THE STANDING SENATE COMMITTEE ON ENERGY, THE ENVIRONMENT AND NATURAL RESOURCES
EVIDENCE
OTTAWA, Tuesday, April 28, 2026
The Standing Senate Committee on Energy, the Environment and Natural Resources met with videoconference this day at 6:32 p.m. [ET] to study Bill S-4, An Act to amend the Energy Efficiency Act; and, in camera, to examine and report on such issues as may arise from time to time relating to energy, the environment, natural resources and climate change.
Senator Joan Kingston (Chair) in the chair.
[English]
The Chair: Good evening. My name is Joan Kingston, and I am Chair of the Standing Senate Committee on Energy, the Environment and Natural Resources. I will ask the senators to introduce themselves.
[Translation]
Senator Verner: Josée Verner from Quebec.
Senator Aucoin: Réjean Aucoin from Nova Scotia.
Senator Youance: Suze Youance from Quebec.
[English]
Senator McCallum: Mary Jane McCallum, Treaty 10, Manitoba region.
Senator D. M. Wells: David Wells, Newfoundland and Labrador.
Senator Wilson: Duncan Wilson, British Columbia and sponsor of the bill.
Senator Coyle: Mary Coyle, Antigonish, Nova Scotia.
The Chair: Before I introduce our witnesses, I would just like to acknowledge that the land on which we gather is the traditional, ancestral and unceded territory of the Anishinaabe Algonquin Nation.
Pursuant to the order of reference received from the Senate on March 11, 2026, we are pursuing our study of Bill S-4, An Act to amend the Energy Efficiency Act.
We are pleased to welcome our panel today: from Whirlpool Canada, Warrington Ellacott, Senior Manager, Government Relations; from the Balsillie School of International Affairs, Ann Fitz-Gerald, Director, who is with us virtually; from Consumers Council of Canada, Max Goodman-Coop, Member of the Board of Directors; and from the Association of Home Appliance Manufacturers Canada, Rémi Moreau, Vice-president and Managing Director for Canada.
I would like to welcome you all here. We will begin with Ms. Fitz-Gerald for opening remarks, followed by the others, for about five minutes.
Ann Fitz-Gerald, Director, Balsillie School of International Affairs: Honourable Chair Kingston, honourable senators and members of the committee, thank you very much for the opportunity to appear before you today. While I am not a professor of energy security, my research on international security and the work of teams here at the Balsillie School of International Affairs in Waterloo increasingly focus on energy efficiency.
I would like to offer two key observations if I may. First, while the current provisions of the Energy Efficiency Act are important, they are not, on their own, sufficient to deliver the scale of improvement required in energy intensity. As a result, they risk falling short of the level of progress assumed under Canada’s nationally determined contributions under the Paris Agreement.
Energy efficiency is widely recognized as the “first fuel” for both energy security and emissions reduction. Historically, global energy intensity improved at approximately 2% per year between 2010 and 2019. At COP28, nearly 200 countries committed to doubling this rate to roughly 4% annually by 2030. However, since 2019, progress has slowed significantly, averaging closer to 1.3% per year globally, well below the required pace, and Canada’s performance reflects this broader trend.
The challenge is structural. Current approaches to energy efficiency are primarily based on incremental improvements through minimum energy performance standards for appliances and equipment, building codes and retrofit standards, transport efficiency measures and industrial energy management practices. While these all remain necessary, they are not on their own sufficient to deliver the scale of change required. In fact, industrial energy intensity improvements have slowed to below 0.5% per year in recent years.
Put simply, we are reaching the limits of what can be achieved through incremental efficiency gains within existing energy systems. To achieve the level of improvement required, particularly the aspirational 4% annual decline in energy intensity, a more fundamental shift is needed, one that moves beyond optimizing current systems towards substituting primary fuel sources.
This leads to my second observation. The transition to a low-carbon economy and the opportunity to enhance productivity and competitiveness depend on deeper electrification across key sectors of the economy, particularly buildings and transport, where the largest efficiency gains remain untapped.
In transport, electrification across all modes — passenger vehicles, freight, public transit and rail — offers a significant opportunity to displace oil use. Electric vehicles use approximately 65% to 70% less energy per kilometre than internal combustion engine vehicles, making them three to four times more efficient.
In buildings, replacing fossil fuel-based heating systems with high-efficiency heat pumps can deliver efficiency improvements of 300% to 400%, reducing energy use for heating by up to 75%.
These are not marginal but transformational gains.
Electrification enables a step change in energy productivity by fundamentally altering how energy is used, rather than simply improving how existing fuels are consumed.
This shift also has important economic implications.
Electricity, particularly in Canada, where it is relatively low-carbon and increasingly sourced from renewables and other clean technologies, generates more economic output per unit of energy consumed than fossil fuels. As such, electrification is not only central to emissions reduction but also to improving national productivity and competitiveness.
