Highly anticipated, and somewhat controversial, changes have been introduced to improve protections for consumers and hold companies accountable for environmental claims. New rules in Canada's Competition Act officially kicked in on June 20, 2025, giving regulators and everyday Canadians more power to challenge 'greenwashing'.
What is greenwashing, and why does this matter?
Greenwashing happens when companies make themselves look more environmentally responsible than they really are. It may include a product or service "sustainable," "green," "eco-friendly," or "carbon neutral," without proof.
This is misleading marketing, and until now, Canada did not have specific rules to deal with this kind of deceptive practice.
Companies that make environmental marketing claims must be able to prove their claims with proper testing or reliable data. This includes claims about products, such as "biodegradable" or "low emissions," but also big-picture claims like being "net zero by 2030," which will require more than a vague promise and must be backed by a plan with accepted methods.
Under the previous rules, only the Competition Bureau could bring misleading marketing claims against a company and the Bureau had to prove that the claims were false. Under the new rules, the onus is reversed, and the company must show that their environmental claims are true. Additionally, individuals and organization can now seek leave to bring private actions before the Competition Tribunal.
Consumers are paying closer attention to where their money goes and whether companies they support are walking the talk. These new laws build trust by making sure that eco-friendly claims are more than just hype. Some consumers make concerted efforts to vote with their feet and pay a premium for greener products and services. Greenwashing claims stymie these efforts in a way that defeats environmentally-conscious consumers' efforts and affect competition between companies that are honest and companies that mislead the public about their environmental practices.
Under the new rules, the stakes are high and the penalties are serious. Businesses could be fined up to $10 million (or more for repeat offenses). In some cases, the fine could be 3% of a company's global revenue. Companies might also be forced to correct their ads publicly or pay money back to affected customers.
In other words: greenwashing isn't just bad PR anymore.
The changes are not without controversy. One of Canada's largest banks, RBC, recently stopped publishing some of its sustainability numbers to avoid greenwashing scrutiny. As CBC reported, Michael McCain, the executive chair and former CEO of Maple Leaf Foods, has called this "green hushing." These amendments to do not prevent companies from taking steps towards more sustainable products and practices—even small steps that are not evidence-based; however, once companies make claims around their sustainability and environmental efforts, they must be able to substantiate them.
Because when it comes to going green, truth matters—and now, the law says so.
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