According to a leaked confidential World Trade Organization
(WTO) interim ruling, a three member panel has sided with Japan and
the European Union (EU) on their challenge of Ontario's
domestic content requirements under its Feed-in-Tariff (FIT)
Program. In order to qualify for FIT, renewable energy projects
must include a minimum quota of Ontario goods and services. Wind
projects over 10kW require a minimum domestic content level of 25%
prior to January 2012 and 50% for projects with a milestone date
for commercial operation on or after January 1, 2012. In the case
of solar projects, as of January 1, 2011, 60% of the goods and
services must come from Ontario for projects over
The EU and Japan appealed to the WTO in
2011 claiming that the FIT program violated three WTO
conventions: General Agreement on Tariffs and Trade (GATT);
Trade-Related Investment Measures Agreement (TRIM); and the
Subsidies and Countervailing Measures Agreement (SCM). The WTO
panel issued its confidential interim ruling finding in favor of EU
and Japan and stating that the FIT program discriminates against
foreign suppliers of equipment and components for renewable energy
facilities under GATT and TRIM, but not under SCM. The EU, Japan,
and Canada will now have the opportunity to submit comments on the
interim report before a final ruling is issued in November.
What this means for Ontario is yet to be determined. The Globe and Mail reported that,
when asked for comment, "a spokesman for the Ontario energy
ministry said in an e-mail that the department does not comment on
confidential reports, and that the province still believes its
program is consistent with Canada's WTO obligations." When
the final report is released, if the panel maintains its position,
the provincial and the federal government will have to decide
whether to appeal the decision or work to bring the FIT legislation
on side with WTO requirements.
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Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
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