Competition bureau commissioner seeks more power to take on greenwashing

Competition Bureau Canada commissioner Matthew Boswell is pressing the federal government for more power to tackle corporate greenwashing.

The bureau is an independent agency tasked with promoting competition and fighting misleading marketing. As Ottawa plans to revamp the Competition Act with a series of amendments in Bill C-59, Boswell sent a 12-page letter to parliamentarians outlining a series of recommendations to strengthen the hand of his office.

One priority area of reform for Boswell is increasing the power to fight corporate greenwashing. The federal government intends to introduce new greenwashing rules, but Boswell believes they don’t go far enough and is asking Ottawa to study whether greenwashing rules can be expanded.

Ottawa is planning to amend the Competition Act to include a new deceptive marketing provision that says a “product’s benefits for protecting the environment or mitigating the environmental and ecological effects of climate change” must be “based on an adequate and proper test.”

But narrowly focusing on products isn’t enough, according to Boswell.

“The reality is that a significant portion of the greenwashing complaints the bureau receives do not involve claims about products, but rather more general or forward-looking environmental claims about a business or brand as a whole,” he wrote. (For example, claims about being “net zero” or “carbon neutral by 2030.”)

Currently, the bureau is investigating RBC and the Pathways Alliance, a consortium of Canada’s largest oilsands companies, over their net-zero and climate action claims. However, because of the way the rules currently apply, the bureau has to prove the companies’ claims about their climate performance are false or misleading at a tribunal, rather than the companies’ proving they are telling the truth. Ottawa’s proposed amendments would flip this, in what’s called a “reverse onus” approach.

Even if the onus was reversed, the ability of the bureau to investigate the complaints is complicated by the fact the greenwashing amendments, as currently drafted, are aimed at products rather than more general claims.

Keldon Bester, executive director of the Canadian Anti-Monopoly Project — an Ottawa-based think tank focused on economic competition issues — told Canada’s National Observer the bureau looking to tackle deceptive claims that go beyond a specific product is “clearly them responding to the raft of greenwashing complaints they've received.”

Bester said it’s notable for two reasons. Firstly, it implies the bureau believes there’s merit to the complaints against RBC and Pathways Alliance. The second is that by getting the feds to amend the act to apply deceptive marketing provisions to more general statements rather than just products or services, the bureau is likely attempting to pre-empt the tribunal narrowly interpreting the rules.

Based on how the competition tribunal has looked at cases over the past 10 to 20 years, it tends to be “hesitant” interpreting laws in a broader way, which Bester explained means the tribunal is more likely to shrink the law’s application than expand it.

“It's that small-c conservatism that the bureau is, I think, forecasting and wanting to get ahead of,” he said.

Competition Bureau Canada declined to answer specific questions, saying it is required by law to conduct its work confidentially. However, it did say environmental issues are important to the bureau.

“Cracking down on deceptive marketing, including false, misleading and unsubstantiated environmental claims, is a priority for the Competition Bureau,” a spokesperson said. “That is why we are closely monitoring the progress of the Government of Canada’s proposed legislation and the potential amendments to the Competition Act.”

Innovation, Science and Economic Development Canada said the federal government is committed to combatting greenwashing and will take Boswell’s recommendations into account as it deliberates changes to the legislation.

As previously reported by Canada’s National Observer, the bureau is investigating Pathways Alliance’s claims it is working towards net zero after Greenpeace Canada filed a complaint detailing how Pathways members — Canadian Natural Resources, Cenovus, ConocoPhillips, ExxonMobil subsidiary Imperial Oil, MEG Energy and Suncor — are claiming to be on a path to net-zero emissions at the same time they plan to increase their fossil fuel production.

Greenpeace Canada senior strategist Keith Stewart said he welcomes the bureau’s greenwashing recommendations because they would “put some real teeth into the rules.” If companies are required to substantiate their net-zero claims, the legal departments of companies tempted to greenwash would tell their marketing agencies to err on the side of caution, he said, contrasting that scenario with the “Wild West” of climate action claims today.

Stewart said that RBC’s claim about being a climate leader and Pathways Alliance’s claims its members will deal with the emissions of the fossil fuels they sell are “fairly vague” compared to previous environmental investigations undertaken by the bureau, making it much more difficult with the current set of rules to determine whether greenwashing is occurring.

In 2022, the bureau levied a $3-million fine against Keurig over false claims its coffee pods could be recycled.

That case “was a nice and clearly delineated claim about a very specific product, and so the test of whether or not what they're saying is correct is relatively easy to make,” Stewart said.

“But when the Pathways Alliance says, ‘We're working towards net zero and we have a plan’… How do you determine whether or not they really do have a plan that gets you to net zero?”

The bureau is “basically saying make the rules clear for everybody about what kind of claims you can make and how you have to back them up before you make them,” Stewart said.

For Stewart, this is evidence of climate change moving up the political agenda. No longer are environmental claims “a sidebar for niche markets,” as they were decades ago, he said. Now, with the energy transition underway, what is green and what isn’t can move billions of dollars worth of investment.

Because there are economic alternatives to oil and gas today — like high-efficiency heat pumps, electric vehicles, wind and solar energy, and more — there is genuine competition for the fossil fuel industry in a way that didn’t previously exist, Stewart said.

“The competition here is actually heating up,” he said. “The economics are increasingly in favour of the alternatives.

“So the fact that fossil fuel companies are making false claims around being green to try to hold their market share has impacts in the real world in a way it didn't 10 or 15 years ago,” he said.