Hon. Pierre J. Dalphond: Honourable senators, I will briefly address one aspect of Bill C-59 — one of the government’s omnibus budget bills. I would like to place on the record concerns raised by many stakeholders in respect of an amendment added to Division 6 of Part 5 of Bill C-59, dealing with the Competition Act.

Bill C-59 implements certain provisions of the budget tabled on March 28, 2023, as well as the Fall Economic Statement 2023. However, this bill also continues the government’s bad habit of including numerous non-financial measures. For example, Part 5 entitled “Various Measures” contains over 130 pages, including two new statutes: An Act respecting the Canada Water Agency; and An Act to establish the Department of Housing, Infrastructure and Communities. It also amends over 10 existing statutes, including the Competition Act.

Bill C-59 makes proposals in relation to private actions before the Competition Tribunal, as contrasted with proceedings initiated by the Competition Bureau. It also amends the Competition Act to add a new reviewable practice regarding deceptive environmental claims about products. This new prohibition will target deceptive, misleading or false statements, warranties or guarantees made about the environmental benefit of a product. This bad practice is called greenwashing.

For example, think of Keurig, the manufacturer of coffee pods. In 2022, the company had to pay a settlement in both the United States and Canada in a class-action lawsuit that alleged Keurig deceptively advertised its K-Cup pods as recyclable. Keurig had to pay $10 million in a settlement and suffer advertising restrictions moving forward.

Pursuant to subclause 236(1) of Bill C-59, the Competition Bureau Canada — and potentially private actors — will be able to initiate proceedings in Canada before the Competition Tribunal in a case of product greenwashing.

In case of an action before the Competition Tribunal, the onus will rest on the manufacturer to prove that the representations made about a product were based on adequate and proper tests.

The government-proposed amendments on representation of environmental benefits of products have generated significant concerns among economic stakeholders, such as the Canadian Chamber of Commerce, the Aluminium Association of Canada and Pathways Alliance, a consortium of the largest oil sands companies. They don’t argue that they were not consulted during the pre-budget process but rather that this is a major change in the regulatory framework governing the sale of their products.

In my view, they’re complaining about policy decisions made by the government after years of consultation, as pointed out earlier today by Senator Moncion in her speech. I accept such decisions, including reverse onus on the manufacturer of a product to show that they conducted proper testing. However, these measures should have been part of a separate bill dealing exclusively with the Competition Act. Instead, they are part of an omnibus bill, depriving Parliament of the time necessary to thoroughly review the proposed amendments.

More concerning is the addition by the House of Commons of another significant prohibited practice not contemplated by the government and somewhat on the fly at the Standing Committee on Finance in the other place. This was what happened with Bill C-59 when it was amended by opposition parties at clause by clause at committee to target claims or representations made about a business or brand as a whole in connection with benefits to the environment.

This amendment proposes to create a new form of reviewable conduct defined as follows:

. . . makes a representation to the public with respect to the benefits of a business or a 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 . . . .

The origin of this amendment is a misunderstanding regarding comments made by the Commissioner of Competition before the Finance Committee in the other place. This was confirmed by the Competition Bureau in a letter to our Standing Senate Committee on Banking, Commerce and the Economy, which stated:

The reality is that a significant portion of the greenwashing complaints the Bureau receives do not involve claims about products, but rather more general or forward-looking environmental claims about a business or brand as a whole (e.g. claims about being “net zero” or “carbon neutral by 2030”).

As a result, the Competition Bureau made the following recommendation to policy-makers:

Study whether the approach to greenwashing taken in Clause 236(1) could be expanded to cover all environmental claims made to promote a product or business interest.

It goes on. This is the Commissioner’s office talking. It said, and I quote:

Although we recommended a more in-depth study, we respect the decision of the House of Commons Standing Committee on Finance to make amendments to clause 236 on this important issue. As we mentioned above, the committee made that decision after hearing from various stakeholders. In the end, the amendments were unanimously adopted by the House of Commons at third reading on May 28, 2024.

In other words, we have before us a bill that contains a significant amendment to the Competition Act not introduced by the government and adopted without any prior consultation with stakeholders while the commissioner was inviting MPs to carefully study that issue and perhaps come up with an answer.

Unsurprisingly, our National Finance Committee, as well as the Banking Committee, received briefs about this unexpected amendment and heard from many organizations raising concerns about the new reviewable conduct and the vagueness of a concept such as “internationally recognized methodology.” This is coupled with the onus of proof placed on the business and the risk of private actions.

During the clause-by-clause stage at the National Finance Committee, Senator Ross proposed to delete the words “. . . in accordance with internationally recognized methodology . . .” After a respectful debate, the committee declined this amendment and instead included strong observations in its seventeenth report, dated June 13, 2024, which I want to highlight and bring to the attention of the Competition Bureau through this debate:

The Committee notes that a meaningful proportion of industry players active in Canada have made real efforts to support the move to a net-zero economy and to differentiate their products and firms on this basis. These legitimate efforts should not be deterred or impeded, for fears of the unintended consequences of the pursuit of greenwashing actions.

Your committee believes that meaningful consultation by the Competition Bureau, to set out clear guidelines in this area, is important, and for any private right of action to be informed by such guidelines as to what may be considered deceptive in the area of environmental pursuits.

Furthermore, while clause 236 (1) of Bill C-59 notes the importance of internationally recognized methodology to substantiate such claims, the Committee believes that the analysis should also include federal and other Canadian best practices, such as those set out by Environment and Climate Change Canada.

Today, colleagues, we are asked to adopt Bill C-59 as a whole, even though it contains significant changes to the Competition Act for which there was no prior consultation by the government in its pre-budget process, nor by the Competition Bureau. However, I invite Minister Champagne — who is in charge of the Competition Act — and the government to consider ways to follow up on our observations, including potential legislative amendments after meaningful consultations with stakeholders.

Finally, I urge the Competition Bureau to live up to its May 31, 2024, letter, wherein it committed to adopt the principled approach to the enforcement of these new provisions. This approach should be informed by the observations made by our Standing Senate Committee on National Finance and developed further after a meaningful consultation process with all stakeholders.

Dear colleagues, thank you very much for listening to these concerns. Meegwetch.