Unpacking Big Oil's fierce pushback against new truth-in-advertising rules

New truth-in-advertising rules requiring that a company’s commitments to climate action be accurate have set off a firestorm in Canada’s oil and gas industry, triggering some of the largest fossil fuel giants to scrub their websites and issue legal notices backtracking on previous claims.

Amendments to the Competition Act to crack down on greenwashing officially became law on Thursday. The changes give Competition Bureau commissioner Matthew Boswell more power to investigate false and misleading claims about a company’s environmental performance. The amendments, which apply to all businesses and not just fossil fuel companies, came after he wrote a letter to the House of Commons and Senate in March urging parliamentarians to ensure that, if a company makes a statement about the environmental benefits of its business, those statements be factual.

The changes enjoyed cross-partisan support, but ahead of the legislation taking effect, the Pathways Alliance, which represents the six-largest oilsands companies (Suncor, Cenovus, Imperial Oil, MEG, Canadian Natural Resources and ConocoPhillips) wiped its entire website where it previously boasted of the groups’ commitment to achieving net-zero by 2050 using a proposed multi-billion dollar carbon capture megaproject.

All that remains on the Pathways website is a statement claiming the new Competition Act creates “significant uncertainty.” Until the group understands how the legislation will be applied, it is removing information about its activities and commitments, says the Pathways Alliance, which is already under investigation by the Competition Bureau.

“The whole thing is absurd,” said Catherine McKenna, chair of the UN’s high-level expert group on net-zero commitments and former environment and climate change minister Tuesday in an interview with Canada’s National Observer.

Greenwashing is a major problem because it hurts companies that are actually working towards a sustainable future, while also undermining confidence in the market for both consumers and investors, McKenna said. Before her political career, McKenna worked as a competition lawyer, and said truth-in-advertising is at the centre of competition law.

“Canadians can expect that if you're going to make claims in advertising that you actually have the evidence to back it up,” she said. “That's not onerous.”

Information about climate action and sustainability can still be found on the websites of the Mining Association of Canada, the Chemistry Industry Association of Canada (which represents the plastics industry), and the Canadian Bankers Association (representing Canadian banks that are deeply entrenched in fossil fuels). Each of those industry groups represents companies that would also be affected by the Competition Act changes.

To date, the Pathways Alliance’s decision to strip its website of information has garnered the most public attention, but it’s not the only fossil fuel entity to challenge the truth-in-advertising rules. Cenovus removed information about its plan to reach net-zero, saying in a statement that it believes “the current changes to the Competition Act impede our ability to be transparent with the public and [we] have made our concerns known to the Canadian government.”

The Pathways Alliance did not return a request for comment.

Pathways members Suncor, Imperial Oil, MEG, and ConocoPhillips have each put disclaimers on their respective websites, noting that information about their climate action is either temporarily unavailable or provided for “historical information purposes only” and not a “current representation.”

Enbridge, which is not a member of the alliance, said in a statement that “while protections against false or misleading claims from businesses and organizations are important, this new federal legislation is overly broad and subjective—confusing the marketplace and inviting frivolous claims.”

But unlike the Pathways Alliance, Enbridge told Canada’s National Observer it has not removed any of the sustainability information on its website because it is “committed to transparency and accuracy and stands behind the information shared in its reports, communications, and marketing.”

Vague claims

A specific issue some of the fossil fuel companies, organizations, and the Alberta government have emphasized is that the Competition Act now requires that company claims about the environmental benefits of their activities be supported by an “internationally recognized methodology.”

Ecojustice lawyer Tanya Jemec said the phrase “internationally recognized methodology” allows for needed flexibility, while offering a credible way to gauge company performance. The phrase gives “the Competition Bureau room to adapt and set standards as they evolve,” she said.

But the fossil fuel industry disagrees. An internationally recognized methodology is “nebulous” according to the Canadian Association of Petroleum Producers (CAPP), and “may or may not exist” according to ExxonMobil subsidiary Imperial Oil.

Several international best practices to define credible net-zero commitments already exist. The International Organization for Standardization (ISO) published guidelines two years ago, while the Science Based Targets Initiative (SBTi) published its net-zero standard earlier this year. A frequently cited standard by experts in interviews is the United Nations High-Level Expert Group’s (HLEG) 2022 report on net-zero commitments.

