Hon. Duncan Wilson: Honourable senators, I rise today as the sponsor of Bill S-4, An Act to amend the Energy Efficiency Act.

The bill before us comes at a critical moment for Canadian consumers, businesses and industries. At a time when rising prices are spreading to every sector and the historic stability of certain international trade relationships has been shaken, Bill S-4 takes a step in the right direction by proposing measures to improve affordability for Canadian consumers and businesses through energy savings.

What’s more, given the unprecedented technological advances that have been made since the Energy Efficiency Act was passed in the early 1990s, this bill represents a necessary modernization of our energy efficiency standards and procedures. This modernization will not only save consumers and businesses money, it will also contribute to Canada’s climate action.

[English]

Before I begin outlining the substance of Bill S-4, I would like to share a personal reflection that provides insight as to why I’m pleased to sponsor this legislation.

Colleagues, in my previous life as an executive of the Vancouver Fraser Port Authority, we led a lot of work to reduce environmental impact from port operation and development. One such initiative that our team developed and led was called the Energy Action program. Through this program, which was partly sponsored by BC Hydro, we worked with tenants and terminal operators to identify opportunities for reducing energy consumption. The impact of this work significantly reduced energy usage and produced substantial cost savings for businesses in the port community. In total, to date, the program has reduced 135 gigawatt hours of electricity annually, which is the equivalent of taking 15,500 homes off the grid.

Through this work, I saw first-hand the transformative power of energy innovation in protecting our environment and helping the bottom line of businesses. Carrying those lessons with me into the Senate Chamber, I approached Bill S-4, An Act to amend the Energy Efficiency Act, with the knowledge that modern energy efficiency standards are integral to energy security, to climate progress and to the prosperity of our communities, businesses and households alike.

Honourable senators, to better understand the need for the legislation before us, it is important that we understand the history and value of the current version of the Energy Efficiency Act. This act was originally passed in 1992, but we live in a vastly different world today than we did more than three decades ago.

Back in 1992 when this act came into existence, CDs had just overtaken cassettes and vinyl as the most popular way to listen to music. It was also the year of the first text message, and most of us had not yet even dreamed of making an online purchase.

When it was adopted, the Energy Efficiency Act was visionary for its time. It established a federal foundation for strong energy efficiency regulations, enabling us to set minimum standards for residential, commercial and industrial products. This act represented nothing short of a great national achievement and a legislative success story.

From 1995 to 2024, measured in 2023 currency, these regulations delivered over $110 billion in savings for Canadian families, businesses and industries. They have also resulted in energy savings equivalent to powering every household in Canada, approximately 16 million households, for four entire years.

At the same time, the energy savings directly attributed to the Energy Efficiency Act translated into the avoidance of more than 770 megatonnes of greenhouse gas emissions. In easily digestible terms, this would be the equivalent of taking all passenger vehicles in Canada off the road for a staggering 12 years.

Yet when this act was created, machines like appliances were simpler, built for a single purpose. Our regulations didn’t have to evolve quickly because technological achievements moved at a much slower pace. The smart connected devices we take for granted today existed only in science fiction like “Star Trek” and “The Jetsons.”

Where bricks and mortar once reigned supreme, billions of dollars of commerce now flows through online platforms with products criss-crossing borders at ever-increasing rates. Innovation such as smart thermostats, AI-equipped industrial systems and appliances that draw information from the grid to make efficiency decisions are becoming commonplace. These things are no longer the exception but the norm.

Modernizing this act will help us to better leverage the power of these products to increase our energy security. The amendments are also designed to help future-proof the act so that Canada can operate with not only the tools required today but also those that will help us to respond to the unforeseen challenges of tomorrow.

Honourable senators, energy efficiency remains one of our most strategic, relevant and powerful tools for tackling affordability for individual Canadians and businesses alike. This approach has proven to lower energy bills, strengthen our electricity grid, reduce emissions and fortify our economy.

The International Energy Agency calls energy efficiency “the first fuel” in clean energy transitions because it is one of the quickest and most inexpensive ways to mitigate greenhouse gas emissions while lowering energy bills and strengthening energy security. To be effective, though, our lives must keep pace with the changing context of energy use. Of equal importance, we must modernize because affordability is more important than ever. In an era of inflation, global economic trade uncertainty and rising economic costs, every dollar saved on energy is a dollar that can be spent elsewhere — for example, on our families, our communities and our aspirations.

Colleagues, without the advancements this bill represents, we will allow our regulatory frameworks to lag. This stagnation will reinforce or create loopholes, inefficiencies and unnecessary burdens. Challenges with online sales, outdated standards and slow regulatory response would erode progress and leave Canadians and their wallets exposed.

