Dentalcorp Reports First Quarter 2025 Results

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Robust revenue growth and continued margin expansion maintain track record of double digit growth in Adjusted EBITDA and Adjusted Free Cash Flow per Share
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Revenue of $409.4 million, an increase of 9.9% from the first quarter of 2024, with Same Practice Revenue Growth ('SPRG') 1 of 4.6%.
Adjusted EBITDA 1 of $75.9 million, an increase of 11.5% compared to the same period in 2024; Adjusted EBITDA Margin 1 of 18.5%, an increase of 20 basis points over the same period in 2024.
Adjusted Free Cash Flow 1 and Adjusted Free Cash Flow per Share 1 of $44.3 million and $0.22, an increase of 25.9% and 15.8%, respectively, over the same period in 2024; Adjusted Net Income 1 of $20.7 million.
Net debt / PF Adjusted EBITDA after rent Ratio 1 of 3.77x, a decrease of 0.57x compared to the same period in 2024.
Acquired 12 new practice locations which are expected to generate $8.3 million in PF Adjusted EBITDA after rent 1 at 7.4x, expanding Dentalcorp's national footprint to 571 locations.
Achieved a 91.5% recurring patient visit rate 1, reflecting strong patient loyalty and continued demand for routine care across the network.
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Second Quarter 2025 Outlook
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Revenue and SPRG 1 for the second quarter of 2025 are estimated to increase by 9.0% to 10.0% (to between $435.8M and $439.8M) and between 3.0% to 5.0%, respectively.
Adjusted EBITDA Margin 1 for the second quarter of 2025 is estimated to increase by 20 basis points from the second quarter of 2024, to 18.7%, and Adjusted EBITDA 1 is estimated to increase to between $81.5M and $82.2M.
Expect to complete acquisitions representing PF Adjusted EBITDA after rent 1 of $6 million+.
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(1) Non-IFRS financial measure, non-IFRS ratio, or supplementary financial measure. For comprehensive definitions and quantitative reconciliations, please refer to the 'Non-IFRS and Other Financial Measures' section within this news release.
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TORONTO — dentalcorp Holdings Ltd. ('Dentalcorp' or the 'Company') (TSX: DNTL), Canada's largest and one of North America's fastest growing networks of dental practices, today announced its financial and operating results for the first quarter ended March 31, 2025, reaffirmed the full year 2025 guidance previously provided in the Company's news release dated March 21, 2025, and announced its outlook for the second quarter of 2025. All financial figures are in Canadian dollars unless otherwise indicated.
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'Our teams across the country delivered another quarter of strong results, with revenue and Adjusted EBITDA growth of approximately 10% and 11%, respectively, over the first quarter of 2024, and setting new highs for both metrics. We continued to realize operating leverage across the business, with first quarter Adjusted EBITDA Margin expanding 20 basis points over the first quarter of 2024 to 18.5%, marking our fourth consecutive quarter of year-over-year Adjusted EBITDA Margin expansion,' said Graham Rosenberg, CEO and Chairman of Dentalcorp.
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'We generated a record $44.3 million in Adjusted Free Cash Flow in the first quarter of 2025, representing an increase of approximately 26% over the first quarter of 2024,' Rosenberg continued. 'This led to continued deleveraging, with our Net Debt / PF Adjusted EBITDA after rent Ratio decreasing to 3.77x, a reduction of 0.57x from the first quarter of 2024, marking our sixth consecutive quarter of deleveraging,' Rosenberg said.
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'Following a strong first quarter of 2025 that exceeded expectations, we're carrying this momentum into the second quarter, anticipating SPRG of 3.0% to 5.0%, revenue growth of 9.0% to 10.0%, and Adjusted EBITDA Margin expansion of 20 basis points over the second quarter of 2024, to 18.7%,' Nate Tchaplia, President and Chief Financial Officer said.
'During the first quarter of 2025, we acquired 12 new practices that are expected to generate $8.3 million in PF Adjusted EBITDA after rent, at an average multiple of 7.4x, and as of today, have closed on or signed LOIs for acquisitions representing 70% of our annual target,' Tchaplia continued.
