FEDERAL REG

SOR/2016-311: Energy Efficiency Regulations, 2016

REGISTRATION OF FEDERAL REGULATION - VIA OIC DATABASE, PRIOR TO PART II OF THE GAZETTE

Registered
December 9, 2016


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 consumer and commercial products, reducing regulatory burden through alignment with the United States, and collaborating with North American partners, provinces and territories to take action on climate c... (Click for more)


Published on December 9, 2016

Bill Summary

SOR/2016-311: Energy Efficiency Regulations, 2016

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 consumer and commercial products, reducing regulatory burden through alignment with the United States, and collaborating with North American partners, provinces and territories to take action on climate change. These commitments will provide benefits to Canadians through energy cost savings and improved environmental outcomes, which lead to increased productivity and competitiveness. 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. Regulating minimum energy performance standards for energy-using products is one of the most cost-effective ways to reduce greenhouse gas emissions. In March 2016, federal, provincial and territorial energy ministers agreed to work collaboratively on energy efficiency standards to contribute to the pan-Canadian framework on clean growth and climate change. This collaboration was further solidified with the August 2016 publication of a framework and action plan for energy efficiency standards under the Energy and Mines Ministers’ Conference. In 2011, the Canada-United States Regulatory Cooperation Council stated that unnecessary regulatory differences and duplicative actions hinder cross-border trade and investment and ultimately impose a cost on our citizens, businesses and economies. Since 2011, the U.S. Department of Energy has implemented changes to its regulations across several product categories. These changes have not yet been made in Canada, which has resulted in an increasing number of unnecessary regulatory differences. In 2014, Natural Resources Canada and the U.S. Department of Energy established a goal of aligning new and updated energy efficiency standards and test methods under the Canada-United States Regulatory Cooperation Council. In March 2016, Prime Minister Trudeau and President Obama committed to better align and further improve energy efficiency standards by 2020. North American leaders, in June 2016, also agreed to align 10 energy efficiency standards or test procedures by 2019. Description: The Energy Efficiency Regulations, 2016 (the Regulations) will (a) increase the stringency of minimum energy performance standards for 20 currently regulated product categories; (b) make minor changes to standards or reporting requirements for seven currently regulated product categories; and (c) repeal and replace the original Regulations to remove references to obsolete and out of date standards and improve the organization of the regulatory text, making it easier for stakeholders to find and understand the requirements that apply to them. Cost-benefit statement: The benefits and costs associated with the Regulations have been estimated using a methodology consistent with that used by other energy efficiency regulators, such as the U.S. Department of Energy. Based on this methodology, the present value of net benefits of the Regulations is estimated to be $1.5 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 Regulations is estimated to be $1.8 billion and $377 million, respectively. On an annualized average basis, this equates to benefits and costs of $202 million and $41 million, respectively. The quantified benefits are calculated as the sum of the energy savings over the service life of products shipped by 2030, the benefits of reductions in greenhouse gas emissions, and the reductions in compliance costs associated with unnecessary regulatory differences. 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 10 years for all product categories, with six product categories having paybacks of two years or less. The Regulations are estimated to result in an annual reduction of 0.7 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 Regulations are considered an “OUT” under the “One-for-One” Rule. The change in administrative burden will result in a $2,756 reduction in annualized average costs to businesses affected by the Regulations. The small business lens does not apply to the Regulations, as there are no costs to small business. Domestic and international coordination and cooperation: Implementation of the Regulations will reduce unnecessary regulatory differences between Canada and the United States, consistent with binational commitments made under the Canada-United States Regulatory Cooperation Council. It will also contribute to international commitments made to reduce greenhouse gas emissions. Domestically, the Regulations will reduce regulatory differences that exist between federal and provincial regulations, thereby reducing internal barriers to trade. Background In 1992, Parliament passed Canada’s Energy Efficiency Act (the Act) and amended it in 2009. The Act provides for the making and enforcement of regulations requiring energy-using products that are imported or shipped interprovincially for the purpose of sale or lease to meet minimum energy performance standards (MEPS), (see footnote 2) for product labelling, and for the promotion of energy efficiency and alternative energy use, including the collection of data and statistics on energy use. The Energy Efficiency Regulations (the original Regulations) were introduced in 1995 as a means to reduce greenhouse gas (GHG) emissions in Canada. They prescribe MEPS for certain consumer and commercial energy-using products. They also prescribe labelling requirements for certain products to disclose and compare the energy use of a given product model relative to others in their category. The original Regulations have been amended regularly to introduce MEPS for new products (see footnote 3) and to update existing MEPS. The purpose of MEPS is to eliminate the least efficient products from the market. Since most energy-using products must cross provincial or international borders to reach their markets, federally regulated MEPS are an effective tool to raise the level of energy efficiency in Canada. Regulated MEPS are one component of Canada’s program to reduce GHG emissions and energy consumption associated with energy-using products. Natural Resources Canada also administers the ENERGY STAR ® labelling program, which sets voluntary specifications for 70 product categories that identify the top 15 to 30% of energy efficiency performers, making the choice of energy-efficient products simple for consumers and businesses. When combined, MEPS and labelling programs drive product innovation by raising requirements for minimum energy performance and pulling the market forward with labels for top-performing products. Through cycles of continuous improvement, this approach eliminates the least efficient products while encouraging innovation as manufacturers produce products to achieve increasing ENERGY STAR levels, making affordable, higher efficiency products available to consumers and businesses. MEPS and labelling programs are among the most cost-effective GHG reduction policies and are the cornerstone of energy efficiency and climate change programs in more than 80 countries. (see footnote 4) In August 2014, alignment of energy efficiency standards was included as an initiative in the Canada-United States Regulatory Cooperation Council’s Joint Forward Plan. (see footnote 5) Specifically, Canada and the U.S. Department of Energy established the goal of aligning new and updated energy efficiency standards and test methods for energy-using equipment through enhanced information sharing and a cooperative development and implementation process, to the extent practicable and permitted by law. These commitments were reaffirmed in March 2016 when Prime Minister Trudeau and President Obama pledged to better align and further improve energy efficiency standards by 2020. Issues GHGs are primary contributors to climate change, which has an impact on Canada’s economy and environment. Carbon dioxide, a by-product of fossil fuel consumption, has been identified as the most significant GHG. Canadian homes and buildings (the built environment) are significant contributors to national GHG emissions. The level of emissions in the built environment is impacted by the energy-using equipment they contain. Equipment that combusts fuel to generate heat leads to direct carbon dioxide emissions at the site, while equipment that consumes electricity contributes to GHG emissions at the point of generation. Total end use sector GHG emissions (see footnote 6) (including electricity) in 2013 were 487 megatonnes (Mt), with 66 Mt and 43 Mt being attributable to the residential and commercial/institutional sectors, respectively. (see footnote 7) Therefore, Canadian homes and buildings represented approximately 22% of national end use sector GHG emissions in 2013. There are market barriers to consumers making optimal economic or environmental choices with respect to energy efficiency. These include a lack of awareness and information available to consumers regarding energy-saving opportunities and actual energy use, a lack of capacity within organizations to understand and manage energy use, and split incentives (e.g. landlords may not purchase efficient equipment if tenants pay the energy bill). In 2011, the Canada-United States Regulatory Cooperation Council stated that unnecessary regulatory differences and duplicative actions hinder cross-border trade and investment and ultimately impose a cost on our citizens, businesses and economies. (see footnote 8) Since 2011, the U.S. Department of Energy has implemented changes to its regulations across several product categories. These changes have not yet been made in Canada, which has resulted in an increasing number of unnecessary regulatory differences. (see footnote 9) In 2014, Natural Resources Canada and the U.S. Department of Energy established a goal of aligning new and updated energy efficiency standards and test methods under the Canada-United States Regulatory Cooperation Council. Natural Resources Canada estimates that, as of October 2016, Canada’s regulations align with less than 50% of product categories regulated in the United States. Objectives The Government of Canada has committed to improving energy efficiency standards for consumer and commercial products (see footnote 10) and encouraging energy conservation. (see footnote 11) The Act provides the authority to make regulations prescribing energy-using products and energy efficiency standards. The Act and the Regulations will continue to be enforced by inspectors designated by the Minister of Natural Resources. The goals of the Regulations are to improve MEPS across 20 product categories; reduce GHG emissions and energy consumption associated with using those products; and eliminate unnecessary regulatory differences between Canadian and U.S. regulations across those categories. The desired outcomes of the Regulations are as follows: GHG emissions are reduced to contribute to Canada’s goal to reduce GHG emissions by at least 30% below 2005 levels by 2030; Consumers and businesses save money by not purchasing low-efficiency product models that have higher costs over their lifetime; and Compliance costs associated with unnecessary regulatory differences are removed. Regulatory action is required to deliver these outcomes, given that voluntary measures will not be sufficient to phase out low-efficiency product models from the Canadian market. It is also required to address unnecessary regulatory differences between Canada and the United States. Description The Regulations will (a) increase the stringency of MEPS for 20 currently regulated product categories; (b) make minor changes to standards or reporting requirements for 7 currently regulated product categories; and (c) repeal and replace the original Regulations to remove references to obsolete and out-of-date standards (see footnote 12) and to improve the organization of the regulatory text, making it easier for stakeholders to find and understand the requirements that apply to regulated products. The Regulations will come into force six months after the date of publication. In general, the dates of manufacture prescribed by the Regulations align with dates in the United States, even if those dates have already passed. This has been done to ensure consistency between the implementation of regulations in Canada and the United States. While some dates are in the past, the Regulations will not be implemented retroactively. Product models imported into Canada or shipped between provinces prior to the coming-into-force date of the Regulations will not be impacted and consumers will be able to purchase them. Once the Regulations are in force, all models that comply in the United States will be capable of complying with Canadian regulations. A) Increasing the stringency of MEPS for currently regulated products 1-7) Appliances: clothes dryers, clothes washers, integrated clothes washer-dryers, commercial clothes washers, (see footnote 13) dishwashers, freezers and refrigerators (seven product categories) The Regulations will align with the U.S. test procedure changes, dates of manufacture and MEPS for household appliances and commercial clothes washers; update reporting requirements by including new energy efficiency metrics for clothes dryers, clothes washers and clothes washer-dryers in order to ensure that the measured energy efficiency and information provided to customers best represent the latest technologies and the way these appliances are used; (see footnote 14) and allow for clothes dryers to be tested to either the Canadian test procedure (see footnote 15) or the alternative U.S. test procedure Appendix D2, (see footnote 16) consistent with the same flexibility provided in the United States. For clothes washers, integrated clothes washer-dryers and commercial clothes washers, two progressively more stringent MEPS will be established to align with those in the United States. They are presented in this table as two tiers of MEPS, along with their respective effective dates. Table 1: Appliance MEPS by category This table presents the appliances MEPS by category. Product Category New MEPS apply to products manufactured on or after the following date: Dishwashers (see footnote 17) May 30, 2013 Refrigerators and freezers (see footnote 18) September 15, 2014 Clothes dryers (see footnote 19) January 1, 2015 Clothes washers (see footnote 20) March 7, 2015 (Tier I) January 1, 2018 (Tier II) Integrated clothes washer-dryers March 7, 2015 (dryer and Tier I washer) January 1, 2018 (Tier II washer) Commercial clothes washers January 8, 2013 (Tier I) (see footnote 21) January 1, 2018 (Tier II) 8) Central air conditioners and heat pumps Central air conditioners and heat pumps are used in residential applications and are installed as part of a home’s central heating and cooling system. For products manufactured on or after January 1, 2017, (see footnote 22) the Regulations will align with U.S. MEPS and test procedures (see footnote 23) that have been in effect since January 2015. The Regulations will not change the MEPS that apply to split-system central air conditioners — the most common type in Canada — since the current MEPS (Seasonal Energy Efficiency Ratio of 13) for that type is already aligned with that of the United States. 9) Chillers A chiller is used in large commercial and institutional buildings to cool liquid, which can then be circulated through a heat exchanger to cool air or industrial equipment. For products manufactured on or after June 1, 2015, the Regulations will align with the American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE) MEPS (see footnote 24) that have been in effect in many U.S. states since 2010. 10) Commercial refrigerators, refrigerator-freezers and freezers (self-contained) Commercial self-contained refrigeration products are used by commercial establishments to keep food cold or frozen. They are commonly found in convenience stores, grocery stores and restaurants as well as in a number of other businesses that sell food in addition to their usual product lines, such as drug stores, gas stations and home hardware stores. For products manufactured on or after January 1, 2012, the Regulations will align with the U.S. MEPS and test procedures (see footnote 25) that have been in effect since 2012. 11) Electric motors An electric motor is a device used to power another piece of equipment such as a pump, fan, compressor or conveyor. The Regulations apply to three-phase electric motors of 0.75 kW (1 HP) and up to 375 kW (500 HP). For products other than medical imaging motors manufactured on or after June 1, 2016, the Regulations will align with the MEPS and test procedures that came into effect in the United States (see footnote 26) on the same date. The same MEPS and test procedure will apply to medical imaging motors manufactured on or after June 1, 2017. 12) Fluorescent lamp ballasts Fluorescent lamp ballasts start and maintain the flow of electricity to tube lights such as the four-foot long lights that are commonly used for overhead lighting in offices and commercial spaces. For products manufactured on or after November 14, 2014, the Regulations will align with the MEPS and test procedures that have been in effect in the United States (see footnote 27) since 2014. 13) General service fluorescent lamps General service fluorescent lamps are tube lights that are typically used for general overhead lighting in offices and commercial spaces. A tube light uses fluorescent technology to convert electrical energy into useful light. For products manufactured on or after July 15, 2012, the Regulations will align with the MEPS that have been in effect in the United States (see footnote 28) since 2012. For products manufactured on or after January 26, 2018, the Regulations will align with MEPS and test procedures that will come into effect in the United States on the same date. 14) General service incandescent reflector lamps General service incandescent reflector lamps are used in track and pot lights in homes and in some commercial settings such as retail displays. For products manufactured on or after July 15, 2012, the Regulations will align with the MEPS and test procedures that have been in effect in the United States (see footnote 29) since 2012. 15) Ice-makers Ice-makers produce ice used in commercial applications such as food service, lodging, food sales, and health care. For products manufactured on or after January 28, 2018, the Regulations will align with U.S. MEPS and test procedures (see footnote 30) that come into effect on the same date. 16) Packaged terminal air conditioners and heat pumps Packaged terminal air conditioners and heat pumps are room air conditioners used in commercial and institutional buildings such as hotels and nursing homes, where each room needs its own climate control. For products manufactured on or after September 30, 2012, the Regulations will align with the MEPS and test procedures that have been in effect in the United States (see footnote 31) since 2012. 17) Refrigerated beverage vending machines Refrigerated beverage vending machines are used in commercial applications to cool, display and dispense carbonated soft drinks and non-carbonated drinks such as fruit beverages, bottled water, and sports drinks. For products manufactured on or after August 31, 2012, the Regulations will align with the MEPS and test procedures that have been in effect in the United States (see footnote 32) since 2012. 18) Room air conditioners Room air conditioners are used by households to cool the air of a single room. They are typically installed in a window. For products manufactured on or after June 1, 2014, the Regulations will align with the MEPS and test procedures that have been in effect in the United States (see footnote 33) since 2014. They will also include provisions consistent with changes to labelling recently announced by the U.S. Federal Trade Commission, (see footnote 34) by allowing labels to appear either on product packaging or on the product itself. 19) Gas-fired storage water heaters Residential gas-fired storage water heaters provide domestic hot water for use in cooking, cleaning and bathing, using natural gas or propane as the fuel source. For products manufactured on or after December 31, 2016, the Regulations will align average and large volume (see footnote 35) water heaters with the U.S. MEPS (see footnote 36) for average volume tanks that have been in effect since 2015. The United States has implemented more stringent MEPS for large volume tanks that will not apply in Canada. 20) Oil-fired water heaters Residential oil-fired water heaters provide domestic hot water for use in cooking, cleaning and bathing, using oil as the fuel source. For products manufactured on or after December 31, 2016, the Regulations will align with the MEPS (see footnote 37) that have been in effect in the United States since 2015. B) Make minor changes to the scope of standards or content of reporting requirements 1) Electric ranges The original Regulations defined two size categories of electric ranges based on the product model’s width: 60.96 cm (24 in.) and 76.2 cm (30 in.). These size categories are reported for labelling purposes to ensure that product models of the same size are compared against each other. Two new sizes of electric ranges have emerged in the market: 91.44 cm (36 in.) and 121.92 cm (48 in.). To ensure that product models in those size categories are compared against others of similar size, the Regulations will add these two size categories. 2) Exit signs The National Building Code of Canada now includes the “running person” pictogram in addition to the traditional “EXIT” or “SORTIE” in its scope of exit signs allowed for use in buildings. The “running person” was not captured in the definition of an exit sign under the original Regulations, which means that any product model including this pictogram is not subject to the MEPS. The Regulations will amend the definition to include this pictogram, which aligns the application of the MEPS with the scope of the National Building Code. 3) External power supplies The original Regulations required that external power supplies be tested in accordance with CAN/CSA C381.1, Test method for calculating the energy efficiency of single-voltage external ac-dc and ac-ac power supplies. There are minor differences between CAN/CSA 381.1 and the current U.S. test procedure. Those differences do not significantly impact the measurement of energy efficiency performance; however, industry raised concerns about the application of these different rules and advocated for flexibility. The Regulations will provide this flexibility by allowing external power supplies to be tested to either the Canadian test standard (CAN/CSA C381.1) or the U.S. test procedure Appendix Z. (see footnote 38) 4) Gas fireplaces The original Regulations required that, for each gas fireplace imported into Canada or shipped between provinces, regulatees provide information on whether the ignition for the product model is achieved by a standing pilot or an intermittent ignition device. With only those options, two new types of ignition systems — on-demand pilot and remotely operated pilot — exist on the market but cannot be reported. Further, these new ignition systems are not specifically covered by the testing standard referenced by the original Regulations (CSA P.4.1-02, Testing Method for Measuring Annual Fireplace Efficiency). In response to industry concerns related to these issues, the Regulations will reference the most recent version of the CSA standard CAN/CSA P.4.1-15 and allow for testing and reporting of product models that include these two new types of ignition systems. 5) Gas furnaces (through-the-wall) The Regulations will continue to require that all through-the-wall gas furnaces comply with an annual fuel utilization efficiency of at least 90%. 