McKenna chaired that UN report, and told Canada’s National Observer the price of admission to the net-zero club is clear: emissions have to actually go down, fossil fuels cannot be increased, short-term emission-reduction targets are required, lobbying efforts have to help and not hinder those goals, and transition plans for fossil fuelled business models are essential.

Canadian fossil fuel companies are “so far away from being net-zero. There’s no nuance in this,” she said.

“It's time for the government to step up and put a cap on emissions, because we now know… they don't have a plan to reduce their emissions,” she said. “They've said they want to be part of the solution. Great. The solution means reducing emissions; that's just what is required.”

On Tuesday, Competition Bureau Canada published a guide to its recent amendments, and said it is assessing the impact of the changes and intends to provide further guidance for companies to help interpret the law.
 

Winning the narrative

While the companies themselves are framing their decision to remove information ahead of truth-in-advertising rules taking effect as precautionary for legal reasons, both the oil and gas industry’s premier lobby group, CAPP, and the Alberta government have tried to frame the new legislation as ideologically driven federal overreach.

CAPP president Lisa Baiton said in a statement the new Competition Act “effectively muzzles” the industry, and is “an effort to clear the field of debate and to promote the voices of those most opposed to Canada’s energy industry.”

In a statement, Alberta Premier Danielle Smith said the legislation “will prevent private entities from sharing truthful and evidence-based information that happens to oppose the extreme and untruthful oil and gas narrative of the federal NDP and Liberals.”

Smith’s comments are entirely inaccurate. In fact, the legislation requires companies to do the exact opposite by using evidence to back up their claims. When asked about this misrepresentation of the legislation, Smith’s press secretary Sam Blackett refused to clarify.

“The provisions in the amendments are industry agnostic, so they apply across the board, and yet we don't see every other sector tearing down websites,” said University of Calgary law professor Martin Olszynski. “So it's hard to ignore the implication that [fossil fuel companies are] concerned they were going to get caught in the crosshairs of this legislation.”

Olsyznski said part of the authoritarian playbook is to undermine an “objective reality,” giving the impression “you can reject facts if you don’t like them.” That's an important element to the current debate, he said, noting that for the federal government and supporters of the truth-in-advertising rules, their starting point is that facts exist.

The oil and gas industry and the Alberta government, on the other hand, “don’t want to engage in that discussion,” he said. That helps explain the attempt to “change the channel” by framing the amendments as draconian ideological overreach, as Smith appeared to do last week when she promoted a column from the Calgary Herald on her social media that accused the Trudeau government of Orwellian tactics, branding Environment and Climate Change Minister Steven Guilbealt Canada’s “first Minister of Truth.”

In a statement, Guilbeault said the changes to the Competition Act is good news for the market, and committed to holding oil companies accountable for their pollution.

“It's simple: consumers deserve to know the truth about the record profits being made by the oil and gas sector,” he said. “We need this industry to make the investments to cut pollution that they’ve been promising Canadians.”

In the weeks leading up to the Competition Act amendments passing into law, the Alberta government has linked those changes with legislation proposed in a private member’s bill from NDP MP Charlie Angus.

Angus’ bill tabled in February proposed to ban fossil fuel advertising, similar to how tobacco advertising was banned in 1989. The legislation aims to “to prevent the public from being deceived or misled with respect to the environmental and health hazards of using fossil fuels.”

In May, Alberta environment minister Rebecca Schulz said Angus had “managed to sneak his bill in through the back door,” referring to the Competition Act amendments, calling it “an undemocratic gag order.”

“I'm more than willing to take the credit for discomforting these companies,” Angus told Canada’s National Observer. “But the bigger issue is it speaks volumes about the lack of sincerity from Canada's oil and gas industry that they are willing to side [with], and hide behind, the rage machine as opposed to being able to explain what exactly they are doing that's going to get them to net zero.”

Angus said the Pathways Alliance has had a “veneer” of being serious about trying to lower emissions and being on a path to net-zero, but the “blind panic” now on display suggests to him “that it was all a front.”

“They've opted to throw in their lot with the conspiracy rage machine of Danielle Smith.”