Tightening of deceptive marketing rules

Jul 04, 2024
Deceptive Marketing Standards

The newest rules to impact marketing activities in Canada are the result of amendments to the Competition Act, which received royal assent on June 20, 2024.

Most notably, until now, there was some ambiguity around environmental claims. Under the new law, standards for communicating environmental claims are explicitly outlined, and the deceptive marketing provisions related to this area have been expanded and clarified.

Environmental claims and environmental protection collaborations

Misleading environmental claims, also known as greenwashing, about a product’s benefits or environmental impact without proper and adequate testing is prohibited. Prior to making any green claims in your marketing and communications, ensure testing and documentation of the evidence to back up any eco-friendly claims, as the burden of proof rests with the person making the claim.

Additionally, claims about the environmental benefits or impact of a business or business activity need to be substantiated in accordance with ‘internationally recognized methodology’, which is currently an undefined term. CMA anticipates further guidance related to this.

Through the new Environmental Certification Program, businesses can apply for a voluntary certificate from the Competition Bureau that will exempt some environmental protection collaborations such as sustainability initiatives or environmental protections or mitigations from certain provisions of the Competition Act. The Commissioner can issue this certificate if the agreement is:

  • To protect the environment.
  • Not likely to prevent or lessen competition substantially in a market.

It’s important to note that the Commissioner retains the authority to revoke or alter the certificate if for example it becomes apparent that the collaboration is not delivering the environmental benefits claimed. This ensures that exemptions are not misused or abused.

Private rights of action

As of June 20, 2025, individuals will have the right to sue organizations for civil claims under the Competition Act, which could include greenwashing and other types of deceptive marketing and civil competitor collaborations. Prior to this change, such actions could only be taken for certain criminal violations, such as tied selling and abuse of dominance.

Proactive compliance is key to mitigating the increased potential for litigation and penalties.

Drip pricing updates

Pricing transparency is a must. It is not permitted to advertise a price that is unattainable due to mandatory fees. This means the advertised price must include all the charges. The only exception is fees by federal or provincial governments such as sales tax.

Drip pricing in an electronic message is now seen as false or misleading.

Next steps

Given the increased monetary penalties, and the introduction of private rights of action on the horizon, marketers are advised to ensure your practices meet the requirements of the law. Here are three steps to achieve this:

  • Stay informed. The rules governing marketing activities continue to evolve. Lean on information from credible sources. CMA provides a series of resources and guidance to keep you “in the know”.
    • The CMA’s member-only Guide to Truthful Marketing contains essential information about understanding and avoiding misleading representations and deceptive marketing practices.
    • Subscribe to industry association newsletters, like our T5P, which delivers marketing news and thought leadership directly to your inbox weekly.
  • Strengthen your approach to compliance. This should include a robust internal review process, ongoing training, and building a collaborative ongoing dialogue with legal and compliance teams.
  • Audit marketing campaigns and strategies, ESG claims, as well as internal compliance programs before your campaign goes out the door.

CMA will provide further guidance as new information becomes available.

Have questions you want answered on this or other topics? Reach out


AUTHORED BY
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Florentina Stancu-Soare

Director, Public Affairs and Regulatory Standards Canadian Marketing Association




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