Alternatively, we can seize the opportunity that Bill S-4 represents in reimagining the Energy Efficiency Act with a focus on improving affordability, powering innovation and slashing red tape. The amendments presented in Bill S-4 fall into four broad groups, each serving to strengthen both our economy and our climate action. The first group of amendments are designed to enable a range of regulatory and non-regulatory tools, three of which I will highlight.

First, the bill would cut red tape by allowing qualifying industries to demonstrate the real-life marketplace impacts of new products or services under a temporary set of rules and regulatory supervision. This is a critical piece of the legislation in support of industry as these amendments feature the ability of the minister to provide exemptions from the application of any provision of the act. This exemption can be for up to three years, with a possible three-year term extension, and allows for the testing of new products or ideas to stimulate innovation, competitiveness or economic growth.

These so-called sandboxes allow a large amount of flexibility to both businesses and industry to support their continued innovation. They do so by allowing industry to demonstrate the real-life impacts of a new product in the marketplace, under a temporary set of rules and controlled by regulatory supervision. This will help the government decide whether to make permanent changes to how a product should be regulated.

Colleagues, allow me to give you an example of how these sandboxes would work in practice.

(1600)

About a decade ago, an appliance manufacturer wanted to start selling heat pump clothes dryers in Canada, as they are a more efficient product than traditional dryers.

While they were a completely new technology that we wanted in the country, they met the definition of a regular old clothes dryer. The issue was in order to comply with the act’s regulations, they needed to be tested according to the prescribed test procedure for both a dryer and a heat pump. That procedure required that the dryer have an exhaust pipe, which is something that heat pump clothes dryers do not have. For a time, this innovative and highly efficient product could not comply with our regulations and could not be imported for sale on the Canadian market.

If a regulatory sandbox had been available then, this appliance manufacturer could have applied to participate, and a new testing protocol could have been developed quickly.

We have all encountered unintended consequences of regulations. I would encourage the government to expand the use of sandboxes in other regulated sectors.

Just recently, I met and assisted a B.C.-based company called Edison Motors, which is facing a regulatory hurdle in getting their modern technology built. I would like to thank my colleague Senator Housakos for connecting this excellent company with my office. They also happen to be a prime example of a company that would directly benefit from a sandbox.

In a nutshell, Edison Motors built Canada’s first heavy-duty electric hybrid trucks. The regulatory framework they are beholden to requires them to use a specific U.S.-certified and manufactured engine in their hybrid trucks, but no such engine exists in Canada with an on-road certification.

This company wanted to buy their engines from Sweden to accommodate the novel technology of their trucks, but this European part does not meet Canadian regulations. In this context, the use of a regulatory sandbox would allow this Canadian company to continue to innovate while demonstrating the benefit of updating the regulations to better support this new and emerging technology.

[Translation]

The first group of amendments would also make it possible to make minor changes more quickly by allowing the minister to amend the regulations directly, rather than going through the lengthy process of getting approval from the Governor in Council. This means that new products could be added to classes of products faster.

Finally, the regulations could reference any existing technical standards, guidelines or documents, which would make it easier to update the requirements as technology evolves and avoid the need to rewrite or describe each technical detail in new regulations implemented by the minister.

Colleagues, the second group of amendments proposed in Bill S-4 aims to modernize the enforcement of the act. Strict standards are only useful if they’re enforced and upheld. For that reason, the bill updates the dollar amount of the court-ordered fines, which were set when the act was created back in 1992. This update accounts for inflation, makes the penalties more serious and aligns with other federal laws and the recommendations of the Department of Justice, based on the severity of the violation.

The bill also adds fines known as “administrative monetary penalties” to serve as a flexible, intermediate tool that should encourage compliance and avoid the need for legal proceedings that would burden our judicial system.

Bill S-4 also adds new measures to quickly correct violations by dealers or commercial entities. For example, the minister may order a dealer or commercial entity to take corrective measures if they are found to be in violation of the act.

Finally, the bill clarifies the parameters for virtual inspections so that inspectors, whose job is to verify compliance or prevent non-compliance with the act, are better equipped to perform their duties in an accessible manner. This measure will enable manufacturers and the government to save time and reduce costs.

[English]

Honourable senators, the third group of amendments expands the act’s reach to be more responsive to modern-day consumer habits and industry operations. These amendments benefit consumers by changing the requirements for online sales, including the requirement for digital labels, to ensure accurate, meaningful information is available on a product’s energy efficiency, whether a person opts to buy in-store or online.

Currently, when you buy online, especially from retailers outside Canada and the United States, you may unknowingly end up with an inefficient product owing to a lack of accessible information. This could result in higher energy bills for years to come. The reason behind this is simple: It is harder to ensure Canadian energy efficiency standards are being met by foreign products.

Imagine it is a heat wave during the summer, and you are desperate for air conditioning. You browse on your usual retailer’s website and pick out an option, assuming that it is a reasonable choice, even though it doesn’t have any energy labelling.

