CANADA Law and Practice Contributed by: Martha Harrison, Nikiforos Latrou, Eugenia (Evie) Bouras and Marissa Caldwell, McCarthy Tétrault
• reflect real-world usage; and • support the general impression conveyed by the advertisement. On 20 June 2024, amendments to the Competition Act introduced new provisions specifically targeting environmental advertising claims. These changes require businesses to substantiate any claims about a product’s environmental benefits or a company’s overall environmental impact with adequate and prop - er evidence. Importantly, the burden of proof lies with the advertiser, and the substantiation must be based on an internationally recognised methodology. Please refer to 2.6 Environmental Claims for more details on the required substantiation for environmental claims. 2.4 Product Demonstrations Product demonstrations in advertising are subject to the same legal and ethical standards as other adver - tising claims. The demonstration must not be false or misleading when considering the general impression conveyed to the consumer. For example, advertisers should not use exaggerated or hyperbolic claims while demonstrating or promising effectiveness or performance of a good that cannot be substantiated. Again, the general impression of the regular consumer will be the standard of whether a claim is false or misleading. 2.5 Endorsements and Testimonials Testimonials and endorsements in Canadian advertis - ing are regulated under the Competition Act, which requires advertisers to either use previously published endorsements or obtain written approval from the tes - timonial provider before publication. Endorsers must have actually used the product and their statements must reflect real experiences. Claims based on test results must be backed by empirical evidence, and expert endorsements must align with those results. In addition, under the Code and the Competition Act, claims made by the endorser must be accurate and clear, and any testimonial must be genuine and based on actual experience. Accordingly, advertisers must ensure that:
• testimonials remain accurate, clear and based on actual experience; • the testimonial reflects typical use conditions and aligns with the product’s licence or terms of use (if applicable); and • any material connection (eg, payment, free prod - ucts, coupon, invitation to event, employment) is Significant amendments to Canada’s Competition Act were enacted in June 2024, introducing (among other things) prohibitions that specifically target false, mis - leading or unsupported claims about the environmen - tal benefits of a product, service or business. While greenwashing claims were always captured under the Act’s general false or misleading advertising frame - work, as a result of these amendments, the Act now requires that: • claims concerning a product or service’s environ - mental benefits must be based on an “adequate and proper test”; and • claims with respect to the “benefits of a business or business activity” for the environment must be based on “adequate and proper substantiation in accordance with internationally recognized meth - odology”. clearly disclosed (eg “#ad”). 2.6 Environmental Claims These greenwashing provisions introduced con - siderable uncertainty among businesses and other stakeholders, particularly the requirement that sub - stantiation be in accordance with an internationally recognised methodology – an entirely new concept that was left undefined under the Act and had never been subjected to judicial interpretation. In June 2025, nearly a year after the amendments came into effect, the Competition Bureau – the federal government regulator that enforces the Competition Act, including its deceptive marketing regime – issued guidelines (the “Guidelines”), providing welcome clar - ity on the Competition Bureau’s interpretation of these new provisions. First, the Guidelines make clear that the Act’s decep - tive marketing provisions, including the new green - washing provisions, are intended to capture market -
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