THE STANDING SENATE COMMITTEE ON ENERGY, THE ENVIRONMENT AND NATURAL RESOURCES
EVIDENCE
OTTAWA, Tuesday, May 5, 2026
The Standing Senate Committee on Energy, the Environment and Natural Resources met with videoconference this day at 6:30 p.m. [ET] to consider Bill S-4, An Act to amend the Energy Efficiency Act.
Senator Joan Kingston (Chair) in the chair.
[English]
The Chair: Good evening, everyone.
I would first like to acknowledge that the land on which we are gathered is the traditional, ancestral and unceded territory of the Anishinaabe Algonquin Nation. My name is Joan Kingston, and I am a senator from New Brunswick and the chair of this committee.
I would like to start by having my colleagues introduce themselves.
[Translation]
Senator Verner: I am Josée Verner from Quebec, and I am the deputy chair of the committee.
[English]
Senator Fridhandler: Daryl Fridhandler, Alberta.
Senator D. M. Wells: David Wells, Newfoundland and Labrador.
Senator Coyle: Mary Coyle, Antigonish, Nova Scotia.
Senator McCallum: Mary Jane McCallum, Treaty 10, Manitoba region. Welcome.
Senator Lewis: Todd Lewis, Saskatchewan.
[Translation]
Senator Moncion: I am Lucie Moncion from Ontario.
Senator Aucoin: I am Réjean Aucoin from Nova Scotia.
Senator Youance: I am Suze Youance from Quebec.
[English]
Senator Dean: Tony Dean, representing Ontario.
Senator Wilson: Duncan Wilson from British Columbia, and I’m the sponsor of the bill.
[Translation]
Senator Moreau: I am Pierre Moreau, representing the senatorial division of The Laurentides, in Quebec. I am the Government Representative in the Senate.
[English]
The Chair: Thank you, colleagues. I would like to welcome everyone here today as well as those who are listening online on sencanada.ca.
Today, 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 will now proceed to clause-by-clause consideration of the bill.
I would like to welcome the officials from Natural Resources Canada who are here with us today: Laureen Chung, Director, Equipment Division; Ben Copp, Director General, Office of Energy Efficiency; and Jean-François Roman, Legal Counsel. Welcome, everyone.
Before we begin, I would like to remind senators of a number of points. As chair, I will call each clause successively in the order they appear in the bill. If, at any point, a senator is not clear where we are in the process, please ask for clarification. I want to ensure that, at all times, we all have the same understanding of where we are in the process.
In terms of the mechanics of the process, when more than one amendment is proposed to be moved in a clause, amendments should be proposed in the order of the lines of a clause. If a senator is opposed to an entire clause, the proper process is not to move a motion to delete the entire clause but, rather, to vote against the clause as standing as part of the bill.
Some amendments that are moved may have consequential effects on other parts of the bill. It is therefore useful to this process if a senator moving an amendment identified to the committee other clauses in this bill where this amendment could have an effect. Otherwise, it would be very difficult for members of the committee to remain consistent in their decision making.
Because no notice is required to move amendments, there can, of course, have been no preliminary analysis of the amendments to establish which one or ones may be of consequence to others and which may be contradictory.
If committee members ever have any questions about the process or about the propriety of anything occurring, they can certainly raise a point of order. As chair, I will listen to the argument, decide when there has been sufficient discussion of a matter or order and make a ruling. The committee is the ultimate master of its business within the bounds established by the Senate, and a ruling can be appealed to the full committee by asking whether the ruling shall be sustained.
I wish to remind honourable senators that if there is ever any uncertainty as to the results of a voice vote or a show of hands, the most effective route is to request a roll call vote which, of course, provides unambiguous results. Finally, senators are aware that any tied vote negates the motion in question.
Are there any questions on any of the above?
If not, we can now proceed. Okay. We are going to proceed with clause-by-clause consideration. Is it agreed that the committee proceed to clause-by-clause consideration of Bill S-4, An Act to amend the Energy Efficiency Act?
Hon. Senators: Agreed.
The Chair: Shall the title stand postponed?
Hon. Senators: Agreed.
The Chair: Shall clause 1 carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 2 carry? Please go ahead, Senator Wells.
Senator D. M. Wells: Thank you. I will give some background on my proposed amendment. It narrows the definition of “energy efficiency standard,” which is the essence of the bill, and it adds a qualifier so that paragraphs (a) to (h) of clause 2(2) may be used only where they relate to energy efficiency or the responsible use of energy. It preserves the structure of the bill; it does not change the list of paragraphs (a) to (h), only the introductory wording.
It reduces the risk that requirements will target attributes only weakly connected to energy, which include the durability, interoperability, systems and technological features that have nothing to do with or are not directly related to the responsible use of energy. This is, again, the bill’s focus.
It improves predictability by requiring the government to justify the energy-related link in regulations, and it limits the risk of drift toward design technology mandates rather than energy outcomes.
Colleagues, I will now read my proposed amendment. I move:
That Bill S-4 be amended in clause 2, on page 1, by replacing lines 15 to 17 with the following:
“class of energy-using products that relates only to energy efficiency or the responsible use of energy, and, in particular, includes standards relating to”.
The Chair: Is there any discussion?
Senator Wilson: I’m pleased to speak in support of this amendment. Limiting any new standards to how they relate to energy efficiency or the responsible use of energy provides sufficient flexibility to target the envisioned performance improvements, and the proposed change also reflects the spirit of the amendment and is not expected to drive any unforeseen issues in terms of regulatory development processes nor interact with the other components of the bill. Therefore, I support this.
The Chair: Are honourable senators ready for the question?
Is it your pleasure, honourable senators, to adopt the motion in amendment?
Hon. Senators: Agreed.
The Chair: I declare the motion in amendment carried.
Shall clause 2, as amended, carry?
Hon. Senators: Agreed.
The Chair: Carried as amended.
Shall clause 3 carry? Please go ahead, Senator Wells.
Senator D. M. Wells: Colleagues, this proposed amendment relates to what we heard at committee regarding the harmonization of our North American standards. As you all know, not just because of CUSMA and NAFTA before that, the standards for many industries — not by legislation but by practice — have become one North American standard, so to speak. Obviously, with the continuation of CUSMA, this amendment relates to that.
It adds to the purpose of the act a principle that requirements should be cost-effective, technologically feasible and harmonized as much as possible with our major trading partners. As you know, colleagues, there is some manufacturing of electricity-using goods or motorized goods in Canada, but most of it comes from the United States, our major trading partner. This adds to section 20 of the Energy Efficiency Act a requirement that the Governor-in-Council take into account the need to limit unnecessary divergence, particularly with the United States. That means, colleagues, having a standard that is not just unique to Canada but unique to the full trading bloc.
It helps steer future regulations away from Canada only, as I said, which would increase costs and delays. And it supports competitiveness and product availability in an integrated North American market. It is not only goods coming into Canada but also goods leaving Canada that would be of the same standard as our major trading partner, and it provides a clear basis to question or challenge regulations that depart from comparable approaches without good reason.
Colleagues, I will now read the specific amendment:
That Bill S-4 be amended in clause 3,
(a) on page 2, by deleting line 38;
(b) on page 3, by replacing line 3 with the following:
“energy efficiency; and
(g) to promote the establishment of requirements that are cost-effective, technologically feasible and, to the extent possible, harmonized with comparable requirements established by the provinces and by Canada’s principal trading partners, including the United States and Mexico.”.
Senator Wilson: I’m going to be voting against this amendment because cost-effectiveness is already considered as part of regulatory development. Specifically, it is also codified in the Cabinet Directive on Regulation, so that covers that. Locking in the focus on North American markets can be unintentionally limiting, should trade patterns be changing moving forward.
Senator Fridhandler: There are two things. While I’m in favour of it, I have a concern that it says “established by the provinces” and does not include those that may be established by Canada as well.
With respect to Senator Wilson’s comments, I don’t think it’s limiting because it uses the words “including the United States and Mexico,” so it is still open for broader consideration. Senator Wells, I don’t know whether we could add “Canada or the provinces” or “Canada and the provinces,” or whether that is contrary to the spirit of your intended amendment.
Senator D. M. Wells: No, it’s not contrary to the spirit of my amendment. I would be happy to add it, if I could, at this time. Do you want me to read out the proposed change?
The Chair: Yes.
Senator D. M. Wells: Thank you. The proposed amendment is the following:
That Bill S-4 be amended in clause 3,
(a) on page 2, by deleting line 38;
(b) on page 3, by replacing line 3 with the following:
“energy efficiency; and
(g) to promote the establishment of requirements that are cost-effective, technologically feasible and, to the extent possible, harmonized with comparable requirements established by Canada and the provinces and by Canada’s principal trading partners, including the United States and Mexico.”.
The Chair: Okay. Do we have that?
Senator Wilson: I would just ask if we could request officials to comment on this proposed amended amendment.
