THE STANDING SENATE COMMITTEE ON ENERGY, THE ENVIRONMENT AND NATURAL RESOURCES
EVIDENCE
OTTAWA, Thursday, May 7, 2026
The Standing Senate Committee on Energy, the Environment and Natural Resources met with videoconference this day at 8:01 a.m. [ET] for clause-by-clause consideration of Bill S-4, An Act to amend the Energy Efficiency Act.
Senator Joan Kingston (Chair) in the chair.
[English]
The Chair: Good morning, everyone. I would like to begin by acknowledging that the land on which we gather is the traditional, ancestral and unceded territory of the Anishinaabe Algonquin Nation. I am Joan Kingston, a senator from New Brunswick and Chair of the Standing Senate Committee on Energy, the Environment and Natural Resources. I welcome you all here this morning.
I am going to start by having the senators introduce themselves.
[Translation]
Senator Verner: Josée Verner, Quebec. I am deputy chair of the committee.
[English]
Senator Fridhandler: Daryl Fridhandler, Alberta.
[Translation]
Senator Galvez: Rosa Galvez, Quebec.
Senator Moncion: Lucie Moncion, Ontario.
[English]
Senator Coyle: Mary Coyle, Antigonish, Nova Scotia.
Senator D. M. Wells: David Wells, Newfoundland and Labrador.
Senator McCallum: Mary Jane McCallum, Treaty 10 territory, Manitoba region.
Senator Lewis: Todd Lewis, Saskatchewan.
[Translation]
Senator Aucoin: Réjean Aucoin, Nova Scotia.
Senator Housakos: Leo Housakos, Quebec.
Senator Youance: Suze Youance, Quebec.
[English]
Senator Wilson: Duncan Wilson, British Columbia.
[Translation]
Senator Moreau: Pierre Moreau, Quebec. I am the Government Representative in the Senate.
[English]
Senator Dean: Tony Dean, Ontario.
The Chair: Thank you, colleagues. 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.
I would like to continue clause-by-clause consideration, but I would also like to welcome the officials from Natural Resources Canada. Would you like to introduce yourselves?
Ben Copp, Director General, Office of Energy Efficiency, Natural Resources Canada: Thank you very much, and it is nice to be here. I am Ben Copp, Director General, Office of Energy Efficiency.
Laureen Chung, Director, Equipment Division, Natural Resources Canada: Good morning. Laureen Chung, Director of the Equipment Division in the Office of Energy Efficiency.
Jean-François Roman, Legal Counsel, Natural Resources Canada: Jean-François Roman, Legal Counsel.
The Chair: Thank you for being here this morning.
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 that they appear. If, at any point, a senator is not clear where we are in the process, please ask for clarification. I want to ensure at all times that 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 the clause. If a senator opposes 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 in this process if a senator moving an amendment identifies to the committee other clauses in the bill where this amendment could have an effect. Otherwise, it would be very difficult for the 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 ones may be of consequence to others and which ones 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 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 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 obviously provides unambiguous results.
Finally, senators are aware that any tie vote negates the motion in question.
Are there any questions on the above? If not, we can proceed.
Senator D. M. Wells: I will raise another point of order. The background for that is that at our last meeting, I raised a point of order questioning the validity of the votes from Senator Moreau as ex officio. We all recognize that he can attend these meetings and that all ex officios can attend the meetings. But it is the convention in the Senate that email advice would be given to the other ex officios advising them of their intention to be present here.
That was challenged by Senator Moreau and Senator Wilson by saying that an email was sent. In fact, we’ve since determined that an email wasn’t sent. I know that in your ruling on that point of order, you noted that suitable notice was given by email. Of course, since then, we have learned it hasn’t been. So my remedy for this would be to have Senator Moreau’s votes — because all those were recorded votes, so we know how he voted — be stricken from the record.
Senator Housakos: I also want to join in on this point of order in support of Senator D. M. Wells’s position. I was also compelled, after reading the transcripts of what transpired Tuesday, to come before this committee as ex officio to also correct the record on some of the things said and to highlight some conventions and practices in this institution that were clearly neglected and ignored on Tuesday.
I appreciate that some have not been here for a very long time, but the convention when it comes to ex officios and their participation at committees — for example, the Leader of the Government and the Leader of the Opposition — there has always been an understanding that one would inform, concretely, the other within a very short and timely period of time before they would be attending the various committees that we both have the right to attend.
That has been done, of course, through the years because the whole objective of ex officios is not to attend meetings to skew votes but to be the eyes and ears of the two main protagonists in Parliament, which are the government and the official opposition.
In this particular instance on Tuesday, I can tell you there was no formal or informal notice given to me that the government leader would be attending the meeting. I also saw in the transcript Senator Duncan Wilson — who, last I checked, was a member of the Progressive Senate Group, or PSG — clarifying that there was an email sent, for example, confirming my presence here when there was not.
I wanted to correct the record on that. I want to highlight that we have to be appreciative of conventions and practices in our Parliament, as all of us know. Some of the practices regarding procedural activity are written in black and white, and a lot of it is not in our Parliament. So we have to respect convention because when we don’t respect convention, we really skew results and take away the dignity from the whole process in the debate.
I believe that if I had had formal notice, as I had yesterday — and I provided formal notice to the government leader that I would also be attending at the Legal Committee for clause by clause. I made it clear that I would be attending the meeting here today. I think it would have been highly inappropriate, as ex officio, to come to meetings — of any clause by clause, particularly — without informing my counterpart, and skew things, essentially giving the official opposition an extra vote in the process.
[Translation]
Senator Moreau: I have heard Senator Wells’ and Senator Housakos’ point of order.
In good faith, I informed the committee at the last meeting that discussions had taken place, that text messages had been exchanged and that written correspondence had taken place between our respective chiefs of staff. Far be it from me to want to place the blame for this mess on our chiefs of staff, whether it be Senator Housakos’ chief of staff or my own. I have reviewed the exchanges; there were exchanges, but these exchanges may have been interpreted differently by both parties.
As far as I’m concerned — and I’d like to acknowledge Senator Moncion, who is also the leader of one of these groups — it is well known that, in leaders’ offices, email exchanges are very frequent, informal exchanges are frequent, and text message exchanges are just as frequent, and it is entirely possible that interpretations may differ. I want to highlight the strong collaboration that exists between our offices as leaders. As for me, I have the utmost respect for our institution, and I know that democracy doesn’t function through manœuvres designed to catch the official opposition or any other member of the Senate off guard.
In this context, chair, I don’t think you will need to rule on the point of order that was raised. Furthermore, to avoid any confusion, and since only one of the votes taken could have a different outcome if my vote were counted — namely, the vote on clause 4 — with the consent of the committee members, I would be willing for us to take another vote on this provision this morning, on the understanding that, for this morning’s meeting, neither Senator Housakos nor Senator D. M. Wells should consider my presence here a surprise, since I believe we’ve had the opportunity to clarify matters before resuming our work.
In this context, what I also wish to do, for those who may have been inconvenienced by the confusion, is to offer these people my sincerest apologies and to tell them that there was nothing intentional in the communication that, admittedly, could have been interpreted differently. Although my presence had indeed been announced, I am making this proposal as a gesture of good faith, to dispel any doubts regarding the good faith of the Government Representative in the Senate’s staff, and out of respect for the institution, my colleagues, and my fellow leaders of various groups.
