Natural Resources Committee on April 28th, 2009

[John Cockburn]

Yes, there are two points to that question. The answer is yes, absolutely. As Carol mentioned, within the body of these amendments is the power to define a product in classes. One of the ways we certainly can define a product is if it consumes power in standby mode. So all consumer electronics.... Conceiveably, we could implement a standard that would affect all of them in one fell swoop, such that this particular type of energy use shall be limited to one watt.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Sorry to take up the time here, Mr. Chair.

But just to understand, has any sort of standard been set? Has any standard been contemplated for that limit, putting a cap on that?

[John Cockburn]

We are looking at absolute numbers. There are complexities with using such a broad brush. We'll have to be quite active defining exceptions.

The second point to that is, as we speak, we are in a consultation process on five consumer electronic products--digital, video, TVs, printers--to establish a standard. That will limit standby power consumption in 2012 to one watt. That's the level we're talking about. We're getting some push-back, but we're talking about it.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

I'm sure you are.

Thank you.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Cullen.

Now we'll go to the government side. I think Mr. Allen is first.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you, Mr. Chair.

I have three questions, actually, with respect to the spirit of the bill and some of the conversations, and very specifically to the clauses in the bill. The clause that deals with interprovincial trade and importation states, in general, that no dealer shall, for the purpose of sale or lease, ship an energy-using product from one province to another province, or import into Canada, unless the product complies with the standard.

The first thing is, are there any jurisdictional issues with respect to cross-provincial movement of these goods, and specifically, do the provinces and territories regulate any of these usages? That's my first question.

The second one is, why is this an issue? You talk about cross-provincial when this is a national standard. We're a national standard, yet you're talking.... How could someone actually move something across provinces if we get a national standard?

And the third one is, can you comment a little bit about the stockpiling change? It seems to me there are probably all kinds of people out there who'd probably want to try to save things, such as light bulbs, in their basements. I just want you to comment on the stockpiling provisions, if there's anything else in there.

[Carol Buckley]

I'll give that a start. Thank you for the question.

John can support me on that. On the last one, on stockpiling, it's oriented to the dealers, not the individual consumers. So if you wanted to stockpile light bulbs, this would not affect you. It was aimed at the seller of the light bulbs, or the importer of the light bulbs, so they aren't importing light bulbs into this country and sending them to another province where they could be stockpiled non-compliant with the regulation. It is not dealing with the individual consumer. It is dealing with the marketplace, where there's a potential with the existing bill, with the existing wording of the act, for companies to import non-compliant goods into Canada and transfer them to another province, and we want there to be no importation or export of non-compliant goods.

It doesn't address the consumer. We know some consumers are worried in particular about light bulbs, and this would not affect them if they want to stock some light bulbs on their own. We're just working from the bottom up.

With respect to the first one, five provinces have their own regulatory regimes. B.C. and Ontario are particularly aggressive; their powers extend to the manufacture and sale within a province and our powers deal with importing into the country or trans-boundary crossing of goods. The powers are different, and together they will capture everything in the entire country.

The federal powers alone will give us a good national program that will capture almost everything, given that most of the things we cover are imported. I guess there would be the odd case of some provinces who aren't regulating, where there is manufacture and sale within that province. Then our regulations wouldn't address those, but that would be a very small percentage of the entire number of goods covered.

With respect to there being any issues, probably John would have an example or two. In general, we work very closely with our provincial and territorial colleagues on this file. In fact, we have a subcommittee of a federal-provincial steering community on energy efficiency that is dedicated to six end uses and regulation or the associated voluntary labelling programs that go with them to promote energy efficiency. Any issues that might arise tend to get worked out between officials in terms of what the different jurisdictions want.

I think that answered all three questions. Did you have anything to add?

[John Cockburn]

To supplement what you already said, one of the questions was why cross-provincial borders. That's a federal domain. Those are the powers of the federal domain we use to support this legislation—interprovincial shipment and importation. Provincial regulatory regimes regulate the internal markets of the provinces.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

My point is that if this is a national standard, then by virtue of your national standards you're preventing the foreign products that are coming in below standard. By definition, you've controlled the interprovincial movement anyway.

[John Cockburn]

I'll give you an example of how it works. The Government of British Columbia was very interested in having standards—here you have an active regime—and implemented a standard for windows. As you may or may not know, there are large companies that make windows, but there are also very small local companies that make windows.

With that particular product, a provincial standard would probably be more effective than a federal standard.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Allen.

Mr. Trost, please.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

I have a couple of questions on different topics.

First of all, I'm sort of curious about the importation from abroad. I'll start out with a bit of an analogy to a situation with the U.S. In U.S. trade law they have something called COOL, country of origin labeling, which has to do with meat and stuff like that. It is officially for better standards, safety, etc., but it really is just a trade impediment harassment to keep Canadian beef and pork out.

