Stricter Efficiency Rules for HVAC and Appliances

Summary#

The federal government has finalized the Regulations Amending the Energy Efficiency Regulations, 2016 (Amendment 18). The rules add new products, raise or update energy and testing standards for many appliances and equipment, and add new labelling and reporting requirements. The changes were published in the Canada Gazette on April 9, 2025 and most provisions come into force six months after publication; some specific provisions come into force immediately on publication.

What it does#

• Adds new types of covered products and rules for manufacturers, importers and sellers. Major newly regulated items include:
  • air compressors;
  • faucets (including replacement aerators) and showerheads;
  • line‑voltage thermostats;
  • pool pumps.
• Raises or updates standards for many existing product groups, including:
  • room, split and single‑package central air conditioners and heat pumps;
  • large commercial air conditioners and heat pumps;
  • portable air conditioners (including a new EnerGuide label);
  • gas, oil and electric household water heaters;
  • general service lamps (expands the lamp types covered).
• Harmonizes testing and efficiency rules with U.S. federal standards and some California state standards by referencing U.S. test procedures (for example, 10 C.F.R. Appendix S for faucets and showerheads). It also uses Canadian technical standards and some CSA standards like CSA C828-19 for line‑voltage thermostats.
• Lets the Minister use faster, targeted updates (Ministerial Regulations) and "ambulatory incorporation by reference" so future U.S. changes can be reflected more quickly in Canada.
• Sets phased compliance dates (manufacture or import dates) for different products. Examples:
  • portable air conditioners and their labels: products manufactured on or after January 10, 2025;
  • many central and commercial HVAC products and pool pumps: manufactured on or after January 1, 2026;
  • faucets and showerheads: manufactured on or after July 1, 2026;
  • household electric, gas and oil water heaters: manufactured on or after May 6, 2029;
  • new lamp scope (most types): manufactured on or after January 1, 2027 (some incandescent lamp rules start January 1, 2026).
• Builds in “early compliance” windows so suppliers may voluntarily meet the new rules before a product’s mandatory date.
• Keeps third‑party verification and reporting systems, and continues using certification bodies accredited by the Standards Council of Canada and import checks with the Canada Border Services Agency.

Who's affected#

• Manufacturers, importers and distributors of HVAC equipment, water heaters, lamps, plumbing fittings, pool pumps, air compressors and related accessories.
• Retailers and wholesalers who import or ship these products between provinces.
• Certification bodies and test laboratories (verification and testing rules change).
• Homeowners, building owners, landlords and managers who buy or replace equipment.
• Tradespeople who install larger or differently sized units (some products may need design or installation adjustments).
• Small businesses: the government estimated about 1,098 small businesses could be affected, with an average compliance/administrative impact of roughly $531 per small business (annualized average figure from the regulatory analysis).
• Provinces and territories that adopt or reference federal rules; some provincial rules already overlap with these changes.

If it is unclear whether a particular model is covered, manufacturers and dealers should check the product definitions and the manufacture‑date rules in the regulations.

Why it matters#

• Energy and climate: the government’s analysis projects large net benefits from the package — a present‑value net benefit of about $50 billion by 2050, with total benefits of about $55 billion and total costs of about $5.6 billion. By 2050 the regulations are estimated to cut annual energy use by about 58 petajoules and reduce annual greenhouse gas emissions by about 3.3 megatonnes; cumulative savings to 2050 are about 1,112 petajoules and 63 megatonnes CO2e.
• Trade and compliance ease: harmonizing with U.S. (and some California) test methods and standards aims to reduce duplicate testing and simplify cross‑border trade and product availability.
• Consumer effects: many products will carry new labels or verification marks. Some fixtures (faucets, showerheads) will have lower maximum flow rates — that saves water and water‑heating energy but has raised questions in consultations about plumbing design and hot‑water delivery time; the regulations exclude fixtures made “exclusively” for health‑care settings.
• Market and cost impacts: some manufacturers will face redesign, testing and labelling costs. The regulatory analysis expects most households and businesses to save more on energy bills over time than they pay in higher upfront costs. The rules also include transitional/early‑compliance options to ease the shift.
• Practical note: some parts of the amendment took effect on publication (April 9, 2025), while most other provisions follow the manufacture‑date timelines listed above. Buyers, installers and sellers should check model manufacture dates and labels to know which rules apply.