The amendments to the Energy Efficiency Act present an opportunity to reflect this reality and become an important policy instrument. By broadening the scope of efficiency beyond incremental improvements and enabling deeper electrification across sectors, the act can become an even more effective instrument for supporting both the energy transition goal and economic performance.
In conclusion, I would like to offer five brief points. First, the proposed amendments are both necessary and timely.
Second, current efficiency approaches, focused on standards, labelling and incremental improvements, will not, on their own, achieve the required pace of progress.
Third, meeting international commitments, including COP28 targets, will require a step change in approach.
Fourth, that step change lies in deeper electrification of buildings and transport.
Last, in the Canadian context, given our relatively clean electricity mix, this transition represents a significant opportunity to strengthen energy security, stimulate investment and enhance national competitiveness.
Thank you. I look forward to your questions.
The Chair: Thank you, Ms. Fitz-Gerald.
I would now like to ask Rémi Moreau to make his remarks.
[Translation]
Rémi Moreau, Vice-President and Managing Director, Canada, Association of Home Appliance Manufacturers Canada: Madam Chair and senators, thank you for the opportunity to appear before you today.
My name is Rémi Moreau, and I am vice-president and managing director of the Association of Home Appliance Manufacturers Canada, or AHAM.
AHAM represents more than 150 companies that manufacture over 90% of appliances sold in Canada. Our industry drives nearly $6 billion in economic output nationwide.
We appreciate the Government of Canada’s commitment to energy efficiency reflected in Bill S-4. Many provisions in this bill represent thoughtful, needed updates. We support, for example, the clearer dealer definition that now captures online retailers and fulfillment providers, the recognition of digital labels, the ability to conduct remote inspections and the continued focus on harmonization with our North American trading partners. These are practical improvements that reflect how the appliance market actually functions today.
However, my testimony today focuses on several areas where targeted amendments are necessary to ensure that Bill S-4 achieves its objectives without unintentionally creating regulatory uncertainty, misalignment with North American standards or administrative burdens that do not advance energy efficiency outcomes.
[English]
The Association of Home Appliance Manufacturers Canada, or AHAM, is concerned with the bill’s proposed expansion of the definition of an “energy efficiency standard” to include durability, interoperability, system design and technological composition. These concepts, while important in broader policy discussions, are not energy performance metrics.
Energy efficiency regulations work best when they remain outcome-based, focused on measurable energy performance using test standards recognized across North America. Introducing design-based criteria risks creating uncertainty, discouraging innovation and diverging from the harmonized North American standards on which our integrated supply chain depends.
AHAM, therefore, recommends that these elements be removed from the definition. At minimum, they should be narrowly clarified to ensure they remain tied only to energy performance outcomes, not design mandates.
The bill grants authority to incorporate regulatory reference documents by reference, including documents that may later be amended.
However, under the current drafting, a reference document, once adopted, could be amended and automatically acquire the force of law without notice or consultation. This undermines transparency and creates the risk of new obligations being introduced outside the regulatory process.
AHAM recommends adding language to ensure that any regulatory reference document is incorporated in static form unless future amendments undergo a clear process with appropriate notice and consultation.
AHAM strongly opposes the introduction of market-driven averages as a compliance mechanism for appliances. Appliance manufacturers design products to meet minimum energy performance standards, clear targets based on testing. Market-driven averages, however, tie compliance to consumer purchasing behaviour, which cannot be controlled or predicted by manufacturers.
For example, a shift toward larger refrigerators due to larger households or evolving kitchen design trends could alter the overall market average and create compliance risk for manufacturers. Manufacturers could be forced to limit the availability of certain refrigerator sizes or redesign products that are already compliant with minimum efficiency standards simply because of changing consumer purchasing patterns.
We therefore recommend that market-driven averages be removed from the bill.
Bill S-4 proposes administrative monetary penalties on a strict liability basis for individuals within a corporation. AHAM believes that personal liability should only apply where an individual has knowingly and intentionally engaged in wrongdoing. This is a well-established principle that employees should not be responsible for corporate action unless there has been a significant intentional and deliberate level of wrongdoing on their part. We urge an amendment to reflect that principle.
The bill introduces the authority to regulate “systems” without defining the term. In the appliance world, that could be interpreted extremely broadly. For example, a system could mean an entire apartment building or a multi-family residential unit. It is unreasonable to expect a regulatory integration of appliances, which may serve different consumer needs and may come from a number of manufacturers, to correspond to some measurement of efficiency in such a system.
To ensure clarity, AHAM recommends limiting this concept to “energy management systems” and providing a clear definition tied to software and hardware that optimizes energy flows.
