Regulations Amending the Energy Efficiency Regulations, 2016 (Amendment 15): SOR/2019-164

Canada Gazette, Part II, Volume 153, Number 12

Registration
SOR/2019-164 June 3, 2019

ENERGY EFFICIENCY ACT

P.C. 2019-598 May 31, 2019

Her Excellency the Governor General in Council, on the recommendation of the Minister of Natural Resources, pursuant to sections 20 ^{footnote a} and 25 of the Energy Efficiency Act ^{footnote b}, makes the annexed Regulations Amending the Energy Efficiency Regulations, 2016 (Amendment 15).

Regulations Amending the Energy Efficiency Regulations, 2016 (Amendment 15)

Amendments

1 The heading of Division 4 of Part 2 of the Energy Efficiency Regulations, 2016 ^{footnote 1} is replaced by the following:

Furnaces, Fireplaces, Unit Heaters and Recovery Ventilators

2 The definition FER in section 256.1 of the Regulations is replaced by the following:

FER means, in respect of a gas furnace, an oil-fired furnace or an electric furnace, the fan energy rating, which is the annual electrical energy consumption of the furnace fan normalized by annual fan operating hours and the product’s maximum airflow (Q_max). (FER)

3 (1) The definitions CSA 2.3 and gas furnace in section 257 of the Regulations are replaced by the following:

CSA 2.3 means the CSA standard ANSI Z21.47-2016/ CSA 2.3-2016 entitled Gas-Fired Central Furnaces. (CSA 2.3)

gas furnace means an automatic operating gas-fired central forced air furnace that uses propane or natural gas and has an input rate of not more than 117.23 kW (400,000 Btu/h). It does not include a furnace for a park model trailer or a recreational vehicle. (générateur d’air chaud à gaz)

through-the-wall means, with respect to a gas furnace, one that is designed and marketed to be installed in an opening in an exterior wall that is fitted with a weatherized sleeve. (mural)

(2) Section 257 of the Regulations is amended by adding the following in alphabetical order:

gas furnace for relocatable buildings means a gas furnace that is intended for use in a temporary modular building that can be relocated from one site to another and is marked for use in relocatable buildings. (générateur d’air chaud à gaz pour bâtiments relocalisables)

manufactured home means a factory-built, single- or multiple-section, one-storey dwelling that

• (a) is designed and constructed for year-round occupancy;
• (b) is designed to be transported to its installation site; and
• (c) is ready for occupancy when it is installed in accordance with the manufacturer’s installation instructions. (maison usinée)

replacement non-condensing gas furnace means a non-condensing gas furnace that is marked for use as a replacement for a non-condensing gas furnace in a manufactured home. (générateur d’air chaud à gaz sans condensation de remplacement)

4 Subsection 258(2) of the Regulations is replaced by the following:

Limits

(2) However, for the purposes of sections 4, 5 and 259, a gas furnace is not considered to be an energy-using product if

• (a) it was manufactured before February 3, 1995;
• (b) it is a gas furnace for relocatable buildings that is manufactured before July 3, 2019; or
• (c) it is a replacement non-condensing gas furnace that is manufactured before July 3, 2019.

5 (1) The portion of item 2.1 of the table to section 259 of the Regulations in column 1 is replaced by the following:

Item	Column 1 Energy-using Product
2.1	Gas furnaces, other than gas furnaces for relocatable buildings or replacement non-condensing gas furnaces, that have an input rate of ≤ 65.92 kW (225,000 Btu/h), use single-phase electric current and do not have an integrated cooling component

(2) The portion of item 2.1 of the table to section 259 of the Regulations in column 3 is replaced by the following:

Item	Column 3 Energy Efficiency Standard
2.1	Annual fuel utilization efficiency ≥ 95% FER ≤ FER for product class “Non-Weatherized, Condensing Gas Furnace Fan (NWG-C)”, set out in 10 C.F.R. §430.32(y)

(3) The portion of item 5 of the table to section 259 of the Regulations in column 1 is replaced by the following:

Item	Column 1 Energy-using Product
5	Gas furnaces, other than gas furnaces for relocatable buildings or replacement non-condensing gas furnaces, that are through-the-wall, have an input rate of ≤ 65.92 kW (225,000 Btu/h), use single-phase electric current and have an integrated cooling component

(4) The portion of item 5 of the table to section 259 of the Regulations in column 4 is replaced by the following:

Item	Column 4 Period of Manufacture
5	On or after December 31, 2012 and before January 1, 2024

(5) The portion of item 5.1 of the table to section 259 of the Regulations in column 1 is replaced by the following:

Item	Column 1 Energy-using Product
5.1	Gas furnaces, other than gas furnaces for relocatable buildings or a replacement non-condensing gas furnace, that are through-the-wall, have an input rate of ≤ 65.92 kW (225,000 Btu/h), use single-phase electric current and have an integrated cooling component

(6) The portion of item 5.1 of the table to section 259 of the Regulations in column 3 is replaced by the following:

Item	Column 3 Energy Efficiency Standard
5.1	Annual fuel utilization efficiency ≥ 90% FER ≤ FER for product class “Non-Weatherized, Condensing Gas Furnace Fan (NWG-C)”, set out in 10 C.F.R. §430.32(y)

(7) The portion of item 5.1 of the table to section 259 of the Regulations in column 4 is replaced by the following:

Item	Column 4 Period of Manufacture
5.1	On or after January 1, 2024

(8) The table to section 259 of the Regulations is amended by adding the following in numerical order:

Item	Column 1 Energy-using Product	Column 2 Standard	Column 3 Energy Efficiency Standard	Column 4 Period of Manufacture
8	Gas furnaces for relocatable buildings	CSA P.2 for annual fuel utilization efficiency 10 C.F.R. Appendix AA, for fan energy rating	Annual fuel utilization efficiency ≥ 80% FER ≤ FER for product class “Mobile Home Non-Weatherized, Non-Condensing Gas Furnace Fan (MH-NWG-NC)”, set out in 10 C.F.R. §430.32(y)	On or after July 3, 2019
9	Replacement non-condensing gas furnaces	CSA P.2 for annual fuel utilization efficiency 10 C.F.R. Appendix AA, for fan energy rating	Annual fuel utilization efficiency ≥ 80% FER ≤ FER for product class “Mobile Home Non-Weatherized, Non-Condensing Gas Furnace Fan (MH-NWG-NC)”, set out in 10 C.F.R. §430.32(y)	On or after July 3, 2019

6 (1) The portion of item 2 of the table to section 260 of the Regulations in column 1 is replaced by the following:

Item	Column 1 Energy-using Product
2	Gas furnaces, other than those that are through-the-wall, that have an input rate of ≤ 65.92 kW (225,000 Btu/h), that use single-phase electric current and that are manufactured on or after December 31, 2009 and before July 3, 2019

(2) The portion of item 2.1 of the table to section 260 of the Regulations in column 1 is replaced by the following:

Item	Column 1 Energy-using Product
2.1	Gas furnaces, other than those that are through-the-wall, that have an input rate of ≤ 65.92 kW (225,000 Btu/h), that use single-phase electric current and that are manufactured on or after July 3, 2019

(3) The portion of item 2.1 of the table to section 260 of the Regulations in column 3 is amended by striking out “and” at the end of paragraph (f), by adding “and” at the end of paragraph (g) and by adding the following after paragraph (g):

Item	Column 3 Information
2.1	(h) if applicable, information that indicates whether product is gas furnace for relocatable buildings or is replacement non-condensing gas furnace.

7 The table to section 260 of the Regulations is amended by adding the following after item 2.1:

Item	Column 1 Energy-using Product	Column 2 Standard	Column 3 Information
2.2	Gas furnaces that are through-the-wall, that have an input rate of ≤ 65.92 kW (225,000 Btu/h), that use single-phase electric current, that have an integrated cooling component and that are manufactured on or after December 31, 2009 and before January 1, 2024	CSA P.2 for information set out in paragraphs (a) to (c)	(a) maximum heat input and output nominal capacities, in kW (Btu/h); (b) annual fuel utilization efficiency; (c) type of fuel used; and (d) if applicable, information that indicates whether product is gas furnace for relocatable buildings or is replacement non-condensing gas furnace.
2.3	Gas furnaces that are through-the-wall, that have an input rate of ≤ 65.92 kW (225,000 Btu/h), that use single-phase electric current, that have an integrated cooling component and that are manufactured on or after January 1, 2024	CSA P.2 for information set out in paragraphs (a) to (c) 10 C.F.R. Appendix AA for information set out in paragraphs (d) and (e)	(a) maximum heat input and output nominal capacities, in kW (Btu/h); (b) annual fuel utilization efficiency; (c) type of fuel used; (d) FER, expressed in W/472 L/s (W/1,000 ft³/min); (e) product’s maximum airflow (Qmax), expressed in L/s (ft³/min); and (f) if applicable, information that indicates whether product is gas furnace for relocatable buildings or is replacement non-condensing gas furnace.

8 (1) The definition gas fireplace in section 265 of the Regulations is replaced by the following:

gas fireplace means a decorative gas fireplace or a heating gas fireplace. (foyer à gaz)

(2) Section 265 of the Regulations is amended by adding the following in alphabetical order:

decorative gas fireplace means a vented fireplace that is fuelled by natural gas or propane, is marked for decorative use only and is not equipped with a thermostat or intended for use as a heater. (foyer à gaz décoratif)

heating gas fireplace means a vented fireplace that is fuelled by natural gas or propane and is not a decorative gas fireplace. (foyer à gaz de chauffage)

9 Subsection 266(2) of the Regulations is replaced by the following:

Limits

(2) However, a gas fireplace is not considered to be an energy-using product

• (a) for the purposes of sections 4, 5 and 7, unless it is manufactured on or after June 1, 2003; or
• (b) for the purpose of section 266.1, unless it is manufactured on or after January 1, 2020.

10 The Regulations are amended by adding the following after section 266:

Energy efficiency standards

266.1 (1) The energy efficiency standards set out in column 3 of the table to this section apply to gas fireplaces described in column 1 that are manufactured during the periods set out in column 4.

Testing standard

(2) A gas fireplace complies with the energy efficiency standard if it meets that standard when tested in accordance with testing procedures established by the standard set out in column 2 that are applicable to a gas fireplace as defined in section 265.

TABLE

Item	Column 1 Energy-using Product	Column 2 Standard	Column 3 Energy Efficiency Standard	Column 4 Period of Manufacture
1	Decorative gas fireplaces	N\A	The product must be capable of (a) automatically extinguishing pilot flame when main gas burner flame is established; (b) automatically extinguishing pilot flame when main gas burner flame is extinguished; (c) if it has the capability of being manually switched to a mode of continuous pilot operation, preventing pilot flame from burning continuously for more than seven days; or (d) in absence of any automatic or manual adjustment to main gas burner flame height or appearance, preventing any ignition source for the main gas burner flame from operating continuously for more than seven days. Must have a direct vent configuration, unless it is marked for replacement use only.	On or after January 1, 2020
2	Heating gas fireplaces	CSA P.4.1-15 for fireplace efficiency	Fireplace efficiency ≥ 50% The product must be capable of (a) automatically extinguishing pilot flame when main gas burner flame is established; (b) automatically extinguishing pilot flame when main gas burner flame is extinguished; (c) if it has the capability of being manually switched to a mode of continuous pilot operation, preventing pilot flame from burning continuously for more than seven days; or (d) in absence of any automatic or manual adjustment to main gas burner flame height or appearance, preventing any ignition source for the main gas burner flame from operating continuously for more than seven days.	On or after January 1, 2020

11 (1) Paragraph 267(1)(e) of the Regulations is replaced by the following:

• (e) the type of ignition system it uses;

(2) Subsection 267(1) of the Regulations is amended by adding the following after paragraph (f):

• (g) information that indicates whether the product is a decorative gas fireplace or a heating gas fireplace; and
• (h) if the product is a decorative gas fireplace that is manufactured on or after January 1, 2020, information that indicates whether it is intended for use as a replacement unit.

12 The Regulations are amended by adding the following after section 271:

SUBDIVISION E

Electric Furnaces

Definition of electric furnace

272 In this Subdivision, electric furnace means an automatic operating central forced air furnace that uses single-phase electric current to heat one or more electrical resistance heating elements and has an input rate of not more than 65.92 kW (225,000 Btu/h). It does not include an electric furnace that

• (a) produces at least 300 Pa (1.2 inches of water) external static pressure when operated at an air volume rate of 104 to 165 L/s (220 to 350 ft³/min) per nominal ton of cooling in the highest default cooling airflow-control setting; and
• (b) uses room outlets that produce velocities greater than 5 m/s (1,000 ft/min) and each have an area less than 39 cm² (6 square inches).

Energy-using product

273 (1) An electric furnace is prescribed as an energy-using product.

Limit

(2) However, for the purposes of sections 4, 5 and 274, an electric furnace is not considered to be an energy-using product unless it is manufactured on or after July 3, 2019.

Energy efficiency standard

274 (1) The energy efficiency standard that applies to an electric furnace is that its FER must be less than or equal to the FER for product class “Non-Weatherized, Electric Furnace/Modular Blower Fan”, set out in 10 C.F.R. §430.32(y).

Testing standard

(2) An electric furnace complies with the energy efficiency standard if it meets that standard when tested in accordance with testing procedures established by 10 C.F.R. Appendix AA that are applicable to an electric furnace as defined in section 272.

Information

275 For the purpose of subsection 5(1) of the Act, the following information must be collected in accordance with 10 C.F.R. Appendix AA and provided to the Minister in respect of an electric furnace:

• (a) its maximum heat input nominal capacity, expressed in kilowatts (British thermal units per hour);
• (b) its FER, expressed in watts per 472 L/s (watts per 1000 ft³/min); and
• (c) its maximum airflow (Qmax), expressed in L/s (ft³/min).

SUBDIVISION F

Recovery Ventilators

Interpretation

Definitions

276 The following definitions apply in this Subdivision.

CSA C439-18 means the CSA standard CAN/CSA- C439-18 entitled Laboratory methods of test for rating the performance of heat/energy-recovery ventilators. (CSA C439-18)

energy-recovery ventilator means a factory-built packaged unit that has fans or blowers, has a maximum rated airflow of not more than 142 L/s (300 ft³/min) at 0°C and transfers heat and moisture between two isolated airstreams. (ventilateur-récupérateur d’énergie)

heat-recovery ventilator means a factory-built packaged unit that has fans or blowers, has a maximum rated airflow of not more than 142 L/s (300 ft³/min) at 0°C and transfers heat between two isolated airstreams. (ventilateur-récupérateur de chaleur)

sensible heat recovery efficiency means, in respect of an energy-recovery ventilator or a heat-recovery ventilator, the ratio of the net sensible energy recovered by the unit’s supply airstream, as adjusted to account for the unit’s external and internal energy gains and losses, to the maximum sensible energy that would be recovered if the unit had an infinite transfer area. (efficacité de récupération de chaleur sensible)

Energy-recovery Ventilators

Energy-using product

277 (1) An energy-recovery ventilator is prescribed as an energy-using product.

Limit

(2) However, for the purposes of sections 4 and 5, an energy-recovery ventilator is not considered to be an energy-using product unless it is manufactured on or after January 1, 2020.

Information

278 For the purpose of subsection 5(1) of the Act, the following information must be collected in accordance with CSA C439-18 and be provided to the Minister in respect of an energy-recovery ventilator:

• (a) its maximum rated airflow at 0°C;
• (b) its sensible heat recovery efficiency at 0°C and the associated net supply airflow, expressed in L/s, and electrical power consumption, expressed in watts; and
• (c) unless the unit is marked for use only where the outdoor design temperature is greater than or equal to -10°C, its sensible heat recovery efficiency at -25°C and the associated net supply airflow, expressed in L/s.

Heat-recovery Ventilators

Energy-using product

279 (1) A heat-recovery ventilator is prescribed as an energy-using product.

Limit

(2) However, for the purposes of sections 4 and 5, a heat-recovery ventilator is not considered to be an energy-using product unless it is manufactured on or after January 1, 2020.

