Canada’s Competition Act bans companies from greenwashing – claiming their products are “greener” than they really are. This has started a new trend of greenhushing – downplaying environmental claims to avoid liability.
In May 2025, LawNow published Greenwashing: What it is and what you can do about it, an article about the law prohibiting a business from making false, misleading, or unsupported environmental claims to promote a product, service, or business. This article provides a greenwashing update.
Greenwashing under the Competition Act
Greenwashing is prohibited by sections 74.01(1)(a), (b), (b.1) and (b.2) of Canada’s Competition Act. By way of example, these provisions prohibit a business from:
- claiming its products’ packaging is made from 100% post-consumer waste when it is made from virgin fibre paper,
- making an unverified claim that its product will increase the fuel efficiency of gasoline-powered vehicles,
- making an unverified claim that its clothing products do not release microplastic fibres when washed in a home washing machine, or
- making an unsupported claim that it is on its way to being net-zero by 2050.
The Competition Act’s prohibitions against greenwashing seek to make sure consumers receive truthful information so they can make informed buying decisions. Another goal of the prohibitions is to prevent businesses who actually offer products and services with lower environmental impacts from seeing their potential customers misled into buying products and services from competitors who engage in greenwashing.
The potential administrative penalties for greenwashing are severe. Under the Competition Act, section 74.1(1)(c)(ii), a corporation that engages in greenwashing might be ordered to pay up to $10 million, or three times the value of the benefit it gained from its deceptive conduct, or 3% of its annual worldwide gross revenues..
Greenhushing: A response to the prohibitions against greenwashing
The Competition Act’s prohibitions against greenwashing have started a new trend – “greenhushing”. Greenhushing is when a business retracts or downplays its environmental claims to avoid liability for greenwashing. For example, in June 2024, just before some of the Competition Act’s new greenwashing rules became law (sections 74.01(1)(b.1) and (b.2)), Pathways Alliance, an organization representing five of Canada’s largest oil sands producers, cleared their website of all environmental and climate performance claims. They claimed they did this because of the uncertainty created by the new rules. Pathways Alliance still maintains that the Competition Act’s greenwashing prohibitions prevent them from discussing their environmental protection efforts.
Other oil and gas companies have taken a similar approach, decreasing or removing their public statements of environmental goals and actions. There are greenhushing examples from other industries too. To avoid liability for greenwashing, the Royal Bank of Canada dropped its commitment to mobilize $500 billion in financing for sustainable initiatives by 2025, and Canada Pension Plan Investments dropped its net-zero by 2050 target for carbon emissions.
The federal government recently committed to changing the Competition Act to make the new greenwashing rules clearer and encourage businesses not to be silent or quiet about their environmental efforts. If the proposed amendments become law, we might see a decrease in greenhushing: Bill C-15, An Act to implement certain provisions of the budget tabled in Parliament on November 4, 2025. Businesses may also become more comfortable making environmental claims after carefully reviewing the Bureau’s guidelines on Environmental claims and the Competition Act (published in June) and other resources published on the Bureau’s website.
Private lawsuits based on greenwashing
Private lawsuits based on greenwashing also seem to be on the rise.
As discussed in LawNow’s May article, Canada’s Competition Bureau (the Bureau) investigated environmental claims made by Keurig Canada Inc. (Keurig) years ago and concluded that the corporation had engaged in greenwashing. The Bureau concluded that Keurig made deceptive claims about the recyclability of its single-use coffee pods. As part of its settlement with the Bureau in 2022, Keurig agreed to pay a $3 million administrative penalty.
This past October, a class action lawsuit based on Keurig’s greenwashing was certified for settlement purposes by the Ontario Superior Court of Justice. Then, earlier this month, the Court approved a proposed $1.85 million settlement: Buis v Keurig Canada Inc. So now, anyone in Canada who bought Keurig pods or a Keurig coffee brewer, between June 8, 2016 and December 8, 2025, in packaging containing a recyclability claim (a settlement class member) may be eligible for a small cash payment. The claim form will be available on Keurig’s class action settlement website soon.
There are also two class action lawsuits based on greenwashing awaiting authorization in Quebec: Grigorescu v 9199-4467 Quebec Inc dba Earth Rated and Gingras v Proctor & Gamble Inc. The first lawsuit alleges that the defendant’s poop bags were falsely promoted “as ‘compostable’, when in reality, neither the intended contents of the bags, nor the bags themselves” are “capable of being composted” in most Canadian cities. The second lawsuit alleges that the defendant promotes Charmin toilet paper “as environmentally-friendly” when the toilet paper is actually “produced using widespread deforestation practices”.
What’s to come?
The Competition Act’s prohibitions against greenwashing, and the growing number of private lawsuits based on greenwashing, show:
- the influence environmental claims can have on consumers when they make buying decisions,
- the growing demand for transparency and corporate accountability for environmental claims, and
- the increasing reluctance of businesses to make environmental claims in the face of potential legal liabilities and reputational risks.
It will be interesting to see how Canadian businesses navigate these developments.
Meanwhile, as a consumer, you can continue to try to ensure that your buying decisions benefit the environment. If you suspect a business of greenwashing, you can report it to the Bureau using its online complaint form.
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DISCLAIMER The information in this article was correct at time of publishing. The law may have changed since then. The views expressed in this article are those of the author and do not necessarily reflect the views of LawNow or the Centre for Public Legal Education Alberta.
About Jennifer Taylor