[Translation]
In closing, AHAM supports the modernization of the Energy Efficiency Act and the overall intent of Bill S-4. However, targeted refinements are needed to preserve regulatory clarity, avoid unintended burdens, maintain alignment with North American standards and ensure that energy efficiency regulations remain focused on tested, measurable outcomes.
Thank you for the opportunity to speak today. I look forward to your questions.
The Chair: Thank you.
[English]
Next we have Mr. Ellacott. The floor is yours.
Warrington Ellacott, Senior Manager, Government Relations, Whirlpool Canada: Thank you, Madam Chair and members of the committee.
Whirlpool Canada welcomes this opportunity to share its views on Bill S-4, An Act to amend the Energy Efficiency Act. My name is Warrington Ellacott, Senior Manager of Government Relations. With close to 30 years of service at Whirlpool Canada, this is my fourth consultation on modernizing this act.
Whirlpool’s Canadian roots date back to 1859 and the John Inglis Company. Today, we are a leading appliance supplier in Canada with 225 employees and annual sales of over $1 billion, featuring brands like JennAir, KitchenAid, Maytag, Whirlpool, Amana and, of course, Inglis. Globally, Whirlpool Corporation, which is listed on the New York Stock Exchange, employs 41,000 people and generates over US$16 billion in annual net sales.
Whirlpool generally supports this fourth modernization of the Energy Efficiency Act. In fact, since the 2017 update, the Canadian marketplace has evolved significantly, driven by rapid technological progress and the growth of e-commerce alongside traditional retail and homebuilding channels. In this context, we commend Natural Resources Canada, or NRCan, for its work in promoting a harmonized North American approach to energy efficiency and test procedures, rooted in a strong commitment to regulatory cooperation.
However, we do urge a cautious approach regarding the proposed expansion of the jurisdictional authority under section 2 of the act. We have concerns regarding how NRCan intends to apply and enforce these broader powers to interoperability, durability, systems design and technological composition, as my colleague stated, and capabilities, which we have outlined in more detail in our brief that includes amended text previously submitted to the committee.
We are particularly concerned that expanding NRCan’s regulatory scope into these complex areas risks duplication and conflicting rules with existing or anticipated federal efforts on cybersecurity and artificial intelligence led by the Department of Innovation, Science and Economic Development, or ISED. Our preferred cloud-based architecture provides consumers with robust and versatile mobile applications today. Over 30% of our products sold in Canada are connected to the internet, and over 50% provide consumers flexibility to delay start for either convenience purposes or to obtain lower energy costs.
Delivering consumer value and regulation of these complex features should remain outside the scope of an act primarily designed for energy efficiency. We believe advancements of this complex nature are better addressed by other ministerial portfolios that have more direct responsibilities to regulate innovation in the wireless, telecommunications, software, and privacy and security space, such as ISED, particularly in areas related to artificial intelligence and digital innovation in Canada.
We thank NRCan and appreciate their sustained collaboration and engagement with industry stakeholders.
I would be pleased to answer your questions. Thank you.
The Chair: Thank you very much.
Next, our last presenter, Max Goodman-Coop.
Max Goodman-Coop, Member of the Board of Directors, Consumers Council of Canada: Hello, everyone. My name is Max Goodman-Coop. I am here on behalf of the Consumers Council of Canada. We are an advocacy organization whose purpose is to represent consumers in Canada.
Basically, we have reviewed the proposed Bill S-4 to amend the Energy Efficiency Act, and we have a series of thoughts and concerns that we would like to raise.
We believe that modernizing the act is an improvement, in general, and does serve the consumer, but we have three major thoughts and concerns that we would like to address. The first is expanding the labelling requirements to online retailers, which we think will be a great benefit to consumers. As mentioned already, a lot of sales these days go through online pathways, so giving more information to consumers online, where they make their purchases, is important. We believe that this will be valuable.
The second is the increase in fines and compliance options. We believe that the ability to order a commercial entity to stop selling a product, as well as all the administrative fines that go along with it, is valuable to protect consumers. We are concerned that this may fall into the trap where a bill is given teeth but there are no mechanisms or personnel to actually use those teeth. Our concern is with all these overseas sales platforms, such as Temu and Alibaba, where we may have difficulty regulating it online. It’s sort of the Wild West. We have concerns with that as well.
Most interesting to us is the bill’s addition of “durability” as a possible energy efficiency standard. We agree that, from an energy-use standpoint, embodied energy does matter towards energy efficiency from a greenhouse gas standpoint and total energy consumption standpoint. However, on top of that, we are really interested in hearing whether this will expand, through the regulations, into the display of product lifetimes for products that are sold. Everyone here has probably had the experience of buying a product where you’re not sure — it’s a crapshoot — if it will last 5 years or 20 years. Nobody really knows, and it’s not displayed as open information. The fact that we have an opportunity here to display this information, we think, is possibly of huge value to consumers.