6) General service lamps The Regulations will introduce third-party verification for general service lamps (i.e. light bulbs). Third-party verification requirements are common to all other regulated product categories, which supports the regulatory compliance strategy. MEPS for general service lamps apply to 75 W and 100 W light bulbs manufactured on or after January 1, 2014, and to 40 W and 60 W light bulbs manufactured on or after December 31, 2014. When the MEPS were originally established in 2008, Natural Resources Canada gave notice that third-party verification requirements would be included in a future amendment. Third-party verification ensures that the product, offered for sale or lease in Canada, meets the MEPS prescribed in the Regulations. The third-party verification requirements will come into effect when the Regulations come into force; however, the energy efficiency verification mark requirement on the product’s package will only come into effect on April 1, 2018. This is in response to a request from manufacturers who require extra time to transition the energy efficiency verification mark to general service lamp packaging. 7) Large air conditioners and large heat pumps The original Regulations applied to all large air conditioners and large heat pumps with a cooling capacity of 19 kW (65 000 Btu/h) or more. The U.S. definition includes an upper limit of 223 kW (760 000 Btu/h). There is no such upper limit in Canada, which means that product models with a cooling capacity above 223 kW are subject to MEPS in Canada but not in the United States. The Regulations will align with the United States by reducing the scope of large air conditioners and large heat pumps to only include units with a cooling capacity of less than 223 kW. 8) Televisions Since April 2012, the original Regulations have required the reporting of nine data elements to the Minister of Natural Resources on the active energy usage of televisions. That information must be collected by using a California Energy Commission test procedure. In October 2013, the U.S. Department of Energy published a Final Rule, prescribing a different test procedure than that required in Canada to quantify active energy usage. The Regulations will remove these nine data elements from reporting requirements as well as the references to the California Energy Commission test procedure. The six data elements that are not related to active energy usage will still need to be reported. C) Repeal and replace the original Regulations The Regulations will simplify and clarify the references applicable to all prescribed energy-using products by grouping all requirements (MEPS, effective dates, test methods and energy performance reporting) in a dedicated subdivision. These changes will be implemented by repealing and replacing the original Regulations with the Energy Efficiency Regulations, 2016. This will make it easier for stakeholders to find regulatory requirements, thereby providing greater clarity on the requirements that apply to regulated products. As part of the repeal and replacement of the Regulations, the following maintenance will be implemented: In response to concerns raised by the Standards Council of Canada, 45 references to obsolete or out of date standards from the Canadian Standards Association (CSA), the Canadian Gas Association (CGA) and other standards development organizations will be removed from the Regulations. Referenced standards will be updated to the most recent versions available for dry-type transformers, gas furnaces, pedestrian modules, traffic signal modules, and standby power measurements. Verification mark (see footnote 39) requirements will be modified. The original Regulations required that the verification mark signify that a product is in compliance with the MEPS. While this means that all product models with a verification mark have a measured energy performance at or better than the prescribed MEPS, it does not signify that the specific measured performance that is reported has been verified by a third party. The Regulations address this by requiring that the verification mark signify that the reported energy performance has been verified by the certification body. No physical change will be required to the verification mark. The regulated requirements relating to digital television adapters will be repealed. When the MEPS for this product were established, it was acknowledged that there would be a time limited impact on the market, since this product is specifically designed to allow analogue televisions to receive over-the-air digital signals. (see footnote 40) Recent studies have shown a dramatic decline in the sales of digital television adapters as analogue televisions are being retired from the market. Regulatory and non-regulatory options considered Maintaining the status quo This option would lead to fewer reductions in GHG emissions and energy consumption than taking regulatory action and would not address the compliance costs associated with unnecessary regulatory differences between Canada and the United States. Since 2010, the market share of product models that would not meet the more stringent MEPS established by the Regulations has declined under the status quo. These changes in market share can be attributed to a combination of (a) the regulated industry making changes to its product offerings in response to signals from Natural Resources Canada that regulatory changes would be made; (see footnote 41) and (b) the regulated industry providing Canada with product models that would comply with more stringent U.S. MEPS. While the market share of product models that would not meet the more stringent MEPS has declined, many products that do not meet them remain in the Canadian market. A regulatory approach will provide incremental benefits to the status quo approach, since it will ensure that all products on the market meet the more stringent MEPS. The status quo option would also maintain an uneven playing field across regulated markets. Businesses that updated product offerings in preparation for regulatory changes have made investments that, in some cases, direct competitors did not. Further, as new regulations have come into effect in the United States, the number of unnecessary regulatory differences between the two countries has increased. Voluntary approach (repeal Regulations) Under this approach, Canada would repeal the Regulations and rely on voluntary measures to reduce GHG emissions and energy consumption associated with energy-using products. This option would eliminate compliance costs associated with unnecessary regulatory differences; however, it would not address GHG emissions and energy consumption to the extent that a regulatory approach will. A voluntary approach would result in fewer GHG emission reductions than remaining with the status quo or taking a regulatory approach. Studies have shown that in countries where MEPS have been introduced for the first time, significant energy efficiency improvements have been observed. For example, a 32% energy efficiency improvement was achieved in one year (1994–1995) when Mexico first implemented MEPS for four product categories. (see footnote 42) Such improvements have translated to large reductions in energy consumption and GHG emissions. Globally, the most mature national MEPS and labelling programs covering a broad range of products are estimated to save between 10% and 25% of national energy consumption. (see footnote 43) There is strong evidence to show that significant and sustained improvements in energy efficiency occur where MEPS are subject to ongoing revision and updating to keep pace with the rate of improvement in new products entering a market. (see footnote 44) Given the global evidence of significant benefits of MEPS, a voluntary approach would mean that these benefits would not be realized. Incremental compliance costs associated with unnecessary regulatory differences between Canada and the United States occur only in situations where both countries enforce mandatory requirements. There are product categories currently regulated in the U.S. that are not regulated in Canada. (see footnote 45) In these cases, the regulatory regimes are different in each country but do not create a burden for industry since no energy efficiency requirements need to be satisfied in Canada. Therefore, compliance costs associated with unnecessary regulatory differences could be permanently eliminated by repealing the Regulations. Regulatory action Taking regulatory action to increase the stringency of MEPS for these 20 product categories will lead to incremental benefits beyond the status quo. Regulatory action will also reduce compliance costs associated with unnecessary regulatory differences since it will align the requirements for 20 product categories with those of the United States. As a result, industry will no longer be required to satisfy different regulatory requirements to offer the same products in the United States and Canada. This option addresses costs associated with unnecessary regulatory differences; however, subsequent amendments could be required to ensure such differences do not occur again in the future. This option also provides the largest reductions in GHG emissions and energy consumption of the three options considered. Benefits and costs Summary Reduced energy consumption, GHG emissions and unnecessary regulatory differences will result in significant net benefits over the lifetime of affected product models. The benefits vary by individual user depending on end-use sector, geographical location and/or operational practices. Annual reductions in energy consumption associated with the Regulations are estimated to be 3.6 petajoules (PJ) in 2020, increasing to 9.6 PJ in 2030 as the sale of more efficient equipment steadily replaces the pre-regulation stock. Annual reductions in GHG emissions resulting from these reductions in energy consumption are estimated to be 0.3 Mt in 2020, increasing to 0.7 Mt in 2030. It is estimated that, by applying a social cost of carbon to these reductions, the cumulative present value of economic benefits associated with GHG emission reductions will be $271 million by 2030. (see footnote 46) Canadian consumers will also realize economic co-benefits in the form of reduced energy costs due to the implementation of the Regulations. It is estimated that $1.6 billion in cumulative present value energy savings will be realized by 2030. Businesses are estimated to have annual savings of $1.4 million resulting from the removal of unnecessary regulatory differences, which will result in a cumulative present value of $12 million by 2030. The cumulative present value of incremental technology costs and costs to Government associated with the Regulations are estimated to be $377 million and $0.1 million, respectively, by 2030. The present value of net benefits of the Regulations is estimated to be $1.5 billion by 2030, with total benefits exceeding total costs by a ratio almost five to one. By 2030, the present value of benefits and costs from the Regulations is estimated to be $1.8 billion and $377 million, respectively. For all product categories affected by the Regulations, the analysis found that the reduction in energy costs over the lifetime of the product will be greater than any additional costs to manufacturers to bring non-compliant product models into compliance with the MEPS. 