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Using Omnibus legislation to broaden the Budget’s scope
Governments have increasingly used ‘Omnibus’ legislation to amend multiple statutes under the guise of an overarching theme – such as a Budget Implementation Act. That tendency has increased with this Liberal– NDP coalition – with the opportunity to do so now twice a year: once during the implementation of the Budget proposals (which include only a portion of items mentioned in any Budget presentation); and then in the Fall Economic Statement (FES). As with all these multi-statute pieces of legislation, when you look under the hood, there is much moving that has nothing to do with the underlying Budget.
Yet, the process of parliamentary approval remains the same – so time is apportioned, in the House and Senate, and at the Committee stage (when most substantive input is presented by experts and parties affected by legislative changes). As a result, substantive amendments to Canadian laws can advance without important input.
Such is the case with the change to the Competition Act that was presented as part of the FES, and which received Royal Assent on June 22nd.
Several Flaws with this Legislation
Bill C-59 is a 546 page bill that is supposed to implement last fall’s Economic Statement … but a few sneaky clauses toward the end give the Competition Bureau the responsibility to assess statements about environmental initiatives, along with the ability to levy multi-million dollar fines.
There are several problems with this, quite apart from hiding it in unrelated legislation and not allowing Parliament to debate and revise it:
- First, the Act does not identify what measurements will be used to determine “honest” communication. Companies are completely in the dark about how to prove their work, and how they will be judged. It goes without saying that some environmental issues are matters of opinion or conflicting expert analysis. The bill references “internationally recognized methodology”, but no one knows what that is. Such a methodology doesn’t actually exist.
- Second, it uses a ‘reverse onus’. This means that if a charge is laid against you, it is up to you to defend that you are NOT misleading people – as opposed to your accuser proving that you ARE misleading people.
- Third, it introduces a private right of access to the Competition Bureau to investigate such matters. Virtually anyone can challenge a company or organization about its environmental commentary. This could conceivably take a great deal of personnel, costs and legal advice to respond; and there is no requirement that the accusations be reasonable in the first place. One can easily foresee multiple frivolous accusations for no better reason that to tie up the resources of companies.
My colleague MP Rick Perkins (our Shadow Minister for Innovation, Science and Industry) and I wrote to Industry Minister François-Philippe Champagne to ask him to reconsider the Act:
“The main problem Canadian business will face is the increased lack of certainty involved with the amendments to the Competition Act. The trifecta of ‘reverse onus’ provisions, increased private right of access to the Competition Tribunal, and the undefined notion of ‘internationally recognized methodology’ (which is non-existent) have investors in all industries pausing until they gain clarity.”
The goal is to reduce “greenwashing”, which is a term which refers to some companies (and perhaps governments and not-for-profits too) that overstate the value of their environmental initiatives.
Previous successful actions against ‘greenwashing’ companies include the Competition Commissioner’s actions against Volkswagen for their ‘diesel-gate’ scandal, and against Keurig for falsely claiming their coffee pods were being recycled.
Already we have seen companies remove information from their websites and decline to offer an environmental progress evaluation to their shareholders – not because they don’t stand behind the information, but because they don’t know how the government intends to hold them to account, and whether it will be fair – or a kangaroo court dominated by activists with the power to levy huge fines.
Any discussions of environmental plans could lead to being challenged and subjected to expensive, lengthy litigation and multi-million dollar fines if found “guilty”.
Here’s the catch: Canadian businesses are going to be required to provide disclosure through the newly-established Canadian Sustainability Disclosure Standards – a newly-revised addition to financial reporting that REQUIRES this disclosure. So what is required is for a reporting entity to ‘disclose information about its sustainability-related risks and opportunities’ – and this will be open for challenge from anyone. Note that, once again, these standards are moving forward in Canada much more quickly than they are in the United States (if you are curious, you can access the updated terms for Canada here.
Of course, the first (but not only) target seems to be Canada’s resource companies, and our oil and gas companies have responded, because they are the ones in the crosshairs of the Non Governmental Organizations that utilize these methods of ‘lawfare’. However, like the ‘No More Pipelines Act’ from 2019, every other industry will find they are just as likely to be targeted.
In my opinion, this carte-blanche legislation will add significantly to the regulatory and legal costs of all businesses in Canada – even from competitors. In the end, it could be a chill on business and competition in Canada.
Finally, as has been put forth by others – ‘Such a vague, poorly-tailored provision does not just minimally impair freedom of expression. To be constitutionally justifiable, legislation must be carefully crafted to infringe a Charter-protected right only so far as necessary to achieve a pressing and substantial objective.’ [Grant Bishop, Globe and Mail, June 26]
See my comments in this video.
Consultation – Please consider participating:
The Competition Bureau has announced a public consultation to gather stakeholder feedback relating to the interpretation and application of the new “greenwashing” provisions of the Competition Act. This consultation will inform the Bureau’s development of enforcement guidance about environmental claims.
Rick Perkins and I have written to the Commissioner to provide our input, and to question his role in defining the Act’s purview – a role that is traditionally undertaken by Parliament. See our letter here.
Excerpt from our letter: “Quite simply, the Commissioner should not be trying to ascertain the intent of Parliament. It is the role of the Commissioner to issue “enforcement guidelines, bulletins, and policies to provide further clarification and interpretation of Canada’s laws and regulations … to do this effectively requires well defined legislation from Parliament along with rigorous debate in the House to guide legislative intent…”
Please consider weighing in with your opinion about either the undemocratic process, or the anticipated outcome of the new laws, before September 27, 2024.
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