Information

280 For the purpose of subsection 5(1) of the Act, the following information must be collected in accordance with CSA C439-18 and be provided to the Minister in respect of a heat-recovery ventilator:

• (a) its maximum rated airflow at 0°C;
• (b) its sensible heat recovery efficiency at 0°C and the associated net supply airflow, expressed in L/s, and electrical power consumption, expressed in watts; and
• (c) unless the unit is marked for use only where the outdoor design temperature is greater than or equal to -10°C, its sensible heat recovery efficiency at -25°C and the associated net supply airflow, expressed in L/s.

13 Section 314 of the Regulations is amended by adding the following in alphabetical order:

CSA P.2 means the CSA standard CAN/CSA-P.2-13 entitled Testing Method for Measuring the Annual Fuel Utilization Efficiency of Residential Gas-Fired or Oil-Fired Furnaces and Boilers. (CSA P.2)

10 C.F.R. Appendix A means Appendix A to Subpart E, Part 431 of Title 10 to the United States Code of Federal Regulations, entitled Uniform Test Method for the Measurement of Thermal Efficiency and Combustion Efficiency of Commercial Packaged Boilers, as amended from time to time. (appendice A 10 C.F.R.)

14 (1) The definition CSA P.2 in section 315 of the Regulations is repealed.

(2) The definition gas boiler in section 315 of the Regulations is replaced by the following:

gas boiler means a boiler that uses exclusively propane or natural gas, is intended for application in a low pressure steam, or hot water, central heating system and has an input rate of not more than 2 930.71 kW (10,000,000 Btu/h). (chaudière à gaz)

15 The Regulations are amended by adding the following after section 315:

Type

315.1 For the purpose of these Regulations, a gas boiler is one of the following types:

• (a) household, if it has an input rate of less than 87.92 kW (300,000 Btu/h); or
• (b) commercial, if it is has an input rate of greater than or equal to 87.92 kW (300,000 Btu/h) but not more than 2 930.71 kW (10,000,000 Btu/h).

16 Subsection 316(2) of the Regulations is replaced by the following:

Limits

(2) However, a gas boiler is not considered to be an energy-using product

• (a) for the purpose of section 4 unless
  • (i) it is a household gas boiler that is manufactured on or after June 30, 1999, or
  • (ii) it is a commercial gas boiler that is manufactured on or after January 1, 2025; and
• (b) for the purposes of sections 5 and 317 unless
  • (i) it is a household gas boiler that is manufactured on or after December 31, 1998, or
  • (ii) it is a commercial gas boiler that is manufactured on or after January 1, 2025.

17 Section 317 of the Regulations is replaced by the following:

Energy efficiency standards — household

317 (1) The energy efficiency standards set out in column 3 of Table 1 to this section apply to household gas boilers described in column 1 that are manufactured during the periods set out in column 4.

Testing standard — household

(2) A household gas boiler complies with the energy efficiency standard if it meets that standard when tested in accordance with testing procedures established by the standard set out in column 2 of Table 1 that are applicable to a gas boiler as defined in section 315.

Energy efficiency standards — commercial

(3) The energy efficiency standards set out in column 2 of Table 2 to this section apply to commercial gas boilers described in column 1 that are manufactured on or after January 1, 2025.

Testing standard — commercial

(4) A commercial gas boiler complies with the energy efficiency standard if it meets that standard when tested in accordance with testing procedures established by 10 C.F.R. Appendix A that are applicable to a gas boiler as defined in section 315.

TABLE 1

Item	Column 1 Energy-using Product	Column 2 Standard	Column 3 Energy Efficiency Standard	Column 4 Period of Manufacture
1	Household gas boilers that are intended for low pressure steam systems	CGA P.2	Annual fuel utilization efficiency ≥ 75%	On or after December 31, 1998 and before September 1, 2010
2	Household gas boilers that are intended for low pressure steam systems	CSA P.2 for annual fuel utilization efficiency	Annual fuel utilization efficiency ≥ 80% No continuously burning pilot light	On or after September 1, 2010 and before January 15, 2021
2.1	Household gas boilers that are intended for low pressure steam systems	CSA P.2 for annual fuel utilization efficiency, standby power and off-mode power	Annual fuel utilization efficiency ≥ 82% No continuously burning pilot light Standby power ≤ 8 W Off-mode power ≤ 8 W	On or after January 15, 2021
3	Household gas boilers that are intended for hot water systems	CGA P.2	Annual fuel utilization efficiency ≥ 80%	On or after December 31, 1998 and before September 1, 2010
4	Household gas boilers that are intended for hot water systems	CSA P.2 for annual fuel utilization efficiency	Annual fuel utilization efficiency ≥ 82% No continuously burning pilot light	On or after September 1, 2010 and before September 1, 2012
5	Household gas boilers that are intended for hot water systems and have tankless domestic water heating coils	CSA P.2 for annual fuel utilization efficiency	Annual fuel utilization efficiency ≥ 82% No continuously burning pilot light	On or after September 1, 2012 and before July 1, 2023
5.1	Household gas boilers that are intended for hot water systems and have tankless domestic water heating coils	CSA P.2 for annual fuel utilization efficiency, standby power and off-mode power	Annual fuel utilization efficiency ≥ 90% No continuously burning pilot light Standby power ≤ 9 W Off-mode power ≤ 9 W	On or after July 1, 2023
6	Household gas boilers that are intended for hot water systems and do not have tankless domestic water heating coils	CSA P.2 for annual fuel utilization efficiency	Annual fuel utilization efficiency ≥ 82% No continuously burning pilot light Equipped with automatic water temperature adjustment device and not operable without the device	On or after September 1, 2012 and before July 1, 2023
7	Household gas boilers that are intended for hot water systems and do not have tankless domestic water heating coils	CSA P.2 for annual fuel utilization efficiency, standby power and off-mode power	Annual fuel utilization efficiency ≥ 90% No continuously burning pilot light Equipped with automatic water temperature adjustment device and not operable without the device Standby power ≤ 9 W Off-mode power ≤ 9 W	On or after July 1, 2023

TABLE 2

Item	Column 1 Energy-using Product	Column 2 Energy Efficiency Standard
1	Commercial gas boilers that have an input rate of ≥ 87.92 kW (300,000 Btu/h) but ≤ 732.68 kW (2,500,000 Btu/h) and are intended for hot water systems	Thermal efficiency ≥ 90%
2	Commercial gas boilers that have an input rate of > 732.68 kW (2,500,000 Btu/h) but ≤ 2 930.71 kW (10,000,000 Btu/h) and are intended for hot water systems	Combustion efficiency ≥ 90%
3	Commercial gas boilers that have an input rate of ≥ 87.92 kW (300,000 Btu/h) but ≤ 732.68 kW (2,500,000 Btu/h) and are intended for low pressure steam systems	Thermal efficiency ≥ 81%
4	Commercial gas boilers that have an input rate of > 732.68 kW (2,500,000 Btu/h) but ≤ 2 930.71 kW (10,000,000 Btu/h) and are intended for low pressure steam systems	Thermal efficiency ≥ 82%

18 (1) The portion of item 1 of the table to section 318 of the Regulations in column 1 is replaced by the following:

Item	Column 1 Energy-using Product
1	Household gas boilers manufactured on or after December 31, 1998 and before September 1, 2010

(2) Item 2 of the table to section 318 of the Regulations is replaced by the following:

Item	Column 1 Energy-using Product	Column 2 Standard	Column 3 Information
2	Household gas boilers manufactured on or after September 1, 2010 and before January 15, 2021 and intended for low pressure steam systems	CSA P.2	(a) type of fuel used; (b) maximum heat input and output nominal capacities, in kW (Btu/h); and (c) annual fuel utilization efficiency.

(3) The table to section 318 of the Regulations is amended by adding the following after item 2:

Item	Column 1 Energy-using Product	Column 2 Standard	Column 3 Information
3	Household gas boilers manufactured on or after January 15, 2021 and intended for low pressure steam systems	CSA P.2	(a) type of fuel used; (b) maximum heat input and output nominal capacities, in kW (Btu/h); (c) annual fuel utilization efficiency; (d) standby power, in W; and (e) off-mode power, in W.
4	Household gas boilers, other than those intended for low pressure steam systems, manufactured on or after September 1, 2010 and before July 1, 2023	CSA P.2 for information set out in paragraphs (a) to (c)	(a) type of fuel used; (b) maximum heat input and output nominal capacities, in kW (Btu/h); (c) annual fuel utilization efficiency; and (d) if product is manufactured on or after September 1, 2012 and before July 1, 2023, (i) information that indicates whether product has tankless domestic water heating coils, and (ii) type of automatic water temperature adjustment device it has, if any.
5	Household gas boilers, other than those intended for low pressure steam systems, manufactured on or after July 1, 2023	CSA P.2 for information set out in paragraphs (a) to (e)	(a) type of fuel used; (b) maximum heat input and output nominal capacities, in kW (Btu/h); (c) annual fuel utilization efficiency; (d) standby power, in W; (e) off-mode power, in W; (f) information that indicates whether product has tankless domestic water heating coils; and (g) type of automatic water temperature adjustment device it has, if any.
6	Commercial gas boilers manufactured on or after January 1, 2025	10 C.F.R. Appendix A	(a) type of central heating system for which product is intended; (b) maximum heat input nominal capacity, in kW (Btu/h); and (c) thermal efficiency or, if product has an input rate of > 732.68 kW (2,500,000 Btu/h) but ≤ 2 930.71 kW (10,000,000 Btu/h) and is intended for hot water systems, combustion efficiency.

19 The portion of the definition oil-fired boiler before paragraph (a) in section 319 of the Regulations is replaced by the following:

oil-fired boiler means a boiler that is intended for application in a low pressure steam, or hot water, central heating system, has an input rate of less than 2 930.71 kW (10,000,000 Btu/h) and is

20 The Regulations are amended by adding the following after section 319:

Type

319.1 For the purpose of these Regulations, an oil-fired boiler is one of the following types:

• (a) household, if it has an input rate of less than 87.92 kW (300,000 Btu/h); or
• (b) commercial, if it is has an input rate of greater than or equal to 87.92 kW (300,000 Btu/h) but not more than 2 930.71 kW (10,000,000 Btu/h).

21 Subsection 320(2) of the Regulations is replaced by the following:

Limits

(2) However, an oil-fired boiler is not considered to be an energy-using product

• (a) for the purpose of section 4, unless
  • (i) it is a household oil-fired boiler that is manufactured on or after June 30, 1999, or
  • (ii) it is a commercial oil-fired boiler that is manufactured on or after January 1, 2025; and
• (b) for the purposes of sections 5 and 321, unless
  • (i) it is a household oil-fired boiler that is manufactured on or after December 31, 1998, or
  • (ii) it is a commercial oil-fired boiler that is manufactured on or after January 1, 2025.

22 Section 321 of the Regulations is replaced by the following:

Energy efficiency standards — household

321 (1) The energy efficiency standards set out in column 3 of Table 1 to this section apply to household oil-fired boilers described in column 1 that are manufactured during the periods set out in column 4.

Testing standard — household

(2) A household oil-fired boiler complies with the energy efficiency standard if it meets that standard when tested in accordance with testing procedures established by the standard set out in column 2 of Table 1 that are applicable to an oil-fired boiler as defined in section 319.

Energy-efficiency standards — commercial

(3) The energy efficiency standards set out in column 2 of Table 2 to this section apply to commercial oil-fired boilers described in column 1 that are manufactured on or after January 1, 2025.

Testing Standard — commercial

(4) A commercial oil-fired boiler complies with the energy efficiency standard if it meets that standard when tested in accordance with testing procedures established by 10 C.F.R. Appendix A that are applicable to an oil-fired boiler as defined in section 319.

TABLE 1

Item	Column 1 Energy-using Product	Column 2 Standard	Column 3 Energy Efficiency Standard	Column 4 Period of Manufacture
1	Household oil-fired boilers	CSA B212	Seasonal energy utilization efficiency ≥ 80%	On or after December 31, 1998 and before September 1, 2010
2	Household oil-fired boilers that are intended for low pressure steam systems	ASHRAE 103	Annual fuel utilization efficiency ≥ 82%	On or after September 1, 2010 and before January 15, 2021
2.1	Household oil-fired boilers that are intended for low pressure steam systems	CSA P.2 for annual fuel utilization efficiency, standby power and off-mode power	Annual fuel utilization efficiency ≥ 85% Standby power ≤ 11 W Off-mode power ≤ 11 W	On or after January 15, 2021
3	Household oil-fired boilers that are intended for hot water systems	ASHRAE 103	Annual fuel utilization efficiency ≥ 84%	On or after September 1, 2010 and before September 1, 2012
4	Household oil-fired boilers that are intended for hot water systems and have tankless domestic water heating coils	ASHRAE 103	Annual fuel utilization efficiency ≥ 84%	On or after September 1, 2012 and before January 15, 2021
4.1	Household oil-fired boilers that are intended for hot water systems and have tankless domestic water heating coils	CSA P.2 for annual fuel utilization efficiency, standby power and off-mode power	Annual fuel utilization efficiency ≥ 86% Standby power ≤ 11 W Off-mode power ≤ 11 W	On or after January 15, 2021
5	Household oil-fired boilers that are intended for hot water systems and do not have tankless domestic water heating coils	ASHRAE 103 for annual fuel utilization efficiency	Annual fuel utilization efficiency‍ ≥ 84% Equipped with automatic water temperature adjustment device and not operable without the device	On or after September 1, 2012 and before January 15, 2021
6	Household oil-fired boilers that are intended for hot water systems and do not have tankless domestic water heating coils	CSA P.2 for annual fuel utilization efficiency, standby power and off-mode power	Annual fuel utilization efficiency ≥ 86% Equipped with automatic water temperature adjustment device and not operable without the device Standby power ≤ 11 W Off-mode power ≤ 11 W	On or after January 15, 2021

TABLE 2

Item	Column 1 Energy-using Product	Column 2 Energy Efficiency Standard
1	Commercial oil-fired boilers that have an input rate of ≥ 87.92 kW (300,000 Btu/h) but ≤ 732.68 kW (2,500,000 Btu/h) and are intended for hot water systems	Thermal efficiency ≥ 87%
2	Commercial oil-fired boilers that have an input rate of > 732.68 kW (2,500,000 Btu/h) but ≤ 2 930.71 kW (10,000,000 Btu/h) and are intended for hot water systems	Combustion efficiency ≥ 88%
3	Commercial oil-fired boilers that have an input rate of ≥ 87.92 kW (300,000 Btu/h) but ≤ 732.68 kW (2,500,000 Btu/h) and are intended for low pressure steam systems	Thermal efficiency ≥ 84%
4	Commercial oil-fired boilers that have an input rate of > 732.68 kW (2,500,000 Btu/h) but ≤ 2 930.71 kW (10,000,000 Btu/h) and are intended for low pressure steam systems	Thermal efficiency ≥ 85%

23 (1) The portion of items 1 and 2 of the table to section 322 of the Regulations in column 1 is replaced by the following:

Item	Column 1 Energy-using Product
1	Household oil-fired boilers manufactured on or after December 31, 1998 and before September 1, 2010
2	Household oil-fired boilers manufactured on or after September 1, 2010 and before January 15, 2021

(2) The table to section 322 of the Regulation is amended by adding the following after item 2:

Item	Column 1 Energy-using Product	Column 2 Standard	Column 3 Information
3	Household oil-fired boilers manufactured on or after January 15, 2021	CSA P.2 for information set out in paragraphs (a) to (e)	(a) type of central heating system for which product is intended; (b) maximum heat input and output nominal capacities, in kW (Btu/h); (c) annual fuel utilization efficiency; (d) standby power, in W; (e) off-mode power, in W; (f) information that indicates whether product has tankless domestic water heating coils; and (g) type of automatic water temperature adjustment device product has, if any.
4	Commercial oil-fired boilers manufactured on or after January 1, 2025	10 C.F.R. Appendix A	(a) type of central heating system for which product is intended; (b) maximum heat input nominal capacity, in kW (Btu/h); and (c) thermal efficiency or, if product has an input rate of > 732.68 kW (2,500,000 Btu/h) but ≤ 2 930.71 kW (10,000,000 Btu/h) and is intended for hot water systems, combustion efficiency.