Laureen Chung, Director, Equipment Division, Natural Resources Canada: With respect to this, it is indicated as part of the purpose clause. We have traditionally sought to harmonize with the United States in terms of their standards. However, the spirit of the entire act is not just constricted to the Energy Efficiency Regulations, so there are other provisions within the entirety of the act that do not touch on the trading relationship with the United States. In addition, we want to have the latitude and flexibility to also look to other jurisdictions as our trading relationships are strengthened throughout the world and in the trade of goods. Our trading relationship with the United States in terms of energy-using products also encompasses countries in Asia that we import quite a few good-quality products from, so we don’t want to constrain the purpose of the act to just North America.
The Chair: I believe Senator Galvez has something to add to this.
Senator Galvez: That’s exactly my opinion. We have a lot of appliances that come not only from Mexico or from the United States but also from Europe and Asia. The parts that make up these products are not only built in the United States or Mexico. They can be built in other places and then come to Canada via the United States, so I think it complicates the bill.
[Translation]
Senator Aucoin: I’m of two minds on this, but it says “to the extent possible,” or “dans la mesure du possible” in French. I’d like to hear from the department officials. Does that provide the flexibility Senator Galvez and Ms. Chung talked about? If not, I’m prepared to vote against it, but if so, I’ll see.
[English]
Ms. Chung: Just to completely understand the question, you are asking if we were to expand on this —
[Translation]
Senator Aucoin: It says “to the extent possible,” or “dans la mesure du possible” in French. We’re not under an obligation to consult with Mexico and the U.S. or harmonize our practices with theirs. That’s how I interpret it, but if I’m wrong, and this limits our ability to do business with Asia or Europe, I would be ready to vote against it.
[English]
Ms. Chung: Regarding the way that the amendment is written with “to the extent possible,” we do want to retain that latitude in terms of regulatory decision making and the best interests of Canada. At the regulatory development stage, we always look at the cost and benefit of regulatory decisions in consultation with our stakeholders. That may be aligning with the United States, or it could be another jurisdiction.
[Translation]
Senator Aucoin: In that case, I’d like to propose an amendment. Instead of “to the extent possible,” it should say “in the best interest,” or “dans le meilleur intérêt” in French.
[English]
The Chair: We have to do this in a stepwise fashion. If we get unanimous consent, we are going to break after in order to actually put it on paper and translate the subamendment that Senator Wells has suggested, so do we have unanimous consent to deal with that?
Senator D. M. Wells: May I speak?
The Chair: Yes.
Senator D. M. Wells: Thank you. Essentially, it is one amendment at a time, and mine is the one at this time. If we could finish debate on my amendment and then there could be a subamendment if that is necessary.
The Chair: We need unanimous consent to have your subamendment put in the correct form.
Senator D. M. Wells: Sorry, chair.
The Chair: I could ask for unanimous consent now, and then we would continue because we have a couple of other people who would like to speak.
Senator D. M. Wells: My amendment is in the correct form.
The Chair: Your subamendment.
Senator D. M. Wells: I don’t have a subamendment.
Catherine Cuerrier, Clerk of the Committee: You amended —
The Chair: You added some words after Senator Fridhandler spoke.
Senator D. M. Wells: Okay. Right.
The Chair: Do we have unanimous consent to suspend and get this subamendment in its proper form in both official languages?
Senator McCallum: Could I ask a question on what is there?
The Chair: Okay. We can do that beforehand. We still need to deal with the subamendment.
Senator McCallum: Yes, I know, but it is on the wording. But Senator Coyle is ahead of me.
Senator Coyle: All I was going to say is that I share the same concern we heard from officials and from Senator Wilson. I wouldn’t want them to have their hands tied and limited, especially with how the world is changing and how our trading relationships are changing. Also, our partnership with the U.S. is not as reliable as it once was, particularly in terms of anything to do with the environment, climate and energy. There are lots of reasons — for me — not to accept this amendment in this form, and I cannot see it actually being adjusted to a form that would satisfy that concern.
Senator McCallum: Senator Wells, where it says, “established by the provinces and by Canada’s principal trading partners,” doesn’t that include other countries like in Asia and all of them? Then it says “including.” So when you look at the principal trading partners, what were you —
Senator D. M. Wells: Thank you. It’s exactly that. I know that especially for machinery, one of our principal trading partners is China. It does not change that relationship at all. It does not change our relationship with South Korea, another major trading partner for equipment. This is simply to ensure that we remain harmonized with our major trading partners within the free trade agreement that we have had since the 1980s and that we will continue to have.
Senator McCallum: I have another question. When you did this amendment, were you looking at one of the witnesses who had brought concerns forward?
Senator D. M. Wells: Great question. Thank you. Yes, I did, and very specifically, there’s Ms. Olivia Auriat, Director of Advocacy at the Canadian Institute of Plumbing and Heating. She emphasized that harmonization across North American supply chains is a priority and warned that divergence from U.S. Department of Energy requirements will create unnecessary complexity and cost. Mr. Perry Chao, Director of Regulatory Affairs at the Heating, Refrigeration and Air Conditioning Institute of Canada, stressed the relevance of U.S.-aligned approaches in an integrated North American market and pointed to proposed section 2.2 as the right place to reflect the cost‑effective, technologically feasible and aligned standards. There are two more and I’ll go through them quickly. There’s Mr. Rémi Moreau, Vice-President and Managing Director of the Association of Home Appliance Manufacturers Canada. He emphasized that energy efficiency regulations work best when they remain outcome-based and aligned with North American test standards, and he warned that divergence creates uncertainty and unnecessary burdens. Finally, we heard Mr. Warrington Ellacott, Senior Manager of Government Relations at Whirlpool Canada, and he highlighted the value of North American regulatory cooperation and noted that duplicates of testing and different labelling provisions add cost and administrative burden. That’s all from testimony we heard from our witnesses.
[Translation]
Senator Moreau: I agree with both Senator Coyle and Senator Galvez. Because of how the amendment is written . . . . I don’t think the subamendment proposed in response to Senator Fridhandler’s comment changes the substance of the amendment. Basically, what I see here is a restriction preventing Canada from harmonizing its practices with best practices around the world in the area of energy efficiency. It doesn’t take into account the great lengths the Prime Minister is going to in an effort to diversify the economy and sign trade agreements with partners all over the world.
Just today, I listened to Senator Housakos’s speech on Bill C-18 in favour of opening up markets, including in Asia. When we pass legislation, we are not passing legislation for this point in time. As I understand it, the witnesses whose testimony Senator Wells referred to are concerned about the current situation, but when we pass legislation, that legislation is not just for now, but also for the future. I see no reason why Canada should limit itself when it comes to international best practices, despite our very important trading partner to the south. This amendment would limit us.
I’d like to provide more information in response to my colleague Senator Aucoin’s question. When a piece of legislation contains the language “to the extent possible,” it means that as soon as it’s possible to harmonize our practices, we can do so regardless of whether other measures exist elsewhere in the world and there is an opportunity to harmonize our practices with those. This is therefore a restriction for Canada, the U.S. and Mexico, and it rules out the possibility of implementing better standards that exist elsewhere in the world.
For all those reasons, and to support my colleague Senator Wilson, the sponsor of the bill, I will be voting against the amendment. I don’t want to jump the gun on the subamendment, which isn’t before us yet, I realize, but in its current form, I don’t think it in any way alters the substance of the main amendment Senator Wells proposed.
[English]
Senator Wilson: Senator Moreau covered it very well.
[Translation]
Senator Youance: I have a question about the first part. We heard a number of witnesses say they didn’t want the bill to impose requirements that are much more stringent than those currently in place, but I’m wondering about something. Since the first part of the amendment refers to cost-effective and technologically feasible requirements, will it block innovation? Everything that’s necessary is there in terms of sandboxes. If this is included, will people make less of an effort to be innovative? It’s mostly the first part of the amendment that I’d like Senator D. M. Wells to address.
[English]
The Chair: We do have a subamendment to the original amendment by Senator Wells. It is moved by the Honourable Senator Wells that the motion in amendment be further amended by adding “Canada” after the words “established by.” We need unanimous consent to consider that amendment. Do we have unanimous consent?
Some Hon. Senators: No.
The Chair: Okay.
Senator D. M. Wells: If I may, you need unanimous consent to consider a subamendment?
The Chair: Apparently, because you are amending your own amendment, there needs to be unanimous consent for you to do it.
Senator D. M. Wells: Okay. Well, Senator Fridhandler can propose a subamendment.
Senator Fridhandler: I will propose the amendment. He could introduce his amendment without having submitted it in advance, and when he read his amendment in the primary sense, he put the word “Canada” in. I don’t really know that we’re dealing with a subamendment. It was an amendment that was circulated in writing beforehand, but what was presented to the committee by Senator Wells included the word “Canada, comma” in his proposed amendment. I don’t think we’re dealing with a subamendment. We are dealing with the primary amendment by Senator Wells regardless of the process.
The Chair: Just to make this clear, if we have you make that subamendment, then we will be good.
Senator Fridhandler: I’m fine to make the subamendment. It is “Canada, comma.”
The Chair: It is moved by the Honourable Senator Fridhandler that the motion in amendment be further amended by adding “Canada, comma” after the words “established by.” Is it your pleasure, honourable senators, to adopt the subamendment?
Some Hon. Senators: No.
Senator D. M. Wells: Call for a vote, please.
The Chair: Okay. We just had a voice vote. We’ll now move to a recorded vote.