[English]
Senator D. M. Wells: Thank you, Senator Housakos, for your remarks giving background and, obviously, Senator Moreau, for your comments. However, this isn’t about respect for me or other leaders or anything like that but about what we discussed and the reason for the chair’s ruling.
I have the transcript from that meeting, and I would like to read it because it is the most important part of my point of order. Part of that is from me. I said:
I make the point of order questioning Senator Moreau’s votes because he didn’t give notification to ex officios in other parties, at least not the Conservative Party.
Senator Moreau has now admitted this and has withdrawn his vote, I think, on clause 4 because of that. That’s no longer in question.
Senator Wilson said:
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, to your Chief of Staff.
I assumed that was the Conservative chief of staff.
It is an email issue. And you, chair, said, “It sounds as if the convention was followed then.”
We know now that the convention was not followed.
The opportunity is there for a remedy, and the remedy is what I noted in my point of order when I brought this up this morning. We have an admission and a withdrawal of a vote from Senator Moreau. I would like all his votes withdrawn. Obviously, if it is valid to withdraw for one vote, it is valid to withdraw for all. They are all for the same reason. We all recognize it is not written in the rules, but nor is it written in rules that more than one person can speak at a time on the chamber floor at committee. However, we have a convention that someone is recognized and they speak.
These conventions are important, and, in fact, they are more than informal rules; they are conventions. They are practices that we follow for order.
I would go back to my earlier remedy. Despite all the very good words from Senator Moreau, that convention was not followed and found not to be followed. In fact, my argument collapsed at the last meeting because we were told that an email was sent and you accepted that. Therefore, my argument collapsed. Had I known there was no email, I would have pressed the point. Of course, that was not the case.
Senator Wilson: For the record, I want to be clear on what I said and didn’t say because it is somewhat different from what Senator D. M. Wells has said and what Senator Housakos has said.
What I said is:
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 —
— comma —
— to your Chief of Staff.
Period.
Then, Senator Moreau said, “It’s an email issue . . .” But it wasn’t “It’s an email issue . . .” period. It was “It’s an email issue, I guess.”
So he wasn’t saying it was an email either. He was saying, “. . . I guess.” It was a question mark. Suggesting that I said definitively it was an email is not correct, and I just wanted to put that on the record.
[Translation]
Senator Moreau: I would like to correct what Senator D. M. Wells is attributing to me, so I will revisit what I said. I did not admit that the convention hadn’t been followed; I pointed out... In any case, a convention is not a rule that applies in the Senate, but a good-faith practice between the parties. This morning, I am willing to act in good faith and say that there was some confusion in the communications between Senator Housakos’ office and mine, but there were communications nonetheless.
I will not admit that I misled the committee, nor will I admit that a rule or convention wasn’t followed, so I would appreciate Senator D. M. Wells not putting words in my mouth. In good faith, I believe, for the sake of our deliberations, that we should take another vote on this matter.
I said earlier in my remarks that democracy is not about taking people by surprise. What Senator D. M. Wells wants to do this morning is to use what I would describe as an honourable way to resolve the matter, namely, ensuring that conventions are upheld and that the official opposition is respected... But if Senator D. M. Wells is asking that my vote be withdrawn on the basis of an admission, I will raise a point of order myself and demand that the vote be maintained.
This is neither in the interest of Senator D. M. Wells nor in the interest of this committee’s work. I will return to what I was saying, and I hope that my colleague Senator D. M. Wells will change his position, primarily so that I’m not made to say things I did not say. I have a good enough command of my vocabulary to know what I’m saying and what I’m not saying.
That said, I reiterate that I’m perfectly willing to have the vote taken again. There are no surprises, and everyone is here this morning. Democracy requires that senators be able to express themselves properly; I believe there was a communication error, but I don’t accept that the convention was not respected — I want that to be very clear on the record. In this context, I think the most elegant thing to do would be to hold the vote again, rather than trying to pull a fast one and have the result of the vote differ from the one expressed by the committee.
[English]
Senator Fridhandler: Before you rule, I think redoing a vote is extremely difficult. In the face of having had recorded votes, I think you need to determine the implication of Senator Moreau’s vote and we move on from there rather than revoting each item, which, I think, would entail some degree of rediscussion. It was all 48 hours ago, and I don’t know where people are on things.
However, they were in a certain position 48 hours ago. That is clearly on the record and easily determined from that point in time.
I would be against voting again. I think it’s a separate matter, but it is for you to rule.
Senator D. M. Wells: I want to apologize to Senator Moreau. I wasn’t trying to put words in your mouth; I was simply taking your statement that you would withdraw your vote from the amendment in question. I saw that as a recognition that it might have been something that — I don’t want to say “violated” convention, because it is not a rule — went against convention. I assumed you accepted that by your offer to withdraw your vote from that amendment.
The Chair: It appears to me, from all the discussion that I’ve heard, that the one vote in question is actually on clause 4. Consensus around the table seems to be a revote on that. It is impossible to just withdraw a vote. That goes against the rules that are written.
So I would propose a revote on clause 4. Senator D. M. Wells, if I could ask you to read your amendment on clause 4 again.
Senator McCallum: If we are going to have a revote, then we need to rediscuss the whole thing. I need to bring fresh to my mind what was discussed and what the answers were from the government.
Just having a revote —
The Chair: As I recall, when Senator D. M. Wells presented his amendment the first time, he did give some reasoning behind it. I think it would be a good thing for us to hear it again, but, after that, we can probably proceed with the revote.
Senator D. M. Wells, please commence. We are going to have distributed your motion on paper so that people can have a look.
Senator D. M. Wells: Just so that everyone has the correct motion, it’s labelled DMW-S4-4-3-17 on my sheet. Thank you, colleagues, for allowing me to do this again.
The clause that I wish to amend relates to a “commercial entity.” It creates a presumption that a label complies where it is affixed by the manufacturer, importer or their agent. This protects good-faith commercial entities from automatically labelling liability.
So, it is the commercial entities, and, in many cases, the end-users, that obviously don’t affix the labels; they receive the product with the labels on it. If they are to move, ship or sell, they are not responsible for the labelling. This avoids shifting risk onto the downstream actors — the commercial entities — that do not control the label. It preserves the bill’s intent, which is for stronger compliance, without creating disproportionate liability.
Colleagues, I will now read the words of 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.”.
I’m happy to take questions from colleagues.
Senator McCallum: I need to rethink this. If someone else can do that, I can —
Senator D. M. Wells: I did have a sidebar with Senator McCallum. It’s related to the labelling and that the end-user is not required for the labelling, that the manufacturer or the importer or the distributor affixes to the product. If that were the case, then any product that’s being shipped from one province to another — in fact, the shipper of the product might even be the same owner that would eventually ship it back to their own province. So if it does cross a border, they would be responsible for ensuring the label is compliant. They had no jurisdiction, impact, creation or any relation to the label that was on it. In fact, it may not even change hands. Certainly, as Senator Lewis and I discussed yesterday, if a piece of farm equipment moves from Saskatchewan to Alberta by the same owner and doesn’t change hands, but it is shipped — that’s what the wording is in the legislation — they would have to ensure that the label is compliant, and that’s a level of rigour that I don’t think should be passed on to the commercial entity of the end-user, if that makes it clearer.
Senator Wilson: We debated this ad nauseam the other night. Could we maybe have the question?
The Chair: Are we ready for the question?
