Canada’s energy efficiency law was built for appliances in the 90s. The Liberal government has introduced legislation in the Senate that it says will modernize these rules to keep pace with fast-growing technology, including the rise of so-called smart appliances.   

The original Energy Efficiency Act first went into effect in 1995 with a goal on reducing overall energy consumption. It enabled Natural Resources Canada to set and enforce standards, create the EnerGuide labelling, and collect energy-use data for regulated appliances and equipment.

Bill S-4, which is now at second reading in the Senate, would expand the definition of energy efficiency and durability standards, and include digital labelling for online retailers. 

The bill essentially aims to streamline how new household appliances enter the Canadian market by giving the minister greater flexibility to update standards and grant temporary exemptions for innovative products through regulatory sandboxes and enforcement. 

“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,” Senator Duncan Wilson, the bill’s sponsor, said in December as he kicked off debate on the legislation.

Wilson said the bill would “cut red tape” to allow industries to test new products or services under a temporary set of rules and regulatory supervisions.

In an interview with iPolitics, he said the bill would grant the government more flexibility to regulate emerging tech.

“This is a management tool to basically be able to give the minister the authority to create a temporary regulatory environment to inspire innovation.”

Sarah Riddell, policy research assistant at Efficiency Canada, the national advocacy group for energy efficiency, shared the senator’s view of the bill.

She said with the current act, a lot of “novel appliances” take longer to come to the Canadian market, since they don’t fit into a certain regulatory standard. 

“With the regulatory sandboxes… Novel technologies could come to the market sooner,” Riddell said. 

When asked what this means in meeting Canada’s energy efficiency and emission goal, Riddell called it an “unsung hero” in climate policy. 

“If every country implemented the minimum energy performance standards for appliances and equipment… it would achieve a fifth of the energy reductions by 2030,” she said. 

Canada’s primary climate goal is to achieve net-zero greenhouse gas emissions by 2050. Riddell added that these appliances include electric motors, lighting and refrigerators. 

While the energy bill brings new household appliances faster to the market, Maya Papineau, associate professor at Carleton University, said the benefits will unfold slowly. 

“Interoperability is important,” she said. Especially when it comes to smart home technologies, and reducing the risk of firms locking consumers into proprietary systems and exercising market power, she said.

Over time, Papineau said this could allow households to respond to energy price spikes, reduce consumption through connected devices and improve grid efficiency. 

However, Papineau expressed concern on the bill’s regulatory sandbox provisions, saying that it may create opportunities for lobbying and delay implementation. 

“I see this sandboxing as a way for firms to potentially lobby the government or say that they will be adversely impacted by some element of this updating… that’s going to affect the speed at which we move towards net zero,” Papineau said. 

De-linking from the U.S. 

Under Trump’s administration, the U.S. has reversed several energy efficiency and emissions regulations, including the 2009 Endangerment finding on greenhouse gas. 

While Canada and the U.S. have historically harmonized standards to reduce trade barriers and compliance costs, a stricter regulatory framework could mean a dual-market system. 

Papineau said that’s not as much of a concern. Instead, this bill encourages Canada to focus on its innovation, she said. 

She noted that much of the country’s durable energy goods come from Asia and other countries. 

“Canada has had for decades now a productivity problem,” she said. 

“We should be creating standards that will help spur Canada’s innovative capacity in the energy efficiency space.” 

She added updating energy efficiency could also mean more growth to the green job industry. 

The bill has undergone a second reading at the Senate and is set for more debate this spring.