Ms. Cuerrier: The Honourable Senator Kingston?
Senator Kingston: No.
Ms. Cuerrier: The Honourable Senator Aucoin?
Senator Aucoin: Yes.
Ms. Cuerrier: The Honourable Senator Coyle?
Senator Coyle: No.
Ms. Cuerrier: The Honourable Senator Dean?
Senator Dean: No.
Ms. Cuerrier: The Honourable Senator Fridhandler?
Senator Fridhandler: Yes.
Ms. Cuerrier: The Honourable Senator Galvez?
Senator Galvez: No.
Ms. Cuerrier: The Honourable Senator Lewis?
Senator Lewis: Yes.
Ms. Cuerrier: The Honourable Senator McCallum?
Senator McCallum: Yes.
Ms. Cuerrier: The Honourable Senator Moreau?
Senator Moreau: No.
Ms. Cuerrier: The Honourable Senator Verner?
Senator Verner: Yes.
Ms. Cuerrier: The Honourable Senator D. M. Wells?
Senator D. M. Wells: Yes.
Ms. Cuerrier: The Honourable Senator Wilson?
Senator Wilson: No.
Ms. Cuerrier: The Honourable Senator Youance?
Senator Youance: Yes.
Ms. Cuerrier: Yeas: 7; nays: 6; abstentions: 0.
The Chair: Okay.
If I’m still hearing correctly, I think Senator Aucoin has another amendment.
[Translation]
Senator Aucoin: I withdraw it.
[English]
Senator McCallum: I want to ask a question of the officials.
If this is not adopted, will it create inequity for some groups in Canada when we’re looking at infrastructure and the cost‑effectiveness for certain groups? I’m looking at First Nations because that was brought up. Regarding being technologically feasible, right now they’re not. That was raised.
Will it create inequity in any way if that’s removed?
The Chair: The amendment?
Senator McCallum: As amended.
Senator D. M. Wells: Thank you, Senator McCallum.
In my view of it, because it harmonizes this with our major trading partners, it will not diminish the opportunity by having that harmonization, but if there is a separate system for Canada than our major trading partners, especially along the border between Manitoba and their neighbours in the U.S., then having harmonization would be better, not worse.
Senator Lewis: We mentioned the United States and Mexico. They trade with the rest of the world as well. The reality is that the Whirlpool Canada people were here as witnesses, and their products are made in the United States, and all their fittings are metric. The United States isn’t a metric country, but they made it metric because they trade with the rest of the world.
That’s the reality of this.
I think all that this amendment is doing is ensuring we remain harmonized with our major trading partner. That’s the reality. If we end up having another bureaucracy approving all this stuff between Canada, the U.S. and Mexico, it’s just going to be more red tape.
I’m in favour of this amendment.
The Chair: Is there any other discussion?
The subamendment was carried, so we’re back to the motion as amended.
Shall the motion — please go ahead, Senator Galvez.
Senator Galvez: In other legislation, we see cost-effectiveness, technological feasibility and harmonization, but the criticism in this case is that the use of those terms could cause a lower standard or lower ambition because we don’t know what Mexico and the United States are going to do. We don’t know. What if, as Senator Coyle said, they abandon anything on energy efficiency, so their appliances and products are less energy efficient? In the name of harmonization, are we going to lower our own standards? That’s a danger. That’s a risk.
It creates ambiguity, but it also can create litigation risk.
I would like to know your opinion on possibly using this language and then, one, ending up with having lower standards and, two, creating ambiguity and litigation risk.
Ben Copp, Director General, Office of Energy Efficiency, Natural Resources Canada: I can try to answer that question. Thank you for the question.
Our intention through the amendments in the bill is to leave these discussions for the regulatory process and not to limit it through more precision in the legislation. Our regulatory process does include a very close look at harmonization. Yes, that is focused on our major trading partner, the U.S. That is where we are looking for the majority of ensuring harmonization. That doesn’t preclude us from looking at other jurisdictions as well, but that is our focus. Certainly, that is what we do through our regulatory process.
[Translation]
Senator Wilson: Senator Youance asked a good question. Perhaps she could ask the sponsor of the bill the question again.
Senator Youance: Yes. Thank you, Senator Wilson.
As I mentioned, in the amended version, we still have the same problem with the amendment, because a number of witnesses talked about the fact that . . . . Under the bill, people may be required to innovate, but they may not be ready. By adopting this amendment, however, we are limiting the opportunities for energy efficiency innovation, are we not? Doesn’t this conflict with the fact that the sandboxes provided for in the bill support innovation? Basically, people can innovate, but they don’t need to try too hard. Is my understanding of the amendment’s impact correct?
[English]
Senator Fridhandler: I just want to reiterate and maybe address —
Senator D. M. Wells: It’s up to the chair.
Senator Moreau: We want the answer to the question.
Mr. Copp: Thank you for the question.
In talking about innovation, through our regulatory process, the analytical exercise that is undertaken through the regulatory impact assessment statement looks in detail to ensure that any regulation that’s made looks at what makes sense in terms of affordability for Canadians, and it looks at other jurisdictions to ensure that if we are aligning with those jurisdictions, it makes sense overall for Canadians. That would be in the sense of innovation too.
That is the process. We want to make sure any amendments that we’re making go through the analytical process that we undertake in the regulatory system to ensure it is in the best interests of Canadians.
Senator Moreau: My understanding is that keeping this in the regulation is the easiest way to follow up on innovation. If we have a section in the law that we have to amend, there could be a restriction in the law, which is not the case when we have a regulation. I think that’s the sense of the question that Senator Youance was just asking. Am I right?
Senator Wilson said earlier that it’s already considered as part of regulatory development. What is the actual situation with our regulation concerning this? Do we have anything in our regulation?
Ms. Chung: Canada follows the Cabinet Directive on Regulation, and with each regulation, we are put to the test. We must meet a cost-benefit analysis as well as incorporating many other considerations as part of the regulatory impact assessment statement.
I’ll give you a concrete example. Sometimes it makes the best sense, usually, to align the test standards with another jurisdiction because that gives us cost-efficiency in terms of not making manufacturers test twice. That is all a part of the regulatory process where we can holistically evaluate all of these considerations, whether they be Indigenous considerations, gender-based considerations, cost-effectiveness, affordability, market readiness and the like.
Senator Moreau: If I understand correctly, the amendment as proposed would be a restriction to what we’re doing right now.
Ms. Chung: Very much so. We don’t have that restriction currently in the purpose clause of this bill, so that would represent a restriction in the new act.
Senator Moreau: That’s the reason I should vote against the amendment. More than that, if Senator Lewis is right, and if the United States is creating the standard, it will tie the hands of any of the witnesses whom Senator Wells was referring to in order to have their standard aligned with the United States standard no matter if there are better things elsewhere in the world, so it’s easy to vote against the amendment.
Senator Coyle: I just want to clarify. I want to pick up on something that Senator Lewis, I think, mentioned in his intervention about how if we don’t pass this — if I understood it and I’d like your take on it — then we would possibly be adding another layer of effort or bureaucracy or an impediment.
Could you comment on that, please? I’m hearing the opposite, so I want to make sure I’m getting it.
Ms. Chung: As I mentioned, we don’t currently have this restriction in our legislation. At the regulatory development stage, we look at all the test standards that are available, and we often align with the United States because it’s cost-effective, but again, we don’t have that restriction within the purpose clause of the bill. We do a rigorous and robust regulatory impact assessment statement to come to that conclusion along with our market studies that we undertake in advance of publishing any draft regulations. It is quite a comprehensive process, and it is done in consultation with industry associations as well as the range of stakeholders.
Senator Coyle: Thank you.
Senator Fridhandler: Senator Wells went through a list of witnesses who requested this. They’re our experts. While we’re dealing with people from the department and they are experts in this too, we had not just one but at least half a dozen who said this approach to harmonization is appropriate for legislation such as this. That’s my first point.
The second point is that I don’t look to deferring decisions to regulations when there is important policy framing that goes in the legislation. That’s our job. Hence, the amendment limits your flexibility in regulations, and it’s intended to do that because we set the high-level policy in legislation, so I think it’s important that we frame it.
Lastly, factually, I just think it’s almost unimaginable that the context in which we’re looking to frame this, which is the North American marketplace, won’t deal with almost every issue that we need to deal with. If it’s an innovation from somewhere else and it isn’t something that the North American market believes is adaptable to this market, then it’s unlikely it will be singularly applicable to Canada if it’s not applicable to the United States and/or Mexico. Therefore, I think this is an important amendment for this piece of legislation.
Senator D. M. Wells: I’m in agreement with Ms. Chung and with Senator Youance. The regulations don’t currently have this restriction, so this is an added restriction on Canada’s trade position. Ms. Chung also said — and I fully agree — that we’re often aligned with the U.S., which is our primary market for both buying and selling. For those reasons, obviously I’m supportive of the amendment as amended.
The Chair: Would we like to read the amended amendment again?
Senator D. M. Wells: I would be happy to do that. There was overwhelming desire for me to do that.