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'With regards to the federal government's Canadian Dental Care Plan ('CDCP'), we have treated over 95,000 CDCP patients with 95% of our practices currently accepting CDCP patients. During the first quarter of 2025, the federal government announced that the 18-64 age cohort will be eligible to receive treatment under the program as of June 1, 2025. This announcement led to some visit deferrals in the quarter and we expect this to continue until these new eligible patients can begin their treatment,' Tchaplia concluded.
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'We are reaffirming our full year 2025 guidance, where we expect to see SPRG of 3.0% to 5.0%, an accelerated pace of M&A with acquisitions representing $25 million+ of PF Adjusted EBITDA after rent, Pre-tax Adjusted Free Cash flow per Share growth of 15%+, and another year of Adjusted EBITDA Margin expansion of 20+ basis points,' said Rosenberg.
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Three months ended March 31,
2025
2024
$
$
(expressed in millions of dollars)
Revenue
409.4
372.4
Cost of revenue
204.4
186.0
Gross profit
205.0
186.4
Selling, general and administrative expenses
131.5
122.9
Depreciation and amortization
51.1
50.8
Share-based compensation
1.5
3.5
Foreign exchange gain
—
(0.3
)
Net finance costs
20.5
25.2
Change in fair value of financial instruments at fair value through profit or loss
8.8
(3.9
)
Other losses
0.9
—
Loss before income taxes
(9.3
)
(11.8
)
Income tax expense (recovery)
0.9
(0.1
)
Net loss and comprehensive loss
(10.2
)
(11.7
)
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Other Metrics
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(a)
Non-IFRS financial measure, non-IFRS ratio or supplementary financial measure. See the 'Non-IFRS and Other Financial Measures and Ratios' section of this release for definitions and quantitative reconciliations.
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Conference Call Notification
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The Company will hold a conference call to provide a business update on Monday, May 12, 2025, at 8:30 a.m. ET. A question-and-answer session will follow the business update.
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Non-IFRS and Other Financial Measures and Ratios
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As appropriate, we supplement our results of operations determined in accordance with IFRS with certain non-IFRS and other financial measures and ratios that we believe these non-IFRS and other financial measures are useful to investors, lenders and others in assessing our performance and highlighting trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. Our management also uses non-IFRS measures for purposes of comparing to prior periods; preparing annual operating budgets; developing future projections and earnings growth prospects; measuring the profitability of ongoing operations; analyzing our financial condition, business performance and trends, including the operating performance of the business after taking into consideration the acquisitions of dental practices; and determining components of employee compensation. As such, these measures are provided as additional information to complement IFRS measures by providing further understanding of our results of operations from management's perspective, including how we evaluate our financial performance and how we manage our capital structure. We also believe that securities analysts, investors and other interested parties frequently use these non-IFRS and other financial measures and industry metrics in the evaluation of issuers. These non-IFRS and other financial measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS, may include or exclude certain items as compared to similar IFRS measures and may not be comparable to similarly-titled measures reported by other companies. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. For further information on non-IFRS and other financial measures and ratios, including the most directly comparable IFRS measures, composition of the measures, a description of how we use these measures, an explanation of how these measures are useful to investors and applicable reconciliations, refer to the 'Non-IFRS and Other Financial Measures', 'Non-IFRS Financial Measures', 'Non-IFRS Ratios' and 'Certain Supplementary Financial Measures' sections of management's discussion and analysis of operations for the three months and year ended March 31, 2025, which is available on the Company's profile on SEDAR+ at www.sedarplus.ca.
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'EBITDA' means, for the applicable period, net loss and comprehensive loss plus (a) net finance costs, (b) income tax expense (recovery), and (c) depreciation and amortization. Management does not use EBITDA as a financial performance metric, but we present EBITDA to assist investors in understanding the mathematical development of Adjusted EBITDA and Same Practice EBITDA Growth. The most comparable IFRS measure to EBITDA is Net loss and comprehensive loss, for which a reconciliation is provided below.