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 within the life of the product. (see footnote 47) The analysis found payback ranges of less than 10 years for all product categories, with six product categories having paybacks of two years or less. Benefits and costs associated with the Regulations are presented in Table 2. Table 2: Summary of benefits and costs associated with the Regulations This table presents the summary of benefits and costs associated with the Regulations. Monetized benefits Costs Quantified benefits Pre-tax fuel (gas and electricity) savings Technology costs Energy savings (PJ) Avoided GHG damages Installation costs (if applicable) GHG savings (Mt) Avoided costs associated with removal of unnecessary regulatory differences Government administration Interested parties seeking more details on this analysis can request a copy of the cost-benefit analysis document by contacting the individual named at the end of this document. Methodology, assumptions and data Natural Resources Canada analyzed the economic gains to be made through the more stringent MEPS and the impact on Canadian society within a cost-benefit analysis framework. The costs and benefits associated with the Regulations were obtained by comparing the following scenarios: the business-as-usual case (i.e. excluding the Regulations); and the policy case (i.e. the business-as-usual scenario including the Regulations). Business-as-usual case The Canadian and U.S. markets for regulated product categories are highly integrated. When the same MEPS are implemented in both countries, it is generally assumed that the same product models will be available to Canadian and American consumers. Even in cases where MEPS are aligned, each country develops regulatory amendments independently and undertakes separate analyses of the potential economic impacts of any proposed changes. For analyses conducted in support of previous amendments to the Regulations, it was assumed that incremental costs and benefits in Canada were fully the result of the Canadian amendments with no spillover effects from the United States. This assumption is consistent with other recent federal regulations (see footnote 48) and provides an assessment of the full economic impacts of regulatory changes impacting Canadians. Neither Canada nor the United States accounts for costs and benefits incurred outside its borders as a result of its regulations. It is recognized that this assumption may underestimate or overestimate changes in the market that occur in one country in response to similar regulations being announced or implemented in the other. These changes in the market are difficult to estimate but were considered in a sensitivity analysis. For the purpose of this analysis, Natural Resources Canada will define the business-as-usual case in terms of Canadian market conditions assessed in 2015. The business-as-usual case for these product categories also includes an estimate of costs, if any, associated with unnecessary regulatory differences. Policy case The policy case is defined as the application of the more stringent MEPS across 20 product categories relative to markets defined by studies completed in 2015. The policy case for product categories for which U.S. regulations are already in effect at the time the Regulations were proposed will include benefits, if any, associated with the reduced compliance costs resulting from the removal of unnecessary regulatory differences. Benchmarks For all product categories, a benchmark product is chosen to represent the product models that do not meet the more stringent MEPS (in some cases multiple benchmarks are chosen). Within those benchmarks, two efficiency levels are considered: (1) the least efficient of their class; and (2) the efficiency of the average unit impacted. The analysis consists of a base case analysis and a sensitivity analysis for each of the 20 product categories covered by the Regulations. Where relevant, regional sensitivities were evaluated (e.g. a water heater would save more energy per year in a colder location). Social cost of carbon The social cost of carbon was used to quantify the economic benefits of reducing GHG emissions. It represents an estimate of the economic value of avoided climate change damages at the global level for current and future generations as a result of reducing GHG emissions. The estimated values of the social cost of carbon used in this assessment draw on ongoing work undertaken by Environment and Climate Change Canada (see footnote 49) in collaboration with a federal interdepartmental working group and in consultation with a number of external academic experts. This work involves reviewing existing literature and other countries’ approaches to valuing GHG emissions. Preliminary recommendations, based on current literature and in line with the approach adopted by the U.S. Interagency Working Group on the Social Cost of Carbon, (see footnote 50) are that it is reasonable to estimate social cost of carbon values at $38.2/tonne of carbon dioxide equivalent in 2013, increasing each year with the expected growth in damages. (see footnote 51) Methodology to estimate costs The additional or “incremental” cost associated with the Regulations was determined as the difference between the cost of the inefficient product model, represented by the selected benchmark, and the cost of a modified version of that product model that would meet the more stringent MEPS. For each product category, the potential cost of modifying the benchmark product model so that it meets the more stringent MEPS was estimated (e.g. cost of adding extra insulation to a water heater; cost of replacing an inefficient compressor in an air conditioner). These costs were then multiplied by the number of shipments in the business-as-usual case that was estimated to have an energy performance that is worse than what is required by the MEPS. Results were summed across all affected product categories to arrive at the estimate of total costs. Additional incremental costs related to installation and maintenance costs or to the lifetime of the product were also evaluated, as applicable. Total costs reported as being attributable to the Regulations include manufacturing, compliance and administrative costs as well as those incurred by Government to implement them. Methodology to estimate benefits Energy savings for each product category were estimated by calculating the energy used by the selected benchmark product model, by simulating how it would be normally used in a year (e.g. number of operating days). The result is compared to the energy used by the modified version of that product model that would meet the more stringent MEPS. The difference was multiplied by the number of shipments in the business-as-usual case that was estimated to have an energy performance that is worse than what is required by the MEPS and the number of years the product is expected to last, in order to arrive at the total energy savings. Results were summed across all affected product categories to arrive at the estimate of total energy saved. This was then monetized by multiplying the results by the cost of energy per unit of energy saved (i.e. dollars per kilowatt hour). The reductions in GHG emissions were calculated by applying fuel-specific emissions factors, consistent with those published by Environment and Climate Change Canada, to the resulting energy savings. In the case of reductions attributable to diminished electricity consumption, the reductions were calculated by applying the emission factors associated with the marginal fuels used to generate the electricity that would be saved through implementation of the Regulations. GHG emissions were monetized and incorporated into the analysis using a social cost of carbon, as calculated by Environment and Climate Change Canada. Reductions in compliance costs associated with unnecessary regulatory differences were informed by product-specific studies commissioned by Natural Resources Canada in 2015. Those studies only identified and assessed differences between product testing requirements that apply in Canada and the United States. Costs or benefits associated with those differences were deemed to represent the economic impacts per tested product model. Those impacts were multiplied by the number of product models tested on an annual basis and summed across all affected product categories to calculate the total annual benefit of removing unnecessary regulatory differences. Assumptions Key assumptions include the following: Business-as-usual case reflects Canadian market conditions in 2015; Benefits and costs are measured in real constant 2015 dollars; A 7% real discount rate; Canadian average energy prices, based on data used in the preliminary analysis undertaken by Environment and Climate Change Canada to develop Canada’s Emission Trends 2015; Valuation of the GHG emissions incorporated into the analysis is based on the social cost of carbon as calculated by Environment and Climate Change Canada; Incremental costs for more efficient technology and compliance are assumed to be passed on to consumers or end users; and Incremental costs associated with more efficient technology were estimated in 2015 and are assumed to be constant, despite evidence (see footnote 52) that such costs come down with time, owing to improvements in manufacturing processes and economies of scale as higher volumes of product models with new technology enter the market. This assumption could lead to overestimates of manufacturing costs; however, it provides a conservative assessment of overall net benefits. Data collection and sources Data is collected on a product-by-product basis, through market studies. It provides key inputs to the analysis such as market size; the portion of the market that does not meet the more stringent MEPS; the benchmarks that best represent that portion of the market; energy savings from the business-as-usual case to the policy case; costs of moving from the business-as-usual case to the policy case; product lifetime; and installation costs. Results The methodology described above was applied to all product categories to develop an estimate of the benefits and costs attributable to the Regulations. The results vary by product category depending on the magnitude of the increase in stringency of the MEPS and the estimated portion of the market that will be impacted by the Regulations. The estimated benefits and costs for each product category are presented in Table 3. These results were then aggregated to present the overall impacts of the Regulations in Table 4. The costs, benefits and greenhouse gases emissions reductions for fluorescent lamp ballasts have been modified since the publication of the Regulations in the Canada Gazette, Part I. These changes were made because the economic analysis inadvertently included a broader scope of models than covered in the Regulations. Table 3: Benefits and costs per product category This table presents the benefits and costs per product category. Product category Product category Cumulative total for product shipped by 2030 (millions of dollars) Cumulative total for product shipped by 2030 (millions of dollars) Cumulative total for product shipped by 2030 (millions of dollars) Product category Product category Total costs Total benefits Total net benefits Central air conditioners and heat pumps Central air conditioners and heat pumps $23 $44 $21 Chillers Chillers $2 $3 $2 Clothes dryers Clothes dryers $22 $55 $33 Clothes washers (see footnote 53) Tier I $24 $595 $572 Clothes washers (see footnote 53) Tier II $108 $231 $123 Commercial clothes washers Tier I $0 $0 $0 Commercial clothes washers Tier II <$1 $20 $20 Commercial ice-makers Commercial ice-makers $4 $18 $14 Commercial refrigerators, refrigerator-freezers and freezers (self-contained) Commercial refrigerators, refrigerator-freezers and freezers (self-contained) $0 (see footnote 54) $0 $0 Dishwashers Dishwashers $0 $0 $0 Electric motors Electric motors $46 $104 $59 Fluorescent lamp ballasts Fluorescent lamp ballasts $3 $276 $279 Freezers Freezers $3 $7 $3 Gas-fired storage water heaters Gas-fired storage water heaters $43 $110 $67 General service fluorescent lamps Tier I -$66 (see footnote 55) $58 $124 General service fluorescent lamps Tier II $44 $52 $8 Incandescent reflector lamps Incandescent reflector lamps $107 $216 $109 Oil-fired water heaters Oil-fired water heaters <$1 $3 $3 Packaged terminal air conditioners and heat pumps Packaged terminal air conditioners and heat pumps $0 $0 $0 Refrigerators Refrigerators $12 $31 $19 Room air conditioners Room air conditioners $7 $13 $5 Vending machines Vending machines $0 $0 $0 Total of all products Total of all products $377 $1,836 $1,460 Table 4: Summary of benefits and costs to Canadians This table presents the summary of benefits and costs to Canadians. Costs, benefits and distribution Costs, benefits and distribution Costs, benefits and distribution Aggregate annual totals Aggregate annual totals Total cumulative present value Average annualized over period to 2030 Costs, benefits and distribution