The amended amendment reads:
That Bill S-4 be amended in clause 3,
(a) on page 2, by deleting line 38;
(b) on page 3, by replacing line 3 with the following:
“energy efficiency; and
(g) to promote the establishment of requirements that are cost-effective, technologically feasible and, to the extent possible, harmonized with comparable requirements established by Canada, the provinces and by Canada’s principal trading partners, including the United States and Mexico.”.
The Chair: Are honourable senators ready for the question?
Hon. Senators: Question.
The Chair: Is it your pleasure, honourable senators, to adopt the motion in amendment as amended?
I don’t hear anything that I can say is either “yea” or “nay.”
Ms. Cuerrier: The Honourable Senator Kingston?
Senator Kingston: No.
Ms. Cuerrier: The Honourable Senator Aucoin?
Senator Aucoin: No.
Ms. Cuerrier: The Honourable Senator Coyle?
Senator Coyle: No.
Ms. Cuerrier: The Honourable Senator Dean?
Senator Dean: No.
Ms. Cuerrier: The Honourable Senator Fridhandler?
Senator Fridhandler: Yes.
Ms. Cuerrier: The Honourable Senator Galvez?
Senator Galvez: No.
Ms. Cuerrier: The Honourable Senator Lewis?
Senator Lewis: Yes.
Ms. Cuerrier: The Honourable Senator McCallum?
Senator McCallum: Yes.
Ms. Cuerrier: The Honourable Senator Moreau?
Senator Moreau: No.
Ms. Cuerrier: The Honourable Senator Verner?
Senator Verner: Yes.
Ms. Cuerrier: The Honourable Senator D. M. Wells?
Senator D. M. Wells: Yes.
Ms. Cuerrier: The Honourable Senator Wilson?
Senator Wilson: No.
Ms. Cuerrier: The Honourable Senator Youance?
Senator Youance: No.
Ms. Cuerrier: Yeas: 5; nays: 8; abstentions: 0.
The Chair: I declare the amendment defeated.
Shall clause 3 carry?
Hon. Senators: Agreed.
The Chair: I heard “agreed.” Carried.
We now move on to clause 4. Shall clause 4 carry? Please go ahead, Senator Wells.
Senator D. M. Wells: Colleagues, on this next clause, I want to explain this amendment under commercial entities’ presumption of label compliance. It creates a presumption that a label complies where it is affixed by the manufacturer, the importer or their agent. It protects good faith commercial entities from automatic labelling liability, and you will recall, colleagues, that this bill added “commercial entity” as a change to the existing act. “Commercial entity” widens it far outside retailers, wholesalers and importers, so my intent on this is to protect the commercial entities which might be the end-users of something that might be on a label that may not be compliant, but they’re the end-user and they might sell it.
It avoids shifting risk onto downstream actors, like commercial entities, who do not control things like labelling, yet this preserves the bill’s intent, which is stronger compliance, without creating disproportionate liability.
Colleagues, I will read my proposed amendment:
That Bill S-4 be amended in clause 4, on page 3, by adding the following after line 17:
“(1.1) For the purposes of paragraph (1)(b), in relation to a commercial entity, a label affixed to an energy-using product imported into Canada or shipped from one province to another by that commercial entity is deemed to comply with the regulations if the label is affixed by the manufacturer, the importer or their agent and is not manifestly non-compliant with the regulatory requirements.”.
The Chair: Is there any discussion?
Senator Wilson: I’m not going to be supporting this amendment, and I’d like to point out that I know the concern that Senator Wells has is not an outcome of the changes. In particular, commercial entities wouldn’t need to double label a regulated energy-using product that is already labelled by a dealer.
I know your concern — you said it before — about the unintended consequences of the “commercial entity” definition, or the addition of this, and I would ask if the officials could speak to that.
Ms. Chung: With respect to commercial entities, as Senator Wilson was mentioning, our intention would not be to have commercial entities double labelling; that’s my understanding of the concern. Typically, manufacturers will be labelling their products, so if there is a label on the product, then that commercial entity would not need to be double labelling that product. If there are any ambiguities, we can also deal with them at the regulatory stage if there are exemptions that are needed or what have you.
Senator Wilson: Ms. Chung, there wouldn’t be additional liability exposure, then, for commercial entities in Canada by relying on that original.
Ms. Chung: If there is a label that is already adhered to or on the energy-using product, digital or otherwise, then that commercial entity would not need to label it. Yes, the liability for that label that was affixed by the manufacturer would reside with that manufacturer.
Senator Wilson: Thank you.
Senator D. M. Wells: That’s exactly what I’m saying.
There’s the fact — and I’ll call it a fact — or the supposition that a commercial entity, which is now included in the bill and might be included in the legislation, would not be specifically responsible for that, as you just said. However, that’s not what it says here. It includes the commercial entity, along with importers, retailers and wholesalers.
If it’s not included, that’s great, but I would like this to be for clarity that it’s not included. Right now, it is included, regardless of what we might say. In the text of the bill, it’s included. We don’t know what will happen during the regulatory phase, but if Ms. Chung is correct, there should be no problem with this because it’s for greater certainty.
[Translation]
Senator Moreau: If Ms. Chung is right, the right way to legislate is not to repeat something that is authorized or prohibited in the existing act. A tenet of law is that Parliament does not speak in vain. If, under the current provision, there is no liability when the label is affixed by the manufacturer of a product imported into Canada, there is no need to add a paragraph saying that this is the situation that exists.
Ms. Chung, currently, without the bill being passed, where do things stand in Canada when it comes to a label affixed by a manufacturer outside Canada to a product imported into Canada? How does the proposed amendment to clause 4 change the current situation?
[English]
Ms. Chung: In the current situation with dealers — we don’t have commercial entities yet, so it’s dealers — if a label is affixed upstream in the process, we don’t go after the downstream dealer. It could be a distributor, for example. If the manufacturer has already applied a label, the distributor is not liable to put on another label; there is already one label on the product. That manufacturer is responsible for submitting that product to a test lab to certify the product has met our minimum energy performance standards.
Senator Moreau: The actual disposition before amendment is creating what we call a commercial entity, which does not exist at the moment. The reason we don’t need to have the amendment is because creating a commercial entity distinguishes between commercial entity and energy product dealer and other commercial purposes. That’s it.
What’s the difference between the commercial entity and the dealer?
Ms. Chung: A dealer can be anyone who is manufacturing and importing into the country or someone who is shipping those energy-using products across our interprovincial borders. In those cases, those are dealers. A commercial entity is an entity that is bringing in a product for their own commercial use. They are not reselling that product to someone else once it’s in the country.
Senator Galvez: The spirit of the amendment is to reduce the liability for the distributor or the commercial entity — okay. Thank you for that.
I don’t agree with having to reduce it because I think that it’s not good for energy efficiency, but I understand that’s what you aim at.
My question is with respect to “manifestly non-compliant.” It’s a very vague, subjective way of describing something. To me, it raises the question of what we are talking about in “manifestly non-compliant.” Are we talking about missing information, incorrect efficiency ratings, technical errors or invisible to non-experts? This uncertainty could create inconsistent enforcement and litigation risk again. Do you mind giving an opinion on that?
Ms. Chung: With respect to the wording of “manifestly non‑compliant with the regulatory requirements,” we would actually need some clarification in terms of the intention behind that.
Senator McCallum: What is the purpose of now specifically including “commercial entity” in this bill, because that’s new? In a lot of situations, the commercial entity would actually be a middleman. Do you know what I’m saying?
Mr. Copp: The purpose of including “commercial entity” is to level the playing field between products that are being brought in for sale and for use commercially. The intent was to close that loophole between products that are being sold and products being brought into the country or between provinces for commercial use where there is a benefit to that commercial entity.
Senator McCallum: Okay, so they’re actually buying their own from other countries or from the States? I’m thinking of a laundromat.
Mr. Copp: Yes, that would be a good example.
Senator McCallum: When you have that, do they bring in their own, or are they buying Canadian products?
Mr. Copp: Possibly both, but depending on where they’re bringing that product from, it is to ensure that those products being brought in for commercial use are meeting our minimum energy performance standards like products that are being brought in for sale.
Senator Lewis: For commercial entity, we’re creating a new class. To Senator Moreau’s point, at the same time, with the new class, there is a lot of misunderstanding about what a commercial entity is. To Senator McCallum’s question, is a plumber a commercial entity? Is a farmer or is a welder? Are they all commercial entities?
Ms. Chung: That’s a good question. My understanding of the definition of “commercial entity,” as we’ve defined it in the bill, is anyone who uses a regulated energy-using product. Commercial entities writ large are entities that make a profit.
Senator Lewis: Sure. So we will have literally millions of new classes of commercial entities because that’s what working people do: They use products. It is a mechanic buying a new tester. They own their own tools.
With the uncertainty around this, they need legislative protection. This is not hindering the bill or the intent of it. It is just adding a layer of protection to give those new commercial entities a little bit of peace of mind that this isn’t going to change what is going to happen to them. This is a big step, and there are going to be a lot of people unhappy about being called a commercial entity as well as what it means and what the definition is. We do need legislative protection for them.