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Adjusted EBITDA
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'Adjusted EBITDA' is calculated by adding to EBITDA certain expenses, costs, charges or benefits incurred in such period which in management's view are either not indicative of underlying business performance or impact the ability to assess the operating performance of our business, including: (a) net impact of unrealized foreign exchange gains or losses on non-cash balances; (b) share-based compensation; (c) external acquisition expenses; (d) change in fair value of financial instruments at fair value through profit or loss; (e) other corporate costs; (f) loss on disposal of dental practices; (g) loss on disposal and impairment of property and equipment and intangible assets; (h) loss on settlement of other receivables; (i) impairment of right-of-use assets; (j) post-employment benefits; and (k) short-term benefits. Adjusted EBITDA is a supplemental measure used by management and other users of our financial statements to assess the financial performance of our business without regard to the effects of interest, depreciation and amortization costs, expenses that are not considered reflective of underlying business performance, and other expenses that are expected to be one-time or non-recurring. We use Adjusted EBITDA to facilitate a comparison of our operating performance on a consistent basis from period to period and to provide for a more complete understanding of factors and trends affecting our business. The most comparable IFRS measure to Adjusted EBITDA is Net loss and comprehensive loss.
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(a)
Represents professional fees and other expenses paid to third parties that are incurred in connection with individual practice acquisitions and are not related to the underlying business operations of the Company.
(b)
Represents costs associated with the implementation of new corporate technology systems, the undertaking of vendor consolidations, termination benefits and restructuring activities, and professional fees related to the settlement of the management loan program and issuance of preferred shares, executive search arrangements, other non-recurring capital market initiatives and the implementation of the CDCP. Also included are costs associated with the purchase of profit rights held by Associate dentists in the cash flows of our dental practices and losses of dental practices that were disposed of during the period.
(c)
Represents the loss on disposal of dental practices that were disposed of during the reporting period.
(d)
Represents post-employment benefits provided to the Company's former President.
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Adjusted Free Cash Flow
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'Adjusted free cash flow' is calculated by adding or subtracting from cash flow from operating activities: (a) external acquisition expenses; (b) other corporate costs; (c) post-employment benefits; (d) short-term benefits; (e) repayment of principal on leases; (f) maintenance capital expenditure; and (g) changes in working capital. We use Adjusted free cash flow to facilitate a comparison of our operating performance on a consistent basis from period to period, to provide for a more complete understanding of factors and trends affecting our business, and to determine components of employee compensation. The most comparable IFRS measure to Adjusted free cash flow is cash flow from operating activities, for which a reconciliation is provided below.
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Three months ended March 31,
2025
2024
$
$
(expressed in millions of dollars)
Cash flow from operating activities
52.1
46.5
Adjustments:
External acquisition expenses (a)
1.0
1.0
Other corporate costs (b)
1.4
1.0
Post-employment benefits (c)
—
2.3
54.5
50.8
Deduct:
Repayment of principal on leases
(7.0
)
(6.5
)
Maintenance capital expenditure (d)
(4.3
)
(4.7
)
Changes in working capital (e)
1.1
(4.4
)
Adjusted free cash flow
44.3
35.2
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(a)
Represents professional fees and other expenses paid to third parties that are incurred in connection with individual practice acquisitions and are not related to the underlying business operations of the Company.
(b)
Represents costs associated with the implementation of new corporate technology systems, the undertaking of vendor consolidations, termination benefits and restructuring activities, and professional fees related to the settlement of the management loan program and issuance of preferred shares, executive search arrangements, other non-recurring capital market initiatives and the implementation of the CDCP. Also included are costs associated with the purchase of profit rights held by Associate dentists in the cash flows of our dental practices and losses of dental practices that were disposed of during the period.
(c)
Represents post-employment benefits provided to the Company's former President.
(d)
Represents capital expenditures for general maintenance and safety compliance of dental practices for the reporting period.
(e)
Represents the change in non-cash working capital items for the reporting period.
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'Adjusted free cash flow per Share' means Adjusted free cash flow divided by the total number of Shares on a fully diluted basis. Adjusted free cash flow per Share is utilized to determine components of employee compensation.