Senator Wilson: Question.
Senator D. M. Wells: I believe Senator McCallum wanted a moment to consider questioning. The whole idea behind reading it again, as I think Senator Fridhandler said, was that there may be a requirement to have the discussion again because memories aren’t always what we would hope. Senator Coyle said she no longer had the motion in her file.
Senator McCallum: What I had been concerned about with this was to ensure that appliances that are no longer compliant are not sold to northern communities because if they have that option and then they are sold and taken to the North, which is what happened in a different place — that was one of the concerns that I had.
The Chair: Senator McCallum, that sounds like something that an observation might cover if you could think about that for a little bit while we carry on with our other business.
Do the officials have anything to add?
Mr. Copp: To confirm, as I said on Tuesday, the regulations are at the time of sale, so they are not for used products. They are at the time of sale, and that’s where our regulations apply, so for products moving across jurisdictions —
Senator McCallum: On a new product. If they have new products that they have not sold and they can resell them without —
Mr. Copp: Yes, at the time of manufacture.
Senator McCallum: What label would be affixed to that old, less energy-efficient appliance?
Mr. Copp: It would be the label put on the product when it was initially manufactured. If they were compliant at that time, they would be compliant later on.
Senator McCallum: But the older ones wouldn’t. We are talking about two appliances: one that is energy efficient and one that is not but that they have in their warehouse, so it will be the old one that exists. The new one cannot be affixed to it because it isn’t energy efficient. Do you know what I’m saying?
Senator Coyle: If I understand correctly, the label, which will identify the level of energy efficiency, will be on the product when it is first sold and it is new. And it will remain on it because you need that transparency if it is being resold so that you know what you’re getting. It’s a transparency issue, I think. This legislation cannot prevent old, inefficient products from being resold to anybody, including northern communities, but it can ensure transparency around the energy efficiency of that product remaining on that item. That’s what I’m getting from what is being said.
The Chair: Mr. Copp, do you concur?
Mr. Copp: Yes. I would confirm what Senator Coyle said.
The Chair: Are we ready for the question? Senator D. M. Wells?
Senator D. M. Wells: Thank you, chair. So that would hold firm. I would agree with that if the legislation said “sold,” but it says “shipped,” which may not be selling. It could be an owner of a piece of equipment, an end-user of a piece of equipment, moving that piece of equipment to another jurisdiction — not sold, just moved or shipped, as the legislation says. Nowhere in this does it say “sold.” Even with that, the onus now rests with the commercial entity — in this case, the end-user — to be compliant with labelling standards on energy efficiency where they already own the equipment. That’s what the legislation says. It says “shipped,” not “sold.” So there is no suggestion of a transfer. It’s just shipped beyond the jurisdiction of the province.
If it said “sold,” I could probably accept that, although I still don’t know why an end-user would have to reconfirm or confirm the energy efficiency of a product it no longer needs. But it doesn’t say “sold”; it says “shipped.” This is the essence of what I’m doing here, colleagues.
Senator Lewis: For transparency and so on, there is so much ambiguity around all this and what a commercial interest is. Is that every SME in the country? Those are the people who will feel uncomfortable with this. I think this gives legislative protection to them so they are not left holding the bag at the end of the day, because that has happened in past legislation, and I think that as this emerges, who the commercial entities are and so on, it will give them a level of comfort that we can point to this particular amendment. We’ll see as the legislation plays out, but what it will do is give them a level of protection within the legislation, and that’s what this amendment does. To me, it doesn’t change any intent of any bill. It protects commercial entities — whatever they may be, because nobody is sure.
[Translation]
Senator Moreau: Chair, we have repeated almost word for word what we said last Tuesday. I believe we’re ready to vote on Senator Wells’ proposed amendment.
[English]
The Chair: Are we ready for the question? All in favour of the amendment?
Hon. Senators: Agreed.
The Chair: Opposed?
Hon. Senators: No.
The Chair: I don’t hear enough —
An Hon. Senator: Can we have a recorded vote, chair?
The Chair: Thank you.
Catherine Cuerrier, Clerk of the Committee: 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 Housakos?
Senator Housakos: Yes.
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, 7; nays, 7; abstentions, 0.
Senator D. M. Wells: I may have miscounted; I had 7-6. Can you read out the names and votes, please?
Ms. Cuerrier: Senator Kingston, nay. Senator Aucoin, yea. Senator Coyle, nay. Senator Dean, nay. Senator Fridhandler, yea. Senator Galvez, nay. Senator Housakos, yea. Senator Lewis, yea. Senator McCallum, yea. Senator Moreau, nay. Senator Verner, yea. Senator D. M. Wells, yea. Senator Wilson, nay. Senator Youance, nay.
The Chair: A tie vote means the amendment does not carry. We need to vote on the clause itself.
Does clause 4 carry?
Senator D. M. Wells: Excuse me, chair. I want to get my papers in order. I have them all over the place.
An Hon. Senator: What is happening now?
The Chair: We voted on the amendment. It was defeated; it did not carry. Now we are voting on the main clause. We voted on the amendment.
Senator D. M. Wells: Are you sure it’s clause 4? I’m at 15.
Senator Coyle: We’re on 15.
The Chair: We were. We went right back to clause 4 and the amendment. We voted on the amendment, and the amendment was not carried.
We must now say if we accept clause 4.
Senator Coyle: Are we then leaping back to 15?
The Chair: After we vote on clause 4.
Senator Coyle: Got it.
The Chair: Are we ready for the question?
All in favour?
Some Hon. Senators: Agreed.
Some Hon. Senators: No.
The Chair: I heard more senators saying “agreed” than not.
Ms. Cuerrier: The Honourable Senator Kingston?
Senator Kingston: Yea.
Ms. Cuerrier: The Honourable Senator Aucoin?
Senator Aucoin: Yes.
Ms. Cuerrier: The Honourable Senator Coyle?
Senator Coyle: Yes.
Ms. Cuerrier: The Honourable Senator Dean?
Senator Dean: Yes.
Ms. Cuerrier: The Honourable Senator Fridhandler?
Senator Fridhandler: No.
Ms. Cuerrier: The Honourable Senator Galvez?
Senator Galvez: Yes.
Ms. Cuerrier: The Honourable Senator Housakos?
Senator Housakos: No.
Ms. Cuerrier: The Honourable Senator Lewis?
Senator Lewis: No.
Ms. Cuerrier: The Honourable Senator McCallum?
Senator McCallum: No.
Ms. Cuerrier: The Honourable Senator Moreau?
Senator Moreau: Yes.
Ms. Cuerrier: The Honourable Senator Verner?
Senator Verner: No.
Ms. Cuerrier: The Honourable Senator D. M. Wells?
Senator D. M. Wells: No.
Ms. Cuerrier: The Honourable Senator Wilson?
Senator Wilson: Yes.
Ms. Cuerrier: The Honourable Senator Youance?
Senator Youance: Yes.
Ms. Cuerrier: Yeas, 8; nays 5; abstentions, 0.
The Chair: Clause 4 is carried.
Now we will revert to where we were before. I believe we had dealt with clause 15 in its entirety. Colleagues, thank you for all that.
Shall clause 16 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 17 carry?
Senator D. M. Wells: I do have an amendment for clause 17 on page 12. This is essentially a “for clarity” clause. It doesn’t change the bill in any way other than making it clearer what is included and what is not. I’ll read the amendment and then take any questions and give an explanation.
