Natural Resources Committee on April 28th, 2009

[The Chair, Conservative, Leon Benoit]

Good afternoon, everyone.

We have three items to deal with at committee today. The first is to hear from witnesses regarding Bill S-3. Over the years, this committee has dealt with the same piece of legislation twice before. This will be the third time, so I don't think we need a detailed explanation, unless some member of the committee would prefer that. Unless someone disagrees, I'd prefer a shortened version.

The second item on the agenda is to go through this bill clause by clause with the experts from the department. If we get that finished, the third issue is to go through the main estimates for 2009-10. Certainly it is the responsibility of this committee, and at the last meeting the member from the New Democratic Party had asked that we do that.

That's the agenda for today. We can get right to business.

Pursuant to the order of reference of Thursday, April 2, 2009, we are considering Bill S-3, An Act to amend the Energy Efficiency Act. In this first hour--and beyond, if necessary, to at least be present at the committee--from the Department of Natural Resources, we have Carol Buckley, director general of the office of energy efficiency, and John Cockburn, director, equipment division. Thank you both very much for being here.

Please go ahead with your presentation on the bill. Then we'll go to clause-by-clause study. If there are any questions resulting from your presentation, we'll certainly go to them first.

[Carol Buckley, Director General, Office of Energy Efficiency, Department of Natural Resources]

Thank you very much, Mr. Chair, and thank you to the committee for having us before you. We are indeed cognizant that this has been before this committee twice before, and I will make my remarks fairly brief.

To remind you, the Energy Efficiency Act from 1992 gives the Minister of Natural Resources the power to establish regulations to eliminate the worst-performing energy-using goods from the marketplace, to promote energy efficiency in general, and to require labelling of certain products. What we are doing with amendments to the Energy Efficiency Act is seeking to broaden the powers of the minister to set regulations for energy efficient products, and also to strengthen the commitment of this government to energy efficiency and all the benefits that brings.

I thought I would speak very briefly to the amendments included in Bill S-3. There are seven, and I won't go into any details on them unless you have a question.

We're asking for the amended act to allow the government to regulate classes of products defined by similar characteristics rather than just individual products. Things that operate in standby mode might be viewed as a class of products that we would like to regulate together. The amendments would permit standards to be based on products according to their intended use, so there would perhaps be differentiation depending on climatic conditions in which windows and doors would be used. As well, the amendments would allow products that affect or control energy consumption to be regulated, in addition to those products that use energy.

Next, there is an amendment to address the potential stockpiling of non-compliant products, given the way the act is currently worded.

Then the amendments address some concerns that the Standing Joint Committee on Scrutiny of Regulations raised with respect to whether we have the full authority to gain all the information we need for keeping companies compliant with the act in terms of information about importing goods.

Then we are looking for amendments around the labelling provisions so that we can stipulate the content of the label, not simply the manner and form of the label. That's very important if the government wishes to tell Canadians something about the energy use of a product.

Finally, there is a requirement for the government to report regularly to Parliament with respect to the stringency and the comprehensiveness of the regulations.

I'd like to point out that we are incorporating the reporting element in particular in these amendments. There is also a strengthened preamble. These items are responses to comments the opposition made in previous rounds of amendments to the Energy Efficiency Act.

That's all I will say, apart from finishing by saying that we have had no substantive comments by industry, by manufacturers, or by importers with respect to the amendments we proposed. They understand them. Typically we give them adequate time to deal with standards when we establish them, and they have no issues with the amendments to the Energy Efficiency Act proposed here.

There is not a lot of awareness from the public with respect to the Energy Efficiency Act. They have more awareness with respect to some of the standards in particular, but there's general support for labelling and for having information available to the public.

The provinces and territories recognize and appreciate our leadership, particularly those that like to put in place their own regulations to complement the federal ones.

That is the end of my formal address. My colleagues and I would be delighted to take your questions.

[The Chair, Conservative, Leon Benoit]

Thank you very much. Are there questions for the department officials?

Mr. Tonks, go ahead, please.

[Alan Tonks, Liberal, York South—Weston, ON]

Is there any relation with respect to the percentage of imports from the United States, or wherever, that come under the provisions of the act? Is there any analysis of that, and then recommendations?

[Carol Buckley]

All goods that are covered by the standards and that are either manufactured in Canada and shipped between provinces or imported into Canada are covered by the regulations, so the regulations will apply to whatever portion is imported from the United States. I can't give you specific numbers because we currently have 34 products covered by the regulations, and at the end of our four-year program term we will have added another 20 to that list.

