Bill C-59: Civil proceedings

This post is third in a four-part series on investigation and enforcement proceedings for greenwashing claims under the Competition Act. Part One, "Balancing green goals with economic risks,” provides a general overview of the investigation and enforcement process for greenwashing claims under the Competition Act. Part Two, "From investigation to inquiry,” explores some of the key considerations for companies that may be under investigation by the Competition Bureau.

In this post, I’ll focus on civil proceedings for deceptive marketing practices, addressing the two new anti-greenwashing provisions and private right to action under the Competition Act (the Act).

Private parties and the Commissioner of Competition (the Commissioner) can seek civil remedies against companies making false, misleading or unsubstantiated environmental claims to the public to promote their products or business interests in several ways:

• The Commission may file an application with the Competition Tribunal (the Tribunal) pursuant to s. 74.01(1) (civil deceptive marketing practices provision) of the Act or commence an action in provincial or federal courts
• Private parties may
• Bring an action in Court against a company, as either a private civil action or class action, for
• Damages from conduct that is contrary to the criminal deceptive marketing practices provisions
• Damages and other relief in respect of false or misleading representations at common law and under provincial consumer protection legislation.

Meanwhile, starting on June 20, 2025, private parties will have expanded rights allowing them to apply for leave to bring a matter before the Tribunal against a company for violating civil deceptive marketing practices.

The steps involved for the Commissioner or private parties to bring an application before the Tribunal are addressed below.

The Tribunal is a specialized adjudicative body governed by the Competition Tribunal Act with no function other than hearing applications made pursuant to the Competition Act and the issuance of orders. The Tribunal typically hears matters that are of national interest and large in scope and complexity.

As stated above, both the Commissioner and private parties granted leave can file an application with the Tribunal. However, before a private party may proceed with its application, it must first obtain leave from the Tribunal. This is described in further detail below.

To avoid a duplicity of proceedings, a criminal prosecution may not be commenced against a company if a civil proceeding for deceptive marketing practices on the same or similar facts is already underway.

With respect to the Commissioner, the general steps in the application process are as follows:

• The Commissioner files a notice of application to the Tribunal
• Within five days, the Commissioner serves the responding company with its application
• If the company wishes to respond, then within 45 days it must file and serve a response to the Commissioner containing, among other things, the grounds on which the application is opposed, the material facts on which the respondent opposing the application relies, and any admissions or denial of each ground and material facts relevant to each ground set out in the notice of application
• Within 14 days of receiving this response, the Commissioner may serve a reply that sets out an admission or denial of each ground and related material facts
• After pleadings close, the parties go through discovery and pre-hearing disclosure, which includes the exchange of documents, witness statements and, if applicable, expert reports
• At the hearing, the parties will conduct direct and cross examination of witnesses and experts.

Any party that is affected by, or has a unique or distinct perspective on, an application may bring a motion to the Tribunal to intervene in a legal proceeding. In particular, the federal and provincial Attorneys General and the Commissioner may intervene in proceedings to which they are not a party.

Any party to an action may seek a confidentiality order from the Tribunal so that a document or information is treated as confidential. Any documents or information disclosed during a Tribunal proceeding, and that are not covered by a confidentiality order, may be accessible to the public.

There is no automatic right for a private party to bring an application against a company before the Tribunal. However, effective June 20, 2025, private parties will (as noted earlier) be able to seek permission to file an application with the Tribunal with respect to civil deceptive marketing practices. The application for leave must contain an affidavit setting out the facts in support of the proposed application, a copy of the proposed notice of application, and a memorandum of fact and law.