Planned obsolescence, outside safety considerations, has long been an issue for consumers. We see a waste of resources, in terms of energy put into products and materials, as well as a financial drain passed on to consumers for the sake of corporate profits.
If we can provide consumers with a method of seeing accurate product lifetime estimates and hold manufacturers to those estimates, we think this will be a great opportunity that benefits the consumer. We also understand this might be something that comes out in the regulation and that this is the opportunity to do it in the future. But, again, this is probably the most compelling thing to us of this bill.
The Chair: Thank you, Mr. Goodman-Coop.
We will now begin with questions from senators.
[Translation]
Senator Verner: My question is for Mr. Ellacott and possibly Mr. Moreau, as well, if they have the translation and if it’s working properly.
I would like to go back to a document you sent to us concerning your cost estimate for the conversion of five final regulations from 2024 issued by the U.S. Department of Energy. You know what I’m talking about. The figure was between $506 million and $715 million. You indicate in your note that financial realities must be taken into account in the context of Bill S-4. Have you made any forecasts or predictions, particularly financial ones, related to the passage of Bill S-4?
I’m telling you this because representatives from Natural Resources Canada have suggested that regulations do not always lead to increased investment costs. I’ll let you answer this.
[English]
Mr. Ellacott: Thank you for the question. I would refer senators to review the 2024 Biden administration’s final rules, which are public and which were the cost estimates I provided to the committee. What that cost represents is the conversion in capital costs required for the manufacturers to update to those standards that NRCan will be referencing in Amendment 19, which is an upcoming amendment that will be facilitated by this act.
In terms of the Canadian context, relative to those capital costs, Canada’s industry, regardless of where the product would be produced — I think it’s also important to recognize that there is no longer any large-appliance manufacturing in Canada; there hasn’t really been after the North American Free Trade Agreement, or NAFTA. Canada solely relies on imports from elsewhere to satisfy its demands for consumer products. Canada’s portion of those costs, which are public, would be in the $110 million range.
We live in a marketplace economy. If there are input costs for manufacturers to produce to a particular standard, obviously, those costs will flow through to the costs of the products. In these estimations for the recent administrative costs, it would represent an average manufacturer-suggested retail price increase of approximately US$65 per product. Take today’s conversion rate, and that would be the representative figure of the cost impact.
To be fair to NRCan’s comment, this is all relative to the changes and, to the first commenter’s remarks, to the extent you ask the manufacturing community to move that bar. In certain cases, yes, it may be more cost-effective to work in one system design than another. Expensive costs would be structural costs. If you ask us to remove more water, for example, from a washing machine, it has to spin faster, which brings in centrifugal forces, and then, of course, that becomes a structural cost and those kinds of things. It does depend, but senators can do research about those costs immediately.
[Translation]
Senator Verner: Mr. Moreau, do you have anything to add?
Mr. Moreau: Thank you for the question.
I would like to add to Mr. Ellacott’s comment. Again, it’s important to remember that Canada is an importer of home appliances. There aren’t many appliance manufacturers in Canada. North American harmonization is extremely important. By adding criteria related to durability, interoperability or product infrastructure, the government would risk disrupting this harmonization with the North American market. This could lead to higher prices for Canadian products because the standards would now differ between Canada and the rest of North America.
In addition, there would likely be fewer products available in Canada. When we look at Canada’s share of the overall North American market, we see that it’s not a very large market. It would become increasingly difficult to produce or develop appliances specifically for Canada. That’s why we think a harmonized market across North America is extremely important.
[English]
Senator Coyle: Thank you to all of our witnesses. My question is for Dr. Fitz-Gerald. It’s nice to see you again. I’m also on the Foreign Affairs and International Trade Committee, and I was impressed with your testimony there. I can see the relevance to this committee.
I want to clarify a couple of things. You don’t have a particular problem with this bill, so I would like you to speak about this bill as it stands now. Your main concern is that it’s not sufficient and that, in the bigger picture of opportunities related to efficiency, we are just not moving quickly enough. You offered a number of recommendations in that regard. Could you clarify for us again where you stand on this particular bill and how that relates to getting to a more sufficient position than the one we’re in here and actually meeting both the opportunity that is in front of us and the imperative?
Ms. Fitz-Gerald: Thank you very much, senator, for that question. Yes, I come from a slightly different perspective, which looks at the contribution that the proposed amendments make to furthering energy efficiency and the broader goal.
We have looked at extrapolated data, and we feel that this, on its own, will not meet those goals. But we support it as an important policy instrument moving forward, particularly one that recognizes that the new general-purpose infrastructure is empowered by four important components: data, AI, cybersecurity and protections, including cybersecurity standards and intellectual property.
Senator Coyle: Thank you.
Senator D. M. Wells: Thank you, panel, for appearing today.