Costs, benefits and distribution Costs, benefits and distribution 2020 2030 By 2030 Average annualized over period to 2030 A. Quantified impacts ($) [millions in 2015 prices] A. Quantified impacts ($) [millions in 2015 prices] A. Quantified impacts ($) [millions in 2015 prices] A. Quantified impacts ($) [millions in 2015 prices] A. Quantified impacts ($) [millions in 2015 prices] A. Quantified impacts ($) [millions in 2015 prices] A. Quantified impacts ($) [millions in 2015 prices] Benefits Pre-tax fuel (gas and electricity) savings Canadians $192 $196 $1,553 $171 Benefits Avoided GHG damages Canadians $32 $37 $271 $30 Benefits Avoided costs associated with removal of unnecessary regulatory differences Canadians $1 $1 $12 $1 Total benefits Total benefits Total benefits $226 $235 $1,837 $202 Costs Technology and installation costs Canadians $41 $54 $377 $41 Costs Compliance and administrative costs Canadians $0 $0 $0 $0 Costs Government administration Government $0.1 $0 $0.1 (see footnote 56) $0.01 Total costs Total costs Total costs $41 $54 $377 $41 Net benefits Net benefits Net benefits $1,460 B. Quantified impacts (in non-$) B. Quantified impacts (in non-$) B. Quantified impacts (in non-$) B. Quantified impacts (in non-$) B. Quantified impacts (in non-$) B. Quantified impacts (in non-$) B. Quantified impacts (in non-$) Positive impacts on Canadians Positive impacts on Canadians Energy savings (petajoules) 3.6 9.6 81.8 - Positive impacts on Canadians Positive impacts on Canadians GHG emission reductions (megatonnes) 0.3 0.7 6.3 - Sensitivity analysis As discussed above, the analysis assumed that incremental costs and benefits in Canada were fully the result of the Canadian amendments with no spillover effects from the United States. It is recognized that this assumption could underestimate or overestimate changes in the market that might occur in one country in response to similar regulations being announced or implemented in the other. To assess the sensitivity of the total results of this assumption, the number of product models in the Canadian market that would be impacted by the Regulations was reduced by 25% and 50% for the four MEPS that, at the point of this analysis, are not yet in force in either Canada or the United States. The results show the level to which the total costs could be overestimated due to this analytical assumption. Table 5 shows how the costs and benefits for each of these four product categories change under each of these scenarios. Even if only 50% of the product models are impacted by the Regulations, the total benefit-to-total cost ratio remains close to five to one (total benefits: $1,740; total costs: $330). The sensitivity analysis was not applied to the other MEPS since they are already in effect in the United States In those cases, the business-as-usual case represents the Canadian market after it has been influenced by U.S. regulations. Table 5: Business-as-usual case sensitivity analysis This table presents the business-as-usual case sensitivity analysis. Costs Costs Costs Benefits Benefits Benefits Net benefits Net benefits Net benefits Reduction in the number of product models impacted by the Regulations 0% 25% 50% 0% 25% 50% 0% 25% 50% Commercial clothes washers (Tier II) $0.01 $0.01 $0.01 $20 $15 $10 $20 $15 $10 Commercial ice-makers $4 $3 $2 $18 $14 $9 $14 $11 $7 Electric motors $46 $34 $23 $104 $78 $52 $59 $44 $29 General service fluorescent lamps (Tier II) $44 $33 $22 $52 $39 $26 $8 $6 $4 Total of product categories subject to sensitivity analysis $94 $70 $47 $195 $146 $97 $101 $76 $51 Total of all product categories $377 $354 $330 $1,837 $1,788 $1,740 $1,460 $1,435 $1,410 Additional benefits and costs As discussed above, this analysis has quantified the benefits of reducing unnecessary regulatory differences by including, in the business-as-usual case, estimated costs associated with industry having to test the same product model twice to satisfy different requirements in Canada and the United States. The policy case removes unnecessary regulatory differences, so the reduction in these costs is quantified as a benefit of regulatory alignment. However, these only represent a small portion of the impacts associated with regulatory alignment, such as administrative costs to manage separate inventories. (see footnote 57) For industries using regulated products in their operations, an improvement in energy performance translates into energy and operating cost savings, increased productivity and competitiveness and improved environmental performance. When such companies spend these energy savings on expanding their businesses or factories, they create greater demand. This generates additional economic growth and creates more jobs throughout the economy. (see footnote 58) The analysis has quantified costs and benefits for each product category relative to a business-as-usual case defined by market conditions assessed in 2015. In the case of three product categories (commercial refrigerators, refrigerator-freezers and freezers [self-contained]; dishwashers; and packaged terminal air conditioners and heat pumps), the assessment showed that all product models being imported into Canada or shipped between provinces comply with the more stringent MEPS. While the analysis does not attribute any costs or benefits to the implementation of the MEPS for these three product categories, the Regulations will prevent future dumping of low-efficiency product models into the Canadian market. Another benefit of the Regulations is related to the verified energy efficiency performance data of regulated equipment that is collected by Natural Resources Canada through its compliance program. These ratings are posted to the Natural Resources Canada website (see footnote 59) and provide readily accessible information to consumers or businesses. Consumers benefit from this information since it provides them with detailed information to make informed purchase decisions. Utilities and retailers also benefit from this information, since it supports programming to promote the sale of high-efficiency products. “One-for-One” Rule Given the decreases in administrative burden, the Regulations are considered an “OUT” under the “One-for-One” Rule. As the Regulations amend existing regulations and do not create a new regulatory title, there is no requirement to repeal existing regulations. The Regulations result in an annualized savings of $2,756 to industry through the elimination of certain reporting requirements. Currently, industry is required to submit reports to the Minister of Natural Resources in accordance with subsection 5(1) of the Energy Efficiency Act. While industry will continue to submit the same number of reports to the Minister as they do now, the administrative burden savings were calculated based on an analysis that isolated and monetized changes in the number of individual data elements that each report contains. Assumptions underlying administrative burden estimates The data elements that are modified by the Regulations are contained in product-specific energy efficiency reports, (see footnote 60) which are required once for each product model before first importation or interprovincial shipment. To quantify the changes in administrative burden, the types of energy-using products that would be affected by the Regulations were first placed in the following categories: A. Product models for which (a) the first energy efficiency reports were submitted prior to the coming into force; and (b) there is a change in the data elements, which necessitates a resubmission. B. Product models for which (a) the first energy efficiency reports will be submitted after the coming into force of the Regulations; and (b) there is a net increase in the number of data elements required. C. Product models for which (a) the first energy efficiency reports will be submitted after the coming into force of the Regulations; and (b) there is a net decrease in the number of data elements required. The economic impacts of product-specific administrative changes per energy efficiency report were calculated for each category and multiplied by the forecasted number of reports to arrive at an overall impact. Assuming that these requirements would be satisfied by clerical staff, the change in the administrative burden was calculated as a $2,756 reduction in annualized average costs to dealers of products in the categories affected by the Regulations. This represents a reduction of approximately $10 in annualized average costs per business. Consultations No comments were received from stakeholders on the impacts of the Regulations on administrative burden. In general, stakeholders were supportive of the approach to achieve alignment with U.S. regulations across these product categories, which includes the alignment of reporting requirements. Small business lens The small business lens does not apply to this proposal, as there are no costs to small business. Natural Resources Canada held discussions with a Canadian manufacturer that is developing products that would fall under the central air conditioner and heat pump category. This company is not producing products that are being shipped across provincial borders and, therefore, is not subject to the original Regulations or impacted by these Regulations. Consultation Overview of pre-consultation Prior to prepublication of the Regulations, (see footnote 61) Natural Resources Canada undertook the following consultation activities: National Standards System. The relevant Canadian Standards Association steering committees, technical committees and technical subcommittees, comprising stakeholders (including manufacturers, industry associations and other interested groups), provided input, and reviewed and voted upon changes to the test standards. Bulletins. Product-specific bulletins were distributed to interested stakeholders. Distribution lists targeted key market channel stakeholders, key federal and provincial stakeholders, and general interest groups (advocacy groups, international regulators). Many of these individuals and organizations in turn forwarded the bulletins to provide access to a larger audience of stakeholders. These product-specific bulletins are emailed and posted on the Energy Efficiency Regulations web page of the Natural Resources Canada website at http://www.nrcan.gc.ca/energy/regulations-codes-standards/6845. General bulletins. General bulletins for all products were issued and distributed broadly to stakeholders. Forward Regulatory Plans. Forward Regulatory Plans were posted to the Natural Resources Canada website. Workshops and webinars. Workshops and post-bulletin webinars were held for some products to provide stakeholders with a public forum to learn more about the requirements, review comments and provide additional input as required, especially where there were significant issues raised that were best addressed as a group in conjunction with the bulletin process. Invitations were sent out to known stakeholders. In some cases, bilateral discussions were held with stakeholders that raised product-specific issues. The meeting notes and presentation materials were forwarded to webinar participants. Market studies. Studies to support decision-making were conducted by third-party consultants who worked with manufacturers and industry associations to gather information. Ongoing bilateral discussions. In the extended intervening time between formal pre-consultations and the publication of the Regulations, Natural Resources Canada kept in close contact with the industry through major industry associations to discuss changes and updates to the products. Pre-consultation chronology Stakeholders (see footnote 62) were informed of the changes being considered in the Regulations and were provided opportunities to comment at several points since 2010. These consultations evolved with time, and the content of the Regulations was modified accordingly to include additional changes that could further support achieving the objectives. The following outlines the key materials used to communicate details to the stakeholder community: 2010 to 2011: Detailed product-specific technical bulletins were published. A series of product-specific webinars and workshops were held with affected stakeholders to discuss the content of these bulletins. A general bulletin was issued for all products in late-2011, updating stakeholders on the outcomes of earlier consultations. 