Bill C-59 was presented to the House of Commons on May 6 with significant amendments from the Standing Committee on Finance. These changes further strengthen the deceptive marketing provisions of the Competition Act with particular reference to misleading price representations and environmental claims. For businesses, the proposed amendments to the deceptive marketing provisions will increase compliance burdens and litigation risk, consistent with the general theme of the series of Competition Act amendments put forward in 2022, 2023 and now in 2024. While the stated purpose of the amendments exercise over the past several years has been to foster greater productivity and lower inflation, and to benefit the Canadian economy, the actual likely practical effect of the changes on businesses is to increase their compliance costs, increase their potential liability, and provide more parties with standing to sue them.

During the clause-by-clause consideration of Bill C-59, the Standing Committee on Finance adopted significant changes that will impact the Competition Act’s deceptive marketing provisions related to drip pricing, ordinary selling price and environmental claims. The bill (with amendments by committee) is presently at the report stage in the House of Commons and has yet to be examined by the Senate before passing into law.

Bill C-59 was presented with the following changes:

• Drip Pricing (junk fees). The proposed amendment strengthens the drip pricing provisions of the Act by specifying that the only fixed, unavoidable amounts that can be excluded from the upfront price of a product or service are those imposed by law directly on the purchaser, such as sales tax. The law currently does not specify on whom government fees must be imposed for the exemption to apply and is therefore less restrictive. The proposed amendment would in substance prescribe “all in pricing” federally even though many provincial consumer protection acts do not do so. It seems likely that only variable or avoidable amounts can properly be excluded.
• Ordinary Selling Price. The proposed amendment would require sellers advertising reduced prices to prove that the regular price they are discounting from is genuine. The law currently requires the Commissioner of Competition to prove that a seller’s discount price is false or misleading. This change is intended to create a “reverse onus” on companies.
• Greenwashing. The new requirement to support environmental claims with adequate and proper substantiation was itself expanded by the committee to cover more general claims about a business or business activities, not just specific products.

The impact of the changes adopted by the committee is that price representations and environmental claims will be easier for the Competition Bureau to challenge. In addition to these proposed changes, Bill C-59 contains amendments that will allow private parties to bring deceptive marketing cases before the Competition Tribunal if it determines that doing so is in the public interest. In the past, private parties were largely limited to bringing complaints to the Bureau and for the Bureau to then decide whether they merit further review. This marks a significant change to Canada’s enforcement approach if passed into law. The Tribunal will have the authority to order monetary payments as a remedy to private litigants, such as disgorgement. Unfortunately, the winners here may be plaintiff-side law firms, rather than businesses or a more productive or fair Canadian economy.

It will be important for businesses to monitor the Tribunal’s application of the public interest test and the extent to which private parties will leverage the new enforcement avenue to address allegations of deceptive marketing practices. The Bureau is also likely to step up enforcement efforts over price representations and environmental claims.

Best Business Practices

As a result of Bill C-59’s proposed amendments, businesses may expect to face more scrutiny of marketing claims and challenges from the Competition Bureau or legal action by private parties for non-compliance.

To stay ahead in compliance efforts, going forward businesses should consider:

• Compliance policy and training. Update internal competition compliance policies related to pricing practices and environmental claims. Provide opportunities for training and education to employees (and new hires) to ensure awareness of legal obligations and risks.
• Transparent pricing. Present the full cost of a product or service upfront. An advertised price should include all mandatory, fixed fees that apply but can exclude government fees that are imposed by law directly on purchasers (like sales tax). Where mandatory but variable fees apply, provide clear and conspicuous disclosure about their existence and amount near the advertised price to enable consumers to make informed decisions and avoid unexpected charges at checkout.
• Verify advertised sales and discounts. Implement clear pricing policies that outline how regular prices are determined and maintain comprehensive records about prices and sales volumes to establish that sales are genuine if challenged.
• Substantiate environmental claims. Environmental claims about products or forward-looking activities (such as net zero or sustainability practices) should be substantiated beforehand by using internationally recognized methods.
• Monitor consumer complaints and trends. Regularly monitor consumer complaints and feedback channels as well as trends reported by consumer interest groups in your industry.

Conclusion

The proposed changes to the Act’s deceptive marketing provisions signal a shift towards a stricter approach to price representations and environmental claims, which is reinforced by the introduction of a new private right of action. Businesses can expect the Competition Bureau’s enforcement efforts to continue focusing on online marketing practices as reported in its 2024-2025 Annual Plan, especially greenwashing and so-called “junk fees”.

As Bill C-59 goes through the legislative process, businesses should prioritize compliance efforts and begin taking proactive measures to address potential risks.

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