Senator Fridhandler: First, I just wanted to point out to Senator Moreau that it is a defined term in the proposed legislation. It is relatively clear. It is any person, whether an individual or a company, that uses this for commercial purposes, which is to gain a profit. The not-for-profit organizations probably are not subject to it, but anyone who uses it to gain a profit would be my interpretation.
Second, I want to comment on Senator Wells’ use of the words “manifestly non-compliant.” I would look at that as a higher standard than “substantively.” It has upped the scale, but it is certainly more than simply “non-compliant.” There is some level of higher factual determination than just simply a label that is “non-compliant.” There is a lot of wiggle room before somebody is in the soup on this one.
Senator D. M. Wells: It is important for colleagues to know the regulatory process. If this bill moves on, anything that happens in the regulatory process is out of our hands. This is a place for us to put a marker into the regulatory process that is a protection for commercial entities. That’s all this is doing. I’ll read the bill here:
4 (1) It is prohibited for a commercial entity to ship an energy-using product from one province to another or import an energy-using product and for a dealer to engage in any of those activities for a commercial purpose, unless
(a) the product complies with the applicable energy efficiency standards; and
(b) the product’s label complies with the regulations.
As I said, once this goes into the regulation-making phase, then gazetted and discussed, we have no control. The only time we have control as legislators is now. We can reach in and say this is a protection for the commercial entity. I’m not saying that we need to protect the importer, the distributor, the wholesaler or the retailer. I’m saying that we need to protect the commercial entity because they are not in the business of selling unless they need to sell it to get a better piece of equipment that is more energy efficient or a less costly piece or whatever. But this is our opportunity to give that protection to the commercial entity.
[Translation]
Senator Moreau: That’s not how I read the bill.
First, in response to Senator Lewis’s comment, a commercial entity is clearly defined in subclause 2(4), which says, “Section 2 of the same Act is amended by adding . . . .” It then defines a commercial entity as “a person, other than a dealer” — so it’s not necessarily just an entity that makes a profit — “that uses an energy-using product for a commercial purpose.”
The purpose of clause 4, which Senator Wells proposes to amend, is not to create an offence. It says that “[i]t is prohibited for a commercial entity” — so a person other than a dealer — “to ship . . . from one province . . . or import an energy-using product . . . unless,” and then it lists the conditions.
What are those conditions? They are as follows: “the product complies with the applicable energy efficiency standards” and “the product’s label complies with the regulations.”
It doesn’t create an offence for the dealer; it prohibits the product from being imported. The purpose is not to protect the dealer if the label is non-compliant, but to prevent the product from coming into Canada.
[English]
Am I right, Ms. Chung?
[Translation]
The purpose of clause 4, which is before us, is to prevent a product that does not satisfy the two conditions set out in the clause from being imported. In other words, the product has to comply with energy efficiency standards, and the label has to comply with the regulations. That is the purpose of clause 4. It doesn’t create an offence for a business owner selling a product with a non-compliant label.
[English]
Am I right?
Ms. Chung: Yes, the goal of clause 4 is to have dealers and commercial entities who are importing or shipping across interprovincial borders to have those regulated energy-using products as compliant with our minimum energy performance standards. I believe that’s your question, senator.
[Translation]
Senator Moreau: Even though Senator Wells’s amendment is well-intentioned, I submit that it has nothing to do with the purpose of clause 4, which is to prohibit the product from being imported, not to establish liability or an offence for the dealer selling the equipment.
[English]
Senator Coyle: Am I allowed to ask Senator Wells a question?
Senator D. M. Wells: It is up to Senator Wells.
Senator Coyle: Then I will ask Senator Wells if he would accept a question?
Senator D. M. Wells: Yes.
Senator Coyle: I just want to go back to your intention because let’s make sure we’re clear here. You have talked about the fact that your intention is to protect commercial entities. Can you be clear with us: protect them from what?
Senator D. M. Wells: Thank you for your question. We need to protect the commercial entity from being required to have the same standards as an importer, distributor or retailer. A commercial entity, like a welding company or a fishing company in Newfoundland and Labrador, shouldn’t be held to the same standard. If they have a piece of equipment that they want to sell to someone, they should not have labelling requirements that an importer or distributor is subject to.
If they are importing something from the United States, then for the distributor, yes, those labelling requirements should be as the legislation suggests. But “commercial entity” is an expansion of the whole legislation that previously wasn’t there. Now it is there, and they are subject to what I will call “proper labelling requirements.” That is not their job. They may be selling equipment that they have no use for anymore. Maybe they are upgrading to something more efficient or better fit for their own purposes. A commercial entity is an entity separate from importers, distributors, retailers and wholesalers. They are completely different. Obviously, as Senator Lewis said, it is a much wider net.
Senator Coyle: I have just one follow-up question. Would you accept another question?
Senator D. M. Wells: Yes.
Senator Coyle: Are you not concerned about this being a possible loophole or workaround way to circumvent the standards that we are trying to upgrade in terms of energy efficiency standards, which is what this whole bill is about? Aren’t you worried about this being a backdoor loophole for somebody to get around these things?
Senator D. M. Wells: Thank you for the question. It is a good question. Everything that relates to this is for things that are imported into the country, and they are imported by importers, distributors, wholesalers or retailers. It’s anything controlled by a commercial entity, which I would consider an end-user.
Senator Coyle: Are we talking about selling?
Senator D. M. Wells: Yes. I’m an end-user of a car. I may sell my car. Do I have to relabel it for my selling purposes if I’m selling it across the border? I’m the end-user of the car. Maybe it is a taxi and I sell it. It’s a really good point. I’m just trying to protect the end-user. We go from a thousand distributors and importers — I don’t know how many there are in Canada — to millions now having to comply with rules that they weren’t subject to prior to this. I accept the intent of the bill for energy efficiency of imports. I have no issue with that. But it is the commercial entity, or what I will call the end-user, who I’m here to represent. In this case, it’s the end-user or the commercial entity. Commercial entity is aside from other companies that are commercial entities that have their primary business as importing or selling or distributing.
Senator Wilson: I understand the intent of what you are trying to get at, senator. However, as we have talked about and as we have heard from officials, it is not the end-user who this applies to, even if the end-user is a commercial entity. It is somebody who is importing or moving products from province to province on a commercial basis. And there is certainly no requirement to relabel, as we have heard. I’m wondering if maybe we could ask officials to expand on this.
Mr. Copp: Thanks, senator. Maybe to clarify, again, these are for trying to ensure that we have a level playing field for products that are being purchased and brought into the country for commercial benefit in order to make sure they are meeting the same standards as products that are being brought in for sale. We only regulate a relatively small group of energy-using products, but it is meant to be specifically for that commercial use to ensure that those same products, as they are brought in and purchased for commercial benefit, are meeting the same standards as products being brought in for sale.
Senator D. M. Wells: Thank you. I’m going to read directly from the bill:
4 (1) It is prohibited for a commercial entity to ship an energy-using product from one province to another or import an energy-using product and for a dealer to engage in any of those activities for a commercial purpose, unless
(a) the product complies with the applicable energy efficiency standards; and
(b) the product’s label complies with the regulations.
It is written there, so I reject that a commercial entity is not captured by this legislation because I’m reading it.
Senator Coyle: Do you want an answer there?
Senator D. M. Wells: No. It’s just a statement.
Senator Coyle: I think there is something critical that you mentioned that maybe we’re imagining all kinds of different businesses and all kinds of different products, such as welding, farming, et cetera. This legislation is related to a very specific group of products. Could you remind us of what those are?
Ms. Chung: Thank you for your question, senator.
We only regulate approximately 70 products, and those are mainly household appliances, heating and air conditioning equipment, water heaters, commercial refrigeration equipment, electronic products, some industrial/commercial equipment, like air compressors as an example or chillers, lighting products and plumbing products. In terms of the example that was used previously of tractors, we do not regulate tractors. We do regulate electric motors but not fossil fuel-powered motors and the like. As you were mentioning, it is a very small set of products. It is not all energy-using products writ large.
Senator Coyle: Thank you for the clarification.
Senator McCallum: When someone has an appliance that is not energy efficient yet sells it to buy an efficient one, how is that monitored? Now they are selling an inefficient model. What happens to those pieces of equipment? I was concerned about it going to a landfill. I raised this at committee.
What happens if it is still usable but they want to pass it on and bring in an efficient model?
Ms. Chung: Thank you for your question. Just to reiterate, for a commercial entity or a dealer, we only have jurisdiction when these products are imported into the country or shipped across borders. To your question, if somebody sells their used appliance to someone in their community, we are not intervening in those situations.
[Translation]
Senator Youance: I’m trying to find a solution for this amendment, because we are trying to look at it on its own. When Senator Wells put forward his amendment, it was as though he was defining how the label was compliant with the regulations. However, if we look at the next paragraph in clause 4, on tampering with the label, isn’t the answer already in the bill? This is what it says about tampering with the label:
(2) A person shall not, before an energy-using product is sold to the first retail purchaser or leased to the first lessee, remove, deface, obscure or alter that product’s label.
Doesn’t that mean that the label or labelling is compliant, since it hasn’t been removed yet?
