Amendment 14 -- Pre-Publication

For the full document, see the download link below this executive summary.

Regulations Amending the Energy Efficiency
Regulations, 2016
Statutory authority
Energy Efficiency Act
Sponsoring department
Department of Natural Resources
REGULATORY IMPACT ANALYSIS
STATEMENT
(This statement is not part of the Regulations.)
Executive summary

Issues: The Government of Canada is committed to
improving energy efficiency standards for appliances
and equipment, taking action on climate change, and
reducing regulatory burden through alignment with
the United States given the integrated nature of the
markets. These commitments will provide benefits to
Canadians through energy cost savings and improved
environmental outcomes, which lead to increased productivity,
competitiveness and energy affordability.
Through Canada’s national energy dialogue, Generation
Energy, Canadians made it clear that energy efficiency
is a critical piece in Canada’s transition to a lowcarbon
future.
Greenhouse gases are primary contributors to climate
change, which has an impact on Canada’s economy and
environment. Greenhouse gas emissions associated
with the use of energy-using products in Canadian
homes and businesses represent a significant portion
of national emissions, which will need to be reduced in
support of Canada’s goal of reducing greenhouse gas
emissions to at least 30% below 2005 levels by 2030. In
December 2016, federal, provincial and territorial
energy ministers adopted the Pan-Canadian Framework
on Clean Growth and Climate Change and agreed
to work collaboratively on energy efficiency standards
in the building sector. This builds on the August 2016
publication of a framework and action plan for energy
efficiency standards under the Energy and Mines Ministers’
Conference and collaborative efforts with provinces
and territories to implement the Canadian Energy
Strategy.

In March 2016, the Prime Minister of Canada and the
President of the United States committed to better
align and further improve energy efficiency standards
by 2020. This builds on the 2014 Canada–United States
Regulatory Cooperation Council commitment to align
new and updated energy efficiency standards and test
methods. The support for continued bilateral regulatory
cooperation was reaffirmed in the February 2017
joint statement by Prime Minister Trudeau and President
Trump. Since 2011, the U.S. Department of Energy
has implemented changes to its regulations across several
product categories. These changes have to be
implemented in Canada to reduce unnecessary regulatory
differences and support cross-border trade and
investment and ultimately reduce costs to citizens,
businesses and economies.
Description: The proposed amendment to the Energy
Efficiency Regulations, 2016 (the Amendment) would
(a) introduce minimum energy performance standards,
labelling and reporting requirements for 6 new product
categories; (b) introduce more stringent minimum
energy performance for 11 currently regulated product
categories; (c) make minor changes to existing standards,
test procedures or reporting requirements for
currently regulated product categories; and (d) provide
flexibility for testing requirements and remove
import reporting requirements for certain product
subcategories.
Cost-benefit statement: The benefits and costs associated
with the Amendment have been estimated using
a methodology consistent with previous modifications
to the Energy Efficiency Regulations and with other
energy efficiency regulators, such as the U.S. Department
of Energy. Based on this methodology, the present
value of net benefits of the Amendment is estimated to
be $4.55 billion by 2030, with total benefits exceeding
total costs by a ratio of almost five to one. By 2030, the
present value of benefits and costs from the Amendment
is estimated to be $5.75 billion and $1.20 billion,
respectively. On an annualized average basis, this
equates to benefits and costs of $724 million and
$152 million, respectively.
The quantified benefits are calculated as the sum of the
energy savings over the service life of products shipped
by 2030 and the benefits of reductions in greenhouse

gas emissions. The quantified costs include incremental
technology costs to meet the more stringent standards
and incremental costs to Government associated
with regulatory implementation. The retail prices for
regulated products may increase if incremental technology
costs are passed on to consumers. These costs
will be more than recovered through energy savings.
The analysis found payback ranges of less than eight
years for all product categories, with nine product categories
having paybacks of two years or less.
The Amendment is estimated to result in an annual
reduction of 1.54 megatonnes of greenhouse gas emissions
in 2030. For industries using regulated equipment,
improvements in energy efficiency translate into
energy and operating cost savings, which in turn lead to
increased productivity and competitiveness.
“One-for-One” Rule and small business lens: The
Amendment is considered an “OUT” under the “Onefor-
One” Rule. While the Amendment would increase
some administrative costs via the introduction of regulatory
requirements for new product categories, these
would be more than offset by the elimination of reporting
requirements for certain existing products. The
Amendment will thus result in a net $543,896 reduction
in annualized average administrative costs to affected
businesses.
The small business lens does not apply to the Amendment,
as the overall impact would be positive.
Domestic and international coordination and
cooperation: Implementation of the Amendment will
reduce unnecessary regulatory differences between Canada
and the United States, consistent with binational
commitments made under the Canada–United States
Regulatory Cooperation Council, and the commitments
made by the Prime Minister of Canada and the President
of the United States. It will also contribute to
international commitments made to reduce greenhouse
gas emissions. Domestically, the Amendment
will reduce regulatory differences that exist between
federal and provincial regulations.