24 Section 369 of the Regulations is amended by adding the following in alphabetical order:

10 C.F.R. Appendix A means Appendix A to Subpart G, Part 431 of Title 10 to the United States Code of Federal Regulations, entitled Uniform Test Method for the Measurement of Thermal Efficiency and Standby Loss of Gas-Fired and Oil-Fired Storage Water Heaters and Storage-Type Instantaneous Water Heaters, as amended from time to time. (appendice A 10 C.F.R.)

25 (1) The definition electric water heater in section 370 of the Regulations is replaced by the following:

electric water heater means a stationary electric storage tank water heater that is intended for use on a pressurized water system and that has a V_r of at least 50 L (13.21 US gallons). (chauffe-eau électrique)

(2) Section 370 of the Regulations is amended by adding the following in alphabetical order:

10 C.F.R. Appendix B means Appendix B to Subpart G, Part 431 of Title 10 to the United States Code of Federal Regulations, entitled Uniform Test Method for the Measurement of Standby Loss of Electric Storage Water Heaters and Storage-Type Instantaneous Water Heaters, as amended from time to time. (appendice B 10 C.F.R.)

26 The Regulations are amended by adding the following after section 370:

Type

370.1 For the purpose of these Regulations, an electric water heater is one of the following types:

• (a) household, if it has an input rate of less than 12 kW (40,982 Btu/h); or
• (b) commercial, if it is has an input rate of greater than or equal to 12 kW (40,982 Btu/h).

27 Subsection 371(2) of the Regulations is replaced by the following:

Limits

(2) However, an electric water heater is not considered to be an energy-using product for the purposes of sections 4, 5 and 372 unless

• (a) it is a household electric water heater that is manufactured on or after February 3, 1995; or
• (b) it is a commercial electric water heater that is manufactured on or after January 1, 2020.

28 Subsection 372(2) of the Regulations is replaced by the following:

Testing standard

(2) An electric water heater described in column 1 complies with the energy efficiency standard set out in column 3 if it meets that standard when tested in accordance with testing procedures established by the standard set out in column 2 that are applicable to an electric water heater as defined in section 370.

TABLE

Item	Column 1 Energy-using Product	Column 2 Standard	Column 3 Energy Efficiency Standard
1	Household electric water heaters that have a bottom inlet and a Vr of ≥ 50 L but ≤ 270 L	CSA C191-04	Standby loss, in W, ≤ 40 + 0.2 Vr
2	Household electric water heaters that have a bottom inlet and a Vr of > 270 L but ≤ 454 L	CSA C191-04	Standby loss, in W, ≤ 0.472 Vr - 33.5
3	Household electric water heaters that have a top inlet and a Vr of ≥ 50 L but ≤ 270 L	CSA C191-04	Standby loss, in W, ≤ 35 + 0.2 Vr
4	Household electric water heaters that have a top inlet and a Vr of > 270 L but ≤ 454 L	CSA C191-04	Standby loss, in W, ≤ 0.472 Vr - 38.5
5	Commercial electric water heaters	10 C.F.R. Appendix B	Standby loss, in %/hr ≤ 0.3 + 102.2/Vs

29 Section 373 of the Regulations is replaced by the following:

Information

373 For the purpose of subsection 5(1) of the Act, the information set out in column 3 of the table to this section must be collected in accordance with the standard set out in column 2 and provided to the Minister in respect of an electric water heater described in column 1.

TABLE

Item	Column 1 Energy-using Product	Column 2 Standard	Column 3 Information
1	Household electric water heaters manufactured on or after February 3 1995	CSA C191-04 for information set out in paragraphs (a) to (c)	(a) Vr; (b) nominal power input of upper and lower elements, in W; (c) standby loss, in W; and (d) cold water inlet configuration, namely, top inlet or bottom inlet.
2	Commercial electric water heaters manufactured on or after January 1, 2020	10 C.F.R. Appendix B	(a) Vr; (b) Vs; (c) standby loss, in %/hr; and (d) input rate, in kW.

30 (1) The definition gas-fired storage water heater in section 374 of the Regulations is replaced by the following:

gas-fired storage water heater means a stationary gas-heated water container that uses propane or natural gas for fuel and has a V_r of at least 76 L (20 US gallons). (chauffe-eau à réservoir alimenté au gaz)

(2) Section 374 of the Regulations is amended by adding the following in alphabetical order:

replacement unit means a commercial gas-fired storage water heater that is marked for replacement installations only. (unité de remplacement)

31 The Regulations are amended by adding the following after section 374:

Type

374.1 For the purpose of these Regulations, a gas-fired storage water heater is one of the following types:

• (a) household, if it has an input rate of less than or equal to 21.97 kW (75,000 Btu/h); or
• (b) commercial, if it is has an input rate of greater than 21.97 kW (75,000 Btu/h).

32 Subsection 375(2) of the Regulations is replaced by the following:

Limits

(2) However, for the purposes of sections 4, 5 and 376, a gas-fired storage water heater is not considered to be an energy-using product unless

• (a) it is a household gas-fired storage water heater that is manufactured on or after February 3, 1995; or
• (b) it is a commercial gas-fired storage water heater that is manufactured on or after July 1, 2023.

33 (1) Subsections 376(1) and (2) of the Regulations are replaced by the following:

Energy-efficiency standards — household

376 (1) The energy efficiency standards set out in column 3 of Table 1 to this section apply to household gas-fired storage water heaters described in column 1 that are manufactured during the periods set out in column 4.

Testing standard — household

(2) A household gas-fired storage water heater complies with the energy efficiency standard if it meets that standard when tested in accordance with testing procedures established by the standard set out in column 2 that are applicable to a gas-fired storage water heater as defined in section 374.

Energy efficiency standards — commercial

(3) The energy efficiency standards set out in column 2 of Table 2 to this section apply to commercial gas-fired storage water heaters described in column 1 that are manufactured on or after July 1, 2023.

Testing standard — commercial

(4) A commercial gas-fired storage water heater complies with the energy efficiency standard if it meets that standard when tested in accordance with testing procedures established by 10 C.F.R. Appendix A that are applicable to a gas-fired storage water heater as defined in section 374.

(2) The table to section 376 of the Regulations is renumbered as Table 1.

(3) The portion of items 1 to 6 of Table 1 to section 376 of the Regulations in column 1 is replaced by the following:

Item	Column 1 Energy-using Product
1	Household gas-fired storage water heaters
2	Household gas-fired storage water heaters
3	Household gas-fired storage water heaters that have a first-hour rating of < 68 L (18 US gallons)
4	Household gas-fired storage water heaters that have a first-hour rating of ≥ 68 L (18 US gallons) but < 193 L (51 US gallons)
5	Household gas-fired storage water heaters that have a first-hour rating of ≥ 193 L (51 US gallons) but < 284 L (75 US gallons)
6	Household gas-fired storage water heaters that have a first-hour rating of > 284 L (75 US gallons)

(4) Section 376 of the Regulations is amended by adding the following after Table 1:

TABLE 2

Item	Column 1 Energy-using Product	Column 2 Energy Efficiency Standard
1	Commercial gas-fired storage water heaters, other than replacement units, that have an input rate of > 21.97 kW (75,000 Btu/h) but ≤ 30.5 kW (105,000 Btu/h), have a Vr of ≤ 454 L (120 US gallons), use single-phase power and limit water temperatures to < 82°C (180°F)	Uniform energy factor ≥ 0.8107-0.00021 Vs
2	Commercial gas-fired storage water heaters that are replacement units, that have an input rate of > 21.97 kW (75,000 Btu/h) but≤ 30.5 kW (105,000 Btu/h), have a Vr of ≤ 454 L (120 US gallons), use single-phase power and limit water temperatures to < 82°C (180°F)	Uniform energy factor ≥ 0.6597-0.00024 Vs
3	Commercial gas-fired storage water heaters, other than those described in items 1 and 2, that are not replacement units	Thermal efficiency ≥ 90% Standby loss ≤ 0.84(Q/0.234 + 16.57√Vs)
4	Commercial gas-fired storage water heaters, other than those described in items 1 and 2, that are replacement units	Thermal efficiency ≥ 80% Standby loss ≤ Q/0.234 + 16.57√Vs

34 Section 377 of the Regulations is replaced by the following:

377 For the purpose of subsection 5(1) of the Act, the information set out in column 3 of the table to this section must be collected in accordance with the standard set out in column 2 and provided to the Minister in respect of a gas-fired storage water heater described in column 1.

TABLE

Item	Column 1 Energy-using Product	Column 2 Standard	Column 3 Information
1	Household gas-fired storage water heaters that are manufactured on or after February 3, 1995 and before January 1, 2018	CSA P.3-04	(a) input rate, in kW (Btu/h); (b) recovery efficiency; (c) type of fuel used; (d) annual energy consumption, in kJ; (e) first-hour rating, in L; (f) Vr; and (g) energy factor.
2	Household gas-fired storage water heaters that are manufactured on or after January 1, 2018	CSA P.3-04, if a certification body has verified that product is in compliance with energy efficiency standard set out in any of paragraphs 3(a), 4(a), 5(a) and 6(a) of Table 1 to section 376; CSA P.3-15, if a certification body has verified that product is in compliance with energy efficiency standard set out in any of paragraphs 3(b), 4(b), 5(b) and 6(b) of Table 1 to section 376.	(a) input rate, in kW (Btu/h); (b) recovery efficiency; (c) type of fuel used; (d) annual energy consumption, in kJ; (e) first-hour rating, in L; (f) Vr; (g) energy factor, if a certification body has verified that product is in compliance with the energy efficiency standard set out in any of paragraphs 3(a), 4(a), 5(a) and 6(a) of Table 1 to section 376; and (h) uniform energy factor and Vs, if a certification body has verified that product is in compliance with the energy efficiency standard set out in any of paragraphs 3(b), 4(b), 5(b) and 6(b) of Table 1 to section 376.
3	Commercial gas-fired storage water heaters, that have an input rate of > 21.97 kW (75,000 Btu/h) but ≤ 30.5 kW (105,000 Btu/h), have a Vr of ≤ 454 L (120 US gallons), use single-phase power, limit water temperatures to < 82°C (180°F) and are manufactured on or after July 1, 2023	10 C.F.R. Appendix A	(a) uniform energy factor; (b) Vr; (c) Vs; (d) input rate, in kW (Btu/h); (e) the type of fuel used; and (f) information that indicates whether product is a replacement unit.
4	Commercial gas-fired storage water heaters, other than those described in item 3, that are manufactured on or after July 1, 2023	10 C.F.R. Appendix A	(a) thermal efficiency; (b) standby loss, in W; (c) Vr; (d) Vs; (e) input rate, in kW (Btu/h); (f) the type of fuel used; and (g) information that indicates whether product is a replacement unit.

35 The definition oil-fired water heater in section 378 of the Regulations is replaced by the following:

oil-fired water heater means a water heater that uses oil for fuel and that has a V_r of at least 76 L (20 US gallons). (chauffe-eau à mazout)

36 The Regulations are amended by adding the following after section 378:

Type

378.1 For the purpose of these Regulations, an oil-fired water heater is one of the following types:

• (a) household, if it has an input rate of less than or equal to 30.5 kW (105,000 Btu/h); or
• (b) commercial, if it is has an input rate of greater than 30.5 kW (105,000 Btu/h).

37 Subsection 379(2) of the Regulations is replaced by the following:

Limits

(2) However, for the purposes of sections 4, 5 and 380, an oil-fired water heater is not considered to be an energy-using product unless

• (a) it is a household oil-fired water heater that is manufactured on or after February 3, 1995; or
• (b) it is a commercial oil-fired water heater that is manufactured on or after January 1, 2020.

38 (1) Subsections 380(1) and (2) of the Regulations are replaced by the following:

Energy efficiency standards — household

380 (1) The energy efficiency standards set out in column 3 of Table 1 to this section apply to household oil-fired water heaters described in column 1 that are manufactured during the period set out in column 4.

Testing standard — household

(2) An oil-fired water heater complies with the energy efficiency standard if it meets that standard when tested in accordance with testing procedures established by the standard set out in column 2 that are applicable to a oil-fired water heater as defined in section 378.

Energy efficiency standards — commercial

(3) The energy efficiency standards set out in column 2 of Table 2 to this section apply to commercial oil-fired water heaters described in column 1 that are manufactured on or after January 1, 2020.

Testing standard — commercial

(4) A commercial oil-fired water heater complies with the energy efficiency standard if it meets that standard when tested in accordance with testing procedures established by 10 C.F.R. Appendix A that are applicable to a oil-fired water heater as defined in section 378.

(2) The table to section 380 of the Regulations is renumbered as Table 1.

(3) The portion of items 1 to 6 of Table 1 to section 380 of the Regulations in column 1 is replaced by the following:

Item	Column 1 Energy-using Product
1	Household oil-fired water heaters
2	Household oil-fired water heaters
3	Household oil-fired water heaters that have a first-hour rating of < 68 L (18 US gallons)
4	Household oil-fired water heaters that have a first-hour rating of ≥ 68 L (18 US gallons) but < 193 L (51 US gallons)
5	Household oil-fired water heaters that have a first-hour rating of ≥ 193 L (51 US gallons) but < 284 L (75 US gallons)
6	Household oil-fired water heaters that have a first-hour rating of > 284 L (75 US gallons)

(4) Section 380 of the Regulations is amended by adding the following after Table 1:

TABLE 2

Item	Column 1 Energy-using Product	Column 2 Energy Efficiency Standard
1	Commercial oil-fired storage water heaters that have an input rate of > 30.5 kW (105,000 Btu/h) but ≤ 40.99 kW (140,000 Btu/h), have a Vr of ≤ 454 L (120 US gallons), use single-phase power, limit water temperatures to < 82°C (180°F) and are manufactured on or after January 1, 2020	Uniform energy factor ≥ 0.6740 - 0.00035 Vs
2	Commercial oil-fired storage water heaters, other than those described in item 1, that are manufactured on or after January 1, 2020	Thermal efficiency ≥ 80% Standby loss ≤ Q/0.234 + 16.57√Vs

39 Section 381 of the Regulations is replaced by the following:

Information

381 For the purpose of subsection 5(1) of the Act, the information set out in column 3 of the table to this section must be collected in accordance with the standard set out in column 2 and provided to the Minister in respect of an oil-fired storage water heater described in column 1.

TABLE

Item	Column 1 Energy-using Product	Column 2 Standard	Column 3 Information
1	Household oil-fired water heaters that are manufactured on or after February 3, 1995 and before January 1, 2018	CSA B211-00	(a) input rate, in kW (Btu/h); (b) recovery efficiency; (c) annual energy consumption, in kJ; (d) first-hour rating, in L; (e) Vr; and (f) energy factor.
2	Household oil-fired water heaters that are manufactured on or after January 1, 2018	CSA B211-00, if a certification body has verified that product is in compliance with energy efficiency standard set out in any of paragraphs 3(a), 4(a), 5(a) and 6(a) of Table 1 to section 380; and CSA P.3-15, if a certification body has verified that product is in compliance with energy efficiency standard set out in any of paragraphs 3(b), 4(b), 5(b) and 6(b) of Table 1 to section 380.	(a) input rate, kW (Btu/h); (b) recovery efficiency; (c) annual energy consumption, in kJ; (d) first-hour rating, in L; (e) Vr; (f) energy factor, and (g) uniform energy factor and Vs, if a certification body has verified that product is in compliance with energy efficiency standard set out in any of paragraphs 3(b), 4(b), 5(b) and 6(b) of Table 1 to section 380.
3	Commercial oil-fired storage water heaters that have an input rate of > 30.5 kW (105,000 Btu/h) but ≤ 40.99 kW (140,000 Btu/h), a Vr of ≤ 454 L (120 US gallons), use single-phase power, limit water temperatures to < 82°C (180°F) and are manufactured on or after January 1, 2020	10 C.F.R. Appendix A	(a) input rate, in kW (Btu/h); b) uniform energy factor; (c) Vr; and (d) Vs.
4	Commercial oil-fired water heaters, other than those described in item 3, that are manufactured on or after January 1, 2020	10 C.F.R. Appendix A	(a) input rate, in kW (Btu/h); (b) thermal efficiency; (c) Vr; (d) Vs; and (e) standby loss, in W.