[English]
Senator D. M. Wells: If I understand you correctly, if a commercial entity sells the product, they would have to have a compliant label. I noticed that when Ms. Chung was answering Senator McCallum, she said, “If you sell it within your community.” The barrier here is interprovincial trade. If a commercial entity in Saskatchewan wants to sell to a commercial entity in Alberta or Manitoba, they wouldn’t be able to do this without some sort of compliance lever that could prohibit them from doing that without it being relabelled. Senator Lewis, I assume that’s one of the conditions that would be germane to your area and mine too. Fish harvesters sell boats all the time and upgrade.
Senator Lewis: I’ll use an example of a laundromat. You don’t buy laundromat equipment in Regina in Saskatchewan. You buy those things in Winnipeg or Calgary, so when you trade the old equipment off and after you trade it into Winnipeg or Calgary, guess what? You can’t do it and you have to look to the regulations to change in order to protect against that. All I’m saying is why not have it in the legislation? This will not change the intent, but it does protect commercial entities, which is a new class that is being created in this bill.
Senator Fridhandler: This is even a bit worse than the discussion going on because the language in proposed section 4(1) does not say “sell.” It says “ship,” which means that if you are a corporation doing business across the country and you move equipment that is covered by this act but the label does not comply with the regulations and you are the commercial user — such as a construction company or a company that does business interprovincially — then you have got a problem. It says “ship.” So it is even broader. It does not require a commercial transaction.
I think Senator Wells’ amendment is to make sure that because there is a prohibition for commercial entities, then they aren’t caught by the prohibition if there is not something that is manifestly non-compliant with the labelling requirement in proposed section 4(1)(b). It is to protect them. They do not control the labelling.
Here’s another example. Lots of equipment gets sold by auctioneers. And who knows where it is going to go? Is the auctioneer who is an agent of the party that is selling, which might be moved interprovincially, on the hook for non-compliant labels? I don’t think that’s the intent. The intent is manufacturers, distributors and importers. It is not to catch the commercial users.
I support the refinement that is brought about by Senator Wells’ proposed amendment.
The Chair: Senator Wells, did you have something else other than the question you were asked?
Senator D. M. Wells: No, I think that’s it.
[Translation]
Senator Aucoin: I’d like some clarification.
Thank you, Senator Fridhandler. Senator Wilson, I thought about what you said.
My question is for the department experts who are with us today.
If I understand correctly, if the bill comes into force as it stands, someone with an old washing machine that is no longer energy-efficient can’t sell it anymore. More appliances will end up in the dump. Is that what would happen under the bill in its current form, without Senator Wells’s amendment?
[English]
Mr. Copp: Thank you for the question.
The intent of that is if it is being sold, crossing a provincial border or otherwise, yes, as per the introduction of “commercial entity,” it would have to meet our energy efficiency standards for commercial use.
[Translation]
Senator Aucoin: I will vote in favour of the amendment, then.
Mr. Jean-François Roman, Legal Counsel, Natural Resources Canada: Senator Aucoin, I would just like to add that when they’re established, energy efficiency standards are based on the product’s manufacturing date. Therefore, if the washing machine or dryer was compliant with the standards in force at the time it was manufactured, 10 years later, it isn’t necessarily non-compliant with the current standards applicable to new products.
Senator Aucoin: Thank you.
Senator Moreau: That means this doesn’t prevent someone from selling a washing machine, dryer or other appliance that was compliant with the standards when it was manufactured. Senator Wells said he wanted to introduce protection in clause 4 for the end-user, but that isn’t actually who’s being captured, because the commercial entity isn’t the end-user. It captures a person, other than a dealer, that uses an energy-using product for a commercial purpose. In Senator Aucoin’s scenario, the person selling their old washing machine isn’t engaging in a commercial transaction. Please correct me if I’m wrong.
Mr. Roman: Yes, that’s right. Let’s take the example of a laundromat selling equipment because it’s buying newer models. It can do that because the old washing machines and dryers it was using were compliant with the standards at the time the equipment was purchased.
Senator Moreau: In my view, Senator Coyle rightly pointed out that introducing this in the part that applies to commercial entities — since a commercial entity means a person — creates a huge legislative loophole if we’re trying to ensure that goods imported into Canada or shipped from one province to another comply with the most up-to-date energy standards. Isn’t that right?
Mr. Roman: Yes. That’s the loophole the amendment proposes to fix.
Senator Moreau: Exactly.
[English]
Senator Dean: I’m trying to keep up with this. First of all, it seems to me that having one designated entity responsible for this is kind of helpful and provides clarity about where responsibility lies.
Can we hear your reaction to the now more developed version of Senator Wells’ and Senator Fridhandler’s concerns and proposal? Where are you on that now? As the experts in a way, are you still inclined and more confident in the proposal or legislation right now at its base, or are you in any way convinced by what you have heard from my colleagues on the other side of the table?
Mr. Copp: Thank you for the question. Our view is that it is clear as drafted in the bill.
Senator Dean: Thank you.
Senator Galvez: I remember when discussing earlier about this bill, I was worried about the limitations of people not doing circular economy, and I was reassured that this bill did not touch that because of what you just said: It is the exporters and commerce, and it is not the individual. But it seems that there is confusion here that anybody can be a commercial entity and, therefore, we have to protect them.
Can you please clarify on that point? Also, regarding importing, this is for new appliances. It is not for old, second‑hand selling. The bill touches new appliances; it does not touch second-hand or third-hand appliances.
Senator D. M. Wells: Sure, it does. There is no restriction.
Senator Coyle: Let’s see what they say.
Senator Fridhandler: I do not see it.
Mr. Copp: Thank you for the question. Yes, the intent is to cover, again, new products that are being brought into the country. That is the intent.
Senator Fridhandler: Can you refer us to where that is said in the legislation? I do not see it. You are taking a legal position that I cannot find in the legal document, so maybe your legal counsel can show us because he also said that it does not apply to things that are already here. It does not say that anywhere. That’s very ad hoc on your interpretation of the legislation.
I would really like to know where it is in the legislation that the limitation is drawn. I would be fine if that’s the case; I would be a lot more satisfied. I can’t see it though.
Senator Moreau: Maybe I can give an answer to Senator Fridhandler.
It is the first line of proposed section 4(1):
It is prohibited for a commercial entity to ship an energy‑using product from one province to another or import an energy-using product . . . .
So if it has to be imported, it is because it’s not here.
Senator Fridhandler: No. It says “or.” And where is the time element of shipping that restricts it from what you are shipping? It does not have a restriction on the time element. It could be something from 20 years ago that I’m shipping. It is missing.
The other point of information that I would raise is that people keep talking about selling. There is no requirement for a commercial transaction. This is much broader than selling. This is shipping — moving things — and that’s an issue that is identified in this discussion. It is an overly broad word for proposed section 4(1) as well. It catches a lot more people than people who are commercially transacting.
Senator Moreau: No. Commercial purpose is in the definition of “commercial entity.”
Senator Fridhandler: So a construction company that carries on interprovincially is a “commercial entity.” It uses the stuff, and it moves it from one province to the next. That’s shipping. It doesn’t have to sell it. It just has to move it, and it is going to be offside if there is an issue on labelling.
Senator Moreau: For commercial purposes.
Senator Fridhandler: It is. A construction company is usually for a commercial purpose.
Anyway.
I’m focusing on selling, which is not what this says, and I’m focusing on an effective date, which this does not establish. I am suggesting that we need straight-up information, not misinformation. I’m looking for clarity.
Senator Moreau: We all do.
Senator McCallum: Does this mean we need another amendment to ensure that appliances which are no longer compliant are not sold to northern communities that will not be able to afford energy-efficient appliances? We were told that.
Senator Coyle: I have a related observation to make.
The Chair: Maybe the officials have something to add.
Mr. Copp: We’re discussing this in terms of what that looks like for products for sale, and it’s the same for the other products. We’re adding “commercial entity” to the legislation to capture those products in the same way that products are captured when they are for sale and brought in across borders.
Senator D. M. Wells: I appreciate you are helping us argue the point. A commercial entity, as Senator Fridhandler said, could be using a product but not selling it. Let’s say they’re shipping it because that’s what the text of the legislation says. That shipping could even remain within their own company, such as an Atlantic Canadian company or a Prairie company. They might be operating in Ontario and Quebec, and they’re shipping it across. It doesn’t even need to capture that they may be selling it. They can’t even use it across the border.
Here we are having a grand, national discussion about reducing trade barriers. Now we’re putting this restriction in place? It just doesn’t make sense.
The Chair: We may be ready for the question, but I’d ask you to read your amendment again, please.
Senator D. M. Wells: I move:
That Bill S-4 be amended in clause 4, on page 3, by adding the following after line 17:
“(1.1) For the purposes of paragraph (1)(b), in relation to a commercial entity, a label affixed to an energy-using product imported into Canada or shipped from one province to another by that commercial entity is deemed to comply with the regulations if the label is affixed by the manufacturer, the importer or their agent and is not manifestly non-compliant with the regulatory requirements.”.
I do want to add, colleagues, that we’re trying to strengthen this. We’re trying to ensure that Canadian companies aren’t unduly harmed by this. If the government sees otherwise, obviously, it can be amended at third reading or in the House.
The Chair: Are honourable senators ready for the question?
Hon. Senators: Question.
