Recent amendments to Canada’s anti‑greenwashing provisions were intended to reduce uncertainty for businesses, but they may do the opposite. While changes to the Competition Act adjust how environmental and sustainability claims must be substantiated and who can challenge them, they do not eliminate enforcement or litigation risk. For organizations making ESG, climate, or sustainability claims, understanding what has changed and what has not is critical to managing exposure to investigations, complaints, and reputational harm.
Why recent anti greenwashing amendments still matter
On March 26, 2026, amendments to the anti-greenwashing provisions of the Competition Act were passed via Bill C15 and received royal assent resulting in two important adjustments in response to industry concerns. However, the amendments may not reduce companies risk exposure to greenwashing allegations and enforcement.
The amendments:
- Remove the reference to “in accordance with an internationally recognized methodology” in s. 74.01(1)(b2) regarding the requirement for environmental business/business benefit claims to be substantiated
- Remove the private right of access for cases to be heard before the Competition Tribunal regarding environmental business/business activity claims (74.01(1)(b2)).
While the amendments were intended to reduce risk, a new set of unintended consequences now face businesses making environmental claims. Below we explain why companies should continue to apply caution and due diligence in their environmental claims.
What removing recognized methodologies means for environmental claims
Removing “internationally recognized methodologies” (IRM) may decrease clarity and increase risk. The original amendments under Bill C-59 required companies making environmental or climate-related claims about their business to substantiate them using “an internationally recognized methodology.” That language, although imperfect, at least pointed organizations toward established frameworks, such as ISO standards, the GHG Protocol, science-based target methodologies, and third-party assurance practices already used by many companies with mature sustainability practices. In its place, the anti-greenwashing regime falls back on the general due-diligence standard that already exists in competition law: claims must be adequately and properly substantiated. For these reasons, companies now face an increasingly uncertain future when making environmental claims.
Key legal considerations for environmental and sustainability claims
- The Competition Act still prohibits deceptive marketing, incl. environmental claims: The amendments do not remove organizations' legal risk exposure, as (a) the provisions introduced by C-59 were not repealed, and (b) misrepresentations (including environmental) were previously prohibited under the Competition Act. Importantly, amendments were not proposed or passed that change s. 74.01(1)(b1) regarding environmental claims about products that must be substantiated with an adequate and proper test. Moreover, the general impression test remains a key component of determining whether a claim is misleading
- Business claims are the most prevalent type of claim at risk of greenwashing: The risk of allegations and enforcement is somewhat proportionate to the issue. Based on KPMG Law’s analysis of greenwashing claims, 71% are business claims. Many companies making forward-looking climate statements, high-level ESG claims, or qualitative sustainability assertions simply do not have that level of evidentiary rigour in place. Many organizations do not fully realize the extent or frequency of the business-benefit sustainability claims they make, thereby increasing legal risk exposure
- Business claims must still be substantiated: Although removing IRMs reduces the burden of finding a recognized standard, there is now no clear guidance for what constitutes adequate substantiation for business claims. This is especially true for novel or complex sustainability claims. Instead, companies must be prepared to substantiate claims to the level that Canadian courts and regulators have historically required when assessing “adequate and proper” testing. That threshold, informed by decades of misleading advertising cases, often requires objective, measurable evidence that is replicable, independently verifiable, and directly linked to the claim being made before it is made public, not merely in response to an allegation of greenwashing
- Updated guidance is not yet available: While the Bureau has committed to updating its guidelines, it’s unclear whether consultation will occur and how soon the guidelines will be updated. In the meantime, companies will have navigate substantiation requirements without a clear benchmark unless the Bureau enforces the provision, thereby increasing the risk of inadvertent non-compliance or exposure to greenwashing allegations.
How private enforcement continues to expose greenwashing risk
Private Right of Access remains an available option. This new enforcement avenue was developed to address the limited resources and capacity of the Competition Bureau to investigate complaints. As of June 20, 2025, private individuals, organizations or companies could apply for leave (permission) to have a greenwashing allegation heard before the Competition Tribunal, if it was satisfied that the application was in the public interest. As several industries anticipated an overwhelming number of applications to the Tribunal, the latest amendments sought to reduce the risk of companies’ defending themselves against frivolous cases. They succeeded, but only in part. While it eliminated one avenue for greenwashing allegations, companies still face risk of cases both within and outside the Competition Tribunal.
How greenwashing claims can still be brought
- Private right of access is still available to deceptive marketing claims: While business and business activity claims can no longer be the focus of applications to the Tribunal, the private right of access is still available to challenge deceptive marketing claims including environmental product claims (s. 74.01(1)(b.1)) and claims that are false or misleading in a material respect (s. 74.01(1)(a)). As we have yet to see a greenwashing allegation use s. 74.01(1)(a)) to file an application to the Tribunal, it remains unclear whether this approach could be applied to an environmental claim that focused on a business or business activity
- Private parties and ENGOs can still file complaints (and cases): Three important avenues remain for private individuals, organizations, and businesses to assert allegations of greenwashing. First, the online form remains available to the public to request the Bureau investigate greenwashing claims. Second, the so-called ‘6-person rule’ remains intact as a way for six residents of Canada to coordinate a request that the Bureau investigate greenwashing claims. Third, and lastly, the private right of access can still be used to challenge deceptive marketing claims including environmental product claims and claims that are false or misleading in a material respect, as noted above
- Greenwashing allegations surge outside the Competition Bureau: Despite the option to use the private right of access, recent greenwashing allegations have been advanced using other avenues. To date, environmental organizations and individuals have filed complaints with securities commissions and civil courts in Canada. This points to a growing trend of plaintiffs using existing processes and laws to challenge environmental claims. Importantly, Canadian companies that operate and advertise in, for example, the UK, EU, and Australia remain exposed to stringent anti-greenwashing regimes that—to date—have been more rigorous and punitive than we've seen from the Canadian Competition Bureau.
What the amendments did not change for businesses
- Changes to reverse onus did not occur. Once a claim is challenged, the business – not the regulator or complainant, must still prove that its environmental representations are accurate, adequate, and properly substantiated
- Changes to financial penalties also did not occur. Penalties for non-compliance remain significant, including administrative monetary penalties and prohibition orders.
Why environmental claims still require caution
The amendments do not eliminate the risk of enforcement, investigations, or financial impact. Companies must still substantiate claims and avoid misleading or exaggerated statements. For companies seeking to make environmental business or product claims, it is recommended that they:
- Undertake a formal, comprehensive legal risk assessment of sustainability communications
- Continue to substantiate all environmental claims with objective, verifiable evidence
- Develop due diligence processes to prevent unintended misleading marketing practices
- Evaluate domestic and global regulatory developments, litigation, advocacy, and activism
- Monitor for guidance and case law from the Competition Bureau, regulators, and courts.
