Honourable senators, it is my privilege to speak at third reading as sponsor of Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023.

As you know, this legislative proposal would help stimulate the national economy by making life more affordable for Canadians. It would do so by creating conditions conducive to housing construction and generating quality jobs.

In this speech, I will first summarize the work of the Standing Senate Committee on National Finance, and then I’ll address the measures I didn’t have a chance to cover during second reading of the bill.

I would like to begin by taking the time to express my sincere thanks to the members of the National Finance Committee who, despite a busy schedule at the end of this session, conducted a diligent and rigorous study of a voluminous bill. Thank you, esteemed colleagues.

As part of its study, the National Finance Committee heard from several witnesses and reviewed briefs from numerous stakeholders, including the Business Council of Alberta, the Canadian Fuels Association, Ecojustice, the Canadian Association of Physicians for the Environment, the Centre québécois du droit de l’environnement, the Canadian Consumer Specialty Products Association, and the list goes on. It also heard from officials from the various departments affected by the bill, as well as the Canadian Chamber of Commerce.

The pre-study of the bill made it possible to identify the main issues and to better understand the various measures proposed.

When the bill was referred to committee following second reading, the committee focused on the measures that were amended in the House of Commons. In addition, one of the measures related to the section amending the Competition Act, specifically Division 6 of Part 5, raised concerns among certain stakeholders. The committee therefore paid particular attention to those concerns and to the potential consequences of the amendment in question.

Before diving into the details of this amendment and the discussion at committee, I will briefly outline the fundamentals of the competition regime and its functioning in Canada.

The federal Competition Act serves as an economic framework law designed to foster greater competition through civil and criminal provisions addressing various forms of harmful anti‑competitive conduct in the marketplace. The act is administered and enforced by the Competition Bureau, an independent law enforcement agency dedicated to protecting and promoting competitive markets and enabling informed consumer choice.

In recent years, particularly following the government’s consultation on the future of competition policy in Canada, initiated in late 2022, many stakeholders and members of the public have expressed concerns about increasing corporate concentration in Canada, rising prices and the disproportionate powers of corporate giants.

The changes brought forward by Bill C-59 are in carefully selected areas and can directly contribute to addressing these long-standing issues.

I would like to discuss the work of the House Standing Committee on Finance and address the concerns raised by stakeholders after the adoption of a set of amendments to clause 236 of the bill that aims to strengthen the fight against greenwashing. Some stakeholders expressed concerns, indicating that the added requirement based on internationally recognized methodology was too vague and lacked clarity in its definition. It is worth noting that a significant portion of the testimony presented at the House Standing Committee on Finance supported the enhancement of the criteria outlined in clause 236 of the bill. This approach was also consistent with briefs received by our Standing Senate Committee on National Finance, notably from the Canadian Association of Physicians for the Environment, the Centre québécois du droit de l’environnement and Ecojustice.

The Competition Bureau, in its testimony to the House Standing Committee on Finance, also addressed the importance of strengthening the criteria, recognizing the scale of the greenwashing problem in Canada. At the House Standing Committee on Finance, the initial set of proposed amendments brought forward drew on amendments advocated by environmental groups, expanding the provisions to include general environmental claims and requiring companies to publish evidence and proof of testing to substantiate the claim. A subamendment was then proposed to require organizations making environmental claims to produce testing for products or substantiation for general business activities only if challenged by the bureau, rather than making them available at the time of the claim, the objective being to avoid undue administrative burdens on small and medium-sized enterprises, or SMEs.

Therefore, the current set of amendments reflects balanced language that maintains the intent and directionality of the amendments but avoids any unintended consequences and burdens for the companies. A substantiation requirement protects competition by ensuring that consumers can trust the statements made about businesses and business activities.