40 The Regulations are amended by adding the following after section 381:

SUBDIVISION D

Gas-Fired Instantaneous Water Heaters

Definitions

382 The following definitions apply in this Subdivision.

gas-fired instantaneous water heater means a flow-activated water heater that uses natural gas or propane for fuel, that has a V_r that is less than or equal to 37.85 L (10 US gallons) and has an input rate to V_r ratio of not less than 309 W/L (4,000 Btu/h/US gallon). (chauffe-eau instantané au gaz)

maximum flow rate means, in respect of a gas-fired instantaneous water heater, the maximum litres per minute (gallons per minute) of hot water that can be supplied by the water heater while operating in a steady state and maintaining a nominal temperature rise of 37.3°C (67°F). (débit maximal)

10 C.F.R Appendix C means Appendix C to the Subpart G, Part 431 of Title 10 to the United States Code of Federal Regulations, entitled Uniform Test Method for the Measurement of Thermal Efficiency and Standby Loss of Gas-Fired and Oil-Fired Instantaneous Water Heaters and Hot Water Supply Boilers (Other Than Storage-Type Instantaneous Water Heaters), as amended from time to time. (appendice C 10 C.F.R.)

Type

383 For the purpose of these Regulations, a gas-fired instantaneous water heater is one of the following types:

• (a) household, if it has an input rate of less than 58.56 kW (200,000 Btu/h), has a V_r of no greater than 7.6 L (2 US gallons) and is designed to provide hot water at a temperature no greater than 82°C (180°F); or
• (b) commercial, if it is not described in paragraph (a).

Energy-using product

384 (1) A gas-fired instantaneous water heater is prescribed as an energy-using product.

Limit

(2) However, for the purposes of sections 4, 5 and 385, a gas-fired instantaneous water heater is not considered to be an energy-using product unless

• (a) it is a household gas-fired instantaneous water heater that is manufactured on or after January 1, 2020; or
• (b) it is a commercial gas-fired instantaneous water heater that is manufactured on or after July 1, 2023.

Energy efficiency standards

385 (1) The energy efficiency standards set out in column 3 of the table to this section apply to gas-fired instantaneous water heaters described in column 1 that are manufactured during the period set out in column 4.

Testing standards

(2) A gas-fired instantaneous water heater complies with the energy efficiency standard if it meets that standard when tested in accordance with testing procedures established by the standard set out in column 2 that are applicable to a gas-fired instantaneous water heater as defined in section 382.

TABLE

Item	Column 1 Energy-using Product	Column 2 Standard	Column 3 Energy Efficiency Standard	Column 4 Manufacturing Period
1	Household gas-fired instantaneous water heaters that have a maximum flow rate of < 6.4 L/min	CSA P.3-15	Uniform energy factor ≥ 0.86	On or after January 1, 2020
2	Household gas-fired instantaneous water heaters that have a maximum flow rate of ≥ 6.4 L/min	CSA P.3-15	Uniform energy factor ≥ 0.87	On or after January 1, 2020
3	Commercial gas-fired instantaneous water heaters	10 C.F.R. Appendix C	Thermal efficiency ≥ 94%	On or after July 1, 2023

Information

386 For the purpose of subsection 5(1) of the Act, the information set out in column 3 of the table to this section must be collected in accordance with the standard set out in column 2 and provided to the Minister in respect of a gas-fired instantaneous water heater described in column 1.

TABLE

Item	Column 1 Energy-using Product	Column 2 Standard	Column 3 Information
1	Household gas-fired instantaneous water heaters manufactured on or after January 1, 2020	CSA P.3-15	(a) uniform energy factor; (b) Vr; (c) the type of fuel used; (d) input rate, in kW (Btu/h); and (e) maximum flow rate.
2	Commercial gas-fired instantaneous water heaters manufactured on or after July 1, 2023	10 C.F.R. Appendix C	(a) thermal efficiency; (b) Vr; (c) the type of fuel used; (d) input rate, in kW (Btu/h); and (e) maximum flow rate.

Coming into Force

41 (1) These Regulations, except subsections 5(4) and (7), 6(1) and (2) and section 7, come into force on the day that, in the sixth month after the month in which they are published in the Canada Gazette, Part II, has the same calendar number as the day on which they are published or, if that sixth month has no day with that number, the last day of that sixth month.

(2) Subsections 5(4) and (7), 6(1) and (2) and section 7 come into force on the day on which these Regulations are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Background

In 1992, Parliament passed Canada’s Energy Efficiency Act (the Act). The Act provides for the making and enforcement of regulations requiring energy-using products that are imported or shipped inter-provincially for the purpose of sale or lease to meet minimum energy performance standards (MEPS) ^{footnote 5} 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 were introduced in 1995 as a means to reduce greenhouse gas (GHG) emissions in Canada. In 2016, the Energy Efficiency Regulations were repealed and replaced to remove references to obsolete and out-of-date standards and improve the organization of the regulatory text, and became the Energy Efficiency Regulations, 2016 (the Regulations). The Regulations 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. They are regularly amended to introduce new energy-using products and to update existing requirements.

Since most energy-using products must cross provincial or international borders to reach their markets, federally prescribed MEPS are an effective tool to raise the level of energy efficiency in Canada. Prescribed MEPS are one component of Canada’s program to reduce GHG emissions and energy consumption associated with energy-using products because they eliminate the least efficient products from the market. Natural Resources Canada (NRCan) also administers the ENERGY STAR^® labelling program, which sets voluntary specifications for 75 product categories and identifies the top 15% to 30% of energy efficiency performers, making the choice of energy-efficient products simple for consumers ^{footnote 6}.

When combined, MEPS and labelling programs drive product innovation through cycles of continuous improvement. Increasing the stringency of MEPS eliminates the least efficient products from the market while increasing the levels that must be met for a product to be certified as ENERGY STAR, and encourages manufacturers to produce affordable high-efficiency products that consumers will recognize as good choices to lower their energy costs. 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. ^{footnote 7}

Policy context

Canada committed to reducing its GHG emissions by 30% below 2005 levels by 2030 by signing the Paris Agreement in 2015. Building on this commitment, First Ministers agreed to take ambitious action in support of meeting or exceeding this target. They also agreed that a collaborative approach between provincial, territorial, and federal governments is important to reduce GHG emissions and to enable sustainable economic growth.

In December 2016, First Ministers adopted the Pan-Canadian Framework on Clean Growth and Climate Change, which presents the country’s plan to meet its GHG emissions reduction targets, grow the economy, and build resilience to a changing climate. The plan outlines an approach for Canadian homes and commercial and institutional buildings (the building sector) that consists of four elements: (1) making new buildings more energy efficient; (2) retrofitting existing buildings, as well as fuel switching; (3) supporting building codes and energy-efficient housing in Indigenous communities; and (4) improving energy efficiency for appliances and equipment. To deliver on the fourth element of this approach, the federal government committed to set new standards for heating equipment and other key technologies to the highest level of efficiency that is economically and technically achievable.

This commitment builds on the August 2016 publication of a framework and action plan for energy efficiency standards under the Energy and Mines Ministers’ Conference and collaborative efforts with provinces and territories to implement the Canadian Energy Strategy. Build Smart — Canada’s Buildings Strategy identifies the achievement of this commitment as a core element of the national plan to reduce the energy consumption and GHG emissions from the building sector.

Fully one third of Canada’s emission reduction target could be met through improvements in energy efficiency, which would also make Canadian businesses more competitive internationally and leave more money in consumers’ pockets. ^{footnote 8} These conclusions are supported by an Efficiency Canada report on the economic impacts of energy efficiency, which showed that implementing strong energy efficiency programs will increase Canada’s gross domestic product and job growth. ^{footnote 9}

Consistent with these commitments, in 2017, Energy and Mines Ministers agreed to advance measures to accelerate energy efficiency and collaborate on market transformation strategies for windows, space heating and water heating systems in the building sector. ^{footnote 10} Ministers also released a series of short-, medium- and long-term aspirational goals for the energy performance of key equipment technologies. Ministers agreed to work towards a goal that, by 2025, all fuel-burning technologies for primary space heating and water heating for sale in Canada will meet an energy performance of at least 90% (i.e. condensing technology level). Ministers also released Build Smart — Canada’s Buildings Strategy, which identifies the improvement of equipment energy efficiency as a key component of the country’s efforts to transition towards a low-carbon built environment.

In June 2018, the Generation Energy Council released a report that highlighted the important role that energy efficiency can play in supporting the transition to a low-carbon economy.

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.

The building sector is a significant contributor to national GHG emissions and accounts for about 17% of national GHG emissions in 2014. The level of emissions in the building sector is impacted by the energy-using equipment it contains. Products that combust fuel to generate heat lead to direct carbon dioxide emissions at the site, while products that consume electricity contribute to GHG emissions at the point of generation.

GHG emissions from Canadian homes declined by 1 megatonne (Mt) between 2005 and 2015, and are projected to decline by a further 3 Mt between 2015 and 2030. This is despite an expected 36% (or 4.4 million) increase in the number of Canadian households (a key driver of residential emissions growth) between 2005 and 2030. GHG emissions from Canada’s commercial buildings increased by 1 Mt between 2005 and 2015, and are expected to remain relatively constant through 2030, despite an expected 32% increase in floor space from 2005 to 2030. ^{footnote 11}

While technologies exist on the Canadian market to provide incremental reductions in GHG emissions and energy consumption in the building sector, there are market failures that lead to consumers making economic or environmental choices with respect to energy efficiency that are less than optimal. 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 energy-efficient products if tenants pay the energy bill). Regulatory action is required given that voluntary measures will not be sufficient to phase out the least efficient product models from the Canadian market.

Objectives

The goals of the Amendment are to

• Reduce GHG emissions and energy consumption associated with energy-using products in a manner that aligns with other jurisdictions, where feasible and appropriate; and
• Reduce energy costs assumed by households, businesses and institutions.

The desired outcomes of the Amendment are as follows:

• GHG emissions are reduced, contributing to Canada’s goal to reduce GHG emissions by at least 30% below 2005 levels by 2030;
• Energy use for space and water heating in the building sector decreases per unit of floor space;
• Canadians save money by using higher efficiency product models that have lower costs over their lifetime;
• Businesses using regulated energy-using products experience cost savings that can lead to increased productivity and competitiveness; and
• Businesses benefit from common North American testing standards, which reduces obstacles to trade.

Description

In March 2017, NRCan published a notice of intent to inform stakeholders that the Department was initiating the development of a regulatory amendment to introduce or increase the stringency of MEPS for 17 product categories. Since that time, a subsequent decision was made to address these product categories through two separate regulatory proposals and some product categories have been added or removed based on consultation with industry and information from market studies. These changes have been communicated to stakeholders by updating the forward regulatory plans regularly, publishing technical bulletins online and through proposals published in the Canada Gazette, Part I.

The regulatory changes outlined below have been developed to support the federal government’s commitment to set new standards for heating equipment and other key technologies to the highest level of efficiency that is economically and technically achievable. In some cases, this is achieved by proposing standards at ENERGY STAR levels; in others, levels have been selected based on an assessment of their technical feasibility and associated economic impacts. Testing standards are aligned with those used in other jurisdictions to avoid unnecessary compliance burden.

The Amendment (A) introduces MEPS, testing standards, verification and reporting requirements for seven new product categories; (B) introduces more stringent MEPS and updates testing standards for four product categories currently regulated federally; and (C) introduces verification requirements, reporting requirements and testing standards for one new product category. Some provisions for through the wall gas furnaces will come into force on the date on which the Amendment is registered in order to delay the applicable date of manufacture. The balance of the Amendment will come into force six months after the date of its publication in the Canada Gazette, Part II.

For the new product categories, import reports and energy efficiency reports will be required for the first time. The information requirements in the energy efficiency reports will be aligned to the extent possible with what is submitted in the United States.

The following is a list of changes that are being made through the Amendment:

(A) Introduce MEPS, testing standards, and verification and reporting requirements for seven new product categories

Electric furnaces

Electric furnaces are those with an input capacity of not more than 65.92 kW (225 000 Btu/h) and use electricity as the primary heat source to provide heated air to a home through a home’s built-in ductwork.

For electric furnaces manufactured on or after July 3, 2019, the Amendment sets the MEPS applicable to the electrical consumption of a furnace fan at levels that will apply on that same date in the United States. Performance will be measured in accordance with testing standards aligned with those of the United States.

Commercial gas boilers

Commercial gas boilers are used for space heating in buildings and can either use hot water or steam as the working fluid to distribute heat throughout the space. They use natural gas or propane as the fuel source and have input ratings greater than or equal to 87.92 kW (300 000 Btu/h) and less than or equal to 2 930.71 kW (10 000 000 Btu/h).

For commercial gas boilers manufactured on or after January 1, 2025, the Amendment sets the MEPS at the condensing technology level. Performance will be measured in accordance with testing standards aligned with those of the United States.

Household and commercial gas-fired instantaneous water heaters

Household and commercial gas-fired instantaneous water heaters are used in homes and businesses to heat water on demand as it flows for use in cooking, cleaning, and bathing. They use natural gas or propane as the fuel source.

For household and commercial instantaneous gas-fired water heaters manufactured on or after January 1, 2020, and July 1, 2023, respectively, the Amendment sets MEPS at condensing technology levels equivalent to current ENERGY STAR performance levels. Performance will be measured in accordance with testing standards aligned with those of the United States.

Commercial oil-fired boilers

Commercial oil-fired boilers are used for space heating in buildings and can use either hot water or steam as the working fluid to distribute heat throughout the space. They have input ratings greater than or equal to 87.92 kW (300 000 Btu/h) and less than or equal to 2 930.71 kW (10 000 000 Btu/h).

For commercial oil-fired boilers manufactured on or after January 1, 2025, the Amendment sets the MEPS at levels prepublished in the U.S. DOE final rule on December 28, 2016. Performance will be measured in accordance with testing standards aligned with those of the United States.

Commercial electric water heaters

Commercial electric water heaters heat water for use in cooking, cleaning, and bathing. They use electricity as the source of energy and have input rates of greater than or equal to 12 kW (40 982 Btu/h) and a volume of at least 50 L (13.21 U.S. gal).

For commercial electric water heaters manufactured on or after January 1, 2020, the Amendment sets the MEPS at levels that are currently in place in the United States. Performance will be measured in accordance with testing standards aligned with those of the United States.

Commercial gas-fired storage water heaters

Commercial gas-fired storage water heaters heat water for use in cooking, cleaning, and bathing. They use natural gas or propane as the fuel source and have input rates greater than 21.97 kW (75 000 Btu/h).

For commercial gas-fired storage water heaters manufactured on or after July 1, 2023, the Amendment sets the MEPS for commercial units, marked as replacement units, at levels that are currently in place in the United States. For all other products, the Amendment sets the MEPS at condensing technology levels. Performance will be measured in accordance with testing standards aligned with those of the United States.

Commercial oil-fired water heaters

Commercial oil-fired water heaters heat water for use in cooking, cleaning, and bathing. They have input rates greater than 30.5 kW (105 000 Btu/h).

For commercial oil-fired water heaters manufactured on or after January 1, 2020, the Amendment sets the MEPS at levels that are currently in place in the United States. Performance will be measured in accordance with testing standards aligned with those of the United States.

(B) Introduce more stringent MEPS and update testing for four currently regulated product categories

Household gas boilers

Household gas boilers provide heat to a home and can use either hot water or steam as the working fluid to distribute heat throughout the space. They use propane or natural gas and have an input rate of less than 87.92 kW (300 000 Btu/h).

For household gas boilers intended for hot water systems that are manufactured on or after July 1, 2023, the Amendment sets the MEPS at the condensing technology level equivalent to the current ENERGY STAR performance level. For household gas boilers intended for steam systems manufactured on or after January 15, 2021, the Amendment sets the MEPS at levels that will apply on that same date in the United States. Performance will be measured in accordance with an updated testing standard aligned with that of the United States.

