Underperforming and improperly labelled equipment and appliances could pose a far greater financial liability than just elevated energy costs. Proposed amendments to Canada’s Energy Efficiency Act would bring a five- to 100-fold increase to existing maximum fines, depending on the circumstances, and introduce a new slate of administrative monetary penalties (AMPs) characterized as primarily for instructive rather than retributive purposes.
A newly tabled bill in the Canadian Senate also includes the framework for proposed regulatory sandboxes that would allow new products to be tested in the marketplace in tandem with the development of rules to govern them. Other new provisions would address digital procedures and mechanisms that have emerged since the legislation was last updated.
“Modernizing the Energy Efficiency Act ensures Canadian families, homes and businesses can access higher-performing, lower-cost energy-using products that save them money and reduce greenhouse gases. This is good news for our environment and Canadians’ wallets,” maintains Tim Hodgson, Canada’s Minister of Energy and Natural Resources.
However, equipment/appliance dealers or other commercial entities that “use an energy-using product for commercial purposes” could be in line for a significant financial hit if they are found to be importing or shipping items between provinces that do not comply with applicable energy-efficiency standards or carry accurate labels. Currently, they would face a maximum fine of $50,000 if convicted of a summary (i.e. less serious) offence or a fine of up $250,000 for a serious indictable offence.
The proposed amendments would lift maximum fines to $250,000 for a first summary offence and $2 million for a first indictable offence. Subsequent convictions could yield fines of up to $500,000 for a summary offence or up to $5 million for an indictable offence.
A range of other transgressions — such as tampering with energy-rating labels, false statements/documentation or inadequate record-keeping — that can currently result in fines of up to $10,000 could become steeply more odious. Maximum fines of $500,000 for a first offence and $1 million for a subsequent offence are proposed.
Elsewhere, the amendments would establish the authority for administrative monetary penalties ((AMPs). As proposed, the Minister of Energy and Natural Resources would designate officials with the authority to issue notices of violation to individuals or other entities for contravening provisions of the Energy Efficiency Act or its regulations. In turn, recipients would have the right to request a review of the alleged violation and/or to enter into a compliance agreement for a lesser penalty. The framework for the penalties would be set out in future regulations.
“The purpose of a penalty is to promote compliance with this Act and not to punish,” the amendment states. “The maximum penalty for a violation is $5,000, in the case of an individual, and $25,000, in any other case.”
Allowance for regulatory sandboxes would be introduced under the Act’s existing authority for Ministerial regulations. Through this proposed mechanism, any person, energy-using product or class of people or products could be exempted from an existing regulatory requirement for a specified period of up to three years if it’s considered in the public interest for the purpose of testing a product, service, process or regulatory measure.
Candidates for the exemption would first have to submit and receive approval for an implementation plan, which would include assurances of monitoring and health, safety and environmental controls. Expected benefits must outweigh the risks of suspending regulatory requirements.
The Minister would have authority to extend the exemption period to up to six years once testing is underway. Alternatively, exemptions could be revoked or adjusted if it’s determined that trials are no longer in the public interest or risk management improvements are necessary.
The bill has thus far just completed the first reading stage in the Senate and still has a long process ahead before it might be adopted in the House of Commons.