It is also noteworthy that the amendment and subamendment to clause 236 adopted at the House Standing Committee on Finance reflect cross-party support and were subsequently passed unanimously at third reading in the House of Commons. A letter from the Competition Bureau sent to the Standing Senate Committee on Banking, Commerce and the Economy on May 31, 2024, and later to the Standing Senate Committee on National Finance, explicitly addresses the amendments in question. The bureau stated:

Although we recommended further study, we respect the decision by the House of Commons Standing Committee on Finance to make amendments to Clause 236(1) on this important issue. As noted above, it took this decision after hearing from various stakeholders. The amendments were ultimately adopted unanimously by the House of Commons at third reading on May 28, 2024.

The letter continues, stating:

In our view the proposed amendments to the Competition Act made in Bill C-59 represent a long-awaited and much‑needed upgrade in our competition law framework that will better serve the needs of Canadians.

This letter and subsequent intervention from the bureau indicate that with the current language proposed in Bill C-59, Canada’s independent competition authority is ready and equipped to fulfill its mandate to defend and protect Canadian consumers and foster a competitive and innovative marketplace in which Canadian businesses can thrive.

In this regard, the committee also heard at length from officials at Innovation, Science and Economic Development Canada. In their view, the introduction of the new concept of internationally recognized methodology in the greenwashing provision is not problematic, as the Competition Act is a principled market-independent framework. The general terms of the act are clarified first by the Competition Bureau through guidelines developed with stakeholders and then by the courts through case law.

More importantly, the Competition Bureau expressed its commitment to reviewing and developing guidelines to incorporate the amendments in Bill C-59, as well as in Bill C-56, following consultation with stakeholders.

The Competition Bureau will strive to implement a solid and predictable framework to ensure that the law is implemented fairly. It is common practice, particularly in competition law, to include in the legislation a broad, liberal, principles-based terminology that will later be defined and clarified by the Competition Bureau based on consultation.

Although the expression “internationally recognized methodology” may seem vague, if we interpret it according to the ordinary meaning of the words and based on the submissions from stakeholders, we can get a better idea of the legislator’s intention here. For example, the stakeholders refer in their submissions to the methodologies used by the European Union.

To ensure Canada’s competitiveness at the international level, it is essential that we adopt a legislative framework that provides the flexibility necessary to incorporate global advancements in environmental matters and adjust our guidelines, policies and regulations accordingly. This approach will enable us to stay on the cutting edge of best practices and remain responsive to the progress achieved elsewhere. Ultimately, this plays a vital role in our ability to remain competitive on the global market and ensure a prosperous future for Canada.

The committee made an important observation in response to stakeholders’ concerns. I thank Senator Dalphond for proposing it, and I also commend Senator Gignac, who worked with him on this.

I also want to thank Senator Ross, who courageously proposed an amendment aimed at addressing this issue. I will now read the important observation adopted by the committee in its entirety:

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.

This observation, the interventions of the Competition Bureau following the adoption of the amendment and the work carried out by the Standing Senate Committee on National Finance should instill in us confidence that the bill contains all the necessary safeguards to ensure proper implementation, particularly regarding the section amending the Competition Act.

The amendments to the Competition Act in Bill C-59 are just one part of a broader legislative reform of the competition law regime in Canada. Initiated from a consultation led by a former colleague, former senator Howard Wetston, the Budget Implementation Act, 2022, No. 1, formerly Bill C-19, introduced several significant changes. Subsequently, Bill C-56 also proposed various amendments to the Excise Tax Act and the Competition Act, thereby fitting within the framework of this reform. Therefore, Bill C-59 represents the continuation of a long-awaited reform, built upon the work of our former colleague. I express my gratitude to former Senator Wetston for his tireless efforts. He has been a pioneering force in modernizing our competition regime in Canada.

Let’s now move on to observations on affordability. This brings me to the second observation adopted by the committee concerning affordability, which is also important to mention. This observation highlights numerous provisions within the bill, encapsulating its spirit and purpose while emphasizing the significance of our dedication to realizing these objectives through concerted efforts. I thank Senator Pate for proposing the following observation, which was also adopted by the committee:

Since the government has identified housing and food affordability as priorities in Bill C-59, it must ensure its policy decisions are supported by adequate implementation of the bill’s proposed tax fairness measures and that they effectively address income security and inclusion for Canadians experiencing financial instability and most in need.