The Chair: Is it your pleasure, honourable senators, to adopt the motion in amendment?
Some Hon. Senators: No.
Some Hon. Senators: Yes.
The Chair: I heard a lot of “nays.” Let’s have a recorded vote.
Ms. Cuerrier: The Honourable Senator Kingston?
Senator Kingston: No.
Ms. Cuerrier: The Honourable Senator Aucoin?
Senator Aucoin: Yes.
Ms. Cuerrier: The Honourable Senator Coyle?
Senator Coyle: No.
Ms. Cuerrier: The Honourable Senator Dean?
Senator Dean: No.
Ms. Cuerrier: The Honourable Senator Fridhandler?
Senator Fridhandler: Yes.
Ms. Cuerrier: The Honourable Senator Galvez?
Senator Galvez: Abstain.
Ms. Cuerrier: The Honourable Senator Lewis?
Senator Lewis: Yes.
Ms. Cuerrier: The Honourable Senator McCallum?
Senator McCallum: Yes.
Ms. Cuerrier: The Honourable Senator Moreau?
Senator Moreau: No.
Ms. Cuerrier: The Honourable Senator Verner?
Senator Verner: Yes.
Ms. Cuerrier: The Honourable Senator D. M. Wells?
Senator D. M. Wells: Yes.
Ms. Cuerrier: The Honourable Senator Wilson?
Senator Wilson: No.
Ms. Cuerrier: The Honourable Senator Youance?
Senator Youance: No.
Ms. Cuerrier: Yeas: 6; nays: 6; abstentions: 1.
The Chair: Since it is a tie, the motion is defeated.
Senator Fridhandler: On a point of order, does the chair not vote? Is the chair a voting member of the committee as well?
The Chair: Yes. I voted first.
Senator Fridhandler: I did not hear that. She called you first?
The Chair: Yes. I have to vote first. I’m sorry that I didn’t signal it well enough.
Shall clause 4 carry?
Senator Fridhandler: Regrettably, I have an issue that I recognized during our discussion. If you look at my version of the bill, proposed subsection 4(3) has no English. On both sides, there is only French. I can’t comment on proposed subsection 4(3) because the bill is misprinted or not properly translated in my version in proposed subsection 4(3). I don’t have an English-language text.
Senator D. M. Wells: It’s page 3 in clause 4(2).
Senator Fridhandler: That’s okay, but I don’t know what we’re passing. It is in French in both columns. There is no English in the bill.
The Chair: Officials from Natural Resources Canada can give us an explanation for Senator Fridhandler’s question.
Mr. Roman: The header of clause 4(2) says clearly that only the subsection in French is replaced by the following, because the way that this section of the Energy Efficiency Act reads at the moment, there’s already a reference to paragraph 4(1)(b) that exists in the English version. Now it’s only in French that we need to make a reference to “à l’alinéa (1)b).” That’s why the text of the amendment is only for the French version of the act.
Senator Fridhandler: Shouldn’t the text refer to it? I hear your explanation, and I trust you, but I don’t know about passing a bill that has French in the English version of the bill as opposed to saying in English that the French version of the act is amended. Is that satisfactory?
I understand what you’re saying, but I don’t know if this is an acceptable way to move legislation.
Mr. Roman: That is the legislative convention. If we don’t need to change the English version of the text because it remains the same, then we don’t need to make an amendment to the act.
Senator Fridhandler: Why wouldn’t you then completely delete clause 4(2) with the exception in proposed subsection 4(3) from this English version of the bill?
Mr. Roman: We don’t delete it.
Senator Fridhandler: If an English person picks up the bill and they look at it, they will not understand what the intention is here. I’ve never seen this before, but I haven’t seen everything.
[Translation]
Senator Youance: I’m going to refer to Senator D. M. Wells’s amendment, which uses the same approach. There is no amendment in French. The English version contains the amended sentence in English, and the French version contains the amendment in English. There is no French amendment to the French version. The same thing is happening here.
[English]
Senator Fridhandler: If it is the appropriate legislative approach, I don’t understand.
Senator Moreau: In clause 13, it’s exactly the same but for the English version. In both the French and English versions of the bill, it has the English version. Here, it is the French version that is amended and not the English version, and that is why we have French on both sides and that is why we’ll have English on both sides with Senator Wilson’s amendment in clause 13.
Senator Fridhandler: You believe you could show me other examples of English-language bills that would have French in it?
Senator Moreau: You have this right here with clause 13.
The Chair: Okay. Senator Youance has also given an explanation, so I’m thinking that this is the way it is drafted and should be drafted. Is that correct from the officials’ point of view?
Mr. Roman: It is. The header says that it’s only the French version that needs to be amended, and that’s why the text that is under the header is only in French.
The Chair: Okay. I think that we should carry on then.
Shall clause 4 carry?
Hon. Senators: Agreed.
The Chair: Thank you. Carried.
Shall clause 5 carry?
Senator D. M. Wells: Chair, I have a point of order. It’s been the convention within the Senate for many years that if an ex officio member is going to be attending and voting as a member of the committee, then notification must be given to other ex officio members. Typically, it’s 24 hours. This wasn’t done in this case. It’s been done in every other case I’ve been aware of. It wasn’t done in this case. I make this point of order questioning Senator Moreau’s votes because he didn’t give notification to ex officio members in other parties, at least not the Conservative Party.
Senator Wilson: Perhaps Senator Moreau and I are going to say the same thing. The notice was sent on Thursday by the chief of staff to the opposition, specifically to your chief of staff.
Senator Moreau: It’s an email issue, I guess.
The Chair: It sounds as if the convention was followed then.
Senator Moreau: Yes.
The Chair: Shall clause 5 carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 6 carry?
Senator D. M. Wells: I’m going to ask you to pause for a second. I’m gathering my papers because of our big discussion and all of that. I want to make sure that I’m up to date. As you said in your opening remarks, if there is any confusion or pause required, I’m asking for that pause right now.
I’m good to go. Thank you.
The Chair: Thank you.
Shall clause 5 carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 6 carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 7 carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 8 carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 9 carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 10 carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 11 carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 12 carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 13 carry? Please go ahead, Senator Wilson.
Senator Wilson: I would like to move an amendment to clause 13 to correct a typo. I move:
That Bill S-4 be amended in clause 13, on page 8, by replacing line 13 of the English version with the following:
“the thing or product was forfeited, apply by notice in writ-”.
It replaces the word “seized” with “forfeited,” and it makes it more consistent with the French side.
The Chair: Is there any discussion? Hearing no discussion, I would ask Senator Wilson to just read that one more time.
Senator Wilson: Sure.
I move:
That Bill S-4 be amended in clause 13, on page 8, by replacing line 13 of the English version with the following:
“the thing or product was forfeited, apply by notice in writ-”.
Senator Fridhandler: Could one of my French colleagues look at the French language because confiscation sounds to me like “seized” not “forfeited,” but I don’t know the French equivalent?
[Translation]
Senator Moncion: It’s “confisqué,” it’s “saisi.”
[English]
And “confiscated” is confisqué. “Forfeited” is fine.
[Translation]
Mr. Roman: That’s very good.
[English]
Senator Wilson: Maybe we should ask the officials.
[Translation]
Mr. Roman: Yes. If we look earlier in the bill, the French version refers to “la date de la confiscation,” whereas the English version refers to the “the date it was seized,” which is a completely different date. The intent is to make sure that the bill is interpreted the same way in both English and French. That is why the correction was made to render “la date de la confiscation” as “the date it was forfeited” in the English version.
[English]
The Chair: Is that clear? Are we ready for the question?
[Translation]
Senator Verner: I’m sorry, I may have completely missed what was going on, but I think the question was whether this was the right translation. It wasn’t about what the dates are. My colleague wanted to know whether “confiscation” is the correct translation for “seized.”
Mr. Roman: In order for both the English and French versions of this provision to refer to the same point in time in the interpretation of the act, what is written in French has to refer to “la date de la confiscation.” Otherwise, “the date it was seized” refers to the date of seizure, which happens earlier in the process.
Senator Verner: Is there a difference between “seized” and “confisqué”?
Mr. Roman: Yes.
[English]
Senator Verner: There is a difference from “seized.” Okay.
Senator Fridhandler: Why can’t you say “confiscated” then?
The Chair: All those in favour?
Some Hon. Senators: Agreed.
The Chair: Thank you.
An Hon. Senator: On division.
The Chair: On division.
Shall clause 13, as amended, carry?
Hon. Senators: Agreed.
The Chair: Carried as amended.
Shall clause 14 carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 15 carry?
Senator D. M. Wells: Senator Fridhandler and I each have amendments, but I know it goes by page number or precedence.
Senator Fridhandler: Mine is on page 10.
The Chair: Senator Fridhandler’s amendment is first, according to my notes.
Senator Fridhandler: My amendment relates to the provision on market-driven averages and, again, might circle back to some of the policy that drove some of our earlier discussions but in a bit of a different sense here. In the bill, we say, “conform to an energy efficiency standard, including through the use of market‑driven averages,” and it’s not geographically defined.