I move:
That Bill S-4 be amended in clause 17, on page 12, by adding the following after line 15:
“(3) In relation to a commercial entity, regulations made under this Act may prescribe requirements only with respect to the importation of an energy-using product into Canada or the shipment of an energy-using product from one province to another.”.
This is to ensure that for the commercial entity, if they are importing something, the product is compliant and they have no further responsibility in making the product compliant. I think that is the essence of the bill related to the importation of energy-using products.
The Chair: Okay. Discussion?
Senator Wilson: This is covered. It only applies at the time that the product is new and when it’s brought in. However, there seem to be some concerns that businesses or commercial entities would be required to replace energy-using products already in use. I would ask the officials if they can clarify whether the bill applies only when products enter federal trade channels through importation or interprovincial shipment, and whether existing products already in use would, therefore, not be captured simply because they are being used commercially.
Mr. Copp: I can confirm this. Yes, this is trade and commerce legislation. This is where it applies: It applies to new products, not used products.
Senator D. M. Wells: We have no control over what the regulations might say. We know what you say and we know what the bill says, but that doesn’t give protection to the commercial entity after the regulations are made. Once this bill leaves the Senate and the House and is granted Royal Assent, we have no control over how it can be changed or defined under the regulations, even though they are gazetted in and there are consultations. We have no control over that.
This amendment gives Parliament control over how this is applied. We don’t have control afterward. There is nothing defined for a new product or anything like that. It says, “. . . an energy-using product . . .” It doesn’t say “new,” “brand new” or “really old.” It doesn’t define it at all.
Mr. Copp: Thank you, senator. Again, as trade and commerce legislation, this is how it applies; this is how we regulate. We lean on the definition of “manufacturer” that is in our legislation that is specific to products at the time of manufacture — new products as sold or leased.
Senator D. M. Wells: I understand that, but it doesn’t say that.
Mr. Copp: The definition of “manufacturer” in terms of the products being new is in the current legislation.
Senator D. M. Wells: I understand that, but I’m talking about “commercial entity,” not “manufacturer.” Now “commercial entity” is lumped in with importers, distributors, retailers and wholesalers, and they are none of those. I want to ensure there is protection for the commercial entity, which is not a manufacturer. They are an end-user. This is the clarity that I seek for the bill. If there is no intention of having the commercial entity captured under this legislation, why are they in there, and how is this damaging to the intent? In fact, it solidifies the intent.
Senator Coyle: Did you want him to answer your question?
Senator D. M. Wells: No. I don’t know if there is an answer.
Senator Coyle: We have had a lot of confusion. A number of us are concerned about both the introduction of the term “commercial entity,” the definition of the term and the implications of that in this legislation. That’s where we are having some of these discussions.
Could I ask our officials to please explain why “commercial entity” is being added, to refresh our memories? What is meant by “commercial entity”? Where is that clearly identified in the legislation? What value do you see that adding to the legislation?
Mr. Copp: Thank you, senator. Because it is trade and commerce legislation, this is how it applies. The intent through the addition of “commercial entity” is to level the playing field. For products that are being brought in and sold for commercial benefit, it levels the playing field and adds this to our legislation so it applies the same way at the border as for products being brought in for sale or commercial benefit.
Senator Fridhandler: We didn’t hear the question, but “commercial entity” is defined. It is in the amendment. On page 2, about midway down, there is a definition of “commercial entity” introduced here.
The Chair: Senator Coyle does have the floor, but for clarification, Senator D. M. Wells, could you read it out for everyone?
Senator D. M. Wells: Thank you, chair. On page 2, as Senator Fridhandler said, “commercial entity means a person, other than a dealer, that uses an energy-using product for a commercial purpose.”
You can almost pick any business in Canada that does anything besides being a dealer that uses an energy-using product for commercial purposes, like a farmer, fisherman, plumber or carpenter.
Sorry, Senator Coyle. I know you have the floor. Mr. Copp, if you say this is the intent, this strengthens that intent.
The Chair: Mr. Copp, would you like to weigh in on this?
Mr. Copp: Thank you, senator. Again, our legislation is trade and commerce legislation, and this is what it intends to do. This is how we currently regulate.
The Chair: Senator Coyle, do you have anything to follow up on with respect to your question?
Senator Coyle: No.
Senator Wilson: I just wanted to reconfirm. I believe it has been confirmed, but I want to reconfirm so we have nailed this down. The bill as drafted does exactly what the amendment is trying to achieve, but the amendment, in the government’s view, is redundant because it’s trying to write down the trade and commerce head of power. The specific concern is about products moving back and forth. Since products were compliant at the time of purchase and the standard levels are based on the date of manufacture, products formerly compliant remain compliant. You said that. Its clear. Therefore, a company in one province that has a product and ships it to another province is covered by the bill, and we don’t need to worry about it. Is that correct?
Mr. Copp: Confirmed, yes.
Senator Wilson: Thank you.
Senator Dean: Briefly, would existing products be negatively affected in any way if this amendment is not passed or is absent?
Mr. Copp: No, senator. Again, it’s for new products as they cross the border.
Senator Dean: Thank you.
[Translation]
Senator Moreau: I’d like to add that Senator Wells, when defining a commercial entity... There are two important elements in the definition of a commercial entity.
Obviously, it is any person, other than a supplier — that is the first element — who uses a product for commercial purposes. Both elements must be present for it to be a commercial entity. If a person uses a product for non-commercial purposes, they are not a commercial entity under the law. The definition makes complete sense when you consider both aspects: who the person is and what the purpose is. If someone uses a product for residential purposes or, for example, if a farmer uses a product for their own purposes, they are not a commercial entity. It cannot just be anyone. The law is much more specific than that.
When people want to create confusion, they say it covers just about anyone, but when you read the bill as it is written, there is no confusion. It must be a person. The only exception is a supplier, but for the person to be a commercial entity, they must use a product for commercial purposes. That is an essential requirement.
[English]
Senator Lewis: First, I’m surprised that farmers aren’t commercial entities, but that’s a different issue.
Mr. Copp, you talked about levelling the playing field. Can you give an example where a commercial entity is at an advantage when something is brought into the country? I can see the concept that you’re trying to talk about. Can you give a concrete example of when that happens?
Mr. Copp: Thank you, senator. We use the example of commercial washing machines. We have a very discrete list of products that are on our list of products that we regulate. If a company is bringing in a product and getting commercial benefit from it, we are levelling the playing field by ensuring that those products meet the same standards as products being brought in for sale.
Senator Lewis: They would bring this product in outside a dealer, on their own? How —
Mr. Copp: They could. They could do it through distributors or however they are bringing that product in across the border. If that product is being brought in for commercial benefit, then we would apply the same standards that we currently apply.
Senator Lewis: Wouldn’t that be checked at the border when it is imported?
Mr. Copp: Yes.
Senator Lewis: Isn’t this redundant then?
Mr. Copp: I’m not sure I understand —
Senator Lewis: Whoever brings it in, a commercial entity or a dealer or a wholesaler, they have to pass the inspection at the border when they bring that in if it’s not properly labelled and so on. Therefore, everybody is under that set of rules right now.
Mr. Copp: We’re adding “commercial entity” to “dealer” to make that clear.
Senator Lewis: Okay, but the dealer or the commercial entity today, when he brings it in, has the same rules.
Mr. Copp: No, it’s only for a dealer.
