Once the election is over we can look ahead to what the new government should do – ASAP. June 20 is Vigilante Day in Canada. That’s when vigilantes – self appointed prosecutors – can go after any business, large or small, that says anything about its efforts to improve their environmental performance. And the vigilantes can get their legal and other costs paid to do this under Canada’s amended Competition Act coming into force on June 20.  Donald Trump will love this law. It damages Canadian businesses on top of his tariffs.

The Law’s Reverse Onus Assumes You are Guilty

After June 20, if a vigilante accuses your business of “greenwashing”, the law imposes a reverse onus: it removes the presumption of innocence and presumes you are guilty – unless and until you can prove your innocence. How, under this law, can you prove your innocence? The law makes that impossible, by requiring proof that your statements are truthful in accordance with what the law calls an “internationally recognized methodology” (IRM).  That means an internationally accepted standard for determining the truth of your statements.

There is No IRM

Unfortunately for you, such an IRM doesn’t exist. Therefore, you will pay a massive penalty. That will be $10 million for a first offence or 3 percent of annual worldwide gross revenues (whichever is higher). That could be billions for a large company and millions for a small one.

When the Competition Bureau tried to explain what the IRM meant it couldn’t do so.  All it could tell us  was that

“The Bureau will likely consider a methodology to be internationally recognized if it is recognized in two or more countries.”

But  that’s not necessarily what the Competition Tribunal will accept. If a vigilante brings a case against your business what the Bureau might consider in deciding whether to start its own proceeding would be irrelevant. And the Bureau, for good reason, didn’t say that in the real world there was a method that actually has been accepted by any country.

No Definition of IRM in the Act

Whenever a government introduces a new and uncertain expression into a law, with serious penalties for violations, it should provide a clear definition of it.  If it can’t define it then it doesn’t know what it means, so it shouldn’t legislate it.  Just throwing it out there and hoping someone else will figure out what it means is irresponsible. Especially when, as here, it should be obvious, with only a bit of effort, that the expression is meaningless.  That’s why a guilty finding is virtually guaranteed.

As of June 20, literally anyone may apply for permission to start a case before the Tribunal.  Permission will probably be granted if the Tribunal considers the case to be “in the public interest”.  Although what you say may be true, it would still be illegal unless you can prove its truth under this nonexistent, undefined IRM.

The Target Pays the Vigilante’s Costs

How is this anti-business “lawfare” – costly and harassing litigation – going to be conducted and financed? In three steps.  First, the vigilante will apply to the Tribunal to start a case against someone. Second, as ensuring compliance with the law is almost always in the public interest, permission will probably be granted. The vigilante doesn’t need to prove anything, only to demand that the target prove, at its expense, that whatever it said is true in accordance with an IRM. Third, the vigilante will ask that its cost of pursuing the target be paid by the target, as well as paying the $10 million plus penalty.

By effectively licensing vigilante lawfare this new law restricts freedom of expression for its potential targets. The law’s message is: Unless you want to spend millions in a lengthy hearing at the Competition Tribunal in a vain effort to try to prove you are not guilty, just say nothing.

The Law Discourages Spending on Environmental Improvements in Canada

The intended targets are the Canadian fossil fuel companies, but the law as written also potentially captures both domestic and foreign companies active in Canada in many other industries. It also creates unintended disincentives to improve environmental performance. For example, if a fast food chain can no longer mention its industry leading expenditures to reduce its carbon footprint without risking a vigilante attack then why not just reduce its spending?  Board members will be asking their CEOs why they are spending all this money on decarbonization in Canada when they can’t even advertise it safely, rather than increasing investment in their US operations, which neither face these vigilante risks nor pay any carbon tax. Donald Trump will be happy.

As this new law has a reverse onus, while ensuring that the onus cannot be met, it has already had a chilling effect on freedom of expression.  Many vulnerable businesses and business associations have already removed all environmental messages from their websites

During the election campaign both Liberal and Conservative party leaders pledged to get the economy moving again while caring for the environment.  If our newly elected Prime Minister is truly an improvement over his predecessor he should add this new law to his urgent repeal list.