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'Pre-tax Adjusted free cash flow' in respect of a period means Adjusted free cash flow less cash income tax (recovery) expense. We use Pre-tax Adjusted free cash flow to facilitate a comparison of our operating performance on a consistent basis from period to period, to provide for a more complete understanding of factors and trends affecting our business, and to determine components of employee compensation. The most comparable IFRS measure to Pre-tax Adjusted free cash flow is cash flow from operating activities.
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'Pre-tax Adjusted free cash flow per Share' means Pre-tax Adjusted free cash flow, divided by the total number of Shares on a fully diluted basis. Pre-tax Adjusted free cash flow per Share is utilized to determine components of employee compensation.
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'Adjusted net income' is calculated by adding to Net loss and comprehensive loss certain expenses, costs, charges or benefits incurred in such period which in management's view are either not indicative of underlying business performance or impact the ability to assess the operating performance of our business, including: (a) amortization of intangible assets; (b) share-based compensation; (c) change in fair value of contingent consideration; (d) external acquisition expenses; (e) other corporate costs; (f) loss on disposal of dental practices; (g) change in fair value of preferred shares; (h) loss on disposal and impairment of property and equipment and intangible assets; (i) loss on settlement of other receivables; (j) impairment of right-of-use assets; (k) loss on modification of borrowings; (l) post-employment benefits; (m) short-term benefits; (n) change in fair value of other financial liability; and (o) the tax impact of the above. We use Adjusted net income to facilitate a comparison of our operating performance on a consistent basis from period to period and to provide for a more complete understanding of factors and trends affecting our business. The most comparable IFRS measure to Adjusted net income is Net loss and comprehensive loss, for which a reconciliation is provided below.
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Three months ended March 31,
2025
2024
$
$
(expressed in millions of dollars)
Net loss and comprehensive loss
(10.2
)
(11.7
)
Adjustments:
Amortization of intangible assets
29.2
26.9
Share-based compensation
1.5
3.5
Change in fair value of contingent consideration (a)
0.1
3.3
Change in fair value of other financial liability (b)
0.1
—
Change in fair value of preferred shares (c)
(0.3
)
(0.2
)
External acquisition expenses (d)
1.0
1.0
Other corporate costs (e)
1.4
1.0
Loss on disposal of dental practices (f)
0.9
—
Loss on modification of borrowings (g)
—
2.3
Post-employment benefits (h)
—
2.3
23.7
28.4
Tax impact of the above
(3.0
)
(3.7
)
Adjusted net income
20.7
24.7
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(a)
On acquisition, and at each subsequent reporting date, obligations under earn-out arrangements are measured at fair value with the changes in fair value recognized in the condensed interim consolidated statements of loss and comprehensive loss.
(b)
The Company has several De novo practices whereby the Company has issued certain put and call options over the Associate Dentists' profit rights, which have been classified as a financial liability at FVTPL. At each reporting date, changes in fair value are recognized in the condensed interim consolidated statements of loss and comprehensive loss.
(c)
At each reporting date, the Company's investment in the Management Preferred Shares, which are classified as a financial asset at FVTPL, are revalued with changes in fair value recognized in the condensed interim consolidated statements of loss and comprehensive loss.
(d)
Represents professional fees and other expenses paid to third parties that are incurred in connection with individual practice acquisitions and are not related to the underlying business operations of the Company.
(e)
Represents costs associated with the implementation of new corporate technology systems, the undertaking of vendor consolidations, termination benefits and restructuring activities, and professional fees related to the settlement of the management loan program and issuance of preferred shares, executive search arrangements, other non-recurring capital market initiatives and the implementation of the CDCP. Also included are costs associated with the purchase of profit rights held by Associate dentists in the cash flows of our dental practices and losses of dental practices that were disposed of during the period.
(f)
Represents the loss on disposal of dental practices that were disposed of during the reporting period.
(g)
Represents the loss on modification of the Company's outstanding credit facilities upon entering into an amended and restated credit agreement.
(h)
Represents post-employment benefits provided to the Company's former President.