Senator Lewis: But they can never get across the border without the proper sticker as a commercial entity, right? If they did use that product, the liability would be astronomical. We have all kinds of coverage within provincial and municipal legislation that covers this, so why add “commercial entity” to this?
Mr. Copp: It’s adding clarity that this is for products brought in for commercial benefit — that they meet the same standards that we apply for products being brought in for sale.
Senator Lewis: Thank you.
Senator McCallum: I want to go back to trade and commerce. Because “commercial entity” is a new term, the trade and commerce that you’re talking about wouldn’t have taken into consideration the term “commercial entity” because it’s new. Therefore, will there be unintended consequences for the commercial entities that will now be included?
Mr. Copp: There should not be unintended consequences to trade and commerce because it is about the product being brought in across the border, where the act or regulations would apply.
Senator Coyle: I’m sorry. I don’t want to belabour this, but I want to follow up on what Senator Lewis said because I’m not sure we got the answer. Anyway, I didn’t understand it.
Senator Lewis, I believe — and I hate to put words in your mouth — implied in what he said that, currently, if a commercial entity were to import one of these pieces of equipment that is covered within that inventory of 70 or so items, now it would have to comply just like all the others and this would be redundant. If I understood what Senator Lewis was suggesting, we don’t need this because that already happens.
Is that fair to say? Can you answer that? Does that already happen? If it does, then why do we need this?
Ms. Chung: Thank you for the question, senator. With respect to commercial entities, we want to clarify. Commercial entities, in the context of this act, they would be commercial entities bringing in equipment that is not for the purpose of sale. So they are going to use that for their own commercial purpose. Our existing act covers dealers bringing in the regulated 70-plus products for sale. So this commercial entity clause covers the gap that is in our act right now, whereby commercial entities can bring in the set of 70-plus products without them being sold once they are in the country.
Senator Coyle: I am not sure you have answered the question. If I may, just to really tease it out, let’s say that today, a commercial entity is importing a product in this range, before we have this legislation. What I understood from Senator Lewis’s point is that he thought they were already having to comply. So are you saying, then, that without the way it’s worded in this legislation, the scenario that Senator Lewis put forward — that they already had to comply and that this is redundant — is not true and that, in fact, we need this for commercial entities to be compliant when they bring those products into Canada?
Ms. Chung: Yes, that is correct.
Senator Coyle: Okay. I just didn’t hear that answer previously. Thank you.
Senator Galvez: I think I just received my clarification. Thank you.
Senator D. M. Wells: However, Ms. Chung, “commercial entity,” the definition in the bill, means a person other than a dealer — not a dealer. With respect to the example that Senator Lewis gave, that is virtually any company in Canada that uses an energy-using product, which is anything that is electrified. So the commercial entity is not the dealer.
Ms. Chung: That’s right.
Senator D. M. Wells: So what the amendment does, colleagues, is provide clarity that allows the commercial entity, the user of the good in this case, to not be liable for what a dealer might be liable for, for bringing it in. This is a clarification of that.
Ms. Chung: No. One aspect would be that the motion that was introduced speaks to a label that is affixed on a product. We are introducing the ability to have digital labels as well as paper labels, so that label may not always be affixed. It depends on how the labelling requirements are defined in the regulations. That is just a small clarification.
The Chair: Are we ready for the question?
Hon. Senators: Question.
The Chair: All in favour of the amendment?
Some Hon. Senators: Agreed.
Some Hon. Senators: No.
The Chair: I don’t hear enough on one side.
Could Senator D. M. Wells read the amendment again, please?
Senator D. M. Wells: Yes, certainly:
That Bill S-4 be amended in clause 17, on page 12, by adding the following after line 15:
“(3) In relation to a commercial entity, regulations made under this Act may prescribe requirements only with respect to the importation of an energy-using product into Canada or the shipment of an energy-using product from one province to another.”.
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 Housakos?
Senator Housakos: Yes.
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, 8; abstentions, 0.
The Chair: So the amendment is defeated.
Shall clause 17 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 18 carry?
Senator Coyle: I have two related amendments. I’m going to introduce the one on clause 18, and then the explanation I give will apply to both clause 19 and clause 18.
What I’m proposing here is a simple amendment and then another one. So my amendment reads as follows:
That Bill S-4 be amended in clause 18, on page 12, by replacing line 19 with the following:
“and Renewable and Emerging Energy Sources”.
My rationale for this is that the current Energy Efficiency Act is actually subtitled “An Act respecting the energy efficiency of energy-using products and the use of alternative energy sources.”
The language we know around “alternative energy” has been replaced in this case by “emerging energy sources.” I feel that referring to renewable energy as “alternative” is actually outdated. It’s been around for a long time and become mainstream. It is not alternative anymore.
It can also not be reasonably categorized as “emerging,” and, like all energy sources, it is always being improved with innovation, but renewable energy has been around for some time, and it is mainstream. So it is no longer emerging and no longer considered alternative.
I am not suggesting we take the term “emerging” out. “Emerging” stays there, because we want to see all kinds of different energy sources, as we always have for centuries, right? But I just want to put “renewable” in there, because that is the reality of what was originally intended as “alternative,” which is dated. So I want to add “renewable” in there.
Also, the expanded definition of “energy efficiency” in the act enabled standards related to interoperability, the type of energy used and capabilities of a product, which could all use energy management devices to store and use renewable energy at the right time.
This suggested amendment simply clarifies that technological standards can be established with the goal of promoting renewable energy. It is self-reinforcing.
This is the same argument I will use for the next one, but this is in line — clause 18 on page 12, replacing line 19 with, “and renewable and emerging energy sources.” It basically adds the word “renewable.”
The Chair: So we’re dealing with clause 18, page 12.
Senator Coyle: Correct.
The Chair: That’s in front of you. Discussion?
Senator Wilson: Senator Coyle and I had an opportunity to discuss some of these proposed amendments.
While I support what Senator Coyle is trying to do in terms of promoting renewables, this is deliberate drafting. The Energy Efficiency Act underpins a suite of activities not limited to the energy efficiency regulations. This includes energy innovation programming administered by Natural Resources Canada, which is focused on advancing emerging energy technologies, including both renewable and non-renewable energy sources — for example, small, modular nuclear reactors — toward commercialization.
The Energy Efficiency Act focuses on saving energy and the responsible use of energy, which doesn’t mean granting preference to renewable energy over non-renewable energy in all contexts. There are contexts where a non-renewable energy is actually a more efficient and preferable type of energy to use.
Canada is a vast country with highly variable energy needs. For example, in a small Indigenous community in the North, hopefully, we may be able to set them up with an SMR or some equivalent one day. In those cases, the use of those technologies would be very important. Flexibility is needed to advance emerging energy sources appropriate for those various purposes.
From my point of view, the proposed wording enables the government to advance many types of energy technologies, including renewables, with a focus on the responsible use of energy. As a result, I will not be able to support Senator Coyle’s proposed amendment, unfortunately.
Senator Coyle: That is unfortunate because this is only additional; it is not exclusive. The term “emerging” remains there, which covers everything you just said in your argument against including. I am in the taking out “emerging” and replacing it with “renewable”; that is still there. Everything you said about communities in the North and other emerging technologies — those exist. To argue in favour of this, it is additional, not replacing.
Senator Dean: This is an interesting discussion on this question of renewables. I wonder if our officials could provide some advice on this and speak to the advantages and disadvantages of the amendment being proposed.
