissions by 100 tons by 2030” is unlikely to attract scrutiny from the Bureau provided that:

1. the company develops a plan to phase out 20% of its gas-powered vehicles on average each year, replacing them with zero-emission vehicles, so that the entire fleet will be made up of zero-emission vehicles by 2030;
2. in 2025, the company starts the process of replacing the oldest 20% of its fleet with new electric vehicles and institutes a schedule to replace the rest of the fleet by 2030; and;
3. the company’s calculation follows the GHG Protocol for Project Accounting standard, which protocol would allow the company to assess the baseline GHG emissions of the fleet and calculate the GHG emissions after implementation of the project.

The Greenwashing Guidelines are not the only considerations for businesses

Although the Bureau’s guidance with respect to greenwashing is important, it is not the only consideration for businesses in this space. Businesses must also consider other regulatory frameworks. The Canadian Food Inspection Agency (“CFIA”), for instance, requires that all method-of-production claims on food labels be truthful, specific, substantiated, and verifiable. This includes claims related to organic farming, sustainable sourcing, and other environmentally-friendly practices.

Previously, there was uncertainty on whether Canadian standards and programs would be sufficient to support environmental claims—particularly in the food industry, where producers often rely on domestic (federal or provincial) certifications for packaging, production methods, and sustainability practices. The Guidelines now acknowledge that such standards, when science-based and government-endorsed, can meet the Bureau’s threshold for substantiation, even if they are not used internationally. As such, CFIA standards—such as those under the Organic Products Regulations—would likely be recognized by the Bureau as internationally recognized methodologies.

Conclusion: The Guidelines Are Only A Provisional Statement of Bureau Enforcement Discretion

The Guidelines offer valuable guidance for businesses; however, they represent only the Bureau's interpretation of the new greenwashing provisions. Private applicants seeking redress under the deceptive marketing provisions are not confined by the Guidelines, either currently by way of the six-resident complaint process that can compel the Bureau to open an inquiry, or later in 2025 when private parties will have the opportunity to seek leave to bring an action directly in respect of allegedly deceptive environmental claims before the Competition Tribunal.

Now is the time for businesses to review their environmental claims and ensure compliance across all applicable regulatory regimes. Depending on the product and context, multiple frameworks may be at play.

For more information, please consult our Competition/Antitrust & Foreign Investment Group or our International Trade & Investment Group.