The Competition Bureau's statement on its Enercare inquiry, issued September 19, 2019, is older than most of what we cover. We include it because it remains the plainest official account of how rental water heater contracts work in the parts of Ontario served by Enbridge Gas, and that market still shapes how Ontario contractors sell owned equipment. The Bureau's page was last modified on January 19, 2022.
What the Bureau examined
The short answer: return policies and buyout-only contracts.
The Bureau looked at whether Enercare, a rental water heater provider, abused a dominant position. It focused on two practices:
- Return policies, including a 48-hour agency verification step before Enercare accepted a water heater returned by a competitor, and how its return depots operated.
- "Buyout only, useful life" (BOULC) contracts, used since 2010, under which the only way to end a rental early is to pay a buyout price set by Enercare.
What it found
The short answer: dominance and anti-competitive acts, but no proven harm to competition.
According to the statement:
- Enercare likely held a dominant position in rental gas-powered water heaters in the Enbridge Gas areas of Ontario, with about 80% of the relevant market in 2018.
- About 45% of Enercare's rental customers were on a BOULC in 2018, and the share was growing.
- Return-depot delays did not appear sustained or systemic, and the verification policy was not found to be anti-competitive.
- The Bureau concluded the BOULC was a practice of anti-competitive acts. Evidence suggested it was meant to deter customers from leaving, and buyout prices and their duration went well beyond recovering Enercare's initial investment.
- However, the evidence did not show that BOULCs kept rental rates higher or stopped competitors from entering or growing. The Bureau therefore did not find a substantial lessening or prevention of competition.
The Commissioner discontinued the inquiry because the evidence was not enough to support an application to the Competition Tribunal at that time.
Buyout examples and history
The short answer: buyouts fall with age, and older contracts differ.
The statement cites examples from Enercare's 2019 schedule: $1,620 to buy out a 50-gallon power-vent gas water heater under one year old, and $707 for one aged 10 years. It notes that customers who signed before 2010 may return their water heater without paying a buyout. The Bureau also recalls a 2002 consent order binding Direct Energy until February 20, 2012, and a 2014 written commitment from Enercare on water heater returns when it acquired Direct Energy's business. The statement says it is not a legal finding and does not say any party acted unlawfully.
Why the Bureau stopped short
The short answer: the legal test needs proof of harm to competition, not just to switching.
An abuse-of-dominance case has several parts. The Bureau's statement found two of them were likely met: a dominant position, and a practice of anti-competitive acts aimed at keeping customers. What it could not show was the third part, that the conduct substantially lessened or prevented competition. In the Bureau's account, BOULCs reduced switching, yet the evidence did not show higher rental rates or competitors being kept out of the market. That distinction matters for anyone who reads the statement as a verdict. It describes contract terms that the Bureau saw as designed to deter departures, but it did not lead to a Tribunal case. The Bureau left the door open: it said it would act on new and compelling evidence, particularly from a competitor able to show harm. The page also notes that its conclusions apply only to this matter.
Analysis: what it means for contractors
This section is our analysis, not the Bureau's view. Contract questions belong with a lawyer.
- Many callers will be under contract. A homeowner who wants to own a tank may face a buyout. Ask them to check their agreement before you quote, and never guess their buyout figure.
- Show the whole cost honestly. A comparison page that lists the purchase price, installation, any buyout the customer reports and the expected life of the unit is more persuasive than a slogan.
- Do not describe competitors' contracts as illegal. The Bureau did not find that, and saying so creates risk.
- Pair this with Ontario's newer rules. The province has since banned consumer NOSIs; see our NOSI story. Our ownership-versus-rental marketing service turns these facts into inbound campaigns.
WaterHeaterNews.ca is a marketing newsroom, not a contractor, lender or law firm. See the Ontario page for more regional context.
Frequently asked questions
What is a buyout-only, useful-life contract?
The Competition Bureau describes it as a rental contract, used by Enercare since 2010, under which the only way to end the contract early is to pay a buyout price set by the company, unless the company decides the unit is no longer reasonable to repair.
Did the Bureau find Enercare broke the law?
No. The Bureau said its statement is not a legal finding. It concluded that Enercare likely held a dominant position and engaged in anti-competitive acts, but the evidence did not show a substantial lessening of competition, so it discontinued the inquiry.
Why is a 2019 statement still relevant?
It remains one of the clearest official descriptions of how rental water heater contracts in Ontario work, including buyout pricing. It is useful background for any contractor who markets owned water heaters to renters.
Could the Bureau reopen the matter?
The Bureau said it would act if new and compelling evidence emerged, particularly from a competitor able to show the contracts caused anti-competitive harm.