Mr. Moreau and Mr. Ellacott, you both talked in similar terms of being generally or conceptually supportive. What are some of the threats that would affect those whom you represent, your company and your members, that we might be able to fix by amendment?
Mr. Ellacott: Thank you for the question. Because this is an act with respect to energy efficiency, the language in clause 2 is extraordinarily broad and brings in a lot of policy and technical discussions primarily from ISED’s perspective. That can lead to a conflicting technical requirement for a product in Canada. The Energy Efficiency Act, in combination with investment in innovation from manufacturers, has been a success. I agree with the statements that have been made over the past few weeks.
However, I will put a caveat to that. That has been through harmonization and regulatory cooperation through the North American framework. Over my 30-year career, in North America we have combined a single safety standard, a single method of testing the product and a single method of labelling the product. Canadians have benefited greatly from that scale. NRCan and the Department of Energy in the United States and the Mexican equivalent have worked very well together on those attributes directly related to energy efficiency. They are not having broad conversations about technical requirements for interoperability, radio systems, the cybersecurity of those systems and the technological communication between those two products. That is found either in the Federal Communications Commission, or FCC, in the United States or here at ISED in Canada.
We are not opposed to the advancement of energy efficiency. What we are talking about is a potential conflict in the technical community that is directly attributed to the manufacturing of an article and the certification of an article and the basic architecture of a product. That would be our perspective.
Senator D. M. Wells: We heard from the minister when he appeared here a couple of weeks ago that this would result in cost savings. It was not clear whether that was cost savings for the government or the consumer. I’m more interested in the consumer. Would this change of the North American system to now become two systems — a U.S.-Mexico system and a Canadian system of compliance — likely result in increased costs to the Canadian consumer?
Mr. Ellacott: Thank you for the question. In my experience, the North American scale is critical and has benefited Canadians. There was a great policy debate following NAFTA whether Canada made the right decision not to incent appliance manufacturers to remain in Canada. Unfortunately, they did not, and they all went elsewhere.
However, if you look through history, because Canada jumped into that scale, which is one of the largest manufacturing scales, basically, globally, the total cost of products in Canada has remained relatively consistent. The warning sign there is that, to the extent that Canada moves away from scale, that risks a limited selection of products and the elimination of certain products. Obviously, if there is a duplication of testing requirements and different labelling provisions, that is costly and adds administrative and testing burdens for manufacturers.
Senator D. M. Wells: Thank you.
Mr. Moreau?
Mr. Moreau: Thank you for the question, senator. I would agree. Clause 2, as I mentioned in my opening statement, is certainly a pain point for appliance manufacturers. The reason is that there is a lack of detail around those new potential energy efficiency standards. In terms of durability, it is not fully defined in legislation, so that clause causes uncertainty. Uncertainty in business is difficult to live with. There is a lot of uncertainty around that.
The other thing for us — and I’m sorry, senator; I don’t have the exact clause — is that market-driven averages are our top concern. Appliance manufacturers need a clear energy efficiency target that they can meet. Through market-driven averages, that target would consistently be moving. It can take years to develop a new appliance or product. It is very difficult to meet that target if it keeps changing while developing new appliances.
Lastly, the harmonization of North America is of the utmost importance to appliance manufacturers and Canadian consumers.
Senator D. M. Wells: Thank you very much.
Senator McCallum: Thank you for coming to present to us. I wanted to talk about printed materials. Printed documentation covers safety, installation, operation, warranty and support, and these materials are currently subject to provincial extended producer responsibility, or EPR, fees, which can reach $1.67 per kilogram. They are the highest in the Yukon, suggesting that residents in First Nations and northern territories may pay disproportionately more for essential documentation. Exempting safety and operational manuals from EPR fees is a topic worthy of discussion with federal and provincial authorities.
Your advice had been to significantly reduce or eliminate non-essential product literature. Who decides what non-essential and essential product literature is? Will it be different for all appliances? What do you do now? Will the documentation be substantially different?
Mr. Ellacott: Thank you for the question. I raised that question in response to your colleague’s observations during the First Nations panel discussion of witnessing products being shipped without instruction manuals. The Whirlpool policy is that every product we manufacture and ship will include printed literature, including safety and operational instructions, as well as how the consumer can call us for a service problem or other information.
The point I was trying to make is that there had been requests at the provincial level to exempt this information included in a product, and that was rejected. Subsequently, over time, obviously, the costs of EPR are a concern. Obviously, the use of paper is a concern to everyone, an environmental concern, so the question then becomes with the act. The act seeks to increase the level of digitization of information relating to the products. Those executions would be through, for example, a QR code on the front of the product, or the consumer would be directed to a website, for example, which, in my view, posed challenges because of the concerns raised by First Nation communities due to access to broadband and connected equipment in general. I think there is a policy debate to be had here about exempting that type of material so that we can continue to service these communities with printed matter. That is my perspective.
