October 1, 2024
Since 1920, the Saskatchewan Chamber of Commerce has been the Voice of Business in Saskatchewan. Supported by provincial businesses, professional associations, and local Chambers of Commerce, the Saskatchewan Chamber is uniquely equipped to develop policies that accurately reflect the needs of the broad Saskatchewan business community. The Saskatchewan Chamber is continuously engaged with its members to provide recommendations that will help make Saskatchewan the best place to live, work and invest.
We are writing to provide input on how the Competition Bureau of Canada should develop clear guidance on how to comply with the new provisions regarding environmental claims in section 74.01(1) of the Competition Act. The introduction of these new provisions has generated concern from the business community surrounding the impact they will have on knowledge sharing about important environmental performance and targets. The facilitation of knowledge-sharing among our business community is one of the Saskatchewan Chamber of Commerce’s primary purposes and we have already seen firsthand the negative consequences arising from the amendments to the Competition Act. Specifically, when these provisions came into effect the Saskatchewan Chamber was in the middle of a consultation with our business community at the request of the Saskatchewan Economic Assessment Tribunal seeking input on the federal government’s Oil and Gas Sector Greenhouse Gas Emissions Cap. Corporations decided to disconnect from this consultation out of concern over the C-59 provisions, and uncertainty around responsibilities and impact.
The new legislation goes beyond consumer protections and eliminates important conversations. It is our opinion that the depth of feedback received to facilitate quality decision-making by government was insufficient. This is not an isolated problem, the Saskatchewan Chamber has previously hosted it’s Thought Leadership Series on the low carbon economy file which included discussions across the province on a diverse range of energy and environment themed topics; with the reverse onus of the C-59 provisions, it would only be prudent for businesses to refrain from engaging in these important conversations going forward as it will open them up to potential allegations and defensive costs. Our organization has significant concern regarding the influence these amendments will have on such vital knowledge-sharing, ultimately negatively impacting innovation, and regulatory development going forward. Businesses must be assured that communications regarding environmental performance, which are backed up by sound science, do not carry unreasonable risk to business operations.
Overall, the Saskatchewan Chamber opposes the amendments to the Competition Act regarding environmental claims related to business practices, as introduced in Bill C-59, and advocates for their complete repeal. However, understanding that this falls outside the Competition Bureau’s mandate, we urge the Bureau to develop concise, reasonable guidance and practical standards that allow businesses to continue knowledge sharing on environmental performance effectively and responsibly.
What kinds of claims about environmental benefits are commonly made about products or services in the marketplace? Why are these claims more common than others?
Saskatchewan is a trade dependent province, significantly reliant on the sale of our natural resources. However, Saskatchewan’s resources often compete in markets where competitors do not face the same environmental restrictions, this can have challenging cost implications for our products. Our industries, our government, and our non-profit organizations often highlight Saskatchewan’s superior environmental performance relative to some of its competitors to support a premium price or attract conscientious investors.
Under the new anti-greenwashing provisions, environmental representations do not need to be false or materially misleading to be actionable. Even when they are true, they may still violate the new provisions unless they can be substantiated in accordance with an “internationally recognized methodology.” This standard is vague and undefined. As such, it creates a significant risk for those wishing to highlight the many success stories for environmental improvement that Saskatchewan has been home to. It is crucial that businesses are not subjected to sanctions, litigation and penalties without clear and transparent guidance on what qualifies as an “internationally recognized methodology” or “adequate and proper testing”. Without this clarity, businesses may struggle to navigate compliance, undermining their ability to communicate their environmental performance effectively.
Are there certain types of claims about the environmental benefits of businesses or business activities that are less likely to be based on “adequate and proper substantiation in accordance with internationally recognized methodology”? Is there something about those types of claims that makes them harder to substantiate?
The Bureau should acknowledge that different but credible methodologies can yield varied results, and no single methodology should be discredited without cause. Consideration needs to be given for the evaluation of data that has been derived from models that involve numerous assumptions and datasets that can be proprietary. This information, while factual, may not offer the same level of transparency as narrowly defined, substantiated “internationally recognized methodologies”. The Saskatchewan Chamber believes companies must retain the flexibility to adopt methodologies suited to their specific operations and regional metrics, thereby ensuring the accuracy and relevance of their environmental performance data. Governments should also be held to the same standards in terms of robust and transparent data collection and analysis processes.
Forward-looking environmental targets, while generally based on sound assumptions, are subject to a degree of uncertainty. The new provisions will create considerable challenges for organizations looking to communicate initiatives that are in development or future ambitions. They will also create a challenge for businesses conducting and making public scenario analysis and forward-looking statements. The Saskatchewan Chamber believes these future orientated projects need to be subject to a different standard. Specifically, our organization supports the position put forward by the Canadian Association of Petroleum Producers calling for alignment with securities legislation and the establishment of “safe habours”. It is critical to ensure all businesses can confidently communicate their environmental objectives and future ambition.
