Natural Resources Canada (NRCan) Amendments 18 and 19 Represent Significant Changes to Canadian Water Heater Market

On April 9, 2025, NRCan finalized their most recent amendment to the federal Energy Efficiency Act, in the form of Amendment 18. This action increased the minimum efficiency standards for a number of consumer products, including gas and electric residential water heaters. That amendment takes effect for all products manufactured on or after May 6, 2029.

For gas-fired water heaters, NRCan is increasing the minimum efficiency for these standards in such a way that atmospheric vent models with standing pilots likely won’t meet the new requirements. Instead, households wishing to continue utilizing gas-fired storage water heaters will be required to utilize these products in conjunction with other technologies such as dampers, fan-assist, or power vent. This portion of the rule is consistent with recent changes for these products that were finalized by the United States Department of Energy (DOE) for the American market.

For electric storage water heaters, however, the changes are more significant. Under Amendment 18 these products, with volumes between 20 and 120 gallons, will need to report and meet efficiencies based on the Uniform Energy Factor (UEF), as opposed to standby loss. The UEF is determined by a mathematical formula that factors in the product’s volume, recovery efficiency, and first hour rating, among other performance measurements derived from the residential water heater test procedure. Smaller electric storage water heaters, with volumes ranging from 13.2 gallons to 20 gallons, will be permitted to continue measuring their efficiency with the standby loss metric and will not need to meet a UEF minimum.

Amendment 18’s requirements for electric storage water heaters departs significantly from the rule recently approved by DOE for the U.S. market. Most notably, Amendment 18 allows for the continued sale and installation of electric resistance storage water heaters with capacities greater than 35 gallons. In the U.S. such units will be required to utilize heat pump technology to meet the prescribed minimum UEF. Additionally, the Amendment allows efficiency of smaller units to continue to be measured by standby loss as opposed to UEF.

In addition to these changes in Amendment 18, NRCan is also actively considering additional modification to the federal Energy Efficiency Act in Amendment 19, which is still in the early rulemaking stage of the process. Here, NRCan is examining harmonization of Canadian energy efficiency standards with those recently enacted by DOE in 2023 for commercial water heater products. In this action, DOE finalized a rulemaking calling for all commercial water heaters to be condensing products with storage water heaters being required to meet or exceed a 95% Thermal Efficiency, and tankless water heaters, including hot water supply boilers, to meet or exceed a 96% Thermal Efficiency. In the U.S. these requirements take effect on October 6, 2026.

So far, NRCan has yet to publish a formal proposal for Amendment 19 in Gazette I. This would be the next step in the rulemaking process if NRCan wants to continue to push the amendment forward. BWC Government and Regulatory Affairs will continue watching this proceeding carefully and will keep you informed of the latest developments.

If you have any questions about this topic, or any others related to government and regulatory affairs in our industry, BWC’s Government and Regulatory Affairs team would like to speak with you. Also, if you know of any legislative or regulatory activity in your community or state that would impact our industry, please do not hesitate to contact us at BWCGovReg@bradfordwhite.com.