Supreme Court Of Canada Limits Greenwashing Class Action Over “Recyclable” Bags To Quebec Only

Greenwashing continues to be a growing focus of litigation in Canada as class actions, securities misrepresentation claims, and other proceedings increasingly target the environmental claims that businesses make to consumers.

On May 28, 2026, the Supreme Court of Canada dismissed an application for leave to appeal in Cohen v Dollarama, 2025 QCCA 804 [Cohen],¹ a Quebec class action alleging that several of Canada’s largest retailers sold bags bearing the label “recyclable” when no recycling centers in the province would accept and process them. With the denial of leave, the authorized class action may now proceed to a determination on the merits of the claim.

This bulletin provides a summary of the Cohen decision and implications and associated risks for companies making environmental claims about their business or products.

Factual Background

The plaintiff sought authorization to bring a national class action against a group of major retailers in Canada. The proposed action alleges that these retailers sold bags bearing the label “recyclable” when the bags were not accepted by recycling facilities in Canada. The plaintiff grounded her claims in the Quebec Consumer Protection Act, Civil Code of Quebec and the federal Competition Act. She sought a refund of the purchase price, compensatory and punitive damages, and injunctive relief to stop the practice.

The plaintiff alleges that she shopped at one of the plaintiff retailers for years, purchasing at least one reusable bag per week. She estimates having paid several hundred dollars for these bags, relying on the “recyclable” representation prominently displayed in stores and on the retailer’s website before each purchase.

The plaintiff further alleges that the bags appear to be woven of polypropylene, which theoretically is recyclable material, but that recycling facilities in Quebec nonetheless do not accept the bags for recycling. She asserts that had she known the bags were not recycled or recyclable, she would never have purchased them.

The Superior Court Decision

The Quebec Superior Court authorized the claims under the Consumer Protection Act and the Civil Code of Quebec, finding it defensible to argue that the reusable bags could not properly be described as “recyclable” if Quebec recycling facilities do not accept them² and that the general impression conveyed by the label would be inaccurate and misleading.³

The court, however, did not authorize the claim on the basis of the Competition Act, which contains provisions prohibiting misleading environmental claims (i.e., greenwashing), as the plaintiff had not demonstrated any loss or damage as required for claims brought under the Competition Act.⁴ The court also declined to authorize a national class, as the plaintiff had not introduced evidence supporting the ability of recycling facilities in other provinces to recycle these bags, thus characterizing the plaintiff’s claims as mere speculation in the context of the other Canadian jurisdictions, unsupported by any corroborating evidence.⁵

The Court of Appeal Decision

The plaintiff appealed on two grounds: the refusal to authorize the claim under the Competition Act, and the limitation of the class to Quebec. The Court of Appeal partially allowed the appeal, finding that the Superior Court had erred by requiring a level of proof of loss that exceeded what the Code of Civil Procedure demands at the authorization stage, and accordingly amended the authorization order to include the Competition Act claims.⁶

On the question of national scope, however, the appeal was dismissed. The Court of Appeal upheld the Superior Court’s finding that the plaintiff’s national allegations amounted to speculation extrapolated from the circumstances in Quebec and were unsupported by any evidence about recycling conditions in other provinces.⁷

The Supreme Court of Canada’s Refusal of Leave to Appeal

The plaintiff appealed the Court of Appeal decision, seeking to extend the claim from Quebec to a national claim. The Supreme Court of Canada dismissed the plaintiff’s application for leave to appeal without reasons. The denial is not necessarily an indication that the Court agreed or disagreed with the lower court’s reasoning as the test for leave is not based on the merits of the proposed appeal. The Supreme Court of Canada will only hear an appeal if, in its view, the case raises a question of public importance.

The Quebec class action, certified on the basis of the Consumer Protection Act, the Civil Code of Quebec, and the Competition Act, may now proceed to a hearing on the merits, where the Quebec Superior court will determine whether the “recyclable” label was deceptive and what, if any, remedies are warranted. Despite the plaintiff’s claim being limited to Quebec, it remains open to other plaintiffs to make similar allegations with respect to the “recyclability” of bags supplied in other provinces where there is evidence of similar recycling service limitations in these jurisdictions.