Senator McCallum: Do you have anything to add?
Mr. Goodman-Coop: In terms of that, we should always include both printed matter and digital if possible, especially at the time of sale. The most important point is that they have access to all of the information they need to make their decisions at the time of sale, and having all the materials at the time of product use, in whatever format we can provide them, is valuable as well.
Senator McCallum: What are the priority areas of concern today?
Mr. Moreau: Thank you for the question, senator. As I mentioned with the question from Senator Wells, I would certainly say that market-driven averages for our members are certainly a massive pain point. We have had those conversations with NRCan as well. They are aware of our comments on that. I would say that appliance manufacturers need a fixed minimum energy efficiency standard that they can meet instead of potentially a moving target, which would be very difficult for them to meet when developing, for example, new appliances.
Mr. Ellacott: Thank you for the question. The only other statement I would make is on this question of looking at other foreign jurisdictions as a comparative tool for setting efficiency standards in Canada. I would submit to the committee that tends to be apples and oranges. If you consider doing a comparison to a Japanese household, for example, you can imagine the size of a Japanese household is quite different than a Canadian household. Everything about the plumbing and electrical systems in a Japanese household is quite different from a North American household. So we have to be careful in how we look at these foreign jurisdictions. This gets very technical, but there are technical test procedures that have been developed and now commonized across North America. So all three parties under the Canada-United States-Mexico Agreement, or CUSMA, agree how to test and certify a particular type of product. That is a monumental benefit to everyone in North America. It eliminates duplicative test burdens. It simplifies and harmonizes laboratory procedures. It is a great advantage.
We have to be careful when we look to other jurisdictions that have completely different households, household technical infrastructure and appliance specifications relative to Canada, so I would put caution on those particular proposals.
[Translation]
Senator Aucoin: I will ask my questions in French.
My first question is for Mr. Goodman-Coop. It concerns section 2 of the Energy Efficiency Act, which contains all the definitions.
I note that, for consumers, the list is probably pretty good; it covers almost everything. However, for manufacturers, I understood that imposing certain definitions would cause a problem between U.S. and Canadian standards.
Mr. Ellacott can also answer the question afterwards.
Would having certain standards specific to Canada pose a problem even if all other tests could be conducted for the entire region — that is, Canada, the United States and Mexico?
From the consumer’s perspective, this seems fairly well defined to me, or perhaps it is vague. What is your position regarding section 2 of the act?
[English]
Mr. Goodman-Coop: Our interest in clause 2 especially, as I outlined, is in durability. We heard from the other witnesses about durability or departing from the North American standards and the issues that could cause. Ultimately, we are not necessarily asking for additional standards or thinking that it would be a great benefit to have additional durability standards outside of what is synchronized in North America, but we are looking for availability of information: durability information, cycle life, average lifetime based off average household usage and based off that cycle life. That information is what we believe would be most valuable to the consumer, and that is information that should already be available. We are not asking for additional testing. Most manufacturers — and I’m happy to be corrected if I’m wrong — should have that information on the lifetime of their products already; it is just not publicly distributed. To have that on a label would be of great benefit and would not, I think, distance us from the existing standards or separate us.
By making this available in the act, does this make it available for regulations and standards in the future? Potentially, and that could be a risk to manufacturers. But from our standpoint, all we are asking for is visibility. We don’t believe that it is going to put any extra undue difficulty on manufacturers, and it will provide the benefit for consumers we are looking for.
Obviously, as consumers, we want longer-lasting and more reliable products, but I think the main focus here is visibility.
Mr. Ellacott: Thank you for the question, senator. I also submitted a recommendation to the committee with respect to the Natural Resources Canada Survey of Household Energy Use. It is an extraordinarily powerful document, and it has been on my desk for the last 30 years. I would encourage everyone in this room to read it in detail. What you will find is striking: Almost 35% of appliance products in service in this country are 11 years of age or older. They are extraordinarily durable. The oldest equipment resides in Quebec. The reason for that is because Quebec has the lowest electricity and water prices in Canada by far.
We are having an efficiency and energy conservation debate here. The older the equipment, the larger the carbon footprint and the more concern it is to the original commenter.
Specifically in Quebec, it is extraordinary. You have almost 3.5 million products that are over 16 years of age. They tend to be that second freezer or second refrigerator that is forgotten about.
To your immediate question on durability, I think the appliance industry already provides very durable products. My colleague can provide statistics from the Department of Energy. So the policy debate is whether this question is duly addressed here with NRCan or at ISED, where those conversations are actually taking place today. I think that is the principal concern that we have. To the senator’s point, of course, if you add a technical specification or labelling requirement for a good, that increases cost. There is a balance that I think we have to strike moving forward. I hope that is a satisfactory response.
[Translation]
Mr. Moreau: Thank you for the question.