Gas fireplaces

Gas fireplaces use propane or natural gas to provide an aesthetically pleasing flame. Decorative gas fireplaces direct minimal heat towards the room and heating gas fireplaces provide a heat source for a room. They are used in people’s homes and commercial establishments such as hotel lobbies and restaurants. Gas fireplaces may be freestanding, recessed, zero clearance or insert units.

For heating gas fireplaces manufactured on or after January 1, 2020, the Amendment introduces MEPS and prescriptive requirements for pilots. For decorative gas fireplaces manufactured on or after January 1, 2020, the Amendment introduces prescriptive requirements for pilots and combustion air. The requirements are designed to achieve similar outcomes as those that apply in British Columbia on January 1, 2019, with differences resulting from the use of more prescriptive requirements for decorative gas fireplaces than those in British Columbia, which is the only province currently regulating their fireplace efficiency. ^{footnote 12} The referenced testing standard is not being changed.

Gas furnaces

Gas furnaces use propane or natural gas to provide heated air to a home through the home’s built-in ductwork. They have an input rate of not more than 117.23 kW (400 000 Btu/h), but do not currently include gas furnaces for mobile homes and recreational vehicles.

For gas furnaces manufactured on or after July 3, 2019, the Amendment removes the exclusion given to gas furnaces for mobile homes and adds an exclusion for park model trailers. It also increases the annual fuel utilization efficiency (AFUE) MEPS to the current ENERGY STAR performance level (95% AFUE) for furnaces, except those that are through the wall, which will remain at 90% AFUE or gas furnaces that are marked for use in a relocatable building or as a replacement furnace in a manufactured home, which will be subject to 80% AFUE. Additionally, for through the wall gas furnaces, the Amendment moves the date on or after which the fan energy rating (FER) requirement published in Amendment 14 will apply, from July 3, 2019, to January 1, 2024. This modification comes into force immediately on registration. Performance will be measured in accordance with an updated testing standard aligned with that of the United States.

Household oil-fired boilers

Household oil-fired boilers provide heat to a home and can use either hot water or steam as the working fluid to distribute heat throughout the space. They have an input rate of less than 87.92 kW (300 000 Btu/h).

For household oil-fired boilers manufactured on or after January 15, 2021, the Amendment sets the MEPS at levels that will apply on that same date in the United States. The existing testing standards are being updated but will remain aligned with those of the United States.

(C) Introduce verification requirements, reporting requirements and testing standards for one new product category

Heat-recovery ventilators and energy-recovery ventilators

Heat-recovery ventilators (HRVs) are mechanical devices that transfer heat from stale indoor air to fresh outdoor air. Energy-recovery ventilators (ERVs) are HRVs designed to also transfer moisture.

For HRVs and ERVs manufactured on or after January 1, 2020, the Amendment will require the submission of energy efficiency reports and importation reports. Performance will be measured in accordance with testing standards currently required for ENERGY STAR certification.

Regulatory and non-regulatory options considered

Maintaining the status quo

GHG emissions associated with the built environment are projected to decrease significantly between 2005 and 2030 despite significant increases in floor space, due to a combination of policies and programs to reduce energy use and associated GHG emissions from electricity production to power these buildings. Given Canada’s commitment to reducing GHG emissions by 30% below 2005 levels by 2030 and the fact that Canada’s building sector accounts for approximately 17% of national emissions, maintaining the status quo would not contribute incremental reductions towards the achievement of these goals. It would also lead to missed opportunities to reduce energy consumption, leaving households, businesses and institutions with higher energy costs for heating associated with the building sector.

The status quo option would not deliver on the federal government’s commitment to set new standards for heating equipment and other key technologies to the highest level of efficiency that is economically and technically achievable as stated in the Pan-Canadian Framework on Clean Growth and Climate Change, nor would it contribute to the achievement of the aspirational goal agreed to by federal, provincial and territorial energy ministers that, by 2025, all fuel-burning technologies for primary space heating for sale in Canada will meet an energy performance of at least 90% (condensing technology level). Since the Amendment has been designed to achieve greater alignment on federal and provincial energy efficiency standards, the status quo option would be inconsistent with the federal-provincial-territorial framework to encourage market transformation through collaboration on energy efficiency standards, released by the Energy and Mines Ministers’ Conference in 2016.

Voluntary approach (repeal the 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 reduce costs for the regulated industry, since there would be no mandatory requirements to meet; however, it would not address GHG emissions to the extent required to meet commitments made under the Pan-Canadian Framework on Clean Growth and Climate Change, nor would it reduce energy consumption to the extent that a regulatory approach would. A voluntary approach would also be a significant departure from Canada’s approach to advancing energy efficiency and from the intent of the Act.

A voluntary approach would result in fewer GHG emission reductions than the status quo option 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. ^{footnote 13} Such improvements have translated into 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. ^{footnote 14} 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. ^{footnote 15} Given the global evidence of the significant benefits of MEPS, a voluntary approach would mean that these benefits would not be realized.

Regulatory action

Taking regulatory action will lead to greater GHG emissions reductions than either the status quo or voluntary approach. This approach provides important incremental GHG emission reductions to contribute to the achievement of Canada’s commitments made under the Pan-Canadian Framework on Clean Growth and Climate Change; it would also contribute to achieving the aspirational goal agreed to by federal, provincial and territorial energy ministers that, by 2025, all fuel-burning technologies for primary space heating for sale in Canada will meet an energy performance of at least 90% (condensing technology level).

Benefits and costs

Summary

Reduced energy consumption and lower GHG emissions 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 operational practices.

Annual reductions in energy consumption associated with the Amendment are estimated to be 15.05 petajoules (PJ) in 2030 and are expected to reach 27.79 PJ in 2040 as the sale of more efficient products steadily replaces the pre-regulation stock.

Annual reductions in GHG emissions resulting from these reductions in energy consumption are estimated to be 0.74 Mt in 2030 and are expected to reach 1.36 Mt in 2040. 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 $1.1 billion by 2040. ^{footnote 16} Canadians will also realize economic benefits in the form of reduced energy costs due to the implementation of the Amendment. It is estimated that more than $3.1 billion in cumulative present value energy savings will be realized by 2040.

The cumulative present value of incremental technology costs and costs to Government associated with the Amendment are estimated to be $1.5 billion and $0.1 million, respectively, by 2040.

The present value of net benefits of the Amendment is estimated to be $2.7 billion by 2040, with total benefits exceeding total costs by almost three to one. By 2040, the present value of benefits and costs from the Amendment is estimated to be $4.2 billion and $1.5 billion, respectively.

Benefits and costs associated with the Amendment are presented in Table 1.

Table 1: Summary of benefits and costs associated with the Amendment

Monetized Benefits	Costs (if applicable)	Quantified Benefits	Unquantified Benefits
Energy (gas, oil and electricity) savings	Technology costs	Energy savings (PJ)	Outside air quality, competiveness, job growth, non-energy benefits (home comfort, indoor air quality, minimizing depressurization in new construction, etc.)
Avoided damages because of GHG reductions	Installation and maintenance costs	GHG savings (Mt)
	Government administration
	Compliance costs and administrative burden footnote 17

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

NRCan 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 Amendment were obtained by comparing the following scenarios:

• the business-as-usual case (i.e. excluding the Amendment); and
• the policy case (i.e. the business-as-usual case including the Amendment).

Business-as-usual case

For the purpose of this analysis, the business-as-usual case was defined in terms of Canadian market conditions assessed in 2016. Where Canadian MEPS are aligning with those of the United States, it was assumed that incremental costs and benefits in Canada were fully the result of the Canadian amendments, with no post-2016 spillover effects from the other jurisdictions such as the United States. This assumption is consistent with other recent federal regulations ^{footnote 18} and provides an assessment of the full economic impacts of regulatory changes affecting Canadians.

Policy case

The policy case is defined as the application of the new or stringent MEPS across 11 product categories relative to markets defined by studies completed in 2016. There is one product category included in the Amendment which does not introduce new or more stringent MEPS. This product category has been included in the compliance and administrative costs calculation presented in Table 3, but no other benefits or costs have been modelled for this product category given that there are no added technology, installation or maintenance costs.

Benchmarks

For all product categories, benchmarks are chosen to represent the product models that do not meet the more stringent MEPS. Within those benchmarks, two efficiency levels are considered and weighted based on their relative market share: (1) the least efficient; and (2) the efficiency of the average unit impacted. Where relevant, regional sensitivities were evaluated (e.g. a gas furnace 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 one tonne of carbon dioxide 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 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. Recommendations based on current literature and in line with the approach adopted by the U.S. Interagency Working Group on the Social Cost of Greenhouse Gases ^{footnote 19} are that it is reasonable to estimate a social cost of carbon value at $46.84/tonne of carbon dioxide equivalent in 2018 (in 2018 dollars), increasing each year with the expected growth in damages. ^{footnote 20}

Methodology to estimate costs

The additional or “incremental” costs associated with the Amendment were 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 insulation to a water heater). These costs were then multiplied by the number of shipments of the product models in the business-as-usual case that were estimated to have an energy performance that is worse than what is required by the MEPS. Results were combined across all affected product categories to arrive at the estimate of total costs.

Additional incremental costs related to installation and maintenance costs over the lifetime of the product were also evaluated, as applicable. Total costs reported as being attributable to the Amendment include, when appropriate, manufacturing, compliance and administrative costs as well as those incurred by Government to implement the changes. The compliance costs do not include testing costs for products that are already being tested to enter the U.S. market or under voluntary programs. The added cost of verification requirements is not included either because they are confidential business costs that vary based on business relationships. ^{footnote 21} However, they are estimated to be less than 10% of the total compliance costs.

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 hours). The result was 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 of the product models in the business-as-usual case that were 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. Energy savings were monetized using 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. To remain consistent with the U.S. methodology and produce more realistic GHG savings, the reductions attributable to diminished electricity consumption were calculated by applying the emission factors associated with the marginal fuels ^{footnote 22} used to generate the electricity that would be saved through implementation of the Amendment. To allow comparison with outcomes reported under the Pan-Canadian Framework on Clean Growth and Climate Change, the reductions in GHG emissions were also calculated by applying an average emission factor. Annual reductions in GHG emissions with the average emission factor are estimated to be 0.74 Mt in 2030, increasing to 1.37 Mt in 2040. GHG emissions were monetized and incorporated into the analysis using a social cost of carbon, as calculated by Environment and Climate Change Canada. The social cost of carbon 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.

Assumptions

Key assumptions include the following:

• Analysis covers shipments impacted by the Amendment between 2019 and 2040;
• Business-as-usual case reflects Canadian market conditions in 2016;
• Benefits and costs are measured in real constant 2018 dollars;
• A 3% real discount rate is applied to all benefits and costs with values discounted to 2018; ^{footnote 23}
• Canadian average energy prices, based on data from Environment and Climate Change Canada’s 2017 Emission Trend; ^{footnote 24}
• 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;
• Costs incurred by manufactures, distributors and installers to produce and install more efficient technologies as well as compliance costs and administrative burden costs are assumed to be passed on to consumers. Government administrative costs are assumed to be passed on to Canadian taxpayers; and
• Incremental costs associated with more efficient technology were estimated in 2016 and are assumed to be constant, despite evidence ^{footnote 25} 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. A 2018 study ^{footnote 26} found that each doubling of production for residential gas furnaces lead to a 5.7% to 8.9% decrease in manufacturing costs.

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 and maintenance costs.

Results

The methodology described above was applied to all product categories to develop an estimate of the benefits and costs attributable to the Amendment. 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 Amendment. The estimated benefits and costs for each product category are presented in Table 2 and are provided by product category, fuel-type and end-use levels. Negative numbers in the table indicate that these particular subcategories present negative net benefits. Consistent with previous amendments, subcategories that do not generate net positive benefits remain subject to the Amendment in order to achieve the desired objectives and outcomes of the Amendment from which Canadians will benefit as a whole. These results are then aggregated to present the overall impacts of the Amendment in Table 3.

Table 2: Benefits and costs (technology, installation and maintenance) per product category and subcategory used in analysis

Product Category (Subcategory)	Cumulative Total for Product Shipped by 2040 (Millions of Dollars) [2018$]
	Product Costs table 4 note *	Product Benefits table 4 note **	Product Net Benefits
Household gas boilers	$148.07	$245.20	$97.13
Intended for hot water systems	$148.02	$244.91	$96.89
Intended for low pressure steam systems	$0.05	$0.29	$0.24
Household oil-fired boilers	$11.85	$57.39	$45.54
Intended for hot water systems	$11.67	$56.69	$45.02
Intended for low pressure steam systems	$0.18	$0.71	$0.52
Commercial gas boilers	$985.63	$1,641.53	$655.90
Intended for hot water systems	$972.37	$1,610.12	$637.75
Intended for low pressure steam systems	$13.26	$31.41	$18.14
Commercial oil-fired boilers	$4.40	$18.71	$14.30
Intended for hot water systems	$4.10	$17.28	$13.17
Intended for low pressure steam systems	$0.30	$1.43	$1.13
Gas fireplaces	$161.15	$1,790.35	$1,629.19
Heating	$86.06	$820.42	$734.37
Decorative	$75.10	$969.92	$894.83
Household gas-fired instantaneous water heaters	$0.00	$48.37	$48.37
Commercial gas-fired water heaters	$29.42	$36.98	$7.56
Commercial gas-fired storage water heater	$10.51	$29.91	$19.40
Residential-duty commercial gas-fired storage water heater	$7.26	$2.08	-$5.18
Commercial gas-fired instantaneous water heater	$11.65	$4.99	-$6.67
Gas furnaces	$135.46	$348.09	$212.63
Electric furnaces	$24.75	$30.38	$5.63
Table 4 note(s) Table 4 Note * Costs for technology, installation and maintenance as applicable. Return to table 4 note * referrer Table 4 Note ** Benefits from energy savings and GHG emission reductions. Return to table 4 note ** referrer

Note 1: Numbers may not add up to totals due to rounding. The information in this table covers shipments impacted by the Amendment between 2019 and 2040. All benefits and costs are discounted at 3% to the year 2018.

Note 2: For commercial electric water heaters, commercial oil-fired water heaters and residential-duty commercial oil-fired water heaters, the analysis does not attribute any costs or benefits to the implementation of the MEPS, as all product models being imported into Canada or shipped between provinces comply with the more stringent MEPS.

Note 3: For HRVs and ERVs, the compliance and administrative cost calculations are included in Table 3, but no other benefits or costs have been modelled for this product category given that there are no added technology, installation or maintenance costs.

Table 3: Summary of benefits and costs to Canadians

Costs, Benefits and Distribution			Aggregate Annual Totals			Total Cumulative Present Value	Average Annualized Over Period to 2040
			2020	2030	2040	By 2040
A. Quantified impacts ($) [millions in 2018 prices]
Benefits	Pre-tax fuel (gas, oil and electricity) savings	Canadians	$104.22	$248.43	$245.02	$3,121.21	$195.85
	Avoided GHG damages	Canadians	$28.21	$90.13	$93.72	$1,095.78	$68.76
Total benefits			$132.43	$338.56	$338.74	$4,216.99	$264.61
Costs	Technology, installation and maintenance costs	Canadians	$19.72	$132.14	$130.31	$1,500.74	$94.17
	Compliance and administrative costs	Canadians	$0.11	$0.12	$0.12	$1.95	$0.12
	Government administration	Government	$0.10	$0	$0	$0.10	$0.01
Total costs			$19.93	$132.16	$130.43	$1,502.79	$94.30
Net benefits			$112.49	$206.40	$208.31	$2,714.20	$170.31
B. Quantified impacts (in non-$)
Positive impacts on Canadians		Energy savings (petajoules)	0.84	15.05	27.79	303.63	—
		GHG emission reductions (megatonnes)	0.04	0.74	1.36	14.87	—

Note: Numbers may not add up to totals due to rounding. The information in this table covers shipments impacted by the Amendment between 2019 and 2040. All benefits and costs are discounted at 3% to the year 2018.

