Smarter energy labels, tougher enforcement

Summary#

This bill updates Canada’s Energy Efficiency Act. It aims to make energy rules fit modern technology, support cleaner energy use, and strengthen enforcement. It also creates tools to test new ideas and products while keeping safety and the environment in mind.

• Expands who must follow efficiency and labelling rules to include more sellers and commercial users.
• Lets the Minister set short-term or multi‑year exemptions (a testing “sandbox”) to encourage innovation and harmonize rules.
• Modernizes standards to cover whole systems, smart devices, durability, water use, and digital labels.
• Cracks down on false or misleading energy claims in ads or labels.
• Adds stronger inspection powers, including remote access with the owner’s knowledge, and allows product testing and seizure.
• Raises fines and adds administrative monetary penalties (AMPs) for quicker, non‑criminal enforcement.

What it means for you#

• Consumers

  • Clearer, more accurate energy labels, including digital labels on websites.
  • Fewer misleading claims about energy use and savings.
  • Over time, more efficient products may become the norm. Prices could change depending on how companies respond, but the bill does not set prices.
  • Note: Reported efficiency numbers are not a guarantee of real‑world results.

• Manufacturers, importers, distributors, retailers, and online sellers

  • “Dealer” now also covers those who advertise, offer, or deliver energy‑using products obtained from a manufacturer or importer. Many retailers and online platforms will fall under the rules.
  • You must meet federal energy efficiency standards and labelling rules before importing or shipping products between provinces.
  • Do not remove or change labels before the first retail sale or lease.
  • You must provide required information to the Minister and keep records in Canada for six years.
  • New truth‑in‑advertising rule: you cannot label or advertise in a way that could mislead about energy efficiency or the info you reported.
  • Be prepared for inspections, remote access (with your knowledge), product testing, and requests for testing data, calculations, and any software or digital modelling tools you used.
  • The Minister can order you to stop importing, shipping, selling, labelling, advertising, or testing a product if they believe it breaks the rules—and can publish your name or product description.
  • Penalties: administrative penalties up to $5,000 (individuals) or $25,000 (companies) per violation; criminal fines can reach up to $5,000,000 for repeat serious offences.

• Commercial entities that use products (business users)

  • If you ship energy‑using products between provinces or import them for a commercial purpose, you must meet the same standards, labelling, and information‑reporting rules as dealers.
  • You may be inspected and must keep records for six years.

• All regulated businesses

  • Energy standards can now include system design, durability, interoperability, type of energy used, water conservation, and performance measures.
  • Compliance can be shown using “market‑driven averages” (for example, averaging efficiency across a product line).
  • Some companies may be required, by future regulation, to report energy use, sales of prescribed products, energy management practices, and data from smart energy devices. Such reports are confidential unless the law allows sharing.
  • You can apply for an exemption to test a new product, process, or regulatory approach (up to three years, extendable to six) if it is in the public interest and risks are managed. The Minister can recover the costs of processing your application.

• Timing

  • New duties for advertisers and commercial entities, and the new rule against misleading representations, start six months after the law takes effect.

Expenses#

Estimated annual cost: No publicly available information.

• The bill lets the government recover costs from applicants for processing and administering exemption (“sandbox”) orders.
• It creates administrative monetary penalties and modernizes fines; any revenue from penalties is incidental to encouraging compliance.
• No official cost estimate for government operations or business compliance has been released.

Proponents' View#

• Updates an outdated law to cover smart, connected, and system‑level technologies and digital labels.
• Cuts red tape over time by allowing faster harmonization with U.S., Mexico, and provincial standards and by using technical documents that can be updated.
• Strengthens honesty in the marketplace by banning misleading energy claims and giving inspectors modern tools.
• Helps Canada’s shift to a low‑carbon economy through higher performance standards and better data on energy use.
• Supports innovation and competitiveness by allowing time‑limited exemptions to test new products and approaches.
• Improves accountability with regular reports to Parliament on enforcement and on how Canadian standards compare to other jurisdictions.

Opponents' View#

• Grants broad powers to the Minister (exemptions, corrective orders, publishing names), which some may see as too much discretion with limited external oversight.
• Compliance could be harder for small retailers and online sellers now counted as “dealers,” due to labelling, record‑keeping, and testing demands.
• Remote inspection access and information‑sharing with foreign authorities may raise privacy and business confidentiality concerns, even with limits in the bill.
• Incorporating technical documents “as amended from time to time” could change requirements without a full regulatory process, creating uncertainty.
• Allowing “market‑driven averages” may let weaker products slip through if higher‑performing models offset them.
• New penalties and cost recovery for exemptions could feel like added fees and risks for businesses trying to innovate.