One Year Out: The New Frontier of Greenwashing Litigation in Canada

On June 20, 2024, amendments to the Competition Act, R.S.C. 1985, c. C-34 (the “Competition Act”) by Bill C-59 came into force throughout Canada. Among these amendments were new provisions directed at “green” deceptive marketing practices, i.e. false or misleading advertisements and claims about climate change and environmental protection or restoration — otherwise known as “greenwashing.”

One year out, we are now beginning to see these new greenwashing provisions in action. Since June 2024, at least two proposed greenwashing class actions have been filed in Canada, naming certain household consumer brands as defendants. Further, effective June 20, 2025, public access to the Competition Tribunal (the “Tribunal”) has significantly expanded with the introduction of new “private access applications,” addressed below.

This is the new frontier of greenwashing litigation in Canada: a frontier characterized by growing regulatory, corporate and consumer emphasis on transparency and accountability in climate action and environmental stewardship. For companies that promote products and other business interests in Canadian markets, this evolving landscape is worth noting. When it comes to responding to climate change, the corporate and collective stakes are high.

Greenwashing under the Competition Act

Although the Competition Act has long prohibited deceptive marketing practices in various forms, Bill C-59 introduced the Competition Act’s first set of explicit greenwashing provisions. The new provisions, ss. 74.01(1)(b.1) and (b.2), read as follows:

74.01 (1) A person engages in reviewable conduct who, for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest, by any means whatever, …

(b.‍1) makes a representation to the public in the form of a statement, warranty or guarantee of a product’s benefits for protecting or restoring the environment or mitigating the environmental, social and ecological causes or effects of climate change that is not based on an adequate and proper test, the proof of which lies on the person making the representation;

(b.‍2) makes a representation to the public with respect to the benefits of a business or business activity for protecting or restoring the environment or mitigating the environmental and ecological causes or effects of climate change that is not based on adequate and proper substantiation in accordance with internationally recognized methodology, the proof of which lies on the person making the representation;

Following the enactment of ss. 74.01(1)(b.1) and (b.2), the Competition Bureau (the “Bureau”) issued guidelines to help clarify the approach to these new provisions (the “Guidelines”).^[1] The Bureau is the federal entity responsible for overseeing compliance with the Competition Act — including investigating complaints — while the Tribunal is tasked with adjudicating complaints (and is not bound by the Bureau’s Guidelines).

The new Guidelines go some but not all the way to clarifying the meaning of key terms under ss. 74.01(1)(b.1) and (b.2) of the Competition Act.

With respect to (b.1), the Guidelines note that “[i]t remains to be seen how the courts will interpret many of the key concepts set out in this new provision.” The Guidelines in turn describe a shifting onus under (b.1): if the Bureau proves that (i) a representation was made to the public, (ii) the representation was a claim about the environmental benefits of a product, and (iii) the representation was made for the purpose of promoting a product or any business interest, then the onus shifts to the business to show that the claim was based on adequate and proper testing.

With respect to (b.2), the Guidelines state that, unlike (b.1), this provision is limited to claims about a business or business activity (not products), e.g. claims about a company’s net-zero emissions status. Further, the Guidelines state that “[t]he Bureau will likely consider a methodology to be internationally recognized if it is recognized in two or more countries.”

The potential consequences for violation of either or both of ss. 74.01(1)(b.1) and (b.2) are steep: the Competition Act contemplates significant administrative penalties for corporate entities of up to $10,000,000, three times the value of the benefit derived, or, if the amount cannot be determined, 3% of the company’s gross annual revenues worldwide. A business may also be ordered to cease the impugned practice and/or publish notice with a correction of the alleged misrepresentation.

Private access applications to the Tribunal

In a notable shift of expanded private recourse under the Competition Act, private parties can now apply directly to the Tribunal to challenge deceptive marketing practices. Whereas previously only the Commissioner of Competition (the head of the Bureau) could apply to the Tribunal after investigation of a complaint, as of June 20, 2025, this is no longer the case.

In a revised information bulletin concerning the new private access provisions, the Bureau has noted that private parties “may choose to pursue private access for many reasons.”^[2] To bring a private access application, a private party must first apply to the Tribunal for leave. For deceptive marketing practices, the test is one of public interest, i.e. whether it is in the public interest for leave to be granted. If granted leave, the private party can then proceed to file their private access application seeking orders and other relief under the Competition Act.

It is anticipated that this new, expanded pathway to adjudication by the Tribunal — coupled with uncertainty in the meaning and application of ss. 74.01(1)(b.1) and (b.2) — will lead to increased litigation and focus on allegations of greenwashing in Canada.

Greenwashing cases prior to the recent legislative changes

Even before the Competition Act’s new greenwashing provisions came into effect, environmental representations were already the focus of litigation and regulatory action in Canada.