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PF Adjusted EBITDA
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'PF Adjusted EBITDA' in respect of a period means Adjusted EBITDA for that period plus the Company's estimate of the additional Adjusted EBITDA that it would have recorded if it had acquired each of the dental practices that it acquired during that period on the first day of that period, calculated in accordance with the methodology described in the reconciliation table in 'Reconciliation of Non-IFRS Measures'. Both creditors and the Company use PF Adjusted EBITDA to assess our borrowing capacity, which management believes, given the highly acquisitive nature of our business, is more reflective of our operating performance. We also use PF Adjusted EBITDA to determine components of employee compensation. The most comparable IFRS measure to PF Adjusted EBITDA is Net loss and comprehensive loss.
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(a)
Represents the additional Adjusted EBITDA that we estimate would have been recorded if the Company's dental practice acquisitions had occurred on the first day of the applicable reporting period. These estimates are based on the amount of Practice-Level EBITDA budgeted by us to be earned by the relevant practices at the time of their acquisition by us. There can be no assurance that if we had acquired these practices on the first day of the applicable reporting period, they would have actually generated such budgeted Practice-Level EBITDA, nor is this estimate indicative of future results.
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'PF Adjusted EBITDA after rent' in respect of a period means PF Adjusted EBITDA less interest and principal repayments on leases and lease interest and principal repayments on acquisitions. Both creditors and the Company use PF Adjusted EBITDA after rent to assess our borrowing capacity, which management believes, given the highly acquisitive nature of our business, is more reflective of our operating performance. The most comparable IFRS measure to PF Adjusted EBITDA after rent is Net loss and comprehensive loss.
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PF Revenue
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'PF Revenue' in respect of a period means revenue for that period plus the Company's estimate of the additional revenue that it would have recorded if it had acquired each of the dental practices that it acquired during that period on the first day of that period. Given the highly acquisitive nature of our business, management believes PF Revenue is more reflective of our operating performance. We use PF Revenue to determine components of employee compensation. The most comparable IFRS measure to PF Revenue is revenue.
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'Net debt / PF Adjusted EBITDA after rent Ratio' means non-current borrowings divided by PF Adjusted EBITDA after rent. We use Net debt / PF Adjusted EBITDA after rent Ratio to assess our borrowing capacity.
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Same Practice Revenue Growth
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'Same Practice Revenue Growth' in respect of a period means the percentage change in revenue derived from Established Practices in that period as compared to revenue from the same dental practices in the corresponding period in the immediately prior year.
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This release includes forward-looking information and forward-looking statements within the meaning of applicable Canadian securities legislation, including the Securities Act (Ontario). Forward-looking information includes, but is not limited to, statements about the Company's objectives, strategies to achieve those objectives, our financial outlook, and the Company's beliefs, plans, expectations, anticipations, estimates, or intentions. Forward-looking information includes words like could, expect, may, anticipate, assume, believe, intend, estimate, plan, project, guidance, outlook, target, and similar expressions suggesting future outcomes or events.
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Our forward-looking information includes, but is not limited to, the information and statements under ' First Quarter 2025 Highlights ' and 'Second Quarter 2025 Outlook' relating to our goals for the second quarter of 2025 for Revenue, Same Practice Revenue Growth, Adjusted EBITDA Margin, PF Adjusted EBITDA after rent attributable to practices acquired in 2025 and our medium-term expectations regarding Same Practice Revenue Growth and Net Debt / PF Adjusted EBITDA after rent Ratio. Such forward-looking information relating to these metrics are not projections; they are goals based on the Company's current strategies and may be considered forward-looking information under applicable securities laws and subject to significant business, economic, regulatory and competitive uncertainties and contingencies, many of which are beyond the control of the Company and its management.
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The purpose of disclosing such forward-looking information is to provide investors with more information concerning the financial results that the Company currently believes are achievable based on the assumptions below. Readers are cautioned that the information may not be appropriate for other purposes. While these targets are based on underlying assumptions that management believes are reasonable in the circumstances, readers are cautioned that actual results may vary materially from those described above.
