The Competition Act’s anti‑greenwashing provisions, introduced in 2024, prompted many businesses to pause or withdraw environmental claims. The last-minute inclusion of enterprise-level wide claims (such as net-zero commitments) raised particular concerns. Businesses faced new requirements to substantiate their environmental claims, as well as significant uncertainty regarding the appropriate standard of proof for such claims – all in the context of the new threat of potential private enforcement.
In response to stakeholder concerns, the provisions regarding enterprise-level claims were further amended again in March 2026 (after many companies had spent significant time and resources complying with the original provisions…). The March 2026 amendments made two significant changes to the provisions governing enterprise-level environmental claims: the first was to remove the requirement that such claims needed to be substantiated in accordance with an “internationally recognized methodology” and the second was to insulate enterprise level environmental claims from potential private enforcement (private enforcement remains available for environmental claims about a product).
While the amendments made in March 2026 amendments eased the most significant concerns caused by the original enterprise-level greenwashing provisions, it is important for companies doing business in Canada to ensure that their environmental claims are accurate and are properly substantiated. It is also important for companies to understand that the longstanding general prohibition against materially false or misleading claims and unsubstantiated performance claims continue to apply to all promotional claims (including environmental claims).
A consideration for multinational companies is how far Canada’s misleading advertising rules reach beyond its borders. For example, could they apply to business-wide environmental claims made by a foreign parent or subsidiary relating to their Canadian operations or similar types of claims?
Potential consequences of non‑compliance
Businesses that breach the rules can be ordered to stop making claims, publish corrective notices and, in some cases, provide restitution. For corporations, monetary penalties can reach the greater of C$10 million (C$15 million for subsequent orders) or three times the benefit derived from the conduct. If that benefit cannot reasonably be determined, the penalty can be 3% of annual worldwide gross revenues.
Since June 20, 2025, private parties have been able to bring enforcement actions under the misleading advertising provisions of the Competition Act to the Competition Tribunal (but need to obtain leave to do so). While no private applications have been brought under the greenwashing provisions to date, businesses remain concerned about strategic litigation brought by competitors or environmental activist groups.
Key takeaways
Companies can make effective environmental claims about both their products and activities to mitigate their environmental impact. The key considerations before making these types of claims are (i) choose an appropriate approach for substantiating the desired claim, (ii) ensure that testing is done or the methodology used is applied properly and results obtained before making the claim, and (iii) make sure the claim made is consistent with and supported by the facts.