2012 to 2014: Natural Resources Canada published Forward Regulatory Plans to communicate the product categories being considered for inclusion in the Regulations as well as the overarching policy direction being taken. Summer 2014: Consultations were held on the policy direction for gas-fired storage water heaters. 2014 to 2015: A series of discussions was held with industry associations to reconfirm support for the approach being taken for the Regulations. A general bulletin was published, outlining the 20 product categories being considered for the proposed Regulations, as well as the policy intent and anticipated timelines for the regulatory process. Product-specific pre-consultation Stakeholders were informed of the content of the Regulations through the activities outlined above. Since the Regulations were developed to align with standards in the United States, some of these consultations resulted in no substantive comment or changes to original policies announced by Natural Resources Canada. (see footnote 63) The outcomes from pre-consultation activities resulted in modifications in the following ways that differed from the original approach being considered for these product categories: Appliances (clothes dryers, clothes washers [household and commercial], clothes washer-dryers, dishwashers, freezers and refrigerators) were added to the Regulations in order to accelerate alignment with U.S. Department of Energy regulations already in force; Gas-fired storage water heater MEPS were adjusted to align with those of the U.S. for the vast majority of product models (i.e. those with a rated storage volume less than or equal to 208 litres); External power supplies could be tested to either the applicable CSA standard or the U.S. Department of Energy test procedure to demonstrate compliance; Gas fireplace would use a CSA standard that captures energy efficiency gains arising from the use of “pilot on demand” ignition systems; Through-the-wall gas furnaces designed for replacement applications would be permitted to comply with a less stringent annual fuel utilization efficiency of 78%; and Large air conditioners and large heat pump requirements would apply to the same product sizes as those in the U.S. following the introduction of an equivalent upper limit of 223 KW (760 000 Btu/h). Consultations after publication of Regulations in the Canada Gazette, Part I Written comments on the Regulations were accepted during a 75-day period from April 30, 2016, through July 14, 2016. During this time, Natural Resources Canada received 48 individual written correspondences from interested parties, representing industry associations, manufacturers, suppliers, certification bodies, provincial governments and the general public. During the comment period, Natural Resources Canada specifically solicited comments from representatives of 11 Canadian consumer advocacy groups to ensure that they had an opportunity to express their views. No comments were received in response to this request. The following paragraphs summarize the major issues raised by interested parties during the comment period and Natural Resources Canada’s views on each of them. Period of manufacture The test procedures, MEPS and information requirements established by the Regulations apply to prescribed periods of manufacture for each product category. Consecutive periods establish a clear transition point where products need to move from one suite of requirements to the next. The Energy Efficiency Regulations have historically been designed to establish the same periods of manufacture — and therefore, the same transition points — as in U.S. Department of Energy regulations. Natural Resources Canada proposed that 16 of the 20 product categories would have periods of manufacture aligned with those of the U.S., despite the fact that 15 of these (see footnote 64) are likely to begin before the Regulations come into force. This will not impose any retroactive requirement on product models that are imported or shipped interprovincially before the coming into force of the Regulations; however, as of the coming-into-force date, importation and interprovincial shipment will be limited to those product models that comply with the more stringent MEPS that apply in Canada and the U.S. Some commenters questioned the approach of aligning periods of manufacture with those of the U.S. in cases where they occur in the past and advocated that all such periods should begin on or after the coming-into-force date. In their view, this would allow time to transition to the new requirements. Natural Resources Canada acknowledges the importance of providing time for the market to transition, where warranted, and has implemented a six-month delay between publication of the final Regulations and the coming-into-force date for this purpose. The length of this delay was developed in accordance with the World Trade Organization’s Agreement on Technical Barriers to Trade, which calls for a reasonable interval (see footnote 65) to allow time for producers to adapt their products or methods of production to new requirements. In June 2016, Natural Resources notified (see footnote 66) World Trade Organization members of the proposed Regulations, providing an early signal that these new requirements would be coming into force. No comments were received during the 60-day comment period that followed the notification requirement. Natural Resources Canada is finalizing the Regulations with the same periods of manufacture as they were presented in the proposed Regulations in all but two cases: The period of manufacture associated with the more stringent MEPS for gas and oil-fired water heaters was changed from April 16, 2017, to December 31, 2016, in response to a request from an industry association representing the consensus view of water heater manufacturers. The association indicated that this date would better align with their annual product planning cycle; and The period of manufacture for motors used in medical devices was changed from June 1, 2016, to June 1, 2017, for reasons discussed below. Third-party verification An industry association advocated for the elimination of any additional testing or labelling efforts for products that have been tested and labelled in accordance with U.S. regulations. In this way, products that comply with U.S. regulations would automatically be deemed to achieve compliance in Canada. Canada’s energy efficiency compliance and enforcement regime relies on third-party verification to ensure that all regulated products imported into Canada and shipped between provinces are compliant with the standards referenced in the Regulations. This approach requires that all prescribed energy-using products bear an energy efficiency verification mark authorized by a certification body accredited by the Standards Council of Canada. The verification mark provides assurance to consumers that the product complies with the applicable standard. This approach differs from the compliance approach taken by the U.S. Department of Energy, which, for many of its covered product categories, allows manufacturers to conduct their own testing and submit test results, along with a statement that attests that the product model is in compliance with all requirements. Natural Resources Canada intends to continue using third-party verification as the means of assessing compliance with the Regulations because it provides a level of independence, transparency and credibility to the regulatory program. (see footnote 67) By requiring verification from a certification body accredited by the Standards Council of Canada, manufacturers are assured of a level playing field upfront, in that all products are treated with the same level of scrutiny and are assessed the same way. The Standards Council of Canada oversight of the certification bodies is an important aspect of this approach since it required them to abide by a strict set of internationally recognized rules. The Standards Council of Canada may suspend a certification body’s accreditation if it does not conform to these requirements. Verification mark for general service lamps An industry association advocated for additional time to comply with the new requirement for a verification mark to be applied on general service lamps or their packaging. Natural Resources Canada agrees that additional time is appropriate to modify product packaging to include the verification mark. The Regulations will provide flexibility for this industry to demonstrate that their products have been verified by a third party without applying the verification mark to the packaging. As of March 31, 2018, compliance must be demonstrated by including the verification mark on the product’s packaging. External power supplies — light-emitting diode drivers Industry comments made reference to a Bill (see footnote 68) being considered by the U.S. Senate that would modify the scope of the U.S. Department of Energy regulations that apply to external power supplies. As of October 2016, the Bill is designed to “exclude from energy conservation standards for external power supplies any power supply circuit, driver, or device designed to power certain light-emitting diodes or to power ceiling fans using direct current motors.” It further requires the U.S. Department of Energy to prescribe energy conservation standards for this excluded equipment within one year of the finalization of a rule for an associated test procedure. Industry advocated for consideration of the same exemption for this equipment from the definition of external power supplies in Canada. Given that this Bill is still being debated in the U.S. Senate, and that these exemptions are not currently in place in the U.S., alignment will be maintained with no change to the definition of external power supplies in the Regulations. Natural Resources Canada is considering aligning with U.S. standards that were effective in February 2016 through a subsequent amendment to the Regulations. Natural Resources Canada will monitor the progress of this Bill and propose any necessary changes to ensure alignment with the U.S. Large air conditioners — water- and evaporatively-cooled units An industry association advocated for a reduction in the scope of application of regulatory requirements for air- and water-cooled large air conditioners by lowering the upper limits on their respective capacity ranges. The rationale for this change was due to an inconsistency between compliance approaches in Canada and the U.S. While the proposed Regulations aligned with the scope of products in the U.S., larger units are only subject to third-party testing in Canada. In the U.S., manufacturers self-certify these larger units. To ensure that the same products are covered by regulations in Canada and the U.S. and that Canadians benefit from the implementation of more stringent MEPS, Natural Resources Canada is finalizing the Regulations to align with the scope of large air conditioners prescribed in U.S. Department of Energy regulations. Natural Resources Canada intends to analyze the potential use of alternative options for industry to demonstrate compliance within the third-party verification system. Gas furnaces (through-the-wall) — replacement units During pre-consultations, stakeholders advocated for less stringent MEPS for through-the-wall gas furnaces used in replacement applications given the lack of available products on the market that could comply with the 90% annual fuel utilization efficiency and be installed in existing buildings within holes in exterior walls that were designed for lower efficiency units. In response to this, the proposed Regulations put forward an annual fuel utilization efficiency of 78% that would apply to replacement units. Natural Resources Canada received comments from two manufacturers who presented opposing views regarding this proposed provision. One supported the approach, indicating that, while they