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Forward-looking statements are necessarily based upon management's perceptions of historical trends, current conditions and expected future developments, as well as a number of specific factors and assumptions that, while considered reasonable by management as of the date on which the statements are made, are inherently subject to significant business, economic and competitive uncertainties and contingencies which could result in actions, events, conditions, results, performance or achievements to be different or materially different from those projected in the forward-looking statements. Forward-looking information is based on many factors and assumptions including, but not limited to, the impact of, and the enrollment of patients in, the CDCP; expectations regarding the Company's business, operations and capital structure; that the Company's acquisition program continues as it has historically, including the Company maintaining its ability to continue to make and integrate acquisitions at attractive valuations including a reduction in acquisition purchase multiples as compared to prior periods; the Company's ability to realize pricing increases, materially driven by Provincial fee guides; a continued increase in patient visit volumes through patient recall and insourcing initiatives that drive the expansion of service offerings and frequency of visits to contribute to optimal patient care; the impact of the investments the Company has made in its corporate infrastructure and teams, and the upgrades to its core information technology systems; the Company's ability to mitigate anticipated supply chain disruptions, geopolitical risks, inflationary pressures and labour shortages, and generate cash flow; no changes in the competitive environment or legal or regulatory developments affecting our business; and visits by patients to our Practices at or above the same rate as current visits.
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Actual results and the timing of events may differ materially from those anticipated in the forward-looking information as a result of known and unknown risk factors, many of which are beyond the control of the Company, and could cause actual results to differ materially from the forward-looking statements. Such risks include, but are not limited to, the Company's potential inability to successfully execute its growth strategy and complete additional acquisitions; its dependence on the integration and success of its acquired dental practices; its dependence on the parties with which the Company has contractual arrangements and obligations; changes in relevant laws, governmental regulations and policy and the costs incurred in the course of complying with such changes; risks relating to the current economic environment, including the impact of any tariffs and retaliatory tariffs on the economy; risk associated with disease outbreaks; competition in the dental industry; increases in operating costs; litigation and regulatory risk; and the risk of a failure in internal controls and other factors described under 'Risk Factors' in the Company's Annual Information Form for the year ended December 31, 2024 and in this release. Accordingly, we warn readers to exercise caution when considering statements containing forward-looking information and caution them that it would be unreasonable to rely on such statements as creating legal rights regarding the Company's future results or plans. We are under no obligation (and we expressly disclaim any such obligation) to update or alter any statements containing forward-looking information or the factors or assumptions underlying them, whether as a result of new information, future events, or otherwise, except as required by applicable securities laws. All of the forward-looking information in this release is qualified by the cautionary statements herein.
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Dentalcorp is Canada's largest and one of North America's fastest growing networks of dental practices, committed to advancing the overall well-being of Canadians by delivering the best clinical outcomes and unforgettable experiences. Dentalcorp acquires leading dental practices, uniting its network in a common goal: to be Canada's most trusted healthcare network. Leveraging its industry-leading technology, know-how and scale, Dentalcorp offers professionals the unique opportunity to retain their clinical autonomy while unlocking their potential for future growth. To learn more, visit dentalcorp.ca.
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Contacts
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For investor inquiries, please contact:
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Investor Relations
Nick Xiang
Vice President, Corporate Finance
nick.xiang@dentalcorp.ca
(416) 558-8338 x 866
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New tool to challenge greenwashing claims goes live as companies weigh strategy