Greenwashing Enforcement and Legislative Context

The misleading advertising claim in Cohen is very similar to a 2022 investigation by the Competition Bureau, which took enforcement action against Keurig Canada’s (“Keurig”) claims made across Canada that its single-use K-Cup coffee pods were recyclable.⁸ The Competition Bureau found the claims to be misleading representations under the Competition Act in jurisdictions where recycling facilities did not have the capability to recycle pods and thus did not accept them for recycling.⁹ Keurig ultimately entered into a consent agreement with the Commissioner of Competition, pursuant to which the company agreed to pay a $3 million administrative penalty, change its recyclable claims and packaging, and publish corrective notices.¹⁰

Since the Keurig enforcement action, greenwashing concerns have continued to grow. Class actions have been filed in Quebec targeting environmental marketing claims¹¹ and the Competition Bureau has commenced investigations into other businesses’ environmental claims, often initiated by complaints from environmental NGOs.¹²

In addition, in response to these concerns, the 2024 amendments to the Competition Act created greenwashing-specific provisions requiring businesses to substantiate environmental claims before making them and providing private parties a right of action in respect of misleading claims (including greenwashing claims). However, in response to concerns by businesses, some of these amendments were repealed on March 26, 2026, to clarify the standard required to substantiate environmental claims and to remove the right of action for private parties in respect of certain alleged deceptive environmental marketing practices, thus re-inserting the Competition Bureau as the gatekeeper of investigating and challenging certain environmental claims.

For further analysis of these developments, see our earlier bulletins: Class Actions in Quebec: A Surge in Environmental Law Private Actions Lays Additional Pressure on the Retail Sector; Bill C-59’s Expansion of the Competition Act’s Deceptive Marketing Practices: “Greenwashing” and Steering Clear of Environmental Misrepresentation; and Environmental Claims and the Competition Act: Competition Bureau Releases Final Greenwashing Enforcement Guidelines.

Looking Forward

Cohen signals that retailers making environmental claims on product labeling may face exposure under provincial and federal causes of action to the extent the claims are misleading or are not properly substantiated. As the merits phase proceeds, the case will test the same distinction at the heart of the Keurig enforcement action under the Competition Act: whether a product composed of theoretically recyclable material can properly be marketed as “recyclable” when recycling programs available to consumers in the jurisdictions where the product is marketed do not accept it or do not have the facilities to recycle it. With the 2024 amendments to the Competition Act maintaining the requirement to substantiate environmental claims, Cohen underscores the importance of ensuring that environmental marketing claims are accurate, properly substantiated, and not misleading prior to the market and sale of a product or its packaging.

Footnotes

1. Sonia Cohen c Dollarama SEC, et al, 2026 CanLII 50176 (SCC).

2. Cohen c Dollarama, 2024 QCCS 2087 at para 28 [Cohen QCCS].

3. Cohen QCCS at para 31.

4. Cohen QCCS at para 79.

5. Cohen QCCS at para 34.

6. Cohen v Dollarama, 2025 QCCA 804 at para 7 [Cohen QCCA].

7. Cohen QCCA at paras 8, 10-12.

8. Keurig Canada Inc, CT-2022-001.

9. See “Keurig Canada to pay $3 million penalty to settle Competition Bureau’s concerns over coffee pod recycling claims”, Government of Canada.

10. See Case Documents – Keurig Canada Inc. – Registered Consent Agreement, Competition Tribunal.

11. See, e.g., Ohayon c. Dollarama, 2024 QCCS 1363 (class action challenging claims by Dollarama regarding the alleged misleading display of certain “eco fees” charged by the retailer). See also a proposed class action challenging claims by 9199-4467 QUEBEC INC. (doing business under the trade-name EARTH RATED) related to the composability of its dog waste bags: Overview of the application 500-06-001347-240, Superior Court of Quebec, Registry of Class Actions.

12. See, e.g., the Competition Bureau’s investigation into lululemon athletica inc.: 3116813-DC-Palumbo-Notice-of-Inquiry-Applicants_2024-04-26_Redacted.pdf, Competition Bureau.