With respect to access to affordable housing and measures to improve the quality of life of Canadians, I would like to remind senators of some of the important measures in Bill C-59.

The bill would provide an investment tax credit for carbon capture, utilization and storage, as well as an investment tax credit for clean technologies.

These measures are designed to stimulate investment in order to create good jobs. They will position our country as a leader in attracting investment, while building a stronger, low-carbon economy.

The bill would temporarily remove the GST from the construction of new rental housing built for or by cooperative housing corporations that offer long-term rentals.

Bill C-56 implemented such a measure for new rental housing projects. The current bill goes even further to increase the new housing supply even more.

I will now address some of the measures that I did not have the opportunity to address in my speech at second reading.

Regarding the excessive interest and financing expenses limitation, part 1(a) of Part 1 of Bill C-59 introduces rules to limit excessive interest and financing expenses, known as the EIFEL rules. These rules are designed to prevent the erosion of the Canadian tax base through excessive interest deductions. They target large multinational corporations and are consistent with the recommendations of action 4 of the OECD’s action plan on tax base erosion and profit shifting. By adopting these rules, Canada is harmonizing with its G7 international partners, including the United States, the United Kingdom and several European Union member states.

Regarding hybrid arrangements, part 1(b) of Part 1 of Bill C-59 also aims to prevent the erosion of Canada’s tax base by neutralizing the tax advantages of hybrid arrangements. Hybrid arrangements are cross-border tax avoidance structures that exploit differences in the tax treatment of business entities or financial instruments under the laws of two or more jurisdictions, with the aim of generating deduction/non-inclusion mismatches or double-deduction mismatches. The former refers to a deduction in respect of a payment in one country without taxable income for the recipient in another, while the latter refers to deductions available in several countries in respect of a single expense.

By adopting these rules, Canada is harmonizing with its G20 international partners, including the United States, the United Kingdom and several European Union member states.

Let’s turn now to intergenerational business transfers, something that Senator Forest really cared about. Part 1(d) of Part 1 of Bill C-59 aims to facilitate the intergenerational transfer of a business while protecting the integrity of the tax system.

You may recall Bill C-208, An Act to amend the Income Tax Act (transfer of small business or family farm or fishing corporation), which was passed by the Senate in June 2021 and received Royal Assent on June 29, 2021. The rules introduced by Bill C-208 contain ineffective safeguards and apply in the absence of a legitimate transfer to the next generation. Bill C-59 aims to correct these shortcomings, while retaining the spirit and intent of the bill.

More specifically, Bill C-59 would ensure that the exception to the anti-surplus stripping rule only applies when a genuine intergenerational business transfer takes place.

To offer some flexibility to taxpayers interested in undertaking a genuine intergenerational transfer, two options are available: Either an immediate transfer over three years based on arm’s length conditions of sale, or a gradual transfer over five to ten years based on the traditional characteristics of estate freezing. Immediate transfers offer greater certainty earlier in the process, but entail more stringent conditions, whereas the progressive transfer approach offers added flexibility.

Let’s now turn to the sharing of confidential taxpayer information for the purposes of the Canadian Dental Care Plan. Part 1(o) of Part 1 of Bill C-59 seeks to change the tax law to give Public Services and Procurement Canada access to confidential taxpayer information so as to help implement the permanent Canadian Dental Care Plan. Employment and Social Development Canada will be able to retain the services of Public Services and Procurement Canada to help administer the Canadian Dental Care Plan.

Senators will recall that the government’s plan includes the Canada Dental Benefit, which gives families with incomes below $90,000 direct payments of up to $1,300 per child under the age of 12 years, over the next two years, to cover their dental care costs.