Mr. Copp: Thank you, senator. The only thing I would add is that “emerging” is inclusive of renewables. That is why.
Senator Dean: So you don’t think it is necessary.
Mr. Copp: I don’t think it’s necessary, no.
Senator McCallum: Senator Coyle, are renewables now established and not emerging? They are being used in different places. Can you comment on that?
Senator Coyle: That’s my point: Renewables are now in the mainstream and very important for energy efficiency. So, it’s a bit of a misnomer to include them under “emerging” because they have been around for a while.
Yes, just like all other energy sources, they will be improved upon, but I don’t see the category of renewables, which used to be called “alternative,” being called “emerging.” It is still a very important category, along with all those other emerging ones that we want to see come forward. We all want energy efficiency, and, as we heard in testimony at this table, the best fuel of the future is efficiency.
So, what are those things that will get us to efficiency? It is all those emerging ones on which we haven’t landed — or we’re landing slowly on some of them, and we will see what they have; some, we can’t even imagine right now.
They are the renewables that we have today. So I think it fits very much with this, which is the Energy Efficiency Act that we’re looking at.
Senator Galvez: This reminds me of another discussion in another committee. I have a very déjà vu feeling. It goes with your question, Senator Coyle.
We have lawn cutters that are electric now. I had one 10 years ago. It is not emerging anymore; it is there. I have visited farms where they have solar and electrical driers. It is not emerging anymore. Nuclear has been in development for 80 years — including small nuclear reactors — so that is also not emerging.
We are very far still from nuclear reactors; we are talking about appliances. In appliances, electric motors are there and don’t need fuel anymore.
I need clarification on this. For you, what is “emerging”?
I have just one more point. Legally, your emerging technology may have a definition, but then, when you go to commerce and want to access inventions, all these definitions are very important.
In the budget, there was this distinction in French and English about eco technology and green technology — they translated it back. We had to review it, because they mean different things. “Eco technology” means nature-based solutions, and “green technology” means solar and wind.
Can you please clarify on this?
Mr. Copp: Thank you, senator.
Yes, the term “emerging” is as fully inclusive as can be for the potential for new energy technologies — again, renewable and other energy technologies. In terms of the amendment proposed, that is really our focus: to make sure it is inclusive and not selective on renewables or non-renewables.
Senator Wilson: I want to respond to Senator Coyle’s point. I know that you may disagree, but my view is that this language would be redundant because it is covered by the existing word. The other reason I’m hesitant is because it could be seen as indicating a universal preference where there might not always be one.
I will draw an example from my time at the Port of Vancouver. We were looking at how to decarbonize the gateway. Not all the decarbonization alternatives would typically be classified as renewable. A good example is hydrogen. With hydrogen, although it is an extremely clean technology, the production of hydrogen is not typically renewable. Maybe one day it will be, but it is not right now; it is very much emerging.
So, I would be concerned that those two things could be offside. The broader term “emerging” is better.
Could officials please explain why maintaining broad and technology-neutral language in legislation like this is important for future-proofing the bill?
Ms. Chung: Thank you, senator.
I want to reiterate that the word “renewable” would grant preference to renewables over non-renewable sources. This could constrain the range of energy technologies that the minister could advance in support of energy efficiency and the responsible use of energy.
Senator Wilson: Thank you. That is very helpful.
Senator Coyle: I don’t find it very helpful at all, actually; I think you have missed the point because we are not taking “emerging” out. I think you have missed the point, as well, Senator Wilson, as the sponsor of the bill. There is no universal preference being introduced here. If I were putting “renewable” in there and taking “emerging” out, then, 100%, both of you would be correct, but we are not.
My argument is that it’s dated to consider. I’m worried that renewable will be left out, because it is not an emerging technology. It’s been around. It is in use. It is in the mainstream, and it is absolutely critical for energy efficiency. I don’t want to miss out on having renewables named when we know that it is really critical today and in our near future.
I can’t imagine it yet — who knows what our energy future is going to be — but at some point, we will need all of these sources because we are being electrified. We need all of these things, including all of the emerging technologies you are talking about and Senator Wilson is talking about, and we need renewables. I’m worried that renewables won’t be covered, even though you say they will, because they are no longer technically emerging, right? They are developing, just as all energy technologies are developing, but they are in our mainstream today, and the final word is that we’re not taking “emerging” out; we’re adding “renewable.”
Senator McCallum: Thank you, Madam Chair. Okay, when I look at this, it promotes the efficient and responsible use of energy, which is the main reason. So it’s about the production, distribution and consumption of energy.
What is the importance of adding an “emerging” here when hydro hasn’t even been mentioned and that is established? Would it be better if Senator Coyle just suggested removing the last part and using “with the aim of accelerating energy efficiency”? Why was “emerging” added there?
Mr. Copp: The addition of “emerging” is to be current with the language being used in terms of being inclusive of all energy sources. The act is doing more than just regulation. Is looking at the responsible use of energy broadly to ensure we are capturing all potential energy sources.
Senator McCallum: But removing it, you would still do the same. You wouldn’t even need that in there. It is about the responsible use of energy and making it efficient.
And so when you put “emerging,” you haven’t mentioned hydro, which is one of the main things —
Senator Coyle: Officials didn’t choose the amendment. I have an amendment that’s in line with this amendment, which is to the title and to that paragraph you’re referring to. That is my next amendment. So I’m satisfied, if others are, to proceed to the question.
The Chair: Are we ready for the question?
Hon. Senators: Yes.
The Chair: All in favour of the amendment.
Some Hon. Senators: Yes.
Some Hon. Senators: No.
The Chair: I don’t hear enough on either side. 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: Yes.
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: Yes.
Ms. Cuerrier: The Honourable Senator Housakos?
Senator Housakos: Yes.
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: Yeas, 9; nays 4; abstentions, 0.
The Chair: The amendment is carried. Shall clause 18 carry? Shall clause 19 carry?
Hon. Senators: Yes.
The Chair: The amendment is carried. Shall clause 18 carry?
Senator Coyle: As I mentioned, I have an amendment to clause 19. Let me read it to you:
That Bill S-4 be amended in clause 19, on page 12, by replacing line 27 with the following:
“accelerating energy efficiency and the use of renewable and emerging”.
So, colleagues, it is the same argument. It is not the title now; it is the body of the text. I have very little else to say other than it is adding and not subtracting. It adds “renewable” so that we update our language and don’t treat renewable as if it is emerging. However, it keeps the playing field wide open for all the other emerging energy efficiency possibilities.
The Chair: Discussion?
Senator Moreau: Since we are discussing efficiency this morning, to be efficient, I would suggest the same vote as was recorded in the preceding —
The Chair: Any other discussion?
Senator Coyle: You mean to go ahead with the vote or consider the previous vote?
Senator Moreau: We would accept that we record the same vote as we did on clause 18, because it is the same argument.
Senator Coyle: If people agree to that.
Senator Moreau: Yes. It will be for efficiency purposes. We do not need to do a vote.
Senator Coyle: You have renewed my hope.
The Chair: That would be great, but I think we could do it another way.
Senator D. M. Wells: Maybe we could do a voice vote, not a recorded vote, because I don’t like my vote being assigned on a separate one. That is a precedent I don’t want to see. But we could have a voice vote, and those who wish to remain silent on a voice vote could do that.