For example, when clause 2 of the bill talks about durability, in our opinion, this is not an energy performance indicator. If you add other elements to clause 2, such as technological components and systems, you start regulating the manufacture of home appliances, and we think that goes too far.
As Mr. Ellacott said, we have some statistics from the U.S. Department of Energy on the durability of certain products. On average, refrigerators last 13.4 years; dishwashers, 15.2 years; washers, 13.4 years; dryers, 14 years; stoves, 16 years.
Senator Aucoin: Which parts of clause 2 do you think are problematic and which ones should not be included? You can answer me later this evening. I’ll give you time to read the clause.
[English]
Mr. Ellacott: Yes, senator. It’s with respect to clause 2 of the bill. You will find the comments we made that were submitted to the committee so you could refer to them.
Senator Wilson: I would like to start by asking a question of Ms. Fitz-Gerald. You talked about the need for a step change in terms of how we look at energy. Obviously, this bill is not going to get at some of those other big energy users, but it will get at things like building and home heating and cooling.
I’m just interested in getting your perspective in terms of how important it is for Canada to adopt standards that help energy function as a whole; for example, advancing interoperability, looking at different metrics for efficiency, et cetera.
Ms. Fitz-Gerald: Thanks very much for the question. My fellow panellists who are closer to the product manufacturing front, I think, will be able to shed more specific light on this, but I will say the following. Standard setting is so important at the moment in a world where everything is driven and empowered by a new general-purpose infrastructure, to which our current policy orientation has not completely pivoted yet and where, even in advanced manufacturing sectors, data can be taken and used to empower foreign entities instead of staying in Canada.
So the digital provisions and the data sovereignty provisions around these issues are hugely important because it’s how Canada will become prosperous in the future if it harnesses not just AI and sovereign compute infrastructure, et cetera, but also the data coming from all of these innovations.
I would agree with my fellow panellist’s comment that it is a discussion that ISED should be pulled into.
Now — sorry — getting to the essence of your question, can you just repeat the last part of the question you asked?
Senator Wilson: Yes. I was just interested in understanding, specifically looking at this bill, where it fits in the mix in terms of how important it is for Canada to adopt standards that help energy systems function better as a whole.
Ms. Fitz-Gerald: If I could expand on my thoughts that I’ve already communicated, we’re looking across sectors at the moment. As a professor of national security, more broadly, the energy sector has been labelled as a strategic domain for the country. It’s highly important in strategic domains for Canada that it is not a rule-taker but a rule-maker and that it sets standards because standards are being set by powers.
While I agree with the points on interoperability, especially at the more tactical, granular level, standards are being set that also tether innovation to the industrial domestic strategies of other countries, and our ability to stand for standard setting in all sectors, including this sector, is important.
Senator Wilson: Thank you. For our industry representatives, if you could maybe articulate a little more. We have heard about some of the issues around interoperability from you. The information we have from the department is that the language is designed to future-proof the bill and provide flexibility and that the primary focus of those provisions is on things that actually consume the most power, which are not typically home appliances. It is more like heating, ventilation and air-conditioning, or HVAC, systems and the like. I would be interested in your thoughts on that.
Mr. Ellacott: Thank you for the question. The conversations and the technical discussions relative to how the devices will communicate with one another reside at ISED and in that international community of ISED.
NRCan’s benefit is an output of that conversation. We have to be very careful about that. I can give you an example of what has transpired here in North America.
Several jurisdictions sought to mandate that appliances would respond to a demand signal from a utility. In doing so, they mandated that we put concurrent and additive equipment in our product. You have to think of adding a router to a washing machine, even though the washing machine operates on an app. Through this application, I can tell who is doing laundry in my home and I can defer energy to meet alternative rates of electricity costs.
The point is that what we see happen when this type of thing transpires is what we see here in the act. Electro-Federation Canada made this very point. Technological fist fights develop between industries. Specifically, in this space, the industry that wants access to that home pipe wins that conversation.
We prefer that those conversations reside with the federal department with the knowledge and expertise in international conversations taking place on how these devices will connect. Once that is established, the energy efficiency standards will roll through anyway. Canada will make a determination of how much energy a device will consume. Whether it gets communication from an external party, I think, is just an add-on question. I don’t know. Has that answered your question satisfactorily?
Senator Wilson: More or less.
I guess this has to be a question, so I will ask for your perspective maybe. My observation would be that this is intended to allow for that. It is not intended to prescribe it nor to suggest that NRCan officials will necessarily be prescribing those technical details. It is just to allow for it in the future.
Mr. Ellacott: My perspective on that, though, is that I do believe they will prescribe that issue in regulation. That’s my concern: With the powers granted in the act, they will use that regulatory authority and do that within conflicts.