Greenpeace activists protest BP's Calgary headquarters, alleging that the company's environmental claims contradicted its oilsands investments, on Thursday, April 15, 2010. The company sold its last oilsands holdings in CANADIAN PRESS/Jeff McIntosh. TORONTO — It's been a year now since a new law took effect that requires companies to back up their environmental claims, but there's still a lot of unknowns about how the anti-greenwashing rules will play out. What is clear so far is that they've already reduced what companies are choosing to say about their environmental record, even as the biggest source of worry for many — an option for the public to initiate claims — is only now kicking in. The pullback started as soon as the law came into effect on June 20 last year, when the Pathways Alliance group of oilsands companies scrubbed all content from its website and social media feeds. Since then there have been other high-profile moves blamed on the law, including RBC dropping its sustainable finance target and several climate metrics, and CPP Investments ditching its net-zero emission by 2050 target, but there have also been numerous other companies that have made quieter adjustments. 'I can say with 100 per cent certainty that many organizations across many industries in Canada are revisiting their disclosure,' said Conor Chell, national leader of ESG law at KPMG in Canada. 'There's a lot of disclosure that was pulled from the public domain.' Companies have raised concerns about the broad, vague wording of the provision in Bill C-59 that requires them to backup environmental claims with 'internationally recognized methodology,' and the threat of penalties of up to three per cent of global revenues if they're found to be in violation of the law. Many companies and groups have called for the additions to be scrapped, while the Alberta Enterprise Group and the Independent Contractors and Businesses Association have launched a constitutional challenge, alleging the law is a breach of freedom of expression protections. The Competition Bureau has tried to address at least the uncertainty of the law by providing guidelines, with a finalized version out just over two weeks ago. Some have said the guidelines are still too vague, while others like the Pathways Alliance say they provide no assurance at all, because the Competition Bureau isn't bound by them, while the Competition Tribunal doesn't have to adhere to them. And it's the Competition Tribunal that many companies are especially worried about. A clause in the law that went into effect Friday allows the public to bypass the bureau, and directly ask the tribunal to hear a case. 'From the perspective of many of our clients, the real risk lies in that private right of action,' said Chell. The clause has raised fears of a flood of cases against companies, tying them up in legal wrangling at the court-like tribunal, possibly for years, and the costs that come along with such disputes. 'We believe the amendments ... should be removed to allow businesses to speak openly and truthfully about what they are doing to improve environmental performance and without fear of meritless litigation by private entities,' said Pathways president Kendall Dilling in a statement. But environmental groups have played down the threat. Ecojustice finance lawyer Tanya Jemec said the narrative that there is going to be a wave of filings is overblown, since bringing a case is time consuming and resource intensive, while they will have to meet a public-interest threshold before being allowed to proceed. 'I think there is a lot of fearmongering going on out there, and efforts, whether intentional or not, to undermine these anti-greenwashing provisions.' Some, including Green Party Leader Elizabeth May, have questioned whether the new greenwashing laws were needed at all, given deceptive marketing practices were already covered by the Competition Act. But Jemec said the existing process takes years, with no updates along the way from the bureau, while being able to take cases to the tribunal will increase transparency and relieve pressure on the bureau. She said the reaction to the new laws, which also set elevated standards and penalties to the existing general protections, shows they were needed. 'The fact that companies are looking at what they are saying and changing course just may be an indication that the provisions are doing their work.' Pushing companies to make sure they can back up their environmental claims improves competition, by making room for those legitimately trying to do better, said Wren Montgomery, associate professor at Western University's Ivey Business School. 'It's often these smaller, newer, really sustainable, pure-play sustainability companies that the innovation is coming from,' she said, noting she's seen in sectors ranging from fashion to wine. 'In my research, we see that greenwash is driving them out, so it's making it really hard for them to get rewarded for bringing that value to the market.' Others, including Calgary-based clean-tech investor Avatar Innovations, have raised concerns that the higher reporting standards could hold back startups, both because of the compliance burden and the lack of established testing standards for emerging technology. Montgomery said there are many established standards, and more being added, to cover environmental claims. 'My larger concern is not that a reporting standard is going to inhibit innovation. It's that greenwashing is going to inhibit innovation, and I think the latter is a much bigger concern for Canada.' It's not just smaller companies affected. Chell at KPMG said that for a while every company was clamouring to get out net-zero targets for the competitive advantage, but that advantage kept fading as more and more did it. He said if the law works as intended, only companies that can actually substantiate claims will be able to do so, especially for those 'big ostentatious claims like net zero, carbon neutrality.' 'So there is actually, I think, a competitive advantage for companies that can make those claims and back them up credibly.' Whether the law is truly effective, or just forcing companies to say less out of caution, is still unclear, but it's certainly brought more focus to the problem, said Chell. 'If the intent was to draw attention to greenwashing as an issue, I would say that that objective has certainly been achieved.' This report by The Canadian Press was first published June 22, 2025. Ian Bickis, The Canadian Press

