Energy Efficiency Act

Honourable senators, I rise today in support of Bill S-4, An Act to amend the Energy Efficiency Act, first adopted in 1992.

At the time, the world looked very different. There was no online retail. Digital technologies were limited. Global energy markets were smaller and far less complex than they are today. Yet, the core principle of the act remains sound: that energy efficiency is one of the most effective and least costly ways to reduce energy demand, lower emissions and save consumers money.

Since its adoption, the regulatory framework established under the act has generated more than $110 billion in savings for households, businesses and industries and has prevented more than 770 megatonnes of greenhouse gas emissions.

These figures remind us that energy efficiency is not an abstract concept; it has a measurable impact. It has real economic and environmental consequences. But legislation, like technology, must evolve and reflect the reality of the modern marketplace. Among other things, the bill expands the definition of regulated actors to include online providers and introduces new enforcement tools, like administrative monetary penalties.

In essence, the bill attempts to equip Canada with a more modern regulatory tool kit. However, the real question before us is not whether the act should change. The real question here is how Canada chooses to modernize it. Do we modernize it in a way that strengthens efficiency, protects consumers and keeps our markets competitive? Or do we modernize it in ways that could unintentionally weaken the standards that have made this policy so successful?

To answer these questions, we must look carefully at three issues: the scientific and economic evidence, the distribution of impacts on Canadians and the policy approaches put in this bill.

From a scientific perspective, energy efficiency is widely recognized as one of the most powerful tools for reducing energy demand and greenhouse gas emissions. Studies suggest that improvements in efficiency could supply a significant portion of the energy reductions required to reach net-zero emissions globally. Every $1 invested in energy efficiency returns $4 to $7 in economic output and shows results in a short period of one to two years.

Efficiency standards already cover dozens of products, from household appliances to industrial items. One example is electric motors, which alone account for roughly half of global electricity consumption. Improvements in efficiency, therefore, translate directly to lower demand on energy systems and lower emissions. Some of those products are also linked to our commitments on refrigeration products under the Kigali Amendment to the Montreal Protocol, one of the most successful international conventions related to protecting the ozone layer.

These technical facts extend beyond climate considerations. Efficiency standards also improve the reliability of electrical grids, reduce peak demand and lower operating costs for households and businesses.

For Canadians confronted with rising energy prices, these savings are not insignificant. In 2021, Statistics Canada data showed that 822,000 Canadian households were energy poor, meaning that they were spending over 10% of their after-tax income on energy bills.

These costs aren’t evenly distributed across the country. They’re often higher in rural areas and the Atlantic region, where energy costs make up a larger share of household expenses. Improving efficiency is more than a mere technical measure; it’s a question of social and economic equity.

At the same time, it would be neither prudent nor responsible to overlook the concerns raised regarding certain provisions of the bill. One issue relates to the regulatory sandbox provisions, which allow temporary exemptions from regulatory requirements in order to test innovative technologies. Again, the question is “What technology?” The technology of the future or the technology of the past? While such provisions are argued as a way to support innovation, they introduce new discretionary powers. As I mentioned today on the National Finance Committee, we should say yes to real innovation but no to financing the technology of the past.

For this reason, implementation must remain transparent, accountable and aligned with broader legislative frameworks, including the ongoing deliberations surrounding Bill C-15. Ensuring coherence among these legislative initiatives will be important for maintaining regulatory clarity and public confidence.

Another important consideration is regulatory harmonization between different jurisdictions. Natural Resources Canada leads a federal-provincial-territorial cooperation table where the federal government is working on harmonizing standards with the six provinces that have their own energy efficiency standards. Several provinces, including British Columbia, Manitoba, Ontario, Quebec, New Brunswick and Nova Scotia, already have their own efficiency standards. As of March 2023, these provincial standards were 86% to 100% harmonized with comparable federal standards.

It is clear that harmonization can help reduce regulatory burdens, which is positive, and provide businesses with a predictable framework, which is also positive. However, harmonization must be approached with caution. If standards are primarily aligned with the lowest performers, this could lead to a gradual erosion of ambition and performance.

Instead, Canada should benchmark its standards against the best jurisdictions in the world, ensuring that our regulatory framework remains competitive and preventing the importation of inefficient products into the Canadian market. Strict efficiency standards therefore support not only environmental objectives, but also fair competition and market integrity.

Colleagues, Bill S-4 ultimately asks us to decide whether Canada’s energy efficiency framework should remain anchored in the regulatory architecture of the early 1990s or evolve to reflect today’s technological and economic realities. We must choose the latter.

The evidence suggests that modernizing the act could strengthen enforcement, support innovation and provide clearer information to consumers.

At the same time, the concerns raised regarding regulatory exemptions and federal-provincial coordination remind us that modernization must be accompanied by careful parliamentary oversight. We must do our job. These issues must be carefully studied in committee.

Progress in a deliberative democracy rarely comes from certainty alone. It comes from examining evidence, recognizing trade-offs and choosing the course of action that best serves the public interest.

For these reasons, the prudent approach is to move this legislation forward while ensuring its implementation is closely monitored. Modernizing our energy efficiency framework is not just a technical update. It ensures that Canada’s economy will be efficient, competitive and resilient for decades to come.

Colleagues, please support sending this bill to the Standing Senate Committee on Energy, the Environment and Natural Resources. Thank you, meegwetch.