When it is installed, however, you watch your energy bill skyrocket, and you can barely afford to turn it on. This appliance didn’t need to meet Canadian energy efficiency standards because you bought it from an online retailer. With the amendments in Bill S-4, you would be protected from this situation. The retailer would be required to only offer products meeting Canadian standards, and the expected energy use would be clearly labelled.

Colleagues, with this amended act, Canadian shoppers will also be provided with energy consumption information online through virtual labelling, rather than the paper labels which they may never see. This enables Canadian consumers to have the full scope of a product’s energy information ahead of finalizing the purchase, whether you buy online or in-store.

Another feature of this legislation is to close what is called the “import for purpose of use” loophole. The amendments in Bill S-4 will remove cases where an apartment landlord, for example, can import less efficient furnaces — if they were older or discontinued — and then install them in their tenants’ suites. This would then force occupants of these homes to pay more for heating going forward.

Moreover, honourable senators, the bill also benefits consumers by introducing new types of energy efficiency standards that could go further than just looking at how much energy is used; it would also add stipulations around what kind of energy and how products perform over their life cycle. The definition of “energy efficiency standards” is being broadened beyond performance standards so that a standard prescribed for an energy-using product or class of products may include modern methods to measure energy use.

These new standards reflect the complexity and potential of modern technologies. Efficiency standards would now include requirements for interoperability. This function would allow smart devices to communicate with our electricity system and better support provinces and territories in managing our electricity demands.

Current performance standards are limited to looking at “energy in” versus “task accomplished.” Bill S-4 proposes amendments so that standards can be developed based on factors, such as the pieces or features that the equipment must have, how equipment must be able to connect with electrical systems or regarding equipment durability. These expanded standards can enable greater energy efficiency improvements across entire product categories.

As a practical example of these new standards, many utilities have demand response programs that control the temperature setting of air conditioners. Bill S-4’s introduction of interoperability and demand standards is a significant step forward, providing the authorities that make it possible to introduce requirements for heating and cooling products to communicate with electricity grids. These new standards are stepping stones to the digitalization of the electricity grid, and it means more reliable and secure energy systems across Canada.

Finally, colleagues, the fourth group of amendments enhances accountability under the act. Canadians will continue to benefit from the regular, transparent and accessible reports from the minister to Parliament on the implementation of the act, including comparing its standards to international standards. After an initial mandatory review at the 10-year mark, there would subsequently be regular mandatory reviews of the Energy Efficiency Act every five years to maintain Canada’s status as a leader on the global stage when it comes to energy efficiency.

(1610)

As we can all appreciate, it is important to provide some time for everyone to become aware of these changes so they can adapt accordingly. Bill S-4 includes a six-month transitional provision for dealers and sellers to adjust. It also provides the requisite time for the department to do outreach with stakeholders across Canada and beyond.

Colleagues, before I conclude my remarks, I would like to provide information around the timelines for the implementation of this act. Key elements of the bill, including the updated fines regime and the parameters for virtual inspections, will come into force upon Royal Assent.

Other changes will require new regulations, policy frameworks and processes to be developed. These would necessitate discussions with the affected stakeholders, who would be actively involved in that process. These amendments include the new energy efficiency standards, online sales originating outside of Canada, digital labels and the Administrative Monetary Penalties or tickets.

Honourable senators, through Bill S-4, we are empowering our country to be better prepared to thrive within the technological advancements we have seen over the past 30 years, as well as those inevitably to come in the decades ahead.

The Energy Efficiency Act as we know it was created in a bygone era. As I have highlighted, it served us well and saved Canadians a lot of money by insisting that appliances and equipment use less energy. However, in the interest of Canada’s continued evolution, the legacy of yesterday must be a stepping stone to continued progress.

Bill S-4 is Canada’s answer to a world that is more connected, more digital and more urgent in its call for energy security, climate action and economic leadership.

At its heart, this modernization is about ensuring that every Canadian, no matter their province or territory, their means or how they shop, can access the best and most efficient technologies.

By modernizing requirements around online sales, we would ensure that inefficient products being sold online would meet the same standards as those products sold in stores.

Digital labelling means that Canadians, wherever they live, could go online to learn about the energy consumption of the products they are buying, whether it is during an online purchase or in a retail storefront.

For renters and people who do not choose their own appliances or heating systems, stronger standards mean that all Canadians will benefit from the energy savings attributed to more efficient equipment.

For businesses, revised standards mean that they, too, will reap the benefits of the savings that come with highly efficient equipment installed in their buildings. For industry, the efficient equipment used in industrial processes, such as motors, pumps and compressors, will continue to improve their bottom line.

It is about building a marketplace and a country that reward innovation and ambition. It is about giving our inventors, entrepreneurs and workers the tools and space to be world leaders.

In closing, colleagues, I ask all senators to join me in supporting Bill S-4.

Meegwetch. Thank you.