Employee ownership trusts are Senator Omidvar’s special initiative. Part (q) of Part 1 of Bill C-59 aims to establish a standard framework for what constitutes an employee ownership trust and its associated tax treatment. These rules define which employees qualify as beneficiaries of an employee ownership trust, or EOT, and their rights to receive distributions from the trust and to vote on the trust’s basic affairs. It also contains provisions to prevent former owners of the company from participating as beneficiaries or exercising undue influence on the governance of the EOT.

Regarding federal financial institutions, Division 1 of Part 5 of Bill C-59 would introduce legislative amendments to allow federal financial institutions to hold virtual-only shareholder meetings, and to allow the introduction of conditions guaranteeing adequate participation.

This amendment would align the laws governing financial institutions with the Canada Business Corporations Act, which allows federally incorporated companies to hold virtual-only shareholder meetings.

Division 5 of Part 5 of the bill amends the Canadian Payments Act to extend eligibility for membership in Payments Canada to three types of regulated entities, specifically payment service providers supervised under the Retail Payment Activities Act, local credit unions that are members of a central cooperative credit society, and operators of clearing houses designated under the Payment Clearing and Settlement Act and supervised by the Bank of Canada.

This measure will enable local credit unions and payment service providers to access Payments Canada systems, thus improving their electronic payment services and offering faster, more predictable transfers to and from unaffiliated accounts. It also demonstrates progress towards stakeholder-supported payments modernization.

Public post-secondary educational institution insolvency is my project. In Division 7 of Part 5, the government is proposing to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to exclude public post-secondary educational institutions from becoming subject to proceedings under these laws. The government has engaged with provinces and territories and sought feedback from universities, colleges, experts, lenders and other post-secondary education stakeholders to explore ways to better protect the public interest functions of post-secondary educational institutions in insolvency and restructuring situations.

The amendments propose preventative solutions to financial distress that consider the important public interest functions of these institutions, as well as the provincial and territorial jurisdictions over post-secondary education.

I will now speak on Division 8 of Part 5, which concerns money laundering, terrorist financing and sanctions evasion. The government is committed to maintaining a robust anti-money laundering and anti-terrorist financing, or AML/ATF, regime to protect Canadians and the financial system’s integrity. The 2023 Fall Economic Statement proposed several legislative amendments to strengthen this framework.

In a nutshell, Bill C-59 proposes the following changes:

On sanctions evasion, it amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, or PCMLTFA, to enable the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, to combat sanctions evasion and to disclose findings to law enforcement.

On operational effectiveness, it amends the Criminal Code to target third party money laundering, update crime-related search and seizure provisions, and adopt financial data production orders for digital assets.

On trade-based money laundering, it amends the PCMLTFA and the Customs Act to enhance the Canada Border Services Agency’s authority to regulate trader compliance and enforce laws.

On white label ATMs, it broadens the PCMLTFA framework to include intermediary companies offering cash withdrawal services for white label ATMs. 

On environmental crime, it amends the PCMLTFA to allow FINTRAC to share intelligence with Environment and Climate Change Canada and Fisheries and Oceans Canada.

On strategic intelligence, it improves FINTRAC’s intelligence products by listing foreign entities and addressing technical inconsistencies.

These measures will improve the AML/ATF regime and help modernize financial crime prevention.

Division 9 of Part 5 of Bill C-59 seeks to amend the Federal‑Provincial Fiscal Arrangements Act to clarify the government’s intention to publish details regarding payments related to the major transfer programs in order to meet its publishing obligations. This will give Canadians access to detailed and up‑to-date information on equalization payments and the other major transfers to the provinces and territories.

Division 10 of Part 5 of Bill C-59 makes adjustments to the composition of the board of directors of the Public Sector Pension Investment Board and to the process for recalling funds. Under the new version, the number of directors would increase from 11 to 13, and the two new seats would be occupied by labour representatives.

Honourable senators, Bill C-59 advances key components of the government’s economic plan by delivering on the main elements of the 2023 Fall Economic Statement. It represents a significant step toward achieving our economic objectives and it strengthens our commitment to the prosperity and well-being of all Canadians.