Again, going back to not only our experts’ request that we focus and aren’t global on anything that might impact this so that they can have some predictability and understanding, my amendment is to insert the words “North American” before “market-driven averages” so that we’ve kind of confined and we’re not ad hoc allowing people administering this act to pick and choose what they might put into the formula. They can’t bring standards from China, Indonesia or Europe that will be very different than what we’re talking about in North America. I think conformity is important when talking about the North American marketplace.
Senator Wilson: The intended scope is broader than North America, so that’s intentional. Adding “North American” before the phrase “market-driven averages” would limit the intent and scope, which is broader than North America.
Maybe we could ask Ms. Chung or Mr. Copp to explain why that is and how that is approached.
Mr. Copp: Sure, I’m happy to take that. Thank you, senators, for the question.
While it’s true that our regulations have looked to harmonize with the U.S. as our main trading partner, our intent here is to not necessarily limit it to North America and to future-proof the act. If it does make sense to harmonize elsewhere, then that’s what we would look at, if it’s in the best interest of Canadians. By adding “North American,” the view is that this would limit that, and keeping it broad allows it to happen in the regulatory process, as analysis intends it to be. Thank you.
Senator Fridhandler: I’m proposing the amendment because I believe the policy that should be applicable to the legislation should confine it to North America. As policy-makers or legislators, we shouldn’t be so open in the legislation. We’ve heard from experts that they are desirous of hearing us deal with the North American marketplace when they’re dealing with their products.
The Chair: Is there any discussion?
Senator D. M. Wells: I’m in agreement with Senator Fridhandler. It’s a question of our primary trading partner and what might be in the future, although they’re covered as well. But our primary trading partner on all things like this is the United States, so I would be supportive of Senator Fridhandler’s amendment.
The Chair: Is there further discussion?
Senator Coyle: As I understand the original language here, it doesn’t preclude North American market-driven averages; it just leaves the door open to the reality, frankly. We heard about that reality, which is that we are already importing from other countries and other jurisdictions and will likely continue or even grow our trading relationships, not to exclude North America but to expand.
To me, I don’t know why we would need to add that here, which would narrow it, where it’s already included in the market-driven averages. North America is in there, but so is the rest of the world as we choose to establish those relationships.
The Chair: Are honourable senators ready for the question?
Hon. Senators: Question.
The Chair: All those in favour of the amendment?
Some Hon. Senators: Agreed.
The Chair: All those opposed?
Some Hon. Senators: No.
The Chair: I think the opposed have it. We’ll take a vote.
Ms. Cuerrier: The Honourable Senator Kingston?
Senator Kingston: No.
Ms. Cuerrier: The Honourable Senator Aucoin?
[Translation]
Senator Aucoin: What was the question? I thought we voted.
[English]
The Chair: I would ask Senator Fridhandler to repeat his amendment.
Senator Fridhandler: The amendment is:
That Bill S-4 be amended in clause 15, on page 10, by replacing line 31 with the following:
“North American market-driven averages”.
Ms. Cuerrier: The Honourable Senator Aucoin?
Senator Aucoin: No.
Ms. Cuerrier: The Honourable Senator Coyle?
Senator Coyle: No.
Ms. Cuerrier: The Honourable Senator Dean?
Senator Dean: No.
Ms. Cuerrier: The Honourable Senator Fridhandler?
Senator Fridhandler: Yes.
Ms. Cuerrier: The Honourable Senator Galvez?
Senator Galvez: No.
Ms. Cuerrier: The Honourable Senator Lewis?
Senator Lewis: Yes.
Ms. Cuerrier: The Honourable Senator McCallum?
Senator McCallum: Could you repeat it again? I’m mixed up now.
Senator Fridhandler: It reads:
That Bill S-4 be amended in clause 15, on page 10, by replacing line 31 with the following:
“North American market-driven averages”.
Ms. Cuerrier: The Honourable Senator McCallum?
Senator McCallum: No.
Ms. Cuerrier: The Honourable Senator Moreau?
Senator Moreau: No.
Ms. Cuerrier: The Honourable Senator Verner?
Senator Verner: Abstain.
Ms. Cuerrier: The Honourable Senator D. M. Wells?
Senator D. M. Wells: Yes.
Ms. Cuerrier: The Honourable Senator Wilson?
Senator Wilson: No.
Ms. Cuerrier: The Honourable Senator Youance?
Senator Youance: No.
Ms. Cuerrier: Yeas: 3; nays: 9; abstentions: 1.
The Chair: I declare the amendment defeated.
Are honourable senators ready for the question on the main motion?
Senator D. M. Wells: I was about to request an intervention. Even Senator Galvez agreed with me.
Colleagues, for clause 15, my amendment is related to one I had earlier. My amendment reads:
That Bill S-4 be amended in clause 15, on page 10, by adding the following after line 31:
“(4) In making regulations under this section, the Governor in Council shall have regard to the need to harmonize, as defined in subsection 20.1(1), with comparable requirements established by the provinces and by the principal trading partners of Canada, including the United States and Mexico.”.
Colleagues, this goes back to an earlier discussion we had where we heard strong pleas and recommendations from those who appeared before the committee, whom I consider the experts. I know we’re calling the bureaucrats under the direction of the minister the experts, but the real experts are in the field and the ones affected by this. This would give some respect to the associations that represent the ones subject to this.
The Chair: Is there any discussion?
Senator Wilson: I’m not going to be supporting this. As I said already when we were speaking on the question of Senator Fridhandler’s amendment, the intention is to not narrow the scope to North America.
The Chair: Is there any other discussion?
Senator D. M. Wells: I have two things on this. One is the existing free trade agreement, and it continues for many years. The free trade agreement we have with the United States and Mexico is currently the most important one that we have. In particular, 75% of our goods are sold to that marketplace, and that is directly what we heard from those most affected by this bill.
The Chair: Senator McCallum, did I see that you —
Senator McCallum: I wanted to see what —
The Chair: Could the officials comment on this amendment?
Mr. Copp: I’m happy to. Thank you for the question.
The intent here is not to be unintentionally limiting to the North American market. Yes, it is true that we look to harmonization with the U.S., both nationally and where our regulatory impact assessment statement looks to. If it is a state regulation, then it makes more sense in the interest of Canadians to harmonize, again, nationally or with the U.S. states. We often look to that harmonization.
Through the amendment here, we do not want to unintentionally be limiting it to the North American market if it does make sense to harmonize internationally both now and potentially in the future as well.
Senator Verner: You don’t want to especially include the United States, but you don’t want to exclude them.
Mr. Copp: Yes.
Senator Verner: Okay.
The Chair: Is there any other discussion?
Senator Galvez: It is my understanding that when we sign a trade agreement, in the narrative and in the wording, we always use “harmonize.” So it would be redundant to put it here is my understanding, because it is already in the international agreement. It is there. Can you just confirm this?
Ms. Chung: In the current North American trade agreement, there is an energy efficiency annex where the countries have committed to consider each other’s energy efficiency standards. It is not binding, but there is a consideration there in the existing annex.
As well, I just wanted to highlight that in the existing provisions that we have to maintain harmonization with another jurisdiction, it is not restricted to the United States and Mexico.
The Chair: Is there any other discussion? Are honourable senators ready for the question?
Hon. Senators: Question.
The Chair: All those in favour of the amendment?
Some Hon. Senators: Agreed.
The Chair: Contrary minded?
Some Hon. Senators: No.
The Chair: I think the “nays” have it.
Senator D. M. Wells: Let’s have a recorded vote, please.
Ms. Cuerrier: The Honourable Senator Kingston?
Senator Kingston: No.
Ms. Cuerrier: The Honourable Senator Aucoin?
Senator Aucoin: No.
Ms. Cuerrier: The Honourable Senator Coyle?
Senator Coyle: No.
Ms. Cuerrier: The Honourable Senator Dean?
Senator Dean: No.
Ms. Cuerrier: The Honourable Senator Fridhandler?
Senator Fridhandler: Yes.
Ms. Cuerrier: The Honourable Senator Galvez?
Senator Galvez: No.
Ms. Cuerrier: The Honourable Senator Lewis?
Senator Lewis: Yes.
Ms. Cuerrier: The Honourable Senator McCallum?
Senator McCallum: Yes.
Ms. Cuerrier: The Honourable Senator Moreau?
Senator Moreau: No.
Ms. Cuerrier: The Honourable Senator Verner?
Senator Verner: Yes.
Ms. Cuerrier: The Honourable Senator D. M. Wells?
Senator D. M. Wells: Yes.
Ms. Cuerrier: The Honourable Senator Wilson?
Senator Wilson: No.
Ms. Cuerrier: The Honourable Senator Youance?
Senator Youance: No.
Ms. Cuerrier: Yeas: 5; nays: 8; abstentions: 0.
The Chair: I declare the amendment defeated.
Shall clause 15 carry?
Hon. Senators: Agreed.
The Chair: Carried.
It is now five minutes past the appointed hours that we have. We can continue in the morning of Thursday at 8 a.m. I think that’s probably the best thing to do.
What does everyone think?
Senator Fridhandler: My favourite thing to wake up to.
The Chair: We will reconvene at 8 a.m. on Thursday morning to look at the rest of this clause by clause. Thank you all.
(The committee adjourned.)