Finance Committee on April 30th, 2024

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chair, and thank you to my colleague Mr. Ste-Marie.

They do the same thing. It basically expands the approach to greenwashing taken in clause 236 to cover all environmental claims made to promote a product or business interest.

Subclause 236(1) of Bill C-59 adds a new provision to the deceptive marketing provisions of the Competition Act to help address certain types of falls from misleading environmental claims. It specifies that claims about a “product’s benefits for protecting the environment or mitigating the environmental and ecological effects of climate change” must be based “on an adequate and proper test”. Importantly, the burden of proof would fall on the person making the representation, making it a type of reverse onus provision.

While the Competition Bureau has welcomed the new tool to address certain forms of greenwashing, it has also noted that it may prove to be a limited change that is more in the vein of clarifying the law than expanding it.

Notably, there's already a similar reverse onus provision in the act, dealing with product performance claims. That's in section 74.01. That provision prohibits making a claim about “the performance, efficacy or length of life of a product that is not based on an adequate and proper test”, and it would likely capture some of the same claims captured under this new provision.

The reality is that a significant portion of the greenwashing complaints the bureau receives do not involve claims about products. Rather, they're more general or forward-looking environmental claims about a business or brand as a whole, such as claims about being net zero or carbon neutral by 2030. These more general claims to promote a business interest can also be false or misleading, and they may be captured by our general deceptive marketing provisions. However, these claims are not reverse onus, and, as was stated by the competition commissioner, it can be challenging for the bureau to prove they are false or misleading in a material respect.

While these more general claims may not be amenable to testing in the way product performance claims are, businesses should at least be able to substantiate them, if challenged.

That's the rationale behind the change. I would have been happy with BQ-3, but I think this does the same thing. I hope we can get support for it.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Davies.

I have Mr. Turnbull.

[Ryan Turnbull, Liberal, Whitby, ON]

Thanks for the exchange here.

When we were looking at these three amendments—BQ-2, BQ-3 and NDP-6—we looked at the various aspects of them together. My understanding of the subamendment just passed for BQ-2 is that we have already covered general claims or representations made by companies in relation to environmental performance or protection.

I believe, if I'm not mistaken, Chair.... Perhaps I would ask for clarification from the legislative clerk as to whether NDP-6 is redundant at this point, given the fact that we've already dealt with the matter at hand, which I think is the intention of this particular amendment.

[The Chair, Liberal, Peter Fonseca]

Okay. Thank you, Mr. Turnbull.

That would be a question for the officials.

[Samir Chhabra]

I would concur with the analysis presented by the honourable member.

Our view in the department, when we reviewed the proposed amendments, was that BQ-2, BQ-3 and NDP-6 all touch the same section of the act and all, operatively, have similar effects. Based on the conversation that was just held by committee members and the motion that was adopted on BQ-2, I see very little or nothing left in terms of substantive differences between NDP-6 and the motion that was just adopted.

[The Chair, Liberal, Peter Fonseca]

Okay. Thank you.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Chair, I'll accept that and withdraw the amendment based on that answer to Mr. Turnbull.

[The Chair, Liberal, Peter Fonseca]

We need unanimous consent for that withdrawal.

[Some hon. members]

Agreed.

[The Chair, Liberal, Peter Fonseca]

(Amendment withdrawn)

Members, we're now going to subclause 236(1.1). Our legislative clerk will explain.

[The Clerk]

Thank you, Mr. Chair.

Since the adoption of the amendment to BQ-2, there is a necessity to add to subsection 74.01(1.1) of the act, a new amendment. I can read what it looks like or sounds like.

We're going to add after line 18 on page 428 a new subclause, 236(1.1), which reads as follows:

Subsection 74.01(1.1) of the Act is replaced by the following:

“The following” is the text that was sent by the clerk a few minutes ago, from Mr. Turnbull.

[The Chair, Liberal, Peter Fonseca]

It's really clear, isn't it?

Are the members now voting on this? They're voting on subclause 236(1.1) and what was just read into the record. Okay.

[Ryan Turnbull, Liberal, Whitby, ON]

I'm sorry, Chair, I'm just going to say that I'm sure all of us are in the same state here, of a bit of confusion, so maybe the clerk could....

I know that I've provided the text in an email before, but I'm not sure what the text is that you're talking about.

[The Chair, Liberal, Peter Fonseca]

Members, the bells are going, so we do need unanimous consent to continue.

[Some hon. members]

Agreed.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

We have members who want to vote in the House. We can continue for a bit, but we need time to get back.

[The Chair, Liberal, Peter Fonseca]

Okay, is it 30 minutes we have for the vote? What do you think you need, 15 minutes? Should we...?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Okay.

[The Chair, Liberal, Peter Fonseca]

We'll continue for 15 more minutes.

Okay, we're going to now suspend, so that everybody can understand where we are.

[The Chair, Liberal, Peter Fonseca]

Shall clause—

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

One second, sorry.

Mr. Méla, could you explain what you explained to Mr. Turnbull to all of us?

[The Clerk]

I was going to defer to Mr. Turnbull.

[Ryan Turnbull, Liberal, Whitby, ON]

I'm happy to say that what the legislative clerk just revealed to me, which I didn't understand when he first spoke, was that this is related to drip pricing. It's adding, by the sounds of it, another clause in order to deal with the drip pricing inconsistency that we would have in the Competition Act. I think it's 74.01(1.1), if I'm not mistaken, which is the section of the Competition Act that has to get amended in order to preserve that consistency.

We all gave unanimous consent, and we passed the other section, because there are two sections. The other one was...remind me of the number. Was it 52(1.3)? That was what we had already voted on, but we gave unanimous consent to amend two sections. The legislative clerk is just saying that we need to now add a clause into Bill C-59 in order to make this additional amendment to the Competition Act.

[The Chair, Liberal, Peter Fonseca]

All right. To proceed, the first thing we need to do is vote on the amendment that Mr. Turnbull just brought to create subclause 236(1.1).

(Amendment agreed to on division [See Minutes of Proceedings])

Now we're going to NDP-7.

MP Davies, would you like to move this?

[Don Davies, NDP, Vancouver Kingsway, BC]

I would indeed, Mr. Chair. Basically, NDP-7 amends 236(2) of Bill C-59, so that sellers would bear the burden of proving that discounts are genuine. That follows a recommendation by the Competition Bureau.

Fake discounts are a common deceptive marketing practice. In some cases, businesses promote a price as being a discount when, in fact, the advertised price is just the ordinary price of the product. That conduct is prohibited under the ordinary selling price provisions of the Competition Act. That's in section 74, in a couple of different places.

Currently, Mr. Chair, the Competition Bureau bears the burden of proving that discount claims are false or misleading. This means that if a seller makes a claim like “$50 off the regular price of $100”, the bureau would have to obtain the data and run the numbers to verify whether the claim is truthful or not and be prepared to prove it in court, which can be a difficult burden. This is not the most efficient approach, given that the company is the one making the savings claim based on its own sales history and is best positioned to back it up if challenged. Therefore, we would recommend that this amendment be made.