Canada: World Trade Organization Rules Against Ontario's Feed-In Tariff Program

Last Updated: December 31 2012
Article by Peter R. Murphy

The World Trade Organization released today its decision on complaints by Japan and the European Union regarding Ontario's Feed-In Tariff local content rules.

Ontario's Feed-In Tariff (FIT) program was established in 2009 under the Green Energy and Economy Act.  The FIT program enables power producers to sell renewable electricity to the Ontario Power Authority under 20-year power purchase agreements.  Under the FIT, electricity generated from wind, solar, hydro, biomass, biogas and landfill gas is sold for prices that include premiums over prices paid in Ontario for electricity generated from other sources.  These premiums are intended to provide incentives for renewable energy project development and to help build a green energy industry in Ontario.1

Local content rules form a key component of Ontario's FIT program.  These rules require a percentage of each renewable energy project's equipment and services to be manufactured or sourced in Ontario before the project will be considered eligible for the FIT program.

In September 2010, Japan triggered a World Trade Organization challenge against the FIT program's local content rules.  Consultations began between Japan and Canada with the United States and the EU subsequently joining in.  On October 6, 2011, after the consultations failed to resolve the matter, the WTO Dispute Settlement Body composed a dispute resolution panel to resolve the dispute.2

In August 2011, the European Union initiated its own WTO complaint against the FIT program's local content rules, with the US and Japan joining in consultations.3

Japan and the EU complained that Ontario's local content rules breach the General Agreement on Tariffs and Trade 1994 ("GATT") by treating imported products less favourably than domestic products.  They also argued that the premium electricity prices paid under the FIT program constituted a subsidy that is contingent on use of domestic rather than imported goods, and is therefore prohibited.

In its ruling4, the WTO panel said Ontario's FIT program local content requirements breached Canada's obligations under the GATT and the international Agreement On Trade-Related Investment Measures by treating domestic and imported renewable energy equipment and components differently.  The WTO panel did not agree, however, with Japan's and the EU's claim that the local content rules constitute an illegal subsidy.

Canada may appeal the WTO panel's decision.  Canada had 60 days, starting on the date the panel's decision was circulated to WTO members, to notify the WTO of its intention to exercise its right to appeal.  Approximately 70% of GATT panel reports are appealed.5  The appeal process considers legal arguments only and cannot re-examine existing evidence.  The result of the appeal will be either the upholding, modification or reversal of the panel's decision.  Appeals can last up to 90 days.

If Canada does not appeal the panel's decision, or if its appeal is unsuccessful, it will have a further 30 days to state its intention to adopt the panel's decision at a WTO Dispute Settlement Body meeting.  If complying with the panel's decision is impractical, Ontario may be given a "reasonable period of time" to bring itself into compliance. 

Generally speaking, compliance with the panel's decision would involve Ontario dismantling the local content requirements of the FIT program.  If Ontario fails to take the actions that are necessary to comply with the decision, it may ask Canada to commence negotiations with the complaining countries to determine mutually-acceptable compensation such as tariff reductions.  If such negotiations do not produce a mutually acceptable result, the complainants may retaliate by imposing sanctions against Canada's exports.

According to the Globe and Mail, Ontario's Energy Minister, Chris Bentley, stated before the WTO panel's report was publicly released that Ontario intended to ask the federal government to appeal the decision if it was made against Ontario.6  It remains unclear whether Canada's Conservative federal government will bring such an appeal  in support of the Ontario Liberal government's  Green Energy and Economy Act.

The WTO Panel's decision will likely have an impact on a number of other countries' similar renewable energy programs.  On November 5, 2012, China made a similar complaint to the WTO regarding local content requirements under the renewable energy FIT programs of European Union member states, including Italy and Greece.7

The WTO Panel's decision is a significant setback to the McGuinty government's efforts to foster a green energy industry in Ontario and illustrates a challenge that governments face when trying to promote home-grown technology, innovation and industry.  New technological and industrial innovation often require, and receive, direct or indirect government financial support.  The WTO panel decision indicates that international free trade obligations will restrict governments' means of supporting and fostering nascent local industries and technologies. 

Environmental groups are particularly concerned with this development.  They argue global trade rules should not restrict the ability of governments to enact policies that support a transition to a clean-energy economy. 8

Unless Canada successfully appeals the WTO Panel's ruling, or refuses to comply with it, the WTO decision will put an end to a significant effort by Ontario's government to foster a local renewable energy technology and manufacturing industry and to promote the generation of renewable energy in Ontario.


1 Ontario Power Authority (website), General Information About the Green Energy and Green Economy Act, .

2 World Trade Organization, Dispute DS412, .

3 World Trade Organization, Dispute DS426, .


5 Zhu Lanye, The Effects of the WTO Dispute Settlement Panel and Appellate Body Reports: Is The Dispute Settlement Body Resolving Specific Disputes Only or Making Precedent at the Same Time?  17 Temp. Int'l & Comp. L.J. 221 at 222.

6 Bertrand Marotte, WTO Rules Against Ontario In Green Energy Dispute, The Globe and Mail, Nov. 20, 2012



The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
8 Nov 2016, Seminar, Ottawa, Canada

The prospect of an internal investigation raises many thorny issues. This presentation will canvass some of the potential triggering events, and discuss how to structure an investigation, retain forensic assistance and manage the inevitable ethical issues that will arise.

22 Nov 2016, Seminar, Ottawa, Canada

From the boardroom to the shop floor, effective organizations recognize the value of having a diverse workplace. This presentation will explore effective strategies to promote diversity, defeat bias and encourage a broader community outlook.

7 Dec 2016, Seminar, Ottawa, Canada

Staying local but going global presents its challenges. Gowling WLG lawyers offer an international roundtable on doing business in the U.K., France, Germany, China and Russia. This three-hour session will videoconference in lawyers from around the world to discuss business and intellectual property hurdles.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.