In February 2024, Vancouver-based Lululemon Athletica Inc. (Lululemon) was the subject of a complaint submitted by Stand.earth, an environmental advocacy organization, focused on Lululemon’s “Be Planet” campaign. Stand.earth’s complaint,^[3] which predated the enactment of ss. 74.01(1)(b.1) and (b.2), was brought under existing provisions of the Competition Act. In early 2024, the Bureau accepted Stand.earth’s complaint and commenced investigation.

Another example is Keurig Canada Inc., which earlier faced complaints regarding the recyclability of its single-use coffee pods. In 2022, Keurig reached an agreement with the Bureau to pay a $3 million penalty, donate $800,000 to a Canadian environmental charity, and change its recyclability claims and coffee pod packaging. As reported by the Bureau, the Bureau’s investigation “concluded that Keurig Canada’s claims regarding the recyclability of its single-use coffee pods are false or misleading in areas where they are not accepted for recycling.”^[4]

Greenwashing is also no stranger to civil litigation in Canada. In September 2022, a proposed class proceeding was filed in the Superior Court of Quebec against Dollarama Inc., Rona Inc., Costco Wholesale Canada Ltd., and Toys “R” Us (Canada) Ltd., among other entities, claiming various relief for deceptive marketing, including under ss. 52 and 36 of the Competition Act.^[5] The plaintiff in that case alleged that the defendants’ reusable bags, marketed as “recyclable,” were not in fact recyclable. At the authorization stage, the plaintiff’s claims under the Competition Act were not certified (for lack of evidence that the proposed class members purchased the defendants’ shopping bags because they thought the bags were recyclable), though other claims, including under Quebec’s Consumer Protection Act,^[6] were authorized to proceed.^[7]

The new frontier of greenwashing litigation in Canada

Since June 2024, at least two proposed class actions have been initiated in Canada, specifically directed at environmental marketing claims.

The first, Grigorescu v. 9199-4467 Quebec Inc. dba Earth Rated,^[8] was filed in December 2024 on behalf of a proposed national class of “[a]ll persons residing in Canada” who had “purchased Earth Rated Certified Compostable Poop Bags.” In this proceeding, the plaintiff has claimed that the defendant’s “certified compostable” products are in fact non-compostable (at least in a majority of Canadian cities). By way of defence, Earth Rated has pleaded, inter alia, that at least certain Earth Rated products “clearly indicate that the products themselves are compostable, but that some municipalities may not accept them or may not accept pet waste.”^[9] This proposed national class proceeding has yet to be certified, i.e. has yet to receive authorization under Quebec law.

The second, Gingras v. Proctor and Gamble Inc.,^[10] was filed in January 2025 on behalf of a proposed class of “[a]ll person residing in Quebec who purchased Charmin Toilet Paper.” In advancing this claim, the plaintiff has pointed to the defendant’s “Keep Forests as Forests” campaign, which promises to “Protect-Grow-Restore” — pleading that the defendant’s practice of marketing and selling Charmin toilet paper as environmentally-friendly, when its products were “in fact, … produced using widespread deforestation practices,”^[11] was likely to deceive ordinary consumers. This proposed class proceeding, too, has yet to be certified.

Looking to the future: the challenge of uncharted territory

The recent statutory amendments and emerging litigation are both manifestations of a broader, global push for heightened corporate responsibility — a push also in flux with recent shifts in industrial, technological, and political forces. The new provisions and emerging litigation reflect both (i) increased recognition of the power of environmental claims to influence consumer choices, and (ii) growing calls for transparency and corporate accountability.

Beyond the courthouse, the effects of these amendments have already been felt in other areas. In April 2025, the Royal Bank of Canada announced the retirement of its “Sustainable Finance Framework,” citing, in part, the enactment of the new Competition Act provisions.^[12] As another example, in June 2024, the Pathways Alliance, a consortium of Canadian oilsands producers, removed certain content from its website and social media accounts, citing the Competition Act amendments as a source of “significant uncertainty for Canadian companies that want to communicate publicly about the work they are doing to improve their environmental performance, including to address climate change.”^[13]

In December 2024, a constitutional challenge to the new Competition Act provisions was also initiated by the Alberta Enterprise Group and the Independent Contractors and Business Association. Filed in Alberta’s Court of King’s Bench, the plaintiffs claim in that proceeding that the amendments limit freedom of expression and violate s. 2(b) of the Canadian Charter of Rights and Freedoms, with a “profound ‘chilling effect’” on businesses and industry.^[14]

Where does all of this leave us? In what is now a familiar debate about the burdens and benefits of climate action, Canadian businesses and industry find themselves in new, uncharted territory when it comes to championing environmental protection and restoration.

Follow our Insights as we continue to watch this emerging field in Canadian law.

Various members of Lawson Lundell LLP’s Regulatory Compliance, Pensions and Employee Benefits, Corporate Commercial, and Litigation & Dispute Resolution groups frequently advise on matters involving the Competition Act, Bill C-59, environmental marketing claims, and class proceedings across Canada. For inquiries about greenwashing litigation and/or related regulatory compliance, please reach out to one of our team members. 

This article was co-authored by Ruby Pyke, a 2025 summer student at Lawson Lundell.