Additional benefits and costs

For industries using affected energy-using products in their operations, an improvement in energy performance translates into energy and operating cost savings and improved environmental performance, which can lead to increased productivity and competitiveness. When such companies spend these energy savings on expanding their businesses or factories, they create greater demand.

Because of the lack of data, the analysis has not quantified widely accepted benefits, such as reduced air pollution, and non-energy benefits related to energy efficiency, such as increased occupant comfort, better indoor air quality and minimizing risks of depressurization in new constructions with better envelopes.

The analysis has quantified costs and benefits for each product category relative to a business-as-usual case defined by market conditions assessed in 2016. In the case of three product categories (commercial electric water heaters, commercial oil-fired water heaters and residential-duty commercial oil-fired water heaters), the assessment showed that all product models being imported into Canada or shipped between provinces comply with the MEPS. While the analysis does not attribute any costs or benefits to the implementation of the MEPS for these three product categories, this Amendment will prevent future dumping of low-efficiency product models into the Canadian market.

Another benefit of the Amendment is related to the verified energy efficiency performance information of energy-using products that is collected by NRCan through its compliance program. The information for new energy-using products will be posted to the NRCan website ^{footnote 27} and will be accessible to consumers or businesses to help them 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

The Amendment is considered an “IN” under the “One-for-One” Rule. It will result in an increase of $72,161 in annualized average administrative costs to industry.

Assumptions underlying administrative burden estimates

Familiarization with the Amendment

Familiarization with new information obligations is a one-time administrative function that applies to manufacturers of regulated products. The task involves reviewing and understanding the new requirements of the Amendment, as well as the energy efficiency reporting form that NRCan provides to each stakeholder. This one-time event is estimated to take two hours and to be undertaken by someone with a technical background who receives a wage rate of approximately $42. The number of stakeholders impacted is estimated as 710, which represents the sum of total companies identified under the following three Harmonized system (HS) codes:

• 332410 — Power Boiler and Heat Exchanger Manufacturing
• 333413 — Industrial and Commercial Fan and Blower and Air Purification Equipment Manufacturing
• 333416 — Heating Equipment and Commercial Refrigeration Equipment Manufacturing

The use of these codes likely overestimates the total number of companies that would be directly impacted by the Amendment. NRCan does not have access to more detailed information that would allow for a more precise stakeholder estimate and decided, for the purpose of this calculation, to apply estimates of incremental burden to all 710 stakeholders.

Submitting import reports

The Amendment introduces import reporting requirements for new energy-using products. Importers of these new products will carry an incremental ongoing administrative burden, as they will be required to provide information for up to 21 new 10-digit HS codes at the time of importation. To estimate the frequency and time associated with this administrative action, NRCan analyzed Canada Border Services Agency import data from four recent years (2012–2015) to establish the number of importers, the average number of transactions per year and the average number of transactions per year per HS code. Based on this analysis, it is estimated that 1 984 importers will be affected by this incremental activity, which will occur 85 times per year. It is assumed that clerical staff with a wage rate of approximately $30 will undertake this task.

To estimate the time required per event, NRCan relied upon a U.S. DOE assessment of the time it takes to populate a similar report in a similar context: information is readily available and must simply be entered into the proper place in the report. The U.S. DOE estimated that it took approximately 22 seconds per data element to populate this report. To account for minor differences between the complexities of the data elements in Canada’s import reports and those that were the subject of the U.S. DOE analysis, NRCan estimates that it would take 36 seconds per data element, with each report requiring two data elements. These activities would be undertaken by administrative support with a wage rate of approximately $29.

Submitting energy efficiency reports

The Amendment introduces an administrative burden associated with the reporting of energy performance information before an energy-using product is imported. The added burden would apply to product models that have reporting elements that differ from reporting requirements already in place in other jurisdictions.

The data used to calculate incremental administrative burden costs was obtained from a variety of sources, such as internal compliance databases, numerous product market studies, Statistics Canada, the Canada Border Services Agency, the Canadian Federation of Independent Business, and the U.S. DOE. Analysis of the data indicates that 8% of shipments may be impacted by new reporting requirements, which require inputting data into fields of the energy efficiency reports. This percentage was applied to the total number of estimated manufacturers (710) to arrive at 57 total stakeholders that would be affected by this incremental burden. The time required to input the data has been estimated to take 36 seconds per data element. These activities would be undertaken by administrative support staff with a wage rate of approximately $29.

Consultations

No comments were received from stakeholders on the impacts of the Amendment on administrative burden. In general, stakeholders are supportive of the approach to align reporting requirements with other jurisdictions when feasible.

Small business lens

Statistics Canada and Canada Border Services Agency data obtained from the Treasury Board Secretariat’s regulatory cost calculator indicates that 2 771 small businesses may be impacted by this Amendment. This number overestimates the total small businesses that will be impacted because NRCan is only regulating a subset of products within each industry sector represented in the data. NRCan does not have access to more specific information to identify the portion of these sectors that would be affected. Therefore, using this number to estimate the administrative costs on small businesses represents a conservative, worst case scenario. The reporting requirements are minor and represent the minimum amount of information required to assess that an individual product model meets the prescribed standards; however, the Amendment is estimated to increase the administrative costs for small importers by $74,121 (annualized average administrative costs), or approximately $35 per business and increases the administrative burden for small manufacturers of affected products by $9,374 (annualized average administrative costs), or $14 per business. The estimated impacts on small businesses are presented in Table 4.

NRCan held discussions with the Canadian Federation of Independent Business, an organization representing the interests of small, independent businesses to better understand the potential impacts of the amendments to the Regulations. The organization indicated that the main challenge for these companies results from a lack of awareness of the new requirements and when they come into force. To mitigate this challenge, NRCan intends to undertake supplemental outreach activities specific to the Amendment to educate importers and mitigate the risk that goods are refused entry into Canada due to the unintentional omission of data or information.

Information obtained during pre-consultations indicates that 10 small Canadian manufacturers may be impacted by the Amendment. Six of these companies are manufacturers of heat/energy recovery ventilators, for which the Amendment introduces reporting for the first time. The reporting requirements are minor and represent the minimum amount of information required to achieve the objective of ensuring that a standardized method is used to quantify the energy performance of these products.

One small manufacturer of gas fireplaces was identified and an assessment of its product offerings indicates that they already comply with the requirements. Three small manufacturers of gas-fired boilers were also identified and engaged in consultations to develop the Amendment. For one company, all of their 24 current model offerings comply with the upcoming requirements. For another, almost half of their 684 current model offerings comply. For the third company, neither of its two current product offerings complies with the MEPS that will come into force in 2023. None of these small manufacturers identified any compliance issues associated with the size of their company during pre-consultations.

Table 4: Small business lens summary

Small Business Lens Summary
Number of small businesses impacted	2 771
Number of years	10
Base year for costing	2012
Administrative Burden	Annualized Value ($)	Present Value
Submitting import reports	$74,121	$520,596
Submitting efficiency reports	$9,374	$65,837
Total cost (all impacted small businesses)	$83,495	$586,433
Cost per impacted small business	$30	$212

Note: Numbers may not add up to totals due to rounding.

Consultation

Pre-consultation summary

The Amendment introduces or updates MEPS, testing standards, verification, and reporting requirements for 12 product categories and supports the market transformation strategies released by federal, provincial and territorial energy ministers in 2017. Stakeholders ^{footnote 28} were informed of the changes being considered in the Amendment and were provided opportunities to comment at several points since 2016. These consultations evolved with time, and the content of the Amendment was modified accordingly. The following outlines the key materials used to communicate details to the stakeholder community:

• February 2016: NRCan released a discussion paper to seek stakeholder views and feedback on the list of products being considered for the next two amendments.
• March 2017: NRCan published a notice of intent in the Canada Gazette, Part I, to inform stakeholders that it was initiating the development of the Amendment and communicate the overarching policy direction being taken.
• April 2017: NRCan updated its forward regulatory plan to communicate the product categories being considered for inclusion in the Amendment.
• 2017–2018: 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. For complex products, ^{footnote 29} the webinars included details on the cost and benefit analysis. In many cases, the industry questioned the assumptions on specific scenarios that could impact the costs and benefits, and NRCan made changes when appropriate. The best data available was used and any new data provided will be taken into consideration. The complete analysis is available in the cost-benefit document.
• April 2018: NRCan updated its forward regulatory plan to reflect changes to the list of product categories being considered for inclusion in the Amendment based on market studies and input from stakeholders.

All the documents mentioned above were distributed to stakeholders via targeted emails. In turn, many of these individuals and organizations forwarded the information to provide access to a larger audience of stakeholders.

NRCan also has ongoing activities that provide additional opportunities to gather feedback from stakeholders and to inform them:

• Energy Efficiency Regulations web page of the NRCan website.
• Ongoing bilateral discussions: NRCan is in close contact with the industry through major industry associations to discuss changes and updates to the products.
• 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 testing standards.
• Market studies to support decision making were conducted by third-party consultants who worked with manufacturers and industry associations to gather information.

Canada Gazette, Part I, consultation

The Amendment was prepublished in the Canada Gazette, Part I, on October 20, 2018. The following outlines the key consultations activities that NRCan undertook during the 70-day comment period:

• October 2018: The Energy Efficiency Regulations website was updated and an announcement was released to over 6300 stakeholders inviting comments on the proposed regulatory text during the 70-day comment period.
• November 2018: Webinars were held to take stakeholders through the proposed regulations and explain what differs from what has been presented in the 2017–2018 technical bulletins and webinars based on information received during pre-consultation.
• December 2018: To respond to a non-enforcement policy that occurred in the United States in November 2018, NRCan issued a technical bulletin to gather comments on a proposal to add a prescriptive option for fan energy rating (FER) of gas, oil-fired and electric furnaces. The U.S. non-enforcement policy has been rescinded on February 11, 2019, and NRCan is not making the changes that were proposed in that bulletin.
• December 2018 – February 2019: More than 20 conference calls and bilateral meetings were held to ensure that questions on the proposal were answered and that the comments provided were understood.

Canada Gazette, Part I, consultation — 70-day comment period

More than 6 300 stakeholders representing industry/retail associations, manufacturers/suppliers, certification bodies, standards development committees, utilities, general interest organizations and governments were solicited for comments. NRCan received written submissions from 31 unique organizations during the 70-day period: 4 from energy efficiency alliances, 4 from industry associations, 18 from individual manufacturers, 3 from utilities, one from a province, and one from an international regulator.

The following paragraphs summarize the major comments and topics of clarification raised by stakeholders during the comment period and NRCan’s views on each of them. No substantive comments were received for commercial oil-fired boilers.

Social cost of carbon

Two industry associations suggested that the social cost of carbon be eliminated from this regulatory analysis because it is not appropriate to count as full benefits for Canadians given that the future damage costs would be distributed globally around the world.

As per the Treasury Board of Canada Secretariat Policy on Cost-Benefit Analysis, ^{footnote 30} departments are required to use the social cost of carbon values estimated by Environment and Climate Change Canada. The monetized damage avoided through an incremental reduction in carbon emissions due to a regulation is a measure of the global benefit (including Canada) of that regulation. Further, no single country, acting alone, can satisfactorily deal with climate change issues. This is a case where both the costs and benefits to other countries matter to Canada if only to motivate collective policy actions. These international interdependencies of costs, benefits and policy solutions as evidenced by the multiple bilateral and multilateral environmental agreements that Canada is or has been party to are an adequate justification for granting standing to the benefits and costs calculated using the social cost of carbon.

Product-specific comments

Commercial electric water heaters

Comments received reflected general support for the Canada Gazette, Part I, proposal.

Residential-duty commercial gas-fired storage water heaters

Issue: Limited product availability at the proposed MEPS level

• Comment: NRCan proposed two MEPS levels for this product category: one that would apply to products marked for use in replacement scenarios and one that would apply to all other products, the latter of which is more stringent. NRCan received several comments from manufacturers and industry associations indicating that they need more time to comply with the MEPS for products that are not marked for use in replacement scenarios due to limited product availability. Manufacturers want to ensure availability of a wide range of products to facilitate a smooth market transition.
• Response: NRCan acknowledges that the compliance rate for products not marked for use in replacement scenarios may be overestimated. While this segment of the market is relatively small, NRCan agrees that the availability of additional product offerings provides more flexibility to consumers. To ensure adequate product availability, NRCan has moved the date of compliance from January 1, 2020, to July 1, 2023.

Issue: Stringency of MEPS

• Comment: One manufacturer commented that the standby loss performance required to meet the proposed uniform energy factor (UEF) standard for products not marked for use in replacement scenarios is too stringent and recommended that NRCan establish a UEF standard with less stringent standby loss requirements.
• Response: During pre-consultations, NRCan received a number of comments from this industry that advocated for alignment with the MEPS presented in the U.S. DOE Notice of Proposed Rulemaking (NOPR) published on December 23, 2016, for products not marked for use in replacement scenarios. NRCan agreed and proposed MEPS at the U.S. DOE level in the Canada Gazette, Part I. NRCan is maintaining that this position reflects the general views of this industry and will retain the MEPS.

Commercial gas-fired storage water heaters

Issue: Stringency of MEPS for products not marked for use in replacement scenarios

• Comment: Although most manufacturers supported the proposed 90% thermal efficiency standard for products not marked for use in replacement scenarios, many commented that the standby loss standard of 0.63 for these same products is too stringent. They also noted NRCan’s estimate that only 4% of current stock would comply with the standard. They recommended a standby loss standard of 0.84, which is the ENERGY STAR level for commercial water heaters.
• Response: NRCan acknowledges the low compliance rate with the standby loss standard and has implemented the standard of 0.84, as recommended.

Issue: Stringency of MEPS for products marked for use in replacement scenarios

• Comment: Most manufacturers did not support the proposed 82% thermal efficiency standard for products marked for use in replacement scenarios. They suggested that NRCan’s methodology of using model-weighted energy efficiency as a proxy for shipment-weighted energy efficiency in determining compliance rates risked overestimating the volume of products on the market that perform at the 82% level. They recommended a thermal efficiency level of 80% for products marked for use in replacement scenarios, which would align with standards currently in force in the United States.
• Response: NRCan relied upon a model-weighted methodology for this product category as detailed shipment data was unavailable at the time of proposal publication. Shipment estimates provided in response to the proposal demonstrated cases where the methodology overestimated compliance rates. Based on this new information, NRCan agrees and has changed the thermal efficiency standards from 82% to 80%.

Issue: Date of manufacture

• Comment: Most manufacturers commented that applying the proposed standards to products manufactured on or after January 1, 2020, would not give them adequate time to adjust product offerings to comply. They recommended a delay of at least three years to ensure availability of a wide range of products to facilitate a smooth market transition.
• Response: NRCan agrees that the availability of additional product offerings provides more flexibility to consumers and businesses. To ensure adequate product availability, NRCan is moving the date of compliance from January 1, 2020, to July 1, 2023.

Commercial oil-fired storage water heaters

Comments reflect general support for the Canada Gazette, Part I, proposal.

Commercial instantaneous gas-fired water heaters

Issue: Stringency of MEPS

• Comment: Stakeholders wanted NRCan to consider establishing two different MEPS for this product, based on end use. Stakeholders recommended 90% thermal efficiency, but with a less stringent 80% standard for products marked for use in replacement scenarios.
• Response: NRCan disagrees that it is necessary to establish different MEPS levels for this product based on end use. According to data provided by industry, approximately 65% of shipments have a 94% thermal efficiency or better. NRCan is maintaining the standard at the proposed 94% level, but has moved the date of compliance to July 1, 2023, to ensure adequate product availability.

