Public interest litigants can now sue for false/misleading advertising

20 Jun Public interest litigants can now sue for false/misleading advertising

As of June 20, 2025, private litigants will now be able to sue for civil false advertising in Canada without having to prove damages – as long as the application is in the “public interest”. It is up to the federal Competition Tribunal to determine which cases meet this new public interest standard.

This new private right of access applies to all civil deceptive marketing practices under the federal Competition Act, including: representations that are materially misleading or false, unsubstantiated performance claims, unsupported reference pricing, drip pricing, unauthorized testimonials, bait and switch practices, sales above an advertised price, and failure to comply with contest disclosure and prize distribution requirements.

It also grants a private right of action under the new greenwashing provisions, which expressly apply the (long-standing) requirement to have “adequate and proper” substantiation to environmental benefit claims. These two new provisions specifically call out claims about the environmental benefits of a product, as well as claims about the environmental benefits of a business or its activities. The substantiation for business benefit claims must be in accordance with an “internationally recognized methodology”. The Competition Bureau’s enforcement guidance suggests that relying on standards like those published by the International Organization for Standardization will be sufficient, as long as they are recognized in at least two countries.  

Successful litigants will have access to the massive civil remedies which were previously only accessible to the Competition Bureau. These remedies include administrative monetary penalties that go up to the greater of $10 million CAD or 3x the value of the benefit derived from the deceptive conduct, and if the latter can’t be reasonably determined, up to 3% of global gross revenues.  

There is also a restitution/disgorgement-style remedy available. Under this remedy, the Tribunal is able to disgorge the entire amount paid to the advertiser for the advertised products. The Tribunal can then distribute this amount to affected end-users in any manner it sees fit. This remedy is only available for the general prohibition against material false/misleading advertising under section 74.01(1)(a), however, and is not available as a remedy for the specialized prohibitions.

It remains to be seen whether the new regime will lead to a substantial increase in applications, given the sophisticated class action proceedings already available to consumers. But the clear signal from Parliament is to foster a more active role for private parties in monitoring and challenging deceptive marketing practices, including greenwashing and other issues affecting the public good.

Businesses should closely review their marketing practices to assess whether this new “public interest” cause of action increase risks under the Competition Act, paying particular attention to advertising claims that might not have previously been actionable given de facto requirement to prove damages. Legal and compliance teams should prepare for the possibility of increased scrutiny from not only regulators, but also competitors and advocacy groups leveraging this new enforcement tool.