have high-efficiency products available, there is significant cost associated with installing them in existing buildings. The other indicated that high-efficiency products are available for both new and replacement applications and that the Regulations should mandate this technology and accelerate its uptake into the market. Natural Resources Canada believes that there is sufficient supply of high-efficiency products to satisfy the demand for their use in new and replacement applications. The Regulations will continue to require that all through-the-wall gas furnaces comply with the 90% annual fuel utilization efficiency. Chillers – condenser matching During pre-consultations, an industry association advocated for the removal of condenser-less chillers from the scope of application of the Regulations, noting that including these products would introduce unnecessary compliance burden, since they are outside the scope of current certification programs. No data was provided at that time to quantify the magnitude of this burden or to explain why condenser-less chillers are outside the scope of the certification program when ASHRAE 90.1-2007, Addendum M, the standard to which the Regulations for chillers aligns, prescribes requirements for them. Natural Resources Canada requested that this information be submitted as a formal comment to the proposed Regulations so that it could be taken into account and potential changes could be considered. In response to the proposed Regulations, the industry association reiterated its claims, but did not provide the additional information necessary to take an informed decision to modify the scope. The Regulations will align with the requirements of ASHRAE 90.1-2007, Addendum M, as well as its scope. Electric motors – medical equipment The proposed Regulations included more stringent MEPS that would apply to electric motors manufactured on or after June 1, 2016. In response, three manufacturers of medical imaging equipment that contains electric motors indicated that additional time was needed to modify these products to achieve compliance with the prescribed MEPS. This claim was supported by documentation detailing the potential impacts of these MEPS on each company’s operations. In particular, the sourcing of motors for use as replacement components in existing medical imaging equipment was cited as an issue that could negatively impact the ability of health-care providers to provide services to their patients. These manufacturers provided information to support their position that while it will be possible to use more efficient motors in replacement applications, more time is warranted to ensure that this can be done while complying with the stringent safety requirements applicable to such equipment. Natural Resources Canada agrees and will apply the MEPS to electric motors manufactured on or after June 1, 2017, only if they are used in medical imaging equipment. This provides an additional year to ensure compliance. This date was communicated to all three manufacturers and no concerns have been raised. Regulatory cooperation In August 2014, Natural Resources Canada and the U.S. Department of Energy established a goal of aligning new and updated energy efficiency standards and test methods for energy-using equipment through enhanced information sharing and cooperative development and implementation, to the extent practicable and permitted by law. This included a commitment to annually share work plans for test procedures and standards; develop guidelines for frequency of interaction and information sharing (e.g. test data, market analyses); mutually participate in the process to establish standards and testing requirements; and leverage multilateral initiatives to advance energy efficiency objectives. (see footnote 69) In May 2015, the two federal departments released the initial joint work plan, (see footnote 70) which introduced an initiative comprising “information sharing and assessment of U.S. experience on a range of residential and commercial equipment such as: air conditioners, furnaces, dehumidifiers, dishwashers and vending machines.” Information has been shared between the two countries regarding product categories that are subject to the Regulations. In particular, this has informed the approach as well as some of the analytical data and assumptions used to quantify the potential economic and environmental impacts of implementing the U.S. requirements in Canada. A subsequent joint work plan was released in July 2016, which reiterated Natural Resources Canada’s commitment to implement its Forward Regulatory Plan and to cooperate on several activities with the U.S. Department of Energy to improve Canada-United States alignment. Consultations with provinces, utilities and Canadian industry have occurred through the national standards development processes, as well as multilateral and bilateral communications with stakeholders. Rationale The Regulations will provide benefits to Canadians by addressing the issues of increasing levels of both GHG emissions and unnecessary regulatory differences between Canada and the United States. Other options considered could deal with each issue individually to a greater extent; (see footnote 71) however, the Regulations have been selected since they focus on both issues. According to the International Energy Agency, policies and programs that address energy efficiency are the most cost-effective way to lower GHG emissions and could complement carbon pricing schemes as an overall strategy to effectively achieve climate change policy objectives. (see footnote 72) Improving energy efficiency also provides economic benefits to consumers and businesses through lower energy bills. In the absence of a regulatory approach, a market for low-efficiency products would continue. Consumers who purchase such products could be motivated by lower purchase costs even though they would pay higher operational costs over the life of the product. The analysis of the Regulations has shown that the more stringent MEPS for all products would generate reductions in GHG emissions and energy consumption. The associated energy savings will generate net monetary benefits for Canadian consumers. It has also shown that, as a result of removing unnecessary regulatory differences, compliance costs associated with having to test the same product model twice to comply with Canadian and U.S. regulations will be reduced. The Regulations will remove these differences across 20 product categories. The analysis has shown that the costs of technologies that will be required to bring low- efficiency products into compliance with the MEPS are outweighed by the benefits attributable to those technologies. The development of the Regulations was informed by stakeholder views. Industry supports an approach that is aligned with that of the United States since most product models are designed to serve a Canada–U.S. market. Provinces support federal regulatory action on energy efficiency. The Energy Efficiency Regulations were first introduced in 1995 and have been amended 12 times to increase the stringency of existing MEPS and introduce MEPS for new product categories. Through the use of third-party verification and regular post-market compliance activities, a high compliance rate with regulated requirements has been observed. This provides confidence that estimated outcomes are being achieved and that Canadians are experiencing the associated benefits. Implementation, enforcement and service standards The Regulations will come into force six months after this publication in the Canada Gazette, Part II. The requirements will apply to the prescribed products based on their date of manufacture or import or interprovincial shipment of the product. As the Energy Efficiency Regulations will be repealed and replaced by the Energy Efficiency Regulations, 2016, the regulatory text for all regulated product categories will be reorganized. Stakeholders for all product categories have been notified of the proposed Regulations and provided with guidance on where to find product-specific requirements within the new organization. The compliance and enforcement procedures already in place for all products prescribed under the original Regulations will continue to be used following the coming into force of these Regulations. The main features of this system are as follows: Verification marking and energy efficiency reporting For products prescribed under the Regulations, Natural Resources Canada employs a third-party verification system using the services of certification bodies accredited by the Standards Council of Canada. Verified energy performance data is submitted to Natural Resources Canada by the dealer in an energy efficiency report as specified in the Regulations. This is required once for each product model before first importation or interprovincial shipment. Import reporting and monitoring Natural Resources Canada’s procedures, already in place, for the collection of information for commercial imports of prescribed products will apply to products affected by the Regulations. This involves cross-checking required import data received from customs release documents with the energy efficiency reports that dealers have submitted to Natural Resources Canada. This cross-checking ensures that Natural Resources Canada can verify the compliance of regulated products imported into Canada. The Regulations will continue to require dealers of prescribed products to provide the minimal information needed for customs monitoring. Direct fieldwork: market survey and product testing In addition to ongoing compliance and marketplace monitoring activities, Natural Resources Canada would survey and test products in the context of monitoring compliance outcomes with product-specific compliance audits. Depending on the product, Natural Resources Canada would conduct in-store audits and/or test products. Natural Resources Canada would also conduct product testing on a complaint-driven basis. The market is highly competitive and suppliers are cognizant of performance claims made by their competitors. Challenge procedures by which performance claims can be questioned exist in all verification programs. Performance measurement and evaluation The desired outcomes of the Regulations are presented in the following table along with the information that will be tracked to measure performance. Table 6: Measuring performance of the Regulations This table shows the desired outcomes of the Regulations along with the information that will be tracked to measure performance. Outcome Indicators Information to Measure Performance GHG emissions are reduced to contribute to Canada’s goal to reduce GHG emissions by at least 30% below 2005 levels by 2030 % of product models that meet MEPS Energy efficiency reports Import reports Market data (shipments, trends) Lab testing Emission factors Energy prices Consumers save money by purchasing higher efficiency product models that have lower costs over their lifetime % of product models that meet MEPS Energy efficiency reports Import reports Market data (shipments, trends) Lab testing Emission factors Energy prices Compliance costs associated with unnecessary regulatory differences are removed Number of unnecessary regulatory differences removed Comparison of Canadian and U.S. regulations Performance will be monitored through a combination of equipment-specific compliance reporting, supported by third-party verification of energy efficiency performance, and ongoing collection of market data to assess broader trends affecting outcomes. Information collected on the energy efficiency performance of regulated equipment informs both GHG emission impacts and consumer savings, since both are calculated as a function of changes in the amount of energy consumed by these products. (see footnote 73) A high compliance rate with the Regulations will be achieved through support from manufacturers, third-party verification, customs monitoring, cooperation with regulating provinces, communication activities, market surveys, and product testing, as required. The standards contained in the Regulations are being implemented under the federal energy