Changes to the Competition Act about Greenwashing

Following recent changes to the Competition Act, Canada’s Competition Bureau is currently developing enforcement guidelines regarding environmental claims to ensure clarity and transparency for Canadians.

Under the Competition Act, private parties can apply directly to the Competition Tribunal to challenge certain types of anti-competitive conduct.

The changes include extending private access rights to cases involving deceptive marketing practices and a civil provision dealing with anti-competitive agreements. Previously, private access was limited to provisions involving refusal to deal, price maintenance, exclusive dealing, tied selling and market restriction, and abuse of dominance. Moving forward, there will be a broadening of who can apply directly to the Competition Tribunal, and ease the legal test used to determine whether cases can proceed.

It has provisions that apply to any representations made to promote a product or business interest. The provisions that are relevant to environmental claims traditionally fell into two baskets:

Provisions that prohibit making representations that are false or misleading in a material respect. The term “material” means that it leads a person to take a particular course of action, like buying or using a product or service; and
A provision that prohibits making claims about the performance, efficacy or length of life of a product unless that claim is based on adequate and proper testing.

New provisions recently enacted by Parliament require that certain types of environmental claims about products be supported by adequate and proper testing and that certain types of environmental claims about businesses or business activities be adequately and properly substantiated. These changes will come into force on June 20, 2025.

It’s up to companies to commit to sustainable construction practices, be transparent about green processes and make needed changes. Businesses that avoid greenwashing and embrace eco-friendly practices will stand out in the marketplace with their authenticity and push others to do the same.

Otherwise, the business will take a blow in customer satisfaction, which is economically significant. Studies have found that even small changes in a firm’s customer satisfaction score can have significant implications for corporate performance.¹

Third-Party Certification Advantages

With third-party certification, builders have the advantage of proving their sustainable building claims and peace of mind in knowing Built Green stands by their certification through onsite verifications and audits conducted by Energy Advisors and Engineers, depending on the project type. The energy performance component of our programs for single family new homes, renovations and restorations (through the EnerGuide label) is also verified by Natural Resources Canada; meanwhile high density certification requires an Engineer’s P.Eng. stamp, a verifier and is audited by a third-party auditor. See BUILT GREEN® Single Family certification process here. If you would like to view the certification process for High Density or any of our other programs, please contact us.

Furthermore, GRESB (formerly Global Real Estate Sustainability Benchmark) recognizes BUILT GREEN® projects for Environmental, Social and Governance Reporting (ESG) for full points under their Design / Construction category.

GRESB collects, validates, scores, and independently benchmark ESG data to provide business intelligence, engagement tools, and regulatory reporting solutions for investors, asset managers and the wider industry.

The organization provides a rigorous methodology and consistent framework to measure the ESG performance of individual assets and portfolios based on self-reported data. Performance assessments are guided by what investors and the wider industries consider to be material issues, and they are aligned with the Sustainable Development Goals, the Paris Climate Agreement and major international reporting frameworks.

¹Harvard Business Review