Association of Home Appliance Manufacturers - 2022 Federal Pre-Budget Consultation

130 Albert Street Suite 1200 Ottawa Ontario K1P 5G4
                              t 613.236.8428     www.ahamcanada.ca

Association of Home Appliance Manufacturers
             2022 Federal Pre-Budget Consultation

The Association of Home Appliance Manufacturers (AHAM) represents more than 150 member
companies that manufacture 90% of the major, portable and floor care appliances shipped for
sale in Canada.
Canada is a net importer of home appliancesthe United States is the predominant trading
partner. Manufacturers design appliances for a North American market. This larger market
increases consumer choice, drives down costs and maximizes economies of scale. The
Government of Canada has made a number of commitments that assume appliance
manufacturers would reformulate products numerous times over the next few years solely for
the Canadian market. Should these commitments be implemented, Canadians may experience
a significant reduction in product choice. It is unlikely that manufacturers will redesign products
given that the Canadian market is only about 10% of the U.S. market, so the reduced choice
could last for some time. Canada needs to assess the consumer impact and economic costs of
these commitments.
Recommendations:
Minimum Energy Performance Standards
1) The Federal government should work with the U.S government to harmonize energy
efficiency regulations and should not move forward with its proposal to make U.S. ENERGY
STAR levels minimum energy performance standards (MEPS) for certain home appliances.
2) AHAM supports programs to encourage the early replacement of appliances, as newer
models use far less energy than their older counterparts. Including home appliances under the
Greener Homes Initiative would give consumers the opportunity to replace their old appliances
with more efficient ones.

3) Enacting the powers of the Natural Resources Minister to provide the authority to amend
regulations for the purpose of maintaining harmonization between jurisdictions. This authority
will not only provide the industry with greater efficiencies, it will garner substantial energy
savings.
Prohibiting flame-retardants
4) Work towards international and North American alignment on flame retardant prohibitions
to eliminate the risk of unintended negative consequences.
5) Allow manufacturers sufficient transition time to find suitable alternatives. Manufacturers
also require an exemption for repair and replacement parts.
6) Finish the assessment of the remaining flame-retardants under Chemical Management Plan
to ensure viable substitution is chosen before enacting a broad prohibition.
Recycled Plastic Content
7) Recycled content in products should be assessed using a standards process in coordination
with safety standards organizations including the CSA and UL. Product safety must be

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prioritized when setting specific standards to avoid issues such as electric shock, injury or risk of
fire and/or contamination though food contact.
8) Manufacturers must be allowed to determine product design and to find the correct balance
between the use of primary and secondary plastics while also meeting product safety
requirements and ensuring product performance over the product’s lifetime.
9) The Federal government should earmark funds to modernize and expand plastic recycling
infrastructure in Canada so that varied and more challenging plastics can be more effectively
recycled.
Keep Appliance Repairs Safe & Secure
10) In accordance with Canada’s Electrical Code, Canada’s Gas Installation Code, and the
representative provincial and territorial regulations on electrical and gas safety, we remind the
Government of Canada, that in order to commercially offer for sale, repair, re-manufacture or
install electrical and gas equipment and manage ozone depleting or flammable refrigerants in
Canada, only qualified, licensed individuals are authorized to perform such procedures.

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Minimum Energy Performance Standards
Canada should not move forward with the mandate to make ENERGY STAR levels mandatory.
The proposal, which would make U.S. ENERGY STAR levels the minimum energy performance
standards (MEPS) in Canada for certain home appliances, would decrease product selection for
Canadian consumers, disproportionately impact low-income Canadians, increase product
delivery wait times, cause misalignment between the U.S. and Canada counter to the Canada-
US Regulatory Cooperation Council, CUMSA and the recent US-Canada MOU, and reduce the
credibility of the ENERGY STAR program.
Disproportionate Impact to Middle and Low Income Canadians
There is a significant price differential between non-ENERGY STAR and ENERGY STAR productsi.
ENERGY STAR products tend to offer more product features. Middle and low income Canadian
families will have to bear these additional upfront costs for nominal energy savings over the life
of the product. Canadians could face cost increases of close $300 at the time of purchase for an
ENERGY STAR appliance to gain just under $20 annually in energy savings on average.
Canadians in the two lowest income brackets can spend between 35-55 percent of their
monthly income on shelter alone. Thus, an unexpected increase in prices to replace an
essential appliance can have a significant impact on their well-being, especially regionally. If a
low income household replaces/purchases an appliance, just the additional cost to purchase an
ENERGY STAR product could represent as much as 10 percent of their monthly after-tax
income. This is compared to an average of $1.73 in energy savings from that appliance per
month.
The ENERGY STAR program is a voluntary program to promote higher efficiency appliances. It is
not meant to be a minimum level. If every product for sale meets ENERGY STAR requirements,
then products cannot properly be highlighted as more energy efficient and there may be little
to no room for efficiency gains above these levels. This process renders the ENERGY STAR logo
meaningless to energy conscious consumers. In addition, Canada’s ability to change or modify
the program and its logo are limited.
If the proposal is finalized, home appliance manufacturers will likely not be able to offer
Canadian consumers full product listings. The following table shows the percent of shipments in
2019 that would not be eligible for sale in Canada under the proposal.
                                                                    Clothes
                  Refrigerators     Freezers    Dishwashers                         Clothes Dryers
                                                                    Washers
 Percentage of
2019 Shipments
 NOT Meeting         39.4%           77.1%          12.3%             37.4%             73.5%
   NRCan’s
Proposed MEPS