efficiency equipment standards and labelling program. Detailed accounts of progress towards achieving the objectives of this initiative will be found in departmental business plans, reports on plans and priorities, and the Report to Parliament under the Energy Efficiency Act. Contact Debbie Scharf Director Equipment Division Office of Energy Efficiency Natural Resources Canada 930 Carling Avenue, Building 3, 1st Floor Ottawa, Ontario K1A 0Y3 Telephone: 613-996-4359 Fax: 613-947-5286 Email: [email protected] Footnote a S.C. 1992, c. 36 Footnote b S.C. 2009, c. 8, s. 5 Footnote c S.C. 1992, c. 36 Footnote 1 SOR/94-651 Footnote 2 The use of the term “minimum energy performance standard” or “MEPS” throughout this document is in reference to the “energy efficiency standard” as defined in the Energy Efficiency Act. Footnote 3 New products are those that have not previously been required to comply with MEPS under the Regulations. Footnote 4 International Energy Agency (IEA), 2015. Achievements of appliance energy efficiency standards and labelling programs - A GLOBAL ASSESSMENT, p. 2. Footnote 5 http://www.tbs-sct.gc.ca/ip-pi/trans/ar-lr/rcc-ccmr/cjfp-rppc-eng.asp Footnote 6 Total end use sector GHG emissions are those resulting from on-site fuel combustion (e.g. in a gas-fired storage water heater) or the production of electricity consumed. It excludes GHG emissions from fugitives, industrial processes and non-energy use. Footnote 7 http://oee.nrcan.gc.ca/corporate/statistics/neud/dpa/showTable.cfm?type=AN§or=aaa&juris=00&rn=1&page=0 Footnote 8 http://www.tbs-sct.gc.ca/ip-pi/trans/ar-lr/rcc-ccmr/japrc-paccc-eng.asp Footnote 9 For certain products, the same product model is tested differently to comply with Canadian and U.S. regulations. Footnote 10 https://www.liberal.ca/files/2015/10/A-new-plan-for-a-strong-middle-class.pdf Footnote 11 http://pm.gc.ca/eng/minister-natural-resources-mandate-letter Footnote 12 Obsolete standards are those that are no longer widely accepted as being the best way to test a product’s energy efficiency. They provide information (e.g. definitions, testing requirements) that are no longer relevant to energy-using products being imported into Canada or shipped between provinces. For example, the Regulations reference the standard CAN/CSA-C300- M91, entitled Capacity Measurement and Energy Consumption Test Methods for Refrigerators, Combination Refrigerator-Freezers, and Freezers. That standard applied to refrigerators or combination refrigerator-freezers that were manufactured before July 1, 2001. Since no such products are being imported into Canada, this standard is considered obsolete, and the Regulations will remove any reference to it. Footnote 13 The use of the term “commercial clothes washer” throughout this document is in reference to clothes washers other than household clothes washers, as defined in the Regulations. Footnote 14 Clothes dryers will use the metric, combined energy factor; clothes washers will use the metric, integrated modified energy factor. Footnote 15 The Canadian procedure is aligned with U.S. D1: Appendix D1, chapter II, part 430, subpart B, of the U.S. Code of Federal Regulations. Footnote 16 Appendix D2, chapter II, part 430, subpart B, of the U.S. Code of Federal Regulations. Footnote 17 http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/67 Footnote 18 http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/43 Footnote 19 http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/36 Footnote 20 http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/39 Footnote 21 http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/46 Footnote 22 The Regulations will prescribe higher MEPS for central air conditioners and heat pumps for products manufactured on or after January 1, 2017, while the U.S. rule came into effect on January 1, 2015. The rationale for this difference is that a U.S. rule affecting three-phase product models within this category does not come into effect until January 1, 2017. Since Canada regulates single-phase and three-phase product models under the same category, the later date was selected, even though the rules for single-phase products came into effect in the United States on January 1, 2015. Footnote 23 https://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/75 Footnote 24 ASHRAE 90.1-2007 Addendum M (2007). https://www.ashrae.org/standards-research-technology/standards-addenda Footnote 25 https://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/52 Footnote 26 https://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/50 Footnote 27 https://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=3 Footnote 28 http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/70 Footnote 29 http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/58 Footnote 30 https://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/21 Footnote 31 http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/45 Footnote 32 https://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/24 Footnote 33 https://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/41 Footnote 34 http://www.gpo.gov/fdsys/pkg/FR-2015-11-02/html/2015-27772.htm Footnote 35 Average volume is less than or equal to 208 litres; large volume is greater than 208 litres. Footnote 36 https://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/27 Footnote 37 https://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/27 Footnote 38 http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/23 Footnote 39 In accordance with the Regulations, a verification mark is issued by a certification body and signifies that a product model complies with the prescribed MEPS. Every energy-using product imported into Canada or shipped between provinces must be labelled with a verification mark. Footnote 40 The Canadian Radio-Television and Telecommunications Commission required digital television transmission on August 31, 2011. http://www.crtc.gc.ca/eng/info_sht/bdt14.htm Footnote 41 For example technical bulletins were published in 2010 and 2011, which clearly described the nature of regulatory changes that were considered for eight of the products covered by the proposed Regulations, including the stringency of new MEPS and the timing being considered for their implementation. As well, Natural Resources Canada published forward regulatory plans in 2012, 2013 and 2014, outlining the product categories to be addressed by the proposed Regulations and the policy intent (e.g. to align with the United States). One manufacturer indicated that it had phased out an entire product line in Canada based on its understanding that new MEPS had come into effect at the same time as in the United States. This was signalled in a consultation bulletin but never implemented. Footnote 42 IEA, 2015. Achievements of appliance energy efficiency standards and labelling programs: A GLOBAL ASSESSMENT, p. 3. Footnote 43 Ibid. p. 1. Footnote 44 Ibid. p. 3. Footnote 45 Microwaves ovens, for example. Footnote 46 Calculated as the value of avoided damages from GHG emissions reductions. Footnote 47 For the purpose of this analysis, it is assumed that incremental costs for more efficient technology and compliance, as well as product development and production, are passed on to consumers or end users. This assumption simplifies the methodology since individual business decisions that affect actual product prices are unknown. Footnote 48 Regulations Amending the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations (SOR/2014-207). Footnote 49 Contact Environment and Climate Change Canada’s Economic Analysis Directorate for any questions regarding methodology, rationale or policy. Footnote 50 U.S. Government, U.S. Interagency Working Group on the Social Cost of Carbon (IWGSCC), 2010. Technical Support Document: Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866. Footnote 51 This is the same social cost of carbon used in the cost-benefit analysis in support of the Regulations Amending the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations (SOR/2014-207). Footnote 52 IEA, 2015. Achievements of appliance energy efficiency standards and labelling programs: A GLOBAL ASSESSMENT, p. 6. Footnote 53 The benefits and costs associated with integrated clothes washer-dryers were accounted for under the product categories of clothes washers and clothes dryers. Footnote 54 In the case of three product categories (commercial refrigerators, refrigerator-freezers and freezers [self-contained]; dishwashers; and packaged terminal air conditioners and heat pumps), studies conducted in 2015 showed that all product models being imported into Canada or shipped between provinces comply with the more stringent MEPS. No costs or benefits are attributed to the implementation of the MEPS for these product categories. Footnote 55 The costs are negative since the analysis showed that a product model that complies with the MEPS could be manufactured at a lower cost than one that does not. Footnote 56 Database support for the implementation of these Regulations is estimated at one full-time equivalent employee for one year occurring in 2017. Footnote 57 The Organisation of Economic Co-operation and Development (OECD) categorizes the major benefits of international regulatory harmonization as the economic gains from reduced costs on economic activity and increased trade and investment flows; the ability to manage risks across borders; administrative efficiencies associated with greater transparency and work-sharing; and increased knowledge among peers from information sharing. The challenges are similarly categorized as the costs associated with coordinating work across borders; sovereignty issues and a lack of domestic regulatory flexibility; political influences on regulatory cooperation; and implementation issues. These impacts are beyond the scope of this analysis. (Source: OECD, 2013. International Regulatory Co-operation: Addressing Global Challenges) Footnote 58 Maximizing Canada’s Energy Advantage – Canadian Industrial Energy Efficiency, Energy and Mines Ministers’ Conference, July 2015. Footnote 59 http://oee.nrcan.gc.ca/regulations/11239 Footnote 60 Part 1, Section 5(1)(f) Footnote 61 http://canadagazette.gc.ca/rp-pr/p1/2016/2016-04-30/html/reg1-eng.php Footnote 62 Stakeholders that were informed include all organizations and individuals with an interest in the proposed Regulations. Groups that provided input include, but are not limited to, manufacturers, industry associations, provincial governments, energy utilities, contractors, and builders. Footnote 63 Including central air conditioners and heat pumps, commercial refrigeration, electric motors, fluorescent lamps ballasts, general service fluorescent lamps, general service incandescent reflector lamps, ice-makers, packaged terminal air conditioners and heat pumps, refrigerated beverage vending machines, room air conditioners, and oil-fired storage water heaters. Footnote 64 The period of manufacture for ice-makers will not begin until January 28, 2018. Footnote 65 World Trade Organization, Agreement on Technical Barriers to Trade, s. 2.12 Footnote 66 https://docs.wto.org/imrd/directdoc.asp?DDFDocuments/t/G/TBTN16/CAN489.DOC Footnote 67 J. Rohlerder, The Role of Third Party Verification in Emissions Trading Systems: Developing Best Practices – Sustainable Development Law & Policy, Winter 2006, p. 28, http://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=1323&context=sdlp. Footnote 68 H.R.4444, EPS Improvement Act of 2016 Footnote 69 http://www.tbs-sct.gc.ca/ip-pi/trans/ar-lr/rcc-ccmr/cjfp-rppc-eng.asp Footnote 70 http://energy.gov/sites/prod/files/2015/05/f22/RCC%20Workplan%20PDF%20EN%20FR.PDF Footnote 71 For example, repealing the Regulations would permanently eliminate unnecessary regulatory differences. Footnote 72 IEA/OECD, 2011. Summing up the Parts - Combining Policy Instruments for Least-Cost Climate Mitigation Strategies, p. 8. Footnote 73 GHG emissions are quantified by applying the appropriate emission factors to the changes in energy, by fuel. Consumer savings are quantified by applying the appropriate energy prices to the changes in energy, by fuel.

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