[Translation]
Senator Aucoin: Ms. Fitz-Gerald, you said that by being more efficient — for example, in terms of buildings — we can reduce our environmental impact by 70%. Did I understand you correctly?
When it comes to motor vehicles, all of this requires more electricity. In your calculations, did you take into account the fact that we would have to build new dams, cut down forests and flood communities? For example, if we flood a forest to build a dam, there are still environmental impacts. Did you account for the increased demand for electricity?
[English]
Ms. Fitz-Gerald: Thank you very much for that question. I would certainly not in any way support anything that was detrimental or damaging to the Canadian environment. I have included some graphs and charts in my testimony, which I hope will be circulated.
I was speaking in the context of my work, which is on military and defence infrastructure. I have been looking at this in northern regions and also in the context of the work that’s been going on in support of a trans-Canada, east-west national electrical grid. That work is more geared towards filling holes, like Swiss cheese, recognizing that there are bilateral and some trilateral connections but not fully an east-west connection and that there are opportunities here, especially for Canada, to use an energy transition for prosperity-enabling purposes as well and to develop high-value, high-volume as well as low-value, high-volume products, which are important for prosperity. It’s a time when the rest of the world is interested in such products and when our neighbours to the south are not as interested in such products as we are now. So it was in that context that I shared those remarks.
[Translation]
Senator Aucoin: If I understand your comments correctly, you’re saying that your studies or research, despite the fact that they may have focused on military facilities in the Far North, could be adapted to other facilities further south. Is that correct?
[English]
Ms. Fitz-Gerald: Yes. And that’s the broader work of a team at the Balsillie School of International Affairs in Waterloo, which is looking at all aspects of electrification. Thank you.
Senator Wilson: Mr. Goodman-Coop, I noticed the expression on your face when the question of durability was being discussed, and I would like to give you a bit more space to discuss that. Could you tell us how durability and energy use are linked and how it could support affordability for Canadian households?
Mr. Goodman-Coop: Sure. Thank you for the question. From the point of view of durability and the lifetime of a product, when we talk about energy use, we’re saying that it’s not relevant to the consumer’s operating energy cost of the product. From the Consumers Council of Canada’s point of view, it is not necessarily as relevant. But from the point view of greenhouse gas emissions and energy used in the creation of the product, the durability of the product is very important. If I have two equivalent pieces of equipment and one of them lasts 5 years and one of them lasts 10 years, then I’m making two 5-year appliances to fulfill the same amount as a 10-year appliance.
One of the things that might be valuable to look at, at least in terms of energy, is that embodied energy of the manufacturing of the product. Again, this does not necessarily come down to the bottom-line cost for the consumer, but maybe from your perspective and a greater sort of energy perspective, I do think it is very relevant to the total energy that goes into making a product.
Again, it may be irrelevant that this energy is being used in China or in Mexico or wherever the appliance is manufactured. But from a greenhouse gas perspective, it is global and it doesn’t really matter where it is burned. You may have a less efficient or less green energy grid to support that.
In the opinion of the council, it is not as important in terms of durability for that ongoing energy cost. That’s what the label provides right now. But the durability as a new labelling standard will be very valuable from the perspective of making an informed decision.
What is a good example? We talked about the average lifetime of a washing machine, right? They said there are three points, as Rémi mentioned — if that information is available to the consumer, without any standards being applied, without any bottom-line standards saying, “Your washing machine has to last this long,” it may improve competition on this new angle because this is visible information now showing how long a product is going to last. Perhaps some brands provide a higher quality, more durable product, and that becomes a new dimension which consumers can now use in deciding to purchase a product. They may be willing to pay more for a product that is energy efficient and lasts longer.
Again, there are also concerns in terms of durability, meaning that there are older products on the market. There is a whole slew of information out there about the embodied energy of a product, and you can do the calculation of saying, “If this lasts a year longer and it is slightly less energy efficient than a product that is one year newer or made the next year, what is the total energy consumption?” There is a lot of energy that goes into making these products, and you cannot discount that from an energy-use standpoint.
That was mainly my concern in this discussion. From the consumer standpoint, obviously, more visibility in their decision making is most important.
Senator McCallum: I wanted to address a question to Ms. Fitz-Gerald. I work with hydro-impacted communities in Manitoba and other provinces. This year, Manitoba Hydro has a deficit of $25 billion. Of it, $63 million is due to drought and extreme weather events and export market prices.
It worries me when people start putting hydro as an alternate source of energy, especially with the damage that hydro does to northern First Nations communities. I have been up there. They don’t even have drinking water anymore. There are a lot of issues there. I’m concerned about that. I wanted to bring that to your attention.
Ms. Fitz-Gerald: I appreciate that. Thank you, senator.
The Chair: Thank you, everyone, for coming to see us tonight and providing the good information that you have. We really appreciate it.
(The committee continued in camera.)