The Chair: All right, all in favour of a voice vote.
Hon. Senators: Agreed.
Senator Moreau: On division.
The Chair: Thank you. Shall clause 19 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 20 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 21 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 22 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 23 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 24 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 25 carry? Senator D. M. Wells.
Senator D. M. Wells: Thank you, colleagues. I have an amendment for your consideration. This brings the first statutory review, so this relates to the statutory review at 10 years. I’m proposing to bring the statutory review forward to five years. It maintains subsequent reviews every five years. It requires the review to assess the act’s effectiveness, including impacts on commercial entities. It doesn’t change the effective operation of the act. It requires an assessment of how the corrective orders, administrative monetary penalties and the exemption sandbox regime are being applied. It also strengthens accountability for new powers in the real world impacts. Colleagues, 10 years is a long time. Any time we talk about renewable resources, energy efficiency and the use of products that require electricity, it gives greater —
The Chair: Could I just stop you? It is my mistake. I should have recognized Senator Fridhandler first. It is just the order that we go on.
Senator D. M. Wells: No worries.
The Chair: We will listen to all of your explanation again if that is necessary.
Senator D. M. Wells: It will be even better.
Senator Fridhandler: Yes, on my amendment on clause 25.
The Chair: Yes, and please excuse me for —
Senator Fridhandler: My concern on clause 25 relates to piercing the corporate veil by deeming an already strict liability offence to flow through to directors, officers, senior officials, employees and other individuals. And, consequently, while I’m not proposing an amendment to the new section 51, each day that there is a violation is a new violation.
When we think of this flowing through to commercial users and the class of people out there, then pushing it upstream to be personal liability, I think it’s highly unusual. From my consultation with legal counsel, I learned that this provision is seldom found in other federal legislation. The only example that he could give me that he could find in his review on the equivalent to clause 50 was in the Labour Code, but I am happy to hear others if you want to chime in. Nevertheless, I find it relatively offensive, operationally, as a point of public policy. Second, as a point of public policy — and I mentioned this in our meetings with experts — knowledgeable corporations will simply obtain extra insurance, which will flow through and cost consumers. It’s the smaller commercial users that won’t understand this. They are individual directors or officers who may or may not be very involved. The language on your engagement in it is very much all over the map, with words like “directed,” “authorized,” “assented” and “acquiesced.”
I’m proposing the complete deletion of subclauses 50(1) and 50(2).
Senator Wilson: Thank you, chair. I’m not going to support this, as removing clause 50 would weaken accountability by allowing those who director or authorize violations to avoid liability, leaving responsibility solely with the corporation.
This provision ensures that senior decision makers are held accountable based on their actual involvement, which is essential for effective deterrence and maintaining a level playing field. The due diligence defence applies to court-issued fines. A person would not be held liable if they had taken reasonable efforts to comply with the act and its regulations.
The due diligence defence does not apply to administrative monetary penalties, or AMPs, that we are considering here in the act since that would move AMPs away from objective assessment of compliance and non-compliance and defeat the purpose of having a quicker, simpler enforcement option. AMPs will be established by way of regulation.
I know this is an attempt to — what did you call it before, Senator Fridhandler? “Remove the corporate veil”?
Senator Fridhandler: Pierce the corporate veil, which it does.
Senator Wilson: However, I think that is precisely why it’s in here. It’s because we want those who are making those decisions to be held accountable.
[Translation]
Senator Moreau: I believe that lifting the corporate veil is absolutely essential, because a company could be nothing more than an empty shell, while its directors knowingly fail to comply with the provisions of the law, rendering the enforcement of penalties purely theoretical. Therefore, the legislature’s intent is to make it clear that no one can hide behind a corporate entity to avoid fulfilling their legal obligations.
A corporate officer, a director, the persons targeted, executive officers, senior managers, and those who perform management or supervisory functions for a corporate entity must be held liable when they violate the law. That’s why most companies have liability insurance to cover actions and errors committed in good faith by executives or directors.
However, in this case, if a legal requirement is violated, even this insurance coverage would not be sufficient, because the insurer could deny the claim. This is a situation where compliance with energy efficiency regulations and compliance with the government’s environmental regulations must have consequences — namely, that directors can no longer hide behind legal structures to evade their obligations. If this liability were eliminated under Senator Fridhandler’s amendment, these executives would be exempt from any liability for violating the law. I do not believe that is the objective we should be pursuing here.
[English]
The Chair: Do the officials have anything to add? Is there any other discussion?
[Translation]
Jean-François Roman, Legal Counsel, Natural Resources Canada: In response to Senator Fridhandler’s comments, all federal laws that include a system of administrative monetary penalties contain exactly the same provision stipulating that company directors and officers are liable when they participate in decisions that led to the commission of an offence under the system. It is not only the Canada Labour Code that includes this type of provision.
Senator Verner: I want to point out that, in the copy of the motion I have, in the English version, lines 31 through 35 are deleted on page 28, but in the French version, lines 26 through 31 would be deleted. These are not the same lines, nor are they the same paragraph.
[English]
I’m told it is not an error, but it’s because the French lines and the English lines don’t always match. That is why.
[Translation]
Senator Verner: We’re not talking about the same thing. In English, the relevant provisions refer to “violation by corporate officers,” while in French, they refer to the principles of common law. It’s not the same section, and the parties involved in the violation are different. It’s not the same thing.
[English]
The Chair: Let’s allow the clerks to have a look.
It has been agreed that there is the same translation on each side. There is a difference in numbering, but that’s because of the length of the words that have to be used.
Senator Wilson: This is a very technical bill, so, in some ways, we have overcomplicated things for ourselves in some of these conversations.
Administrative monetary penalties should be viewed as the regulatory equivalent of something like a parking ticket. When you get a parking ticket, you don’t go and look for a due diligence defence. You either violated the rules or you didn’t. You can, of course, challenge a parking ticket just as you could challenge an AMP. I think sometimes we are getting ourselves wound up in seeing problems where they don’t exist.
This kind of strict liability provision is very common in many areas. Earlier, we were talking about what some witnesses.
In Senator Fridhandler’s questions to Ms. McClenaghan from the Canadian Environmental Law Association, he was asking her about this strict liability provision. I’m going to quote from the record from that meeting in terms of her response:
The provision you’re describing —
— this is her in response to Senator Fridhandler’s question —
— sometimes we lawyers call it a strict liability provision, which means that if it’s proven that the thing happened, then there’s liability. The policy reason for that is to ensure that those who are most able to take due care do take the most care to ensure that the standard they’re conveying actually is the case. It is often the case in the sale of products to have strict liability offences.
In general, they can be helpful for consumers because consumers bear such a burden otherwise to meet the standards of proof of a civil case beyond a reasonable doubt and are not in possession of all of the facts to do that.
Then there was a bit of a conversation about insurance, you’ll remember, and she confirmed that:
It’s quite appropriate to have insurance for this kind of liability. Often, insurance companies themselves will, then, have additional requirements and have the power of the purse, so to speak, to exact those tests and checks that are necessary that single consumers can’t do on their own.
I think we’re worrying about something here that is not an issue. Yes, these AMPs aren’t traffic tickets. They do go up to $5,000, but the situation in which that would occur is that when there is quite a significant consistent failure to meet the standard. It’s not something such that, all of a sudden, you will be surprised by an AMP. Before you even get a ticket or an AMP from the department or government, there will be conversations happening. We have heard that they are not going to just issue the fine without having some dialogue with the company that is affected.