The number of projects that I spoke to you about today gives you a good idea of the scope of this bill and the elements it contains.

With that, I thank you for your attention.

Will Senator Moncion take a question?

With pleasure.

Colleague, thank you for your leadership on this file. Thank you as well for your open-mindedness when we come to you voicing our concerns and looking for reassurance.

One of the tax measures in this bill that concerns me a great deal relates to the 3% tax on digital services. Although the Minister of Finance tabled a notice of ways and means motion in December 2021, it took almost two and a half years before a bill was introduced. I think the minister wanted to negotiate a multilateral agreement with other OECD countries, but that did not work out. As a result, companies are being charged a 3% tax, retroactive over two years. To the extent that the businesses involved are large American companies, like Netflix and Disney, which boast 30% profit margins, no one is shedding any tears for them. However, for smaller businesses, like travel agencies, which have a 6% profit margin, a 3% retroactive tax could hurt.

Given that the American ambassador to Canada has warned our government that it is embarking on something contentious — he even used the words “big fight” when talking about what could happen — can you give us some reassurance, especially on the verge of a change in Washington? Do you have any guarantees that all these measures will not be challenged and that, ultimately, we will not be forced to amend this bill?

Thank you for the question, Senator Gignac. You’re asking me to give you guarantees. I can never give you any guarantees, either as a senator or from a decision‑making standpoint.

Thank you for reminding us of the chronology of events. The digital services tax was announced in the fall of 2020. At that time, a sort of agreement was reached whereby the government would try to negotiate with the various companies to reach an agreement. In October 2021, the government postponed the imposition of the digital services tax until late 2023. At the end of 2023, the government presented its economic statement for 2023 and announced its plans. This gave businesses time to begin setting aside funds to pay this tax.

In the meantime, given the absence of a firm timeline for implementing pillar 1, and since other countries continue to collect the tax — because other countries have this tax in place — the government said it would protect Canadians by ensuring that companies pay their fair share of taxes. That is what we heard. The bill, published in draft form in December 2021, with amendments made in December 2023, comes into effect on January 1.

I cannot give you any guarantees, and I just gave you the chronology of events. Businesses could get ready. This may affect the negotiations with the government and the government is the one that will have to deal with those businesses on the basis of this situation when negotiations are held. We know that intimidation tactics can be used during negotiations to get a government to back down in situations like this. However, I believe that the government is well placed to negotiate an agreement that could eventually be acceptable for both countries, regardless of who is leading the country.

Thank you for your reply. I understand that you can’t offer any guarantees. I’m sure you will agree that the way things are being done now is definitely not great. For a bill to be introduced so long after a notice of ways and means motion is not ideal. Yes, companies were aware of this, but when I read what was published at the time, it said that, in the meantime, the government would do this and didn’t intend to introduce anything before 2024, but hoped to negotiate a treaty with the other OECD countries.

If I understand correctly, companies like Expedia and Booking were supposed to have set aside money or collected a 3% tax in case the government went ahead with the bill if talks with other OECD countries didn’t work out. That’s not an easy thing for companies to do given the delay between tabling a ways and means motion and introducing the bill. When a bill is introduced, lawmakers can debate it, hear witnesses, submit amendments and take action. With a ways and means motion, people can take notes, but things can change.

Do you agree that this way of proceeding is not ideal and is detrimental to businesses?

Thank you for the question, senator.

We can debate about how this might not be the ideal approach, but it is the approach that the current government decided to take.

From what we have seen from the negotiations with Australia and Europe, there were delays in the negotiations, but in the end the parties came to an agreement and found some common ground. I think that Canada is at that point with its American partner.

This may not be ideal, but you’re a banker, just as I was, and you know that we had no choice but to include provisions for all sorts of scenarios and contingencies. I would imagine that the businesses that do their accounting properly and that know that such contingencies exist must put money away to prepare for such situations.

