On November 4, 2025, the federal government published its 2025 budget, including plans to remove the requirement for companies to substantiate environmental benefit claims using internationally recognized methodologies, and to eliminate the right of third parties to bring greenwashing claims.
The federal government’s 2025 budget (“Budget 2025”) signals another whipsaw shift in Canada’s approach to “misleading” environmental and sustainability claims. Budget 2025 announces the government’s intention to amend the recently introduced greenwashing provisions in the Competition Act to restore greater clarity and certainty for businesses.
The proposed updates include:
- Removing the requirement for companies to substantiate environmental benefit claims using internationally recognized methodologies; and
- Eliminating the right of third parties to bring greenwashing complaints directly to the Competition Tribunal.
The Competition Act was amended in 2024 to introduce “greenwashing” provisions and expand private access to the Competition Tribunal:
- The new greenwashing provisions require businesses to prove that any claim about the environmental benefits of a product is based on adequate and proper testing, and that any claim about the environmental benefits of a business or business activity is based on adequate and proper substantiation in accordance with internationally recognized methodology.
- The amendment expanding private access became law in June 2025, granting private parties the right to bring complaints directly to the Competition Tribunal for false or misleading advertising. Private access does not extend to complaints under the greenwashing provisions, which can only be enforced by the Competition Bureau. However, complaints about environmental or sustainability-related claims may still be pursued under the Competition Act’s general prohibition on materially false or misleading representations.
Budget 2025 recognizes that the recent changes to the greenwashing provisions have created investment uncertainty and are having the opposite of the desired effect with some parties slowing or reversing efforts to protect the environment. Following the Budget 2025 amendments, the greenwashing provisions in the Competition Act will be limited to claims about a product, will remove the requirement to substantiate environmental benefit claims about a business or business activity using internationally recognized methodologies, and will end third party access to the Competition Tribunal for greenwashing complaints.
It remains to be seen which aspects of the greenwashing provisions the government will retain or change, and whether it intends to eliminate the right of third parties to bring complaints to the Competition Tribunal altogether or simply reaffirm that the greenwashing provisions do not apply to third parties.
Should Budget 2025 pass, businesses should expect further updates in the near term, which will likely include a partial reversal of the most controversial aspects of the current greenwashing framework under the Competition Act.
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