Chilling effect.
“We are concerned that this is an egregious overstep,” said Chris Gardner, CEO of the Independent Contractors and Businesses Association (ICBA), which launched the lawsuit this week, along with the Alberta Enterprise Group., in Calgary Court of King’s Bench.
“Issues around Canada’s energy industry — the potential, the challenges, the opportunities — are important discussions to be having, and those discussions should be held in forums where the debate can be open and free and not restricted by government.”
Earlier this summer, the federal government stunned the oilpatch and parts of corporate Canada by passing Bill C-59. It includes amendments to the federal Competition Act to prevent greenwashing, requiring businesses to substantiate certain environmental claims.
Businesses aren’t allowed to represent the benefits of their activities to mitigate the environmental effects of climate change if they’re not based “on adequate and proper substantiation, in accordance with internationally recognized methodology.”
However, it’s not yet understood what that internationally recognized methodology will be, although the burden of proof lies with businesses making those claims.
After the bill was passed, some industry groups and oil and gas producers pulled information from their websites, while criticizing the ambiguity around the methodology and potential financial penalties for breaking it.
“The consequences of C-59 are so negative and it’s such an extreme piece of legislation or law coming from the federal government, everybody has to err far on the side of caution,” said Tristan Goodman, head of the Explorers and Producers Association of Canada.
The Alberta government has said the bill seeks to muzzle the energy industry from speaking out while key discussions on energy and environmental policies — such as the federal emissions cap on the sector — heat up.
Alberta Energy Minister Brian Jean welcomed the lawsuit Thursday, calling the bill “undemocratic” and “extreme.” It will prevent businesses from talking about the actions and investments they’re taking to reduce emissions, he noted.
“It’s great to see the private sector come forward and challenge the federal government on something that is so obviously a breach of people’s rights,” Jean said in an interview.
“We’re very excited and thrilled to see industry picking up the torch.”
Since July, the Competition Bureau has been consulting on how these provisions should be interpreted, but the lack of rules to date has made some firms wary about discussing their environmental actions and objectives.
“This is just a gold medal in poorly thought out and rushed public policy and legislation,” said Business Council of Alberta president Adam Legge.
“It has just sent a chill down the corporate sector.”
In the statement of claim, the two plaintiffs argue the amendments in the bill violate free speech provisions within the Canadian Charter of Rights and Freedoms and should be nullified.
It says the issue of how Canada should best balance resource development with the environment is a “defining public policy issue of our times” with many differing views.
In a democratic society, it’s not legal for the government to control or manipulate the discussion by preventing some sides from providing information or opinions, says the statement of claim, which includes allegations which are not proven.
“The profound ‘chilling effect’ these new provisions will have on free expression in this context is confirmed by the fact that large segments of the business and resource development community have already withdrawn a range of public statements regarding the environmental impacts of their products or activities,” it states.
Peter Gall, a lawyer for the two groups, said muzzling one side of an important debate “goes to the heart of free speech” and doesn’t serve the public interest, noting the other side and the government are free to say whatever they want on such issues.
“I’m hard-pressed to see that there is a sufficient public interest in muzzling the industry that would override the freedom of speech rights of the public,” Gall said in an interview.
However, supporters of the bill contend it simply requires businesses to back up their claims about the environment, such as what constitutes net-zero emissions or the actions taken to meet certain goals.
“False and misleading environmental claims not only deceive consumers, but they also threaten our health,” Dr. Melissa Lem, president of the Canadian Association of Physicians for the Environment, said in a statement.
Keith Stewart of Greenpeace Canada disputed the notion that the bill limits free speech, saying it only requires companies to be truthful about their green claims.
“We also think this is more a PR stunt than an actual serious legal manoeuvre,” he said.
A statement of defence in the case has not been filed.
The amendments to C-59 were introduced to hold all businesses to the same standard, and ensure environmental sustainability claims are credible and verifiable, said Audrey Milette, press secretary to federal Industry Minister Francois-Philippe Champagne.
“This is about fostering trust in the marketplace and giving consumers the confidence to make informed choices,” she said in an e-mail.
But the lawsuit notes three different mechanisms already exist within the Competition Act to address false and misleading statements, including criminal prohibitions, potential civil damages and penalties.
“This law has already had a chilling effect. It’s stopped the industry from saying anything,” said Gall.
“You have a law that says only one side of the debate can be heard. That’s what’s so important about this case.”
Chris Varcoe is a Calgary Herald columnist.