Canada enacts new greenwashing and merger control rules

The Federal Government of Canada has passed a series of new rules to tackle greenwashing or unsupported claims of companies that promote the environmental benefits of their business or products —and new merger control measures. The new rules are amended to the Competition Act along with other changes to the competition laws on 20 June 2024. 

Public or private firms operating in Canada need to comply with the new rules amended in the Competition Act, be cautious in their marketing and sustainability reporting, and face penalties if found in violation of these revised regulations.

Let’s explore the new greenwashing, merger control and other important rules amended by the Government of Canada in detail. 

Updates to Canada's greenwashing laws

Under the newly amended laws, the changes tackle unsupported environmental claims, commonly known as greenwashing, by:


  • Requiring that claims about the environmental benefits of the product be supported by proper testing and adequate. 


  • Requiring that claims about the environmental benefits of business or business activity be based on proper and adequate substantiation in accordance with an internationally recognized methodology. 


  • Assessing the impact of these requirements and expects to provide guidance, in due course, that will offer predictability and transparency for business and the legal communities in the enforcement of the law. 


Businesses that collaborate to protect the environment can seek a certificate from the Competition Bureau confirming bid ranging. The Competition Act’s conspiracy and civil agreement provisions will not apply to collaboration. 

Furthermore, the new Act includes significant penalties for companies breaching the deceptive marketing provisions, with fines up to three times the value of the benefit derived from the deceptive conduct or $10 million, or $15 million for subsequent orders, or even 3% of the company's annual revenue. 

Updates to Canada's merger control laws

The updates on the Competition Act include provisions to address anti-competitive mergers. The amendments include: 


  • Creating a presumption that a merger is anti-competitive if it increases market share or concentration. 


  • Strengthening remedies for anti-competitive mergers by establishing that they aim to restore or preserve the level of competition that would have existed without the merger. 


  • Expanding the range of mergers that require advance notification to the Competition Bureau by addressing gaps in the requirements. 


  • Preventing parties from closing potentially harmful mergers where the Competition Bureau has applied for an injunction. 


The Competition Bureau's period to challenge a merger for which it was not notified has been extended from one year to three years. 


Other changes to Canada's Competition Act

Beyond greenwashing laws and merger control, the Government of Canada has made many significant changes to Competition law, including: 


  • Stronger measures to address anti-competitive agreements: The amendments strengthen the civil provision, which prevents companies from entering into agreements that substantially lessen or prevent competition. 


  • Enhanced refusal to deal provision: The new rules prohibit businesses from refusing to deal with another business if that refusal harms competition and meets other conditions. 


  • Improvements to deceptive marketing practices provisions: The changes strengthen the Competition Bureau’s ability to act against misleading discount claims and drip pricing. 


  • Expanded private access to the Competition Tribunal: Private parties can apply directly to the Competition Tribunal to challenge certain types of anti-competitive conduct. 


Next steps

The changes made to the Competition Act come into effect immediately, except for those relating to private access, which will come into effect next year on 20 June 2025. 

In the coming months, the Bureau will consult the Canadian residents as it reviews its guidance, and interested parties can submit their initial comments or suggestions through the Bureau’s Guidance Feedback Form. 


While you’re here…


These new greenwashing rules and other changes to the Competitions Act for companies operating in Canada may require more detailed due diligence processes, risk monitoring, and ESG performance assessments and reporting in order to operate with authority. These are areas where Auquan can help. 

Auquan automates and streamlines deal sourcing, due diligence, monitoring, sustainability, and compliance workflows so teams can move faster and more efficiently. Using advanced AI, Auquan generates material and sustainability insights on any entity worldwide — public or private — fine-tuned for your team’s investment and lending requirements.

Let’s explore how Auquan can help you and your team eliminate tedious and time-consuming manual data work and focus more on what you do best: making strategic decisions ahead of the market. 


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