Manufacturers are facing unprecedented pressure from both supply and demand sides of their
businesses due to the CoVID-19 pandemic. Manufacturers had to shift operations to protect

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their workers and follow government occupational health and safety regulations. They are also
faced with parts and material shortages, including a global semiconductor supply shortage and
an uneven steel and aluminum market, burdened with tariffs. Transportation, whether it be
trucking services or securing shipping containers, is also slowing the supply of appliances. The
result is significant delays in delivery of many products.
On the demand side, stay-at-home orders pushed consumers to do home renovations and
purchase new appliances, like freezers. Canadian home appliance shipments reached their
highest level in years, shipping over 7.5 million units in total in 2020, a 12 percent increase from
2019. And year-to-date shipments in 2021 are out pacing 2020 shipments.
Retailers and home builders already have low inventory and back orders for the five targeted
appliances. With the NRCan proposal eliminating a significant portion of the models from the
Canadian market on top of this, supply shortages and longer wait times will further increase.
Prohibiting Flame-Retardants
Environment and Climate Change Canada (ECCC) is planning to prohibit two flame retardants
(DP and DBDPE). Overall, DBPDE is widely used in home appliances as a safety measure in
plastic resins to control or mitigate a thermal event if it were to occur. This would be a Canada-
unique ban outside of what is typically coordinated more globally. Preliminary assessments
indicate this will impact 100% of shipments for sale into the Canada. ECCC officials have
confirmed the intention to publish the proposed amendment in Canada Gazette, Part I in the
fall of 2021.
Flame retardants are used to meet fire safety standards such as CSA and UL. There is currently
no clear path for manufacturers to meet fire safety standards without flame retardants and
there is currently no substitute for DP and DBDPE flame retardants for some applications. There
are some “candidate” alternative substances available; however, extensive testing is still in
preliminary stages, which must evaluate product safety and component compatibility, while
maintaining product performance. Substituting flame-retardants is not a simple “drop-in”
process. Certain appliances contain other substances, such as refrigerant and foam, of which
manufacturers must ensure insertion of a flame-retardant does not jeopardize the product or
harm the consumer.
Flame-retardant use in appliances help reduce the risk of fire due to overheating, a risk that
inherently exists in all electrical products. These components are internal to the product so
not in areas where customers would have normal access. The use of DBPDE in home appliances
are specific, targeted, and necessary to meet performance criteria required by fire safety
standards.
Furthermore, AHAM members indicate that the economic impact to production, retooling, and
redesign will be immense, and this is assuming there is an acceptable alternative. The impact
would be significant enough to where manufacturers will likely eliminate the distribution of
certain appliances to Canada.

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Plastic
Canada has adopted a target of at least 50% recycled content in plastic products by 2030. The
appliance industry uses plastic in a wide range of engineered applications and must comply
with specific product safety regulations. There is no single recycled content target that is
applicable to all appliances and circumstances. Setting an arbitrary target can compromise the
product function and negatively impact the health and safety of Canadians who use them.
Product safety must be considered paramount when setting standards to avoid issues such as
electric shock, injury, risk of fire, potential flooding in the home, and/or contamination through
food contact. Finally, recycled plastic resins are not readily certified and available in the
quantities that the industry needs to meet the proposed target.
Keep Appliance Repairs Safe & Secure
In order to commercially offer for sale, repair, re-manufacture or install electrical and gas
equipment and manage ozone depleting or flammable refrigerants in Canada, only qualified,
licensed individuals are authorized to perform such procedures. If consumers choose to
attempt to fix their own product or hand it over to someone else to repair, that is their choice.
However, “Repair Regulations” would make it challenging for appliance manufacturers to
ensure their products are being repaired safely by qualified, trained repair technicians.

Appliance repairs are done in people’s homes and, if not performed correctly, can cause
personal harm and property damage such as flooding and fires. Such repairs could also involve
interaction with appliance network capabilities.
Connected appliances in some circumstances require Wi-Fi connectivity to the consumer’s in-
home network. Requiring manufacturers to provide to third parties access to their products’
connected infrastructure could unknowingly compromise the product’s firmware and leave not
only the appliance, but the consumer’s entire network vulnerable to cyberattacks. This is why
manufacturers accredit their technicians, which includes background checks, and training on
each appliance’s design to ensure consumer safety and cyber security.
According to AHAM data, over 90% of appliance repair businesses in Canada are locally owned
small business enterprises, employing authorized and certified technicians. Repair regulation
jeopardize these jobs, which according to the Government of Canada Jobs Bank Trend Analysis,
is a skill set in demand and under employed. The Appliance Service Technician trade has been
an accredited Red Seal trade since 1994 who sets common standards to assess the skills of
tradespeople across Canada. In accordance with provincial regulations, provincial authorities
specify the qualifications required to perform such work
Home appliances are a success story in terms of energy efficiency and environmental
protection. New appliances often represent the most effective choice a consumer can make to
reduce home energy use and costs. Modern refrigerators use the same amount of electricity as
a 50-watt light bulb. A new clothes washer uses 50 percent less energy than it did 15 years ago
and can hold 40 percent more laundry. Today’s average dishwasher uses close to 50 percent
less water than it did 20 years ago. The industry is also transitioning to more environmentally

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friendly refrigerants and foam-blowing agents. Therefore, it is not always the case that
repairing old products is better for the environment than purchasing new ones.

 i
  AHAM collected retail price information through publicly available online sources across the country during
 the week May 16, 2021 from BestBuy Canada, Brault & Martineau, Coast Appliances, Cohen’s Electronics and
 Appliances, Home Depot Canada, Trail Appliances.

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