Household instantaneous gas-fired water heaters

Issue: Lifetime costs of compliant products

• Comment: Some stakeholders challenged NRCan’s assumption that there is no incremental installation or maintenance costs between a baseline non-condensing instantaneous water heater and one that complies with the proposed MEPS. They commented that this assumption is even less representative in scenarios where an instantaneous water heater is replacing a storage water heater.
• Response: NRCan disagrees with the view that this assumption is not representative of the comparative costs associated with products at these different performance levels. According to NRCan’s market analysis, the retail cost of a product that complies with the proposed MEPS is higher than that of a non-condensing product; however, that same study demonstrates that compliant products are less costly to install than a non-condensing product. This is primarily attributable to a reduction in the cost of venting. Interviews conducted with stakeholders during the course of the market analysis showed that there is no incremental maintenance costs between a non-condensing instantaneous water heater and one that would comply with the proposed MEPS. NRCan’s cost benefit analysis methodology is based on assessing the incremental impacts of a like-for-like replacement. This is consistent with methodologies used in other jurisdictions, such as the United States, and is considered appropriate as it limits the scope of the analysis to the impacts resulting from the implementation of the amendments. In this case, the Amendment requires instantaneous gas-fired water heaters to meet a more stringent standard; it does not require consumers or businesses to change the type of water heater they use.

Household gas boilers

Issue: Date of manufacture

• Comment: NRCan proposed that the updated MEPS apply to products manufactured on or after January 15, 2021. Some manufacturers asked for more time to comply with the 90% AFUE MEPS for gas boilers intended for hot water systems. The industry associations suggested a minimum three-year delay.
• Response: NRCan agrees and has delayed the MEPS that apply to gas boilers intended for hot water systems to those that are manufactured on or after July 1, 2023. Given that the new requirements for gas boilers intended for steam systems are aligned with standards that will come into force on January 15, 2021, in the United States, NRCan is retaining this date of manufacture for those products.

Issue: Venting materials

• Comment: NRCan’s market analysis used polyvinyl chloride (PVC) as the vent material for condensing boilers. Manufacturers commented that in Canada, the installation standard CSA B149 requires the use of chlorinated polyvinyl chloride (CPVC) vent material rather than PVC for condensing boilers, which is estimated to be, on average, 33% more expensive.
• Response: NRCan agrees with this comment and has adjusted its analysis to reflect the increased cost of the CPVC vent material for condensing boilers.

Issue: Installation costs for difficult non-standard replacement scenarios

• Comment: Some stakeholders commented that NRCan’s analysis did not consider the increased cost to install a condensing boiler in challenging replacement scenarios, and has therefore overestimated the net benefits for this product. Stakeholders wanted NRCan to consider establishing different MEPS levels for this product, based on end use with a lower standard given for units in replacement scenarios.
• Response: NRCan acknowledges that installing condensing boilers in certain retrofit scenarios would have a higher incremental cost than the averages used in the analysis. However, NRCan is confident that difficult retrofit scenarios are rare and that feasible technical solutions exist in those instances. This conclusion is based on additional consultations and study conducted following the publication of the proposal. Accordingly, NRCan’s analysis remains unchanged.

Issue: Installed cost of a MEPS–compliant boiler

• Comment: Some stakeholders commented that NRCan underestimated the installed cost of a boiler that would comply with the MEPS in its analysis. One stakeholder also questioned how the installation cost of the average non-compliant representative boiler could be higher than that of the compliant boiler.
• Response: NRCan’s market study used costs originally sourced from the U.S. DOE technical support document and adjusted those using RSMeans, a leading North American source of construction data. These costs were further refined based on interviews that were conducted with manufacturers as part of this market study. One manufacturer submitted cost data for household boilers, but the data was seen as too limited to extrapolate across the entire industry as part of the economic analysis. The cost to install the average non-compliant representative boiler is lower than the MEPS–compliant boiler in replacement scenarios due to the difference in the cost of the venting material used. The average non-compliant model is 85% AFUE and must use stainless steel venting which is more expensive than CPVC vent material used for the MEPS–compliant model that is 90% AFUE.

Issue: Illegal importation of products

• Comment: One manufacturer commented that a misalignment between standards in the United States and Canada will lead to (a) a significant increase in illegal products being introduced into the Canadian marketplace; and, (b) the utilization of lower-cost products that do not suit the application, such as less efficient water heaters, which are not approved for use in hydronic systems.
• Response: NRCan disagrees that having a higher standard for boilers in Canada will lead to illegal importation of products. Regulated energy-using products imported into Canada for the purpose of sale or lease must provide specific information on the customs release request such as brand name and model number. Natural Resources Canada cross-references import data with previously filed energy efficiency reports to ensure all regulated products imported into Canada meet the minimum energy efficiency standard.
• NRCan acknowledges that homeowners have a choice when replacing their existing heating system and may choose a lower cost, less energy-efficient option. NRCan provides information on its website to help educate consumers and inform energy efficient purchase decisions. While NRCan acknowledges that a potential alternative heating appliance in a hydronic system would be a combination space and water heating system, many such systems today employ an instantaneous water heater, which will also be subject to a condensing standard before the updated standard becomes effective for boilers. The heating appliance industry is governed by codes and standards that regulate the installation of hydronic space heating systems. These processes have their own compliance requirements that are independent of energy efficiency regulations and rely on the expertise of contractors and installers to ensure the codes are followed.

Issue: Need for regulatory action

• Comment: One manufacturer commented that market data indicates that shipments of boilers that currently comply with these MEPS have levelled off over the past 3 years, indicating the ongoing need by at least 22% of the marketplace for lower efficiency replacement boilers. They argued that this is due to the lower incremental installation cost when replacing “like for like” models.
• Response: NRCan acknowledges that replacing a non-condensing boiler with a condensing boiler will have a higher incremental installed cost. However, NRCan’s analysis shows that consumers will see energy cost savings over the lifetime of the product.

Issue: Product service life

• Comment: Many stakeholders commented that NRCan’s assumption of a 26.5 year service life for boilers is overestimated. Stakeholders’ estimation of service life varied from 12 to 20 years. They indicated that the economic analysis using such a long service life would require at least one heat exchanger replacement, and that NRCan needed to take into account this cost.
• Response: NRCan used the same estimated service life as the U.S. DOE used in its analysis. The CBA includes the cost of a heat exchanger replacement as an annualized operations and maintenance cost applied to shipments using a failure rate analysis. NRCan is retaining this service life as it does not have a well-substantiated alternative and has included a cost adjustment for a heat exchanger replacement to extend the life to 26.5 years.

Issue: Impact to employment

• Comment: One Canadian manufacturer stated that amending the MEPS would lead to job losses at their manufacturing plant in Canada.
• Response: NRCan acknowledges that some Canadian manufacturers have boiler models that will not meet the new MEPS, but has delayed the compliance date for hot water boilers until July 1, 2023, four years later than originally proposed. This has been done to foster a smooth transition to these new requirements.

Issue: Secondary piping and pump requirements for MEPS–compliant boilers

• Comment: One manufacturing group commented that many manufacturers’ installation manuals recommend the use of a secondary piping system requiring an additional pump. They stated that NRCan had not included these additional costs in its analysis, thereby underestimating the incremental installed cost of a boiler that complies with the MEPS.
• Response: NRCan’s benchmark analysis is based on a comparison of costs and energy savings between a product that represents a least efficient baseline model and a baseline model that just meets the MEPS, both installed in a distribution system with the same characteristics. NRCan acknowledges that there is a variety of installation best practices for boilers at all efficiency levels. However, NRCan is retaining its methodology of baseline system comparisons.

Issue: Incremental maintenance costs for MEPS–compliant products

• Comment: Some stakeholders commented that the maintenance costs of a condensing boiler are underestimated in the analysis.
• Response: NRCan’s analysis calculates the incremental maintenance cost between non-compliant and compliant boilers. Regularly scheduled service calls were calculated for all boilers, regardless of efficiency level. For a boiler that complies with the MEPS, this service call would need to be extended to perform maintenance on the condensate withdrawal system, estimated as an additional 0.077 labour hours annually. Weighted for the 81% of boilers that have annual maintenance, this would lead to an incremental cost, on average, of $5.44 CDN.

Commercial gas boilers

Issue: Stringency of MEPS

• Comment: Stakeholders commented that the proposed MEPS are too stringent for commercial boilers that would be used in replacement scenarios. Stakeholders wanted NRCan to consider establishing two MEPS levels for this product based on end use, to align with current regulations in Ontario. Stakeholders recommended 90% efficiency, but with a less stringent standard that aligns with current standards in the United States for products marked for use in replacement scenarios. They indicated that although there is an overall 72% compliance rate to the proposed standard, only 50% of large commercial boilers comply, which indicates that certain parts of the market are not transitioning to condensing boilers. They state that this market data shows that the condensing boiler market share has levelled off over the past three years, justifying a need for non-condensing products to continue to exist in the market. Manufacturers and utilities state that equipment that approaches, but does not meet the MEPS level, would serve as an effective approach to achieving energy savings without the additional installation costs.
• Response: NRCan disagrees that it is necessary to establish separate MEPS for this product based on end use. NRCan analyzed the option of two MEPS and the net benefits to Canadians under this scenario were greatly reduced. NRCan modelled near-condensing units and determined that the incremental cost-to-savings ratio is higher than for condensing units, meaning near-condensing products have more cost per energy saved. According to data provided by industry, approximately 72% of shipments are currently at, or better than, the proposed standard for hot water boilers. NRCan is maintaining the standard at the proposed 90% level, but has moved the date of compliance to January 1, 2025, six years after the anticipated publication. This will foster a smooth transition of the market to these new requirements.

Issue: Vent material

• Comment: Some stakeholders identified that in its analysis, NRCan had incorrectly used PVC vent material in the replacement scenario for the education archetype in Vancouver. Manufacturers commented that the installation standard CSA B149 requires venting certified by ULC S636, which requires the use of CPVC, stainless steel, or polypropylene which are more expensive than PVC.
• Response: NRCan agrees and has adjusted its analysis to reflect the use of CPVC vent material in the education archetype in Vancouver.

Issue: Difficult venting — common manifold

• Comment: Several stakeholders commented on the technical difficulty presented when one non-condensing boiler in a multiple boiler plant that uses a common vent manifold needs to be replaced. They stated that the replacement of a non-condensing boiler with a condensing boiler, will effectively oversize the vent and create poor drafting pressure, potentially leading to acidic condensate corrosion.
• Response: NRCan consulted with industry experts who confirmed that many technical solutions exist to address oversized venting issues in a multiple boiler replacement scenario, such as the installation of draft dampers or vent liners. They also indicated that the replacement of one boiler in these scenarios does not always lead to an issue of oversized venting. Multiple boiler system vents are sized to accept up to one or more boilers in operation, since these systems are generally configured to match varying loads.

Issue: Difficult venting — orphaned domestic water heaters

• Comment: Some stakeholders commented that an existing atmospheric vent might serve both a non-condensing boiler and another gas appliance such as domestic water heater. Removing the boiler from this atmospheric vent could result in an “abandoned” water heater, and if the vent cross-section is too large for the remaining non-condensing application, the exhaust air may not have enough buoyancy to properly move through the vent. In addition, the exhaust may cool down more quickly than anticipated, causing condensation in a vent not designed to resist condensation.
• Response: According to installers and building owners co-venting boilers and commercial water heaters is rare. Since loads for space heating are much larger than water heating, separate venting to match the flue gas temperatures from each appliance would be needed, particularly in the non-heating season.

Issue: Difficult venting — new vent pathways

• Comment: One manufacturer commented that converting vents from non-condensing to condensing operation is not always possible, or it may be accompanied by higher costs, reduced utility, inconvenience to the customers, and/or loss of usable space. One utility suggested that finding new vent pathways in existing buildings may require major renovations.
• Response: NRCan acknowledges the existence of difficult replacement scenarios; however, information collected during consultations suggests that technologically feasible and economically practicable solutions exist to address these scenarios for a large majority of installations. NRCan, in consultation with installers and building owners, found that condensing boilers are regularly installed in difficult replacement scenarios at reasonable costs. Market statistics also support a shift to condensing equipment for a large majority of installations.

Issue: Representative installation costs

• Comment: One manufacturer commented that a national analysis based on a limited number of representative cases does not adequately account for the significant variation in total installation costs in the market. They recommended accounting for chimney relining costs, statistical variations of venting length, and vent diameters to represent possible variations found in actual installations. One energy efficiency advocate noted that there are always costs associated with new venting for all technology types. They add that the existing boiler venting is usually not reusable when it comes time to install any new boiler, due to the condition of the venting and/or building code requirement triggered by the boiler replacement project.
• Response: NRCan acknowledges that there are many possible installation scenarios. NRCan performed an analysis on representative cases to capture average incremental costs and energy savings. The analysis considered the three most common archetypes that use space heating boilers in new and replacement construction in four cities that represent large urban centres in varying climatic locations across Canada. NRCan believes that if additional archetypes and installation scenarios were added to the analysis, NRCan would take a similar approach to weigh all the possible outcomes and develop a national-level representation of impacts on the building stock, which would be the average or representative case: a standard 42-foot vent length replacement scenario. NRCan considers its estimates of retail costs to be conservative (up to 188% higher than competitive pricing levels in the market today), which serves to account for the costs of the more difficult installation scenarios in this national-level representation.

Issue: Retail and installation costs are underestimated

• Comment: Stakeholders commented that retail and installation costs were underestimated or not completely accounted for in the economic analysis, thereby overestimating the net benefits. Most comments referred to varying costs of installation and lack of analysis on difficult installation scenarios.
• Response: NRCan’s economic analysis was based on methodologies developed by the U.S. DOE. The market analysis included translating costs from the U.S. DOE’s technical support document to Canadian market and economic realities (e.g. geography, climate, and socio-economic standards). In order to accurately reflect the boiler market in Canada, NRCan consulted with stakeholders on the initial costs and adjusted the analysis to incorporate feedback from both manufacturers and distributors. NRCan further consulted with industry analysts and obtained competitive incremental retail costs which were significantly lower when compared to the costs used in analysis. By comparison, costs used in the analysis were between $16,000–$98,000 lower for replacement scenarios and between $7,000–$66,000 lower for new construction. NRCan is confident that the sensitivity of costs presented in its analysis accounts for difficult replacement scenarios.

Issue: Product service life

• Comment: Many manufacturers commented that NRCan’s assumption of a 24-year service life for condensing boilers is overestimated. Stakeholders’ estimation of service life varied from 10 to 20 years. They suggest that the difference in manufacturer warranties between non-condensing and condensing boilers demonstrate that condensing models are expected to have a shorter service life than non-condensing models. Several manufactures noted that condensing heat exchangers use a much thinner wall thickness and are subject to acidic condensate, thereby requiring repairs and additional servicing if product lifespans exceed 12 years. Stakeholders indicated that replacement costs of the heat exchangers used in NRCan’s analysis are underestimated and should be between 50% and 65% of the cost of a new boiler.
• Response: NRCan acknowledges that limited data exists to fully understand the service life of condensing boilers. NRCan used the same estimated service life as was used in the U.S. DOE technical support document. The analysis includes the cost of a heat exchanger replacement as an annualized operation and maintenance cost applied to shipments using a failure rate analysis. The cost of the heat exchanger was estimated at 33% of the total cost of a condensing boiler, based on the U.S. DOE technical support document. NRCan is retaining this service life as it does not have a well-substantiated alternative and has included a cost adjustment for a heat exchanger replacement to extend the life to 24 years.

Issue: Condensate withdrawal

• Comment: Manufacturers commented that condensing boilers need to have access to a suitable drain to dispose of the boiler’s acidic condensate. In some cases, neutralization of the acidic condensate is necessary prior to it being drained. In some replacement scenarios, existing cast iron drains might be damaged if the condensate is under-neutralized.
• Response: NRCan acknowledges that condensate withdrawal is a requirement for condensing boilers and that it adds cost in certain replacement scenarios, where a suitable corrosion resistant drain is not conveniently located close to the boiler. Corrosion-resistant draining and condensate neutralization are well understood in Canada. Some installations require condensate pumps, condensate neutralizer or a Y-strainer. NRCan’s market study, which referred to findings from the U.S. DOE technical support document, indicated that the percentage of installations requiring all these parts is relatively low, but acknowledged that there is limited data on which to base these estimates. The market study did not include condensate removal costs as part of the installed costs, so these are not accounted for this in analysis. The analysis does, however, include maintenance costs for condensate neutralizing.