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Bank of Canada hoping for better look at ‘complicated' inflation picture

Bank of Canada Governor Tiff Macklem is seen during a news conference, in Ottawa, Wednesday, June 4, 2025. THE CANADIAN PRESS/Adrian Wyld OTTAWA — The Bank of Canada will get a fresh look at national inflation figures this week — a picture that's been particularly murky as of late amid tax changes and trade wars. Statistics Canada is expected to publish its consumer price index for May on Tuesday. Financial data shows the consensus among economists is that inflation ticked up to 1.8 per cent year-over-year last month. April figures showed the annual inflation rate slowed sharply to 1.7 per cent, thanks largely to a drop in gasoline prices tied to the end of the consumer carbon price. Benjamin Reitzes, BMO's managing director of Canadian rates and macro strategist, said he expects inflation cooled two ticks to 1.5 per cent in May. He pointed to a slowing in shelter inflation and a smaller jump in gas prices compared with the same time last year for the easing. But it won't be just the headline number the Bank of Canada is parsing as it attempts to set its benchmark interest rate in an increasingly uncertain world. 'The reality is, they don't just look at one number. They look at a number of different inflation metrics to really try and figure out what the underlying trend is,' Reitzes said. Bank of Canada governor Tiff Macklem called the current inflation picture 'complicated' in a speech to the St. John's Board of Trade in Newfoundland and Labrador on Wednesday. The 'firmness' in underlying inflation lately might be early signs of the trade war with the United States impacting inflation, he said. The central bank has so far been dogged by uncertainty tied to the tariff dispute, holding its policy rate steady at 2.75 per cent twice in a row as it waits for clarity on how the trade restrictions will impact inflation. While the tariffs and counter-tariffs themselves are likely to drive up prices for businesses, it's not yet clear to the bank how quickly companies will pass those costs on to customers. Resulting slowdowns in the economy could also see businesses and consumers rein in spending, keeping inflationary pressures relatively tame. Katherine Judge, senior economist at CIBC Capital Markets, said inflation likely inched higher because of tariffs. 'The acceleration in the monthly pace will be largely tied to food prices that are picking up counter-tariff impacts and core goods prices that could begin to reflect broader tariffs,' she said in a note to clients on Friday. 'We expect rent inflation to decelerate after a surprising jump in April, and in line with industry data, leaning against food price increases.' Judge noted the upcoming inflation reading will reflect adjustments Statistics Canada made to its CPI basket, but said such changes don't usually have a meaningful impact on the headline number. Reitzes said it's been hard to pinpoint the impact of tariffs on the inflation data. 'The Bank of Canada is certainly watching for that, though,' he said. 'The army of economists they have working for them will be kind of teasing through all of that data and looking for any signs of that.' Food inflation has been a bit stronger in recent months, which Reitzes noted is one area where Canada is applying counter-tariffs. But he also said that could be a lagged impact from weakness in the Canadian dollar at the start of the year now filtering into food prices. Another source of noise in the inflation data is tax changes from the federal government in the early part of the year. First, Ottawa's two-month GST holiday skewed price data on a range of groceries, gifts and household staples, and now the end of the consumer carbon tax is driving down headline inflation. But that impact is only going to last for a year and will fall out of the inflation comparison after 12 months. Macklem said the central bank is increasingly putting weight on CPI measures that strip out influences from tax changes to give it some clarity. He noted Wednesday that inflation excluding taxes was 2.3 per cent in April — stronger than the central bank was expecting. Macklem also signalled Wednesday that the Bank of Canada is scrutinizing its own preferred measures of core inflation a little more closely. Those core inflation figures are now running above three per cent, but Macklem also warned there's 'potentially some distortion' that could be 'exaggerating' price pressures. Alternative measures of core inflation are coming in lower, so he said the bank is looking at a range of factors as it gauges where inflation is heading next. 'There is some unusual volatility. So how temporary or persistent this is, I think remains an open question,' Macklem said. The Bank of Canada will get a look at two inflation reports before its next interest rate decision on July 30. If inflation shows signs of remaining well contained in those releases, Reitzes said the Bank of Canada might find a window to lower interest rates to boost the economy in the face of tariffs. 'They'll probably take that opportunity, but inflation needs to provide them with that,' he said. 'And at the moment it is not doing so.' This report by The Canadian Press was first published June 22, 2025. Craig Lord, The Canadian Press