Some business leaders says uncertainty over the anti-greenwashing rules is holding back communications and investment in cleantech over fears of being targeted under the legislation for forward-looking statements.DARRYL DYCK/The Canadian Press
Ottawa is clawing back some provisions in its contentious anti-greenwashing legislation in a move that has upset both business groups and environmental advocates.
In its 2025 budget, the government said it would propose legislative amendments to remove some aspects of the provisions within the Competition Act under Bill C-59, while maintaining protections against greenwashing – the practice of making false or misleading environmental claims.
Two provisions to be revoked require companies to prove their green assertions using internationally recognized – though unspecified – methodologies, and allow third parties to make complaints directly to the Competition Tribunal. They went into force over the last 16 months.
“These ‘greenwashing’ provisions are creating investment uncertainty and having the opposite of the desired effect with some parties slowing or reversing efforts to protect the environment,” the government said in the budget, unveiled Tuesday.
Companies, especially in natural resource industries, complained the legislation, strengthened in 2024, prevented them from publishing anything about their environmental records and plans by putting them at risk of stiff financial penalties, and many removed materials from their websites.
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Some business groups as well as the Alberta government criticized the rules as overreach, though supporters of the legislation said corporate decisions to expunge materials showed that it was acting as a deterrent as designed.
“The changes are important but insufficient. We’ve long called for the full repeal of the Bill-59 changes,” said Adam Legge, president of the Business Council of Alberta, which represents the chief executives of large companies as well as entrepreneurs. “They are unnecessary, given the existing powers of the Competition Bureau and the commissioner.”
Mr. Legge said the uncertainty over the anti-greenwashing rules is holding back communications and even investment in cleantech over fears of being targeted under the legislation for forward-looking statements.
“They are unacceptably demanding and strict, such that without the removal of those requirements or the softening of the language around the certainty of forward-looking statements, I still think there will remain a chill in innovation investment and clean technology investment,” he said.
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Marie-France Faucher, deputy spokesperson for the Finance Department, said feedback from business organizations and advocacy groups was given “careful consideration” when deciding on the amendments. The government will present the amendments in the coming weeks, she said in a statement.
According to one survey, investors complain that information about climate-related risks and energy-transition planning has become more difficult to glean after companies in various sectors scrubbed data from public disclosures in response to the legislation.
However, Richard Brooks, climate finance director at environmental advocacy group Stand.earth, said he is disappointed that the provisions had not been given the time to achieve their full effect. “We do know that it did lead to the removal of a number of greenwashing statements by oil and gas companies and the largest bank in Canada, so it was clearly having an effect,” Mr. Brooks said.
Royal Bank of Canada in April dropped its sustainable finance targets from public materials. It blamed legal uncertainty stemming from the anti-greenwashing provisions in Bill C-59 as well as changing measurement practices. An official with RBC had no immediate comment on whether the changes would affect its disclosure.
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It remains to be seen what effects removing the two provisions will have on the investment climate, given that making misrepresentations in public materials will remain prohibited, said Conor Chell, national leader of ESG law for KPMG.
Corporate leaders had expressed concerns there could be a flood of complaints with the tribunal after the private right of action went into effect in June. However, none have been made to date, Mr. Chell noted.
There are enough experts available to guide companies on how to navigate the legislation and locate recognized standards, and the Competition Bureau could have provided more education, said Wren Montgomery, associate professor of management and sustainability at the Western University’s Ivey School of Business.
But reversing the provisions only showed the government capitulating to the corporate sector and moving Canada’s policy in the direction of the United States, she said. She called the complaints from the corporate sector “fearmongering.”
“So, I think Carney has believed the greenwashing. They’ve greenwashed the greenwash bill,” Prof. Montgomery said.