Issue: Existing boiler plant controls

• Comment: Stakeholders commented that some existing boiler plants have multiple non-condensing, atmospheric boilers of the same model or manufacturer. If one of these boilers fails, it would need to be replaced by a condensing boiler, possibly from a different manufacturer, causing potential control issues in the boiler plant.
• Response: NRCan disagrees that replacing one boiler in an existing boiler plant with a condensing boiler will cause any significant incremental issue with plant controls. In discussion with contractors and industry consultants, NRCan heard that building automation systems could typically work with any type of boiler, allowing boilers of different types and manufacturers to work together. Hybrid configurations are common in commercial buildings and adding a condensing boiler to an existing plant would likely result in more effective load matching.

Issue: Energy savings from condensing boilers in existing hot water distribution systems

• Comment: Manufacturers noted that condensing boilers only operate in condensing mode when the return water temperature to the boiler is sufficiently low. A hot water distribution system designed for non-condensing boilers may not have the capability to reduce the return water temperature required for a condensing boiler to condense, thereby limiting potential energy savings.
• Response: NRCan acknowledges that the annual energy savings of a condensing boiler installed in an existing high temperature distribution system will be lower than if installed in a hot water distribution system designed to return low temperature water. NRCan has modelled these scenarios and accounted for the reduced energy savings fully in its analysis. The incremental annual energy savings using a condensing boiler is significant when compared to lower efficiency equipment, regardless of the type of hot water distribution system.

Issue: Emergency Replacement Scenarios

• Comment: Some utilities commented that a boiler failure during winter could render that building without heat for weeks. They note that critical public buildings and institutions cannot be stranded without a heating system if a suitable replacement is difficult to install.
• Response: NRCan acknowledges that a heating system failure in winter is a concern, regardless of the type of heating system or its efficiency level. Commercial building operators would need to react to such a scenario and factor in lead time of replacement boilers, available contractors, and provide supplemental heat as needed. NRCan believes that the incremental change in contingency plans for most commercial buildings would not be significant, due to this regulation. Engineering guidelines, such as the ASHRAE HVAC Design Manual for Hospitals and Clinics, suggest that heating systems should be designed with a redundant system or with enough capacity to ensure heat to critical areas in the event of extended maintenance or the replacement of major components. According to the CEE Commercial Boiler System Initiative, boilers are generally replaced due to the end of life or as part of building energy upgrades. CEE’s early replacement program guidance encourages replacements prior to the heating season to prevent failure during operation and to avoid total system shutdown during installation. By extending the compliance date to January 1, 2025, NRCan proffers sufficient time for commercial buildings and institutions to develop and adjust contingency plans for emergency replacement scenarios, and for the market to adapt to condensing boilers in retrofit applications.

Household oil-fired boilers

Comments reflect general support for the Canada Gazette, Part I, proposal.

Electric furnaces

Issue: Treatment of modular blowers

• Comment: Some stakeholders commented that electric furnaces can be assembled on site using a modular blower with after market heating elements. The regulations would only apply if importation into Canada or shipment from one province to another occurred after the point of assembly. Stakeholders noted that this could encourage dealers to sell modular blowers with separately purchased heating elements to be assembled on site to avoid application of the Regulations. They recommended that NRCan include modular blowers within the scope of the electric furnace subdivision and apply the same minimum energy performance standards as those proposed for electric furnaces to avoid this situation.
• Response: While NRCan acknowledges that these assembled products would not be subject to the regulations, it does not currently have the data and information necessary to assess the potential impacts of a change in scope. As a result, NRCan is not adding modular blowers to the definition of electric furnaces, but will consider including this in a future amendment.

Issue: Scope — exemptions to the standard

• Comment: One stakeholder asked NRCan to clarify whether products listed as exempt from the FER standards in the U.S. are also exempt in Canada. These products include hydronic air handlers, small duct high velocity (SDHV) modular blowers, SDHV electric furnaces, central air conditioners and the indoor sections of heat pumps.
• Response: NRCan’s intention is to align with the exemptions to the U.S. FER standards. Hydronic air handlers and small duct high velocity (SDHV) modular blowers are not defined as energy using products in the Regulations, and therefore would not be subject to FER requirements. Although central air conditioners and heat pumps are defined as energy using products, the Regulations do not require minimum FER standards for these products. NRCan has modified the definition of an electric furnace to exclude those that are SDHV.

Gas furnaces

Issue: Stringency of MEPS for gas furnaces other than through-the-wall gas furnaces

• Comment: Some stakeholders opposed NRCan’s proposal to increase the MEPS for gas furnaces from 90% to 95% AFUE. They argued that the increased standard would limit consumer choice while the higher cost of the more efficient furnaces would encourage consumers to fuel switch or to purchase less efficient gas-fired heating products. Stakeholders recommended adopting a 92% AFUE standard to address these issues.
• Response: NRCan disagrees that the higher standard will limit consumer choice or lead to fuel switching given that 84% of gas furnace shipments already comply with the proposed 95% AFUE standard, according to shipment data provided by the Heating Refrigeration and Air Conditioning Institute. Therefore, NRCan will maintain the Canada Gazette, Part I, proposal and regulate gas furnaces to 95% AFUE.

Issue: Stringency of MEPS for through-the-wall gas furnaces

• Comment: Stakeholders opposed NRCan’s proposal to increase the MEPS from 90% to 95% AFUE for a sub-category of gas furnaces called through-the-wall (TTW) gas furnaces. They indicated that only one registered model in NRCan’s database would comply with both a 95% AFUE and meet the FER requirement for gas furnaces that were published as part of Amendment 14. During consultations on the 95% AFUE level, stakeholders highlighted that the FER requirement, which is designed to apply to products manufactured after July 3, 2019, presents a significant technological challenge for TTW gas furnaces, given the space-constrained nature of the product.
• Response: NRCan acknowledges the technological limitations associated with the space-constrained nature of these products and has removed the proposed increase in MEPS to 95% AFUE. As a result, the current 90% AFUE will continue to apply. To address technological challenges associated with TTW gas furnaces complying with the FER requirement, NRCan has delayed the MEPS to products manufactured on or after January 1, 2024. This provision comes into force immediately on registration.

Issue: Replacement gas furnaces for existing manufactured and mobile homes

• Comment: Stakeholders commented that NRCan’s proposal to remove the exclusion for gas furnaces for mobile homes from the Regulations would require that these products comply with a 95% AFUE level and the FER standard for condensing gas furnaces. Stakeholders cited various technical challenges that could arise in certain manufactured/mobile homes when replacing a non-condensing furnace with a condensing furnace, due to differences in the home’s design and installation. This could result in undue financial hardship for homeowners. Stakeholders also recommended that NRCan reference the FER standard in the U.S. Code of Federal Regulations for the mobile home, non-condensing gas furnace category for gas furnaces intended for use in manufactured homes in Canada, to align with the United States.
• Response: NRCan acknowledges the technical challenges that could arise for certain manufactured or mobile homes. To address these issues, NRCan has created a new sub-category of gas furnace to represent gas furnace replacements for existing non-condensing gas furnaces in manufactured homes and applied the same standard as that defined for gas furnaces for relocatable buildings. NRCan agrees with stakeholder views on the appropriate FER standard for these furnaces and has referenced the U.S. standard, as recommended by stakeholders.

Heat recovery ventilators and Energy recovery ventilators (HRV/ERV)

Issue: Definition of rated net supply airflow

• Comments: NRCan proposed to limit the scope of HRV/ERVs to those having a rated net supply airflow of not more than 142 L/s. One industry association commented that the proposal did not include a definition of net supply airflow and suggested that this risked potential misinterpretation and confusion.
• Response: NRCan agrees that the lack of a definition for rated net supply airflow may lead to confusion. The definition has been modified to limit the scope to those having a maximum rated airflow at 0^oC of not more than 142 L/s. Maximum rated airflow is a defined term in the referenced testing standard.

Issue: Laboratory airflow capacity at low temperatures

• Comment: One industry association highlighted that the laboratory testing these products only has the capacity to test airflow to 55 L/s at −25^oC.
• Response: NRCan acknowledges that the maximum airflow at which the laboratory can test products at −25^oC is significantly less than the proposed limit of 142 L/s. Modifying the scope, as described above, clarifies the temperature at which product scope is to be determined. It is not intended that the 142 L/s airflow rate be assessed at −25^oC.

Gas fireplaces

Issue: Ignition system requirements

• Comment: Stakeholders noted that the proposed use of the term “pilot flame” in each of the ignition system capabilities may inadvertently disallow ignition technologies that do not employ a pilot flame to light the main burner. Stakeholders also commented that ignition systems with the capability of operating in a continuous pilot mode by toggling a manual switch (switchable units) could be deemed compliant under the proposed language. To address these issues, they recommended that NRCan revise the language to be more inclusive of ignition technologies not equipped with a pilot flame and to prevent these switchable units from operating in a continuous pilot mode, since this would be consistent with the intent of the regulations.
• Response: NRCan agrees that these issues need to be addressed and has revised the ignition system capabilities language in accordance with stakeholder recommendations.

Issue: 24-hour automatic shutoff device for decorative gas fireplaces

• Comment: The automatic shutoff device requirement for decorative gas fireplaces was intended to limit energy use by automatically shutting off the unit’s main burner after a 24-hour period during which there is no input signal. Stakeholders commented that there is no detailed fireplace usage data to suggest any energy savings associated with these devices to justify the associated costs. Stakeholders recommended that NRCan remove this requirement.
• Response: NRCan acknowledges that there is insufficient data available to justify these costs and is removing this requirement in line with stakeholder recommendations.

Issue: Testing and reporting fireplace efficiency for decorative gas fireplaces

• Comment: Stakeholders indicated that the continued testing of decorative gas fireplace to the same test standard as a gas fireplace heater is inconsistent with NRCan’s stated intention to distinguish between gas fireplace heaters and decorative gas fireplaces. They argued that continuing to publish a fireplace efficiency rating for a decorative gas fireplace would increase the level of confusion for consumers in trying to understand the differences between decorative gas fireplaces and gas fireplace heaters. Stakeholders recommended that NRCan remove the testing and reporting of fireplace efficiency for decorative gas fireplaces.
• Response: NRCan disagrees with these views, given that the fireplace efficiency for decorative units provides consumers with valuable information and allows them to distinguish between units that provide very little heat and those designed to provide considerable heat to the living space. NRCan believes that continuing to provide consumers with this information will be beneficial and allow them to make informed purchase decisions. NRCan is maintaining the requirement to report fireplace efficiencies for both decorative gas fireplaces and gas fireplace heaters.

Regulatory cooperation

The Amendment is the result of significant cooperation — both domestically and with the United States — to contribute to the achievement of domestic goals for the reduction of GHG emissions and energy consumption.

Domestically, collaborative efforts to reduce GHG emissions from Canada’s building sector has been guided by two federal, provincial and territorial forums:

• 1. Canada’s First Ministers’ Conference — a meeting of the provincial and territorial premiers and the Prime Minister. These events are held at the call of the Prime Minister and, since 1950, have typically been held annually. In 2016, First Ministers adopted the Pan-Canadian Framework on Clean Growth and Climate Change, which included a commitment that the federal government would set new standards for heating equipment and other key technologies to the highest level of efficiency that is economically and technically achievable.
• 2. Canada’s Energy and Mines Ministers’ Conference — an annual gathering of federal, provincial and territorial ministers responsible for energy and mining portfolios. At these meetings, ministers discuss shared priorities for collaborative action to advance energy and mining development across the country. In 2016, the ministers released a framework that defined how federal, provincial and territorial governments would achieve greater alignment on energy efficiency standards and encourage market transformation through increased collaboration. In 2017, the ministers released market transformation strategies for energy-using equipment in the building sector and established short-, medium- and long-term aspirational goals for windows, space heating and water heating systems in the building sector. The ministers agreed to work towards a goal that, by 2025, all fuel-burning technologies for primary space heating and water heating for sale in Canada will meet an energy performance of at least 90% (condensing technology level).

Given that the Amendment has been informed by collaborative work with provincial and territorial governments, it will contribute to the objective of the Canadian Free Trade Agreement by reducing and eliminating, to the extent possible, barriers to the movement of goods within Canada.

Internationally, Canada has benefited from a long-standing cooperative relationship with U.S. DOE regulators of energy efficiency. Federally, this relationship has been formalized under the Canada–United States Regulatory Cooperation Council and the 2015 signing of a Regulatory Partnership Statement. ^{footnote 31} Through binational cooperation, both countries have worked to reduce and eliminate instances of unnecessary regulatory differences and to develop coordinated approaches to achieving common policy objectives.

The Amendment is consistent with the objectives of the Memorandum of Understanding between the Treasury Board of Canada Secretariat and the United States Office of Information and Regulatory Affairs Regarding the Canada–United States Regulatory Cooperation Council signed in June 2018. The Amendment seeks to foster alignment of federal regulations where feasible and appropriate, primarily through the use of testing standards already used by other jurisdictions to assess energy-using product compliance with the MEPS.

Rationale

The Amendment will benefit Canadians by reducing GHG emissions and energy consumption in homes and buildings. Homeowners and businesses will benefit from reduced energy costs associated with the use of more efficient technologies.

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. ^{footnote 32}

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 Amendment has shown that more stringent MEPS for all products will generate reductions in GHG emissions and energy consumption. The associated energy savings will generate net monetary benefits for Canadian consumers. The analysis has shown that the overall costs of technologies that will be required to bring low-efficiency products into compliance with the MEPS are outweighed by the overall benefits.

The Amendment is supported by provincial and territorial governments as its development was influenced by work conducted under the framework released by the Energy and Mines Ministers’ Conference in 2016 to achieve greater alignment of U.S. energy efficiency standards with those of Canada and to encourage market transformation through increased collaboration. It also contributes to the federal commitment made under the Pan-Canadian Framework on Clean Growth and Climate Change to set new standards for heating equipment and other key technologies to the highest level of efficiency that is economically and technically achievable and the aspirational goal released by federal, provincial and territorial energy ministers that, by 2025, all fuel-burning technologies for primary space heating for sale in Canada will meet MEPS of at least 90% (condensing technology level).

The Amendment has been designed to contribute to this commitment and goal while minimizing the burden on the affected industries, primarily through the use of existing testing standards used by the industry or required by other jurisdictions to assess conformity. Prescribed MEPS are a proven cost-effective approach to achieving reductions in GHG emissions and energy consumption. The Energy Efficiency Regulations were first introduced in 1995 and, including the Regulations, have been amended 14 times to increase the stringency of existing MEPS and introduce MEPS for new energy-using products. 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

Some provisions of the Amendment come into force upon registration while the rest of the Amendment come into force six months after publication in the Canada Gazette, Part II. The requirements will apply to the prescribed energy-using products based on their period of manufacture, date of import or date of interprovincial shipment.

The compliance and enforcement procedures already in place for all products prescribed under the Regulations will continue to be used following the coming into force of this Amendment. The main features of this system are explained below.

Verification marking and energy efficiency reporting

For products prescribed under the Regulations, NRCan 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 NRCan 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

NRCan procedures already in place for the collection of information for commercial imports of prescribed products will apply to products affected by the Regulations. These procedures involve crosschecking required import data received from customs release documents with the energy efficiency reports that dealers have submitted to NRCan. This crosschecking ensures that the compliance of prescribed products imported into Canada can be verified.

The Regulations will continue to require dealers of prescribed products to provide the information needed for customs monitoring.

Direct fieldwork: market survey and product testing

In addition to ongoing compliance and marketplace monitoring activities, NRCan surveys and tests products in the context of monitoring compliance outcomes with product-specific compliance audits. Depending on the product, in-store audits and/or testing of products are also conducted.

NRCan also conducts 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 5: Measuring performance of the Regulations

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.	Percentage of product models that meet MEPS	Energy efficiency reports Import reports Market data (shipments, trends) Lab testing Emission factors Energy prices
Canadians save money by using higher efficiency product models that have lower costs over their lifetime.
Energy use for space and water heating decreases per home and per unit of commercial building floor space.
Businesses using regulated energy-using products save money that can lead to increased productivity and competitiveness.

Performance will be monitored through a combination of product-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 products indicates 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. ^{footnote 33}

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 Amendment 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

Jamie Hulan
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: nrcan.equipment-equipement.rncan@canada.ca