What internationally recognized methodologies should the Bureau consider when evaluating whether claims about the environmental benefits of the business or business activities have been “adequately and properly substantiated”? Are there limitations to these methodologies that the Bureau should be aware of?
Unfortunately, there is no simple, one-size-fits-all international methodology to follow. The uncertainty over what “internationally recognized methodology” means regarding the substantiating of claims has caused significant concern amongst Saskatchewan’s business community given the myriad of methodologies and standards globally.
Several Canadian jurisdictions have regulatory reporting requirements mandating the disclosure of specific sustainability and climate-related information or metrics. These disclosures must often follow methodologies outlined by regulation, which may differ from internationally recognized standards. The Competition Bureau should clarify that methodologies required for Canadian federal or provincial reporting, or methodologies that meet existing regulatory requirements, are deemed acceptable.
In addition to Canadian jurisdictions, numerous international organizations have established methodologies for sustainability and climate-related disclosures. However, the adoption of these methodologies across countries and businesses has been inconsistent in both scope and extent. Due to this convoluted landscape, the Saskatchewan Chamber recommends the Competition Bureau avoid prescriptive methodology identification. Instead the Competition Bureau should provide clear criteria for determining whether a methodology is considered “internationally recognized,” along with guidelines for evaluating emerging methodologies. Any methodologies complying with such criteria would be considered valid under the provisions. This clarity would help businesses navigate compliance with confidence and ensure consistency in the application of standards across industries and regions while allowing flexibility.
What other factors should the Bureau take into consideration when it evaluates whether claims about the environmental benefits of businesses or business activities are based on “adequate and proper substantiation in accordance with internationally recognized methodology”?
The Saskatchewan Chamber urges the Competition Bureau to avoid implementing requirements that force companies to make significant new investments in external experts to review and substantiate environmental claims, as this could divert critical resources from other sustainability initiatives. Increased regulatory scrutiny, coupled with the demand for extensive documentation and third-party verification, will place Canadian businesses at a competitive disadvantage relative to global competitors. Such burdensome requirements could hinder innovation and growth while offering little added value to transparency or accountability.
What challenges may businesses and advertisers face when complying with this provision?
Although the amendments will only apply to representations made from June 20, 2024 onward, the Saskatchewan Chambers urges the Competition Bureau to clarify what is considered to be a “continuing representation.” The requirement to scrutinize past statements, potentially spanning years and multiple platforms, demands significant allocation of time, staff, and financial resources, diverting attention from essential business operations. This effort is compounded by the absence of a clear and fair framework for compliance, leaving companies to navigate a complex and resource-intensive process. The Saskatchewan Chamber believes this approach will stifle business activity without providing meaningful benefits. Our businesses have continuously complied with the standards for consumer protection established at the time and should not be penalized for past practices under shifting regulatory standards. We believe the Competition Bureau should make it clear that it will not pursue claims for representations made before the amendments came into force which may still be publicly accessible. Building on this, the Saskatchewan Chamber recommends that claims based on previously valid methodologies should not become liabilities if newer, more accurate methods emerge.
What other information should the Bureau be aware of when thinking about how and when to enforce this provision?
The Saskatchewan Chamber urges the Competition Bureau to ensure it has proper capacity to handle complaints efficiently. Given that the processes established under new amendments place the burden to substantiate a representation upon the entity which made it, there is little disincentive to prevent bad actors from targeting companies with the intent of wasting their time and resources. The Bureau should develop a public framework (based on feedback from all stakeholders) for vetting complaints to determine their validity and prevent unfounded claims from consuming resources. This framework should differentiate between valid complaints that proceed and those dismissed with minimal consideration. Furthermore, measures must be in place to prevent bad actors from abusing the system, including penalties for false complaints and safeguards against international competitors that may seek to disadvantage Canadian businesses. Ensuring fairness and protecting the reputation of organizations with credible research is essential, as is maintaining transparency around complaint handling. In order to execute this successfully the Competition Bureau must ensure it has well-trained staff capable of prompt action.
The Saskatchewan Chamber of Commerce and its members are strong advocates for honest, transparent, and accountable business practices. While we acknowledge that the intent of these amendments is to enhance transparency and accountability in environmental representations, they have unfortunately already restricted our businesses’ ability to share information and engage in important public discussions. By addressing the concerns raised by the business community regarding the application of these amendments, we hope the Competition Bureau can strike a balance between fairness, accuracy, and the protection of both businesses and the environment. This will allow discourse to reopen, while still safeguarding against misinformation and false statements.