Perhaps it's something John can answer. We might be able to answer for some of the larger categories, but for many of the products there are no manufacturing capacities in Canada. For example, we don't have a manufacturing capacity for domestic white goods--the stove, the fridge, and so forth--so in that case they would be 100% imported. Some large portion would come from the United States, but not exclusively so.

[Alan Tonks, Liberal, York South—Weston, ON]

Within the context of the discussion we've had about our relationship with the United States, are automobiles covered through the act?

[Carol Buckley]

We are not covering automobiles at this point in time. The government has made the decision to cover automobiles under the Canadian Environmental Protection Act.

[Alan Tonks, Liberal, York South—Weston, ON]

So it's separate legislation.

Is there an ongoing coordination? I'm focusing more on the United States than on other countries. I recognize that we have imports from other countries, but we recognize the special relationship, and it's a rather sensitive issue right now. Is there an ongoing coordination with respect to legislation in the United States and Canada?

[Carol Buckley]

Absolutely. Given that we are not a producer of many of these goods in all of the categories, John here has a very good relationship with his counterparts in the United States, and has had for many years. I consider it will only grow stronger as our interest in strengthening our regulatory role increases, just as it appears likely to increase south of the border. We have a strong foundation of working with the Americans, so we are harmonized to the extent that it makes sense.

In some cases it makes sense climatically for them to have more stringent cooling requirements and for us to have more stringent heating equipment requirements, but it's something John puts a great deal of effort into, and it's not restricted to the United States. He has the same relations with countries around the world, and he keeps abreast of all of the regulatory proposals coming forward so that we make sure we don't miss anything in Canada. We understand how we could profit by what others might be thinking, and we share the ideas that we are moving forward on.

However, the Americans are probably the most important partner. Is that a fair statement?

[John Cockburn, Director, Equipment Division, Department of Natural Resources]

That's fair.

It's also a good thing if you are a proponent of standards. The United States has a very vigorous regime of energy efficiency standards, so by harmonizing, which makes sense from a trade perspective, we're also getting a lot of the benefits of the energy efficiency standards without infringing on any trade relationships. It works both ways there.

[Alan Tonks, Liberal, York South—Weston, ON]

I understand that close relationship, but I understand this bill calls for a review every four years. Is that correct?

[Carol Buckley]

Yes. We'd be reporting to Parliament every three years, and then after the fourth year there would be a report on the stringency of our regime vis-à-vis the North American context.

[Alan Tonks, Liberal, York South—Weston, ON]

If anything with respect to that coordination indicated there was a problem, what is the process you use? Do you report through this committee to Parliament? How would the remediation take place if there was a problem?

[John Cockburn]

The current Energy Efficiency Act already has an annual reporting requirement. The report is provided to both Houses of Parliament. The intent of the provisions in the amendment are that after an initial period of four years, and then every three years, we would be reporting on the stringency and scope of the standards in that energy efficiency report. Then the parliamentarians would have an opportunity to draw their conclusions and make the points they'd like to make on that report.

[Alan Tonks, Liberal, York South—Weston, ON]

Thanks, Mr. Chairman.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Tonks.

Go ahead, please, Madame Brunelle.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

I am studying this bill for the first time. I am new to the Standing Committee on Natural Resources. I hope that I am not going to prolong the conversation unduly.

If I am not mistaken, this bill applies to all classes of manufactured products?

[John Cockburn]

It applies to all classes of products imported to Canada that cross interprovincial borders.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

So that means that all the products that we import from China would have to comply with these same safety standards?

[John Cockburn]

Yes, that is correct.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

I notice that there are quite significant fines for violators. Who will be responsible for ensuring compliance with these standards? Who does the checking? So many products enter the country.

[John Cockburn]

The people who have to comply are those who supply the products covered by the legislation.

All the requirements in the legislation are set out in the regulations. Natural Resources Canada has a group of people responsible for ensuring compliance to the regulations.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

How, specifically, do you go about it? Do inspectors go into stores to ensure that the standards are being met? How is that done?

[John Cockburn]

Sometimes, people go and check markets like that.

But it is primarily about checking imports. We have already discussed the ways in which many products are imported. We have an agreement with the customs service, and documentation showing compliance with the regulations is required for all products entering Canada from the United States or Europe.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

As consumers are more and more demanding when it comes to saving energy, will our standards apply automatically? Is studying the report that the minister has to prepare every four years the way to find out if we are still current?