Honourable senators, I rise today in this chamber to speak to Bill C-59, the fall economic statement implementation act, 2023.

I will focus my remarks on clause 236, which amends the Competition Act, and on the importance of these changes.

More and more, we are seeing environmental legislation added to budget bills, and Bill C-59 is not an exception. This is because climate- and nature-related risks are associated with significant costs to Canadians. Addressing issues of environmental pollution and global warming while we transition to a low-carbon economy requires a whole-of-government approach, one that uses environmental levers as part of a horizontal approach to policy development and legislation.

Indeed, given the climate and overlapping, cascading crises, and the fact that Canada is progressing neither with greenhouse gas emissions reduction nor with reduction of pollution, the federal government must do more to protect Canadians.

Since 1990, after the implementation of more than 10 climate change mitigation plans, Canada has yet to reach its climate targets or succeed in achieving its emissions reduction targets.

The United Nations notes, and it is clear, that:

Greenwashing undermines credible efforts to reduce emissions and address the climate crisis. Through deceptive marketing and false claims of sustainability, greenwashing misleads consumers, investors —

— responsible investors —

. . . hampering the trust, ambition, and action needed to bring about global change and secure a sustainable planet.

Division 6 of Part 5 of Bill C-59 contains measures to modernize Canada’s competition framework by proposing amendments to the Competition Act. The provision as amended was adopted unanimously in the other place. I encourage you, colleagues, to vote for Bill C-59 as amended by the elected chamber and accept the report with the observations of the National Finance Committee.

The Competition Bureau has long had the ability to enforce against greenwashing, that is, false or misleading representations of the benefits of a product toward the environment that are not based on proper and adequate testing. However, the existing provisions could capture only few greenwashing claims and, most importantly, did not require firms to have evidence to back some of the environmental claims. This has limited the power of the Competition Bureau to effectively enforce against greenwashing.

In Canada, greenwashing unfortunately is a systemic issue. Just last week at the House of Commons Standing Committee on Environment and Sustainable Development, it was made clear that Canadian banks, while claiming to be on the path to net zero, are investing more in fossil fuels compared to renewables. They favour fossil fuel investments over clean energy at the ratio of almost 4 to 1, even though these investment ratios should be exactly the opposite. These investments should be effective before 2030 if we hope to achieve a 1.5 °C scenario.

The same committee at the other place met with the Pathways Alliance, a coalition of six companies representing 95% of oil sands production in Canada. This group advertised their net-zero 2050 goals and lobbied the government to approve and subsidize a carbon capture and sequestration project. This, they claim, will help them achieve net-zero emissions despite several scientists raising concerns about the scientific validity of this technology.

Indeed, according to a joint report of the U.S. Senate Budget Committee and the House Committee on Oversight released just last April, oil companies’ massive public-facing campaigns portray carbon capture and storage as a viable and available solution to allow them to continue increasing their greenhouse gas emissions while they internally acknowledge that they are not planning to deploy the technology at the scale needed to solve the climate crisis.

The U.S. report also finds that “the industry’s true goal is to prolong, perhaps indefinitely, the unabated use of fossil fuels.” Based on these facts, are we surprised that one of our five big banks and the Pathways Alliance are the subject of the investigation by the Competition Bureau or that the Pathways Alliance lobbied to amend this clause of Bill C-59?

Greenwashing can give a company an unfair advantage, allowing them to continue business-as-usual polluting practices while benefiting from deceptive claims of environmental stewardship. This can make it more difficult for responsible business corporations that are not greenwashing and that are, in fact, doing the hard work required to stand out in the marketplace.

Over time, greenwashing has eroded consumer faith, which makes consumers more likely to dismiss environmental claims, even those that are, in fact, legitimate.

A 2023 report revealed that 57% of Canadian consumers do not believe most green claims brands make. Thus, companies are likely to gain an advantage by closing the perception gap and validating their sustainability and environmental claims.