The general steps in the process are as follows:

• A private party files a notice of application for leave to make an application against an individual and/or a company for civil deceptive marketing practices
• Within five days of filing the notice, the applicant serves each person against whom an order is sought and the Commissioner with the notice of application for leave
• Within 48 hours, the Commissioner will certify to the Tribunal whether or not matter is the subject of an inquiry by the Commissioner or settlement between the Commissioner and the person against whom the order is sought. If the matter is the subject of an inquiry or settlement agreement, then the Tribunal will notify the parties within five days that it cannot consider the application for leave 
• Within 15 days of receiving notice from the Tribunal that the hearing of the application for leave will proceed, a respondent files and serves a copy of its memorandum of fact and law
• Within seven days of receiving this memorandum, the private party may serve a reply.

The application is judged summarily, primarily based on affidavit evidence from both parties and without an oral hearing.¹ The threshold for obtaining leave is not difficult to meet in comparison to the challenge of proving a case on its merits. The Tribunal may grant leave if it is satisfied that it is in the public interest to do so.²

The Tribunal will not proceed with an application for leave if:

1. It is the subject of an inquiry by the Commissioner that is either ongoing or discontinued because of a settlement between the Commissioner and the company³
2. The subject matter of the application ceased more than one year prior.⁴

Where, on application by the Commissioner or a person granted leave under s. 103.1, the Tribunal finds that a company has violated the civil deceptive marketing practices provisions, it has the discretion to issue a broad range of remedial orders, including:

1. Prohibiting the reviewable conduct, being the representation or unsubstantiated claim in question and similar representations and claims (for a period of 10 years, unless the court specifies a shorter period)
2. Requiring the publication of corrective notices
3. Imposing administrative monetary penalties payable to the government (not private parties), of up to the greater of $10 million for the first order (and $15 million for each subsequent order) and three times the value of the benefit derived from the agreement (or if the amount cannot be reasonably determined, 3 per cent of the person’s annual worldwide gross revenues) for the company
4. Requiring the payment of restitution to those who purchased the products at issue (only available for orders relating to violations of the general prohibition against materially false or misleading representations; this is not available for breach of either of the two new greenwashing provisions)⁵—except wholesalers, retailers or other distributors, to the extent that they have resold or distributed the products—in any manner that the court considers appropriate.⁶

The Commissioner may also apply for interim injunctions or temporary orders prohibiting the conduct. Although temporary orders are currently only available to the Commissioner, they will become available to private applicants, effective, again, June 20, 2025. As such, private parties with leave will be able to compel a company to cease or alter their marketing campaigns before a full hearing on the merits can be held.

Note, too, that private claims can be brought in parallel with public enforcement. This means that a conviction in a public enforcement action by the Bureau or the Public Prosecution Service of Canada can be used as proof in a private claim that the person engaged in civil or criminal deceptive marketing practices.

However, no order can be made against a person for publication of corrective notice, administrative monetary penalties, or restitution, if that person establishes that it exercised due diligence to prevent the reviewable conduct from occurring.⁷

The scope and magnitude of the new measures under the Competition Act and the renewed public attention on greenwashing claims means that companies must remain vigilant in their internal processes. A failure to adapt could result in costly investigations and enforcement actions, jeopardizing both financial standing and reputation. Given the potential risks, it is crucial that companies update their internal processes and ensure that their public reporting undergoes regular legal review on an annual basis.

Please note this publication presents an overview of the investigation and enforcement proceedings for deceptive marketing practices under the Competition Act. It is for informational purposes only and is not a replacement for legal advice. If you need guidance, please contact our ESG Legal Risk and Disclosure team to explore how we can help you navigate your legal needs.

1. (Barcode Systems Inc. Symbol technologies Canada ULC, 2004 FCA 339 at para 24; See also Nadeau Poultry Farm Limited v Group Westco Inc. et al., 2008 Comp Trib 6)
2. Competition Act, s. 103.1(6.1)
3. Ibid, s. 103.1(3), (4). The Commissioner must certify within 48 hours of receiving a copy of the application for leave whether or not the matter which forms the subject of the application fits either of these conditions
4. Ibid, s. 103.1(8)
5. Ibid, s 74.1
6. Ibid, s. 74.1(1)(d)
7. Ibid, s. 74.1(3).