Canada claims that anti-greenwashing law restricts industry from expressing their views.

The Canadian government, led by Prime Minister Mark Carney, is planning adjustments to the nations anti-greenwashing legislation after feedback from fossil fuel companies and other organizations that their environmental initiatives are not being adequately recognized.

The proposed revisions, outlined in Carneys November 4 budget, aim to address what officials describe as a growing tendency for businesses to remain silent about their environmental efforts due to fear of violating the law, according to a statement from Innovation, Science and Economic Development Canada.

Greenwashing refers to misleading claims about a products or companys environmental impact, creating the impression of greater eco-friendliness than is actually the case. Canada added anti-greenwashing provisions to the federal Competition Act last year to tackle misleading advertising about companies progress toward net-zero emissions without concrete actions to reduce carbon emissions.

Government officials now say that some companies are withholding information that could encourage investment in green innovation. Carneys budget suggested that the law, introduced under former Prime Minister Justin Trudeau, has caused certain parties to slow or even reverse environmental initiatives.

When questioned, the federal department did not provide specific examples of companies reducing genuine environmental efforts as a result of the law, which focuses on marketing claims rather than environmental practices themselves.

Experts caution that fears about legal risks may be overstated. Wren Montgomery, cofounder of the Greenwash Action Lab and professor at Western Universitys Ivey Business School, noted that compliance knowledge is widespread. She suggested that corporate complaints may be more about avoiding accountability than legal uncertainty.

The debate comes as Clean50, a sustainability-focused collective, released an open letter on November 16 signed by 144 business, academic, and environmental leaders urging Carney to maintain anti-greenwashing protections. The letter warns that weakening the rules could undermine investor confidence and disadvantage companies already aligned with the law.

Canada has also committed internationally to combat climate disinformation, emphasizing access to accurate and evidence-based information on climate change.

The governments concerns center on a legal requirement for companies to substantiate environmental claims with evidence aligned with internationally recognized carbon accounting standards. Carneys budget argued that this requirement, along with allowing private complaints to a tribunal, creates investment uncertainty and proposed removing both rules while keeping the core obligation to support environmental claims.

The federal Competition Bureau, responsible for fair marketplace practices, warns that misleading environmental marketing can distort competition and misinform consumers. The bureau has issued guidelines allowing the use of carbon accounting standards recognized in at least two countries.

Montgomery emphasized the importance of using internationally accepted standards to prevent misuse of third-party certifications. Experts suggest alternative options, such as refining language around acceptable standards or temporarily suspending the private complaint mechanism rather than removing it entirely.

Industry feedback, particularly from oil and gas companies, highlighted concerns over vague standards and legal uncertainty. A spokesperson noted that stakeholders frequently felt unable to communicate environmental progress publicly, fearing legal repercussions.

The goal of modifying the law is to reduce fears of enforcement while ensuring that companies remain accountable for their claims. Environment and Climate Change Canada previously noted that uncertainty had posed challenges for encouraging voluntary net-zero commitments but stressed that environmental plans should still be based on credible, internationally recognized carbon accounting methodologies.

Many industry groups, including the Canadian Renewable Energy Association, support the anti-greenwashing rules and the use of the Greenhouse Gas Protocol. Public opinion also strongly favors enforcing penalties for unverified environmental claims, with a 2024 survey showing 93% of Canadians in agreement.

Author: Gavin Porter