Even more concerning is that companies producing greenwashed products or running greenwashed businesses and facilities also have a history of locating these polluting businesses in equity-deserving communities, including low‑income and racialized communities and, of course, Indigenous people’s lands. Greenwashing puts at risk not only the environment but also public health. Notably, this is why we needed a framework for the prevention of environmental racism.

The amendments to the Competition Act in Bill C-59 will make it easier for consumers to identify genuine green products, as well as businesses with sustainable practices.

A 2021 survey found that 49% of Canadian consumers agreed they made purchases from companies that supported environmental protection, and 46% of survey respondents agreed they purchased more biodegradable and eco-friendly products. Colleagues, there is a strong demand and a strong-growing market for green products, and we know consumers can drive the market, but up until now this ability in the context of the green market has been hindered by greenwashing.

On May 31, 2024, in a letter to the Chair of the Standing Senate Committee on Banking, Commerce and the Economy, sent on behalf of the Competition Bureau, it was stated:

As a general principle, when companies make claims to promote a product or a business interest, they should be able to back them up. Bogus claims are false or misleading and undermine competition on the merits. In the context of greenwashing, the harm of unfounded claims is even more pernicious given the existential threat posed by climate change and the need to accelerate a green transition.

The letter goes on to say that:

A substantiation requirement protects competition by ensuring that consumers can trust the statements that are made about businesses and business activities. It safeguards honest and reputable manufacturers and merchants who compete with those making claims about the environmental impacts of production. Increasingly, consumers make purchasing decisions based on the environmental impacts of production, and as such, the harm from unsubstantiated claims in relation to businesses and business activities is just as serious a harm to competition as the harm in respect of unsubstantiated claims in respect of individual products.

These amendments will strengthen our ability to police deceptive greenwashing claims. . . .

I am aware that concerns were raised by a few stakeholders and some colleagues at committee about what qualifies as an “internationally recognized methodology” in the context of adequate and proper substantiation with respect to the benefits of a business or business activities as they relate to environmental claims. However, I am confident that while this term is not defined in the bill, Canadians and Canadian businesses can place their trust in the Competition Bureau, the Commissioner of Competition and the Competition Tribunal.

As noted at committee, the Competition Bureau has a distinguished and unsullied reputation. They have a history of professionalism, demonstrated understanding of legislation and awareness of what is happening in Canada, as well as the ability to monitor what goes on in the United States and elsewhere in the world.

With regard to “internationally recognized methodology,” I will also note that there are such methodologies for most environmental claims, including the following: the Science Based Targets Initiative, which is commonly used for net-zero targets; the International Sustainability Standards Board, which is commonly used for climate-related disclosures; and the Taskforce on Nature-related Financial Disclosures, which is commonly used for nature-related disclosures, to only name a few. I’m told that if you do the research, there will be 15 other standards, including the family of the International Organization for Standardization.

Furthermore, this type of substantiation requirement is not unique to Canada. California has a requirement that is almost identical, and the European Union and the United Kingdom are developing rules and guidance that are intended to regulate and require evidence of certain environmental claims, including those related to carbon neutrality and climate friendliness.

Finally, I would like to highlight that the amendments to the Competition Act proposed in clause 236(1) are not an attack on free speech, nor do they intend to foster green hushing or eco-silence. While these amendments may lead to organizations being more careful when making green claims, this should be viewed as a positive consequence. The bottom line is that an organization should not make any claim — green or otherwise — that it cannot substantiate with sound evidence.

While there remains opportunity to further strengthen the Competition Act and greenwashing regulations in general, I recommend that this be left for future consideration, including giving more power to the commissioner, as he has expressed.

As the intensity of environmental and social crises increases, we must take a horizontal approach to budget bills, and we must consider all aspects of the Canadian budgetary cycle through a climate lens.

I support this legislative approach, designed to horizontally fill the gaps that are making our environment, economy and society vulnerable. For the reasons I have just outlined, I support Bill C-59 and I ask you to vote for it. Thank you. Meegwetch.