The Fall Economic Statement Implementation Act, 2023 (Bill C-59) yesterday received royal assent, implementing (1) key climate-related “truth-in-advertising” amendments to the Competition Act and (2) two important investment tax credits (ITCs) for clean technology and carbon capture utilization and storage. Omnibus Bill C-59 was introduced in the House of Commons in November 2023 (and amended several times since then) to implement certain provisions of the Fall Economic Statement (FES) tabled in Parliament in November 2023 (see our earlier bulletin here) and certain provisions of the budget tabled in March 2023 (Budget 2023) (see our earlier bulletin here).

This bulletin summarizes the climate-related amendments to the Competition Act. A subsequent bulletin will cover the ITCs.

Deceptive marketing practices. Part VII.1 of the Competition Act sets out a number of deceptive marketing practices that are considered “reviewable conduct” under the legislation, and therefore subject to scrutiny by the Competition Tribunal and the courts and related administrative remedies.

For example, section 74.01(1)(a) contains a general prohibition on representations to the public that are materially false or misleading, and made for the purpose of promoting the supply or use of a product or a business interest (directly or indirectly).

Where the Competition Tribunal or a court determines that a corporation is engaging (or has engaged) in reviewable conduct, it may order the corporation:

  • not to engage in the conduct or substantially similar reviewable conduct;
  • to publish a notice providing a description of the reviewable conduct and related details; and
  • to pay an administrative monetary penalty in an amount not exceeding the greater of $10M (and, for each subsequent order, $15M) and three times the value of the benefit derived from the deceptive conduct (or 3% of the corporation’s annual worldwide gross revenues, if such an amount cannot be reasonably determined).

Bill C-59 amendments. The new amendments arising from Bill C-59 expand the list of deceptive marketing practices to provide that a corporation engages in reviewable conduct when, for the purpose of promoting the supply or use of a product or a business interest (directly or indirectly), it:

  • 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; and
  • 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 [emphasis added].

It is uncertain how the Competition Tribunal and the courts will interpret the new provisions. The Competition Tribunal has noted in the past that case law related to performance claim advertising has provided a number of principles that are the hallmarks of an “adequate and proper test”:

  • it depends on the general impression that the advertisement makes on consumers;
  • it is conducted before the claim is made;
  • it is done under controlled circumstances, controlling for external variables;
  • subjectivity is eliminated as much as possible;
  • it is not necessarily measured against a test of certainty, but it should establish that the results are not mere chance or a one‑time effect, by establishing that the product causes the desired effect in a material manner; and
  • the results of the testing support the claim made.

In contrast, there is no case law on the meaning of “adequate and proper substantiation in accordance with internationally recognized methodology”.

Industry reaction. The Pathways Alliance, a consortium of Canada’s six largest oilsands companies, and several Canadian oil companies yesterday removed content from their websites or added disclaimers in response to the new legislation. The Pathways Alliance issued a news release signed by the presidents of each of its members indicating that their “ability to remain transparent has been significantly compromised as a result of Bill C-59.” The news release states that “[c]reating a public disclosure standard that is so vague as to lack meaning and that relies on undefined ‘internationally recognized methodology’ opens the door for frivolous litigation, particularly by private entities who will now be empowered to directly enforce this new provision of the Competition Act.”

The Globe and Mail reported that the Canadian Bankers Association indicated that financial institutions are reviewing the legislation and its implications, and that there appeared to be no changes to the banks’ digital communications on Thursday.


For further information or to discuss the contents of this bulletin, please contacLisa DeMarco at lisa@resilientllp.com

*Special thanks to Anuja Purohit for her assistance in preparing this bulletin.

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