I understand the intent of this legislation is never to do anything like that. But looking at it from another country's perspective, could they complain to WTO or some other organization that the Canadian government is using these standards to keep their products out? For example, the Canadian product drew 1 watt, while an international competitor drew 1.2 watts, and we set the standard as 1.1. It may be hypothetical. I don't think any minister has any intent to use the bill that way, but from another country's perspective, it could just be viewed as trade harassment.

Has there been any thought given to how we would deal with those situations, or the possibility of them, and whether this bill would have any problems being trade compliant in those situations?

[John Cockburn]

The question as to the implications of our regulatory regime from a trade perspective has been posed before, and we have talked on particular issues with Foreign Affairs on that. With that there are two particular aspects that arise. The first is that you're generally okay if you treat everybody the same, so we don't provide national treatment for any of these products. It doesn't matter where they come from. We can demonstrate that a one-watt standard is a one-watt standard for something Korean, and it's a one-watt standard for something that's traded from Brantford to Montreal. That is the primary thing that the trade legislation is trying to make sure doesn't happen.

The second thing is that within most trade legislation—and I'm sure our counsel will correct me if I'm wrong, but I'm pretty sure about it—this legislation generally falls under environmental legislation. The rationale is greenhouses gases. And then there are exceptions with respect to countries having different regimes or different standards to achieve their own environmental perspectives.

So on those two cases, we have a pretty strong case, and we're not too worried about it.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Good.

My second question has to deal with clause 6, about having to compare things with those in Mexico and the United States. Now, as I read the clause, it's more for demonstrative purposes. There's no real change of Canadian standards, if, say, we're different from Mexico or Chihuahua or who knows whatever else we may be comparing ourselves to.

My question is, assuming I've read that correctly, do we have any idea how much this would cost? How does the minister “demonstrate the extent”? When you say “demonstrate”, you're not talking to a lawyer here; you're talking to a geophysicist. I could use that word flexibly, and it could drive the costs either up or down. I'm a little concerned this could end up being spent bureaucracy money, useless stuff, with which people could be doing more efficient projects. How are we going to keep this from being a waste of money and just sort of a useless PR exercise?

[Carol Buckley]

I think we're always happy to put the largest share of our budgets into the effective work, as opposed to the monitoring and scrutiny of that work, but a certain amount of evaluation is necessary to ensure you're doing the best job you can. In this case, it helps us to just put in place the best regime that we think we need in Canada. We find it very helpful to compare ourselves internationally. There are some things to help us do this in a very cost-effective fashion. In some cases, for example, more broadly, the International Energy Agency does do reviews of different instruments, such as standards and regulations, and we can use that very cost-effectively without having to do the work ourselves to compare ourselves.

In this particular situation, comparing on a North American basis, some of the metrics are very straightforward. We deal with our American and Mexican colleagues on a regular basis, so in order to draw the information together amongst the three countries would not be a particularly difficult or expensive task. We think it would be one that would pay off significantly in order that we understand the context in which our regime sits in the North American continent.

So without being able to quote you figures or amounts, I can tell you it would definitely be a fairly modest study.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

So you think this would be cheaper? How many Mexican states are there? There are 50 U.S. states, plus--I don't know, what--30-some Mexican states or something. That's 80 different entities. And California is always doing some kooky, nutty thing about the environment, some way or thing. It's just a crazy state.

[An hon. member]

Can we quote you on that?

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

You can quote me on that one. For the record, California's just a crazy place for energy and environment policy.

[An hon. member]

The Conservative government says so.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

The Conservative government doesn't. An MP from Saskatoon says so.

I was just wondering if there might be some more efficient way or it might be more efficient to compare similar climate zones, because, frankly, the climate's a little bit different down in Acapulco from what it is in Saskatchewan for window efficiency.

[Carol Buckley]

But we would be working through the federal governments, who often have a good view, just as we do, of what's happening in Canada. Despite the fact that we don't run the regulatory system in B.C., we have quite a good idea of what they're doing, so working federal government to federal government, you can share quite a bit of information. I wouldn't suggest that we'd be out there on a regular basis doing a survey of each and every American and Mexican state to get a good view of what the respective regimes look like.

The second point, with respect to climate, affects certain things, certainly furnaces and air conditioning equipment. But all of the electronics that we plug into the wall, which John was mentioning, the phantom power users, are pretty similar products, whether you're using them in Acapulco or Canada. So in some cases climate has no impact whatsoever.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Understood.

[John Cockburn]

Just to correct a perception there, certainly the intent of the wording per the drafting instructions--we had a discussion on this when their legislation was being developed--is that it's not the individual states and Mexico, it's the United States and Mexico.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

So it's just the national.

[John Cockburn]

It's just the national standards regime. We do have arrangements, through the North American Energy Working Group, with our standards counterparts in Mexico and the U.S.

The second point I might add to Carol's response is that we're in the business of standards. We do this, and then the government counts on standards to meet its environmental goals. Under that mandate, we're actively looking at standards in other places, because harmonization is a big deal.

In terms of going to the expense, a lot of the cost of making this report is going to be defrayed against our opportunities assessment, if you want to call it that, to determine where the next portfolio standards are going to come from.