I would like to maybe take this opportunity to ask officials if they could just better clarify this particular subject. In my view, AMPs and the strict liability are core to this bill. Removing it would really gut the bill.
Senator Fridhandler: I never suggested removing the AMP per se. I’m not disputing that; I’m disputing the flow-through of liability to the individual directors, officers or employees without being able to exercise any due diligence defence. The corporation that might commit it or the entity that is primarily responsible — I have not challenged that; I have not challenged the structure of an AMP. I have challenged the personal liability that will accrue where a person — and the language used in proposed section 50 is “. . . directed, authorized, assented to, acquiesced in or participated in the commission . . .” Certainly, some of those are stronger than others. When I hear “acquiesced in” and I think I’m a member of the board of directors and I didn’t ask for a recorded vote to vote against something that someone is doing down the line, I could be said to acquiesce.
I also say that $5,000 is a lot of money for a lot of commercial users — small-business people that will be subject to this provision. The proposed section that follows, which I haven’t dealt with, if we otherwise do it — “each day” they are in an offending position is another offence. So, you can see a small-business person who does not understand this easily racking up tens of thousands of dollars if they are in a situation that is confrontational with someone but not deserving of personal liability.
It’s the flow-through, not the AMP and the strict liability of the offence itself. I agree that’s appropriate in many situations.
The Chair: Yes. It was asked for the officials to comment on this, please.
Mr. Copp: Thank you, senator. I think you said it very well; I don’t have a lot to add.
I will emphasize the focus on information sharing and working with all groups that our regulations cover. That is our intent. Before we get to something like an AMP, we are working closely and our relationships are strong with manufacturers and dealers. That is our first pass before we get to that point.
Certainly, any AMP that would be created in regulation would have a graduated scale to it, as well; that would be our focus.
Senator D. M. Wells: I wanted to point out that it’s maybe like a summary conviction or a parking ticket, but the maximum penalty does go up to $25,000. So, it’s not just $5,000 or whatever a parking ticket might be. I wanted to point that out. It seems onerous on someone who, as Senator Fridhandler said, would not be directly involved in what might be contravening the act.
[Translation]
Senator Moreau: I would like to add a point to Senator Wells’ last comment regarding a range of penalties, such as a fine ranging from $500 to $25,000 for a first offence. I have practised law for 40 years, and I’ve never seen a judge sentence someone to pay a $25,000 fine for a first offence. Let’s put things in perspective. We do, after all, live in a state governed by the rule of law.
I’d like to return to an important point. Regardless of Senator Fridhandler’s arguments, and with all due respect to my colleague — who is also a fellow lawyer — what this amendment will essentially do is ensure that a person who ordered, authorized, consented to, or participated in a violation of the law will be exempt from any liability, provided they hide behind the cover of a corporate entity. Is that really what we want? I repeat this because words matter: A person who has consented to, authorized, ordered, or participated in a violation of the law will be immune. I don’t see how, in a country like Canada, which is governed by the rule of law, we as legislators — which is what we are — could justify recognizing a person who has participated in a violation of the law as being exempt from liability. For me, that would be a first.
[English]
Senator Galvez: I lost a bit of what I wanted to say, but I want to make an observation: We need to have order in the discussion. There is a list, and we have to follow the list. Otherwise, there is a conversation and we lose track of the discussion. That is all.
I think we are ready for the vote.
Senator McCallum: On page 29, under “employees,” which is that deleting 1 to 10 — it says:
A person is liable for a violation that is committed by their employee acting within the scope of their employment . . .
However, you can never guarantee that with an employee.
I am concerned about that. Can you please explain that? You assume your employees are going to do what is supposed to be done, but that doesn’t always happen.
Mr. Roman: That’s the principle of vicarious liability that exists, again, in many statutes. Normally, when you have an employee of a company, unless they are acting outside their functions, the employer is responsible for what the employee is doing.
The Chair: Two other people wish to speak, but a question has been called, so —
[Translation]
Senator Aucoin: I had requested to speak before you recognized Senator Galvez.
The Chair: Yes, I agree. I apologize. The question, however, had been called.
Senator Aucoin: Had the question been called prior to my asking to speak?
The Chair: Senator Galvez said, “Question,” and Senator McCallum immediately indicated that she wasn’t ready. That said, if you have a question... I apologize for my mistake.
Senator Aucoin: I have a question. May I ask it, Madam Chair?
The Chair: Go ahead.
Senator Aucoin: I’d like to ask Senator Fridhandler a question, because I agree with Senator Moreau’s comments.
Do you have an example of someone who would be in violation of the law or acting contrary to it, but who shouldn’t have been? By all accounts, if that person participates in the violation in any way, they will be fined or face consequences, unless you have an explanation or an example of someone who might be forced to violate this law without knowing it.
[English]
Senator Fridhandler: I have very often sat on boards of directors of companies where we have approved policies that I might not be aware of on a micro-operational level. So, this applies to directors and officers, where the implications of what happens down the line to yield a violation of the minutiae of this bill on labelling. For example, I direct that we will carry out a project in Saskatchewan, and I’m in Alberta. I want them to ship the equipment, but I don’t know that the labelling is bad. They ship the equipment. I’m a director of the company, and I could be said to have not only acquiesced in but approved the violation because I said to ship the required equipment to Saskatchewan. Then, I’m personally in violation and, for each day, I’m subject to — I don’t know what the action of shipping constitutes when it sits in Saskatchewan for a project for 30 days or longer — a very severe fine.
I’m not relying on a judge and judicial discretion, which I have a lot more faith in than I do administrators of legislation. I think judges have a lot more training around sentencing and penalty knowledge than rests in the administrators of legislation. I do not have extensive experience there.
I’m comfortable that judges don’t throw the book at you at $50,000 when it’s — but I’m not quite sure what happens on the administrative side.
That’s my example. I haven’t thought of all the various violations that I could have approved as a director or officer of a company where I don’t deal at the micro level on actions carried out by that company.
Senator Lewis: I just have a question on the application of this. To your point, we’re all within the law, so when this is applied, does it first go to the corporation, or do they pick an individual director or employee? What does this mean? If you have seven people on your board of directors, do they all get a $5,000 fine? Who picks and chooses? Does it stop at the corporation first, then, after they are bankrupt, it goes on to the employees or the directors? What is the application in real life?
[Translation]
Mr. Roman: I can’t give you any specific examples. These provisions are new, and there are no laws I work with at Natural Resources Canada where we’ve had to apply this type of administrative penalty so far.
[English]
Mr. Copp: I will just add that the AMP regime will come into regulations; all these details will be spelled out through the regulatory process, which involves extensive consultation. That’s how it will be defined.
The Chair: Are we ready for the question?
Hon. Senators: Question.
The Chair: All in favour of the amendment?
Hon. Senators: Agreed.
The Chair: I don’t hear enough on either side.
Senator D. M. Wells: Hold 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 Housakos?
Senator Housakos: Yes.
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, 8; abstentions, 0.
The Chair: I declare the amendment defeated.
Shall clause 25 carry — okay. We have a decision to make because it is 9:55 a.m. I don’t even know if we have this room to finish this particular clause. If that’s not the case, then we will carry on with clause by clause on Tuesday, May 26, at 6:30. Thank you, colleagues.
(The committee adjourned.)