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Why consultation isn't required
Due to the urgency of this issue for Ontario manufacturers, who were suddenly and unexpectedly faced with an inability to produce gas fireplaces, a proposed amendment was not posted on the Regulatory Registry for public comment. Ontario manufacturers and their industry association alerted the Ministry that without this suspension, manufacturers would have had to shut down production and lay off staff in Ontario. Industry members confirmed that the impact of the semiconductor shortage was widespread, affecting all manufacturers selling gas fireplaces in Canada, and that the issue is likely to continue into 2022.
The Ministry of Energy (the “Ministry”) amended O. Reg. 509/18: Energy and Water Efficiency – Appliances and Products (the “Regulation”), made under the Electricity Act, 1998 to temporarily suspend a prohibition on standing pilot lights for the manufacture of gas fireplaces. The suspension applies to products manufactured from August 5, 2021 to June 30, 2022 (inclusive).
This change is expected to avoid job losses at Ontario manufacturers of gas fireplaces. Shortages in the supply of semiconductors, caused by several factors including the impact of COVID-19, are currently limiting the supply of electronic ignition systems, used in place of standing pilots in gas fireplaces. These supply shortages mean that without the regulatory change, manufacturers would not have been able to build gas fireplaces that met the Ontario efficiency requirements and so would not have been able to sell these products to Ontario consumers.
Analysis of Regulatory Impact:
In December 2016, O. Reg. 509/18 was amended to require that gas fireplaces sold in Ontario and manufactured after January 1, 2021 not include a standing pilot light. Standing pilot lights were replaced with electronic ignition systems in order to meet the efficiency requirements. Recently, a global shortage of semiconductors caused by COVID-19 and other factors created a shortage of the semiconductors that are required to make the electronic ignition systems. The gas fireplace industry is small, and not able to compete with larger industries like automobiles and high-tech that are at the front of the line for access to semiconductor supply. Gas fireplace manufacturers therefore lost the ability to purchase the ignition components required to meet the O. Reg. 509/18 efficiency requirements for gas fireplaces manufactured after January 1, 2021 and so could not sell their products in Ontario.
This amendment temporarily suspends the standing pilot prohibition, eliminating the dependency on semiconductors and allowing manufacturers to resume production of gas fireplaces for sale in Ontario. This is expected to prevent the loss of millions of dollars in revenue at Ontario manufacturers, dealers and distributors of gas fireplaces and avoid the loss of hundreds of jobs in Ontario. It will also ensure the availability of gas fireplaces for purchase by Ontario consumers this year.
At the federal level, Natural Resources Canada (NRCan) also prohibits standing pilot lights in gas fireplaces. Amendment of Ontario’s regulation will only affect products manufactured and sold within the province and Ontario manufacturers will not be able to sell gas fireplaces with standing pilots in other provinces as long as NRCan’s requirements remain in effect.
Gas fireplaces using standing pilot lights use more energy than those equipped with electronic ignition systems. The requirement that gas fireplaces sold in Ontario and manufactured after January 1, 2021 not include a standing pilot light was expected to reduce emissions in Ontario by 2,200 kilotons by 2040. With the temporary one-year suspension the Ministry expects an additional 3.1 petajoules of energy use, while still reducing emissions by 2,043 kilotons by 2040.
These changes will benefit Ontario manufacturers and their employees by avoiding prolonged shutdowns and layoffs at their facilities. This would prioritize economic growth and job security as the province continues toward recovery from the COVID-19 pandemic.
This amendment does not create any additional administrative costs for businesses or consumers.
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