As an update to our first news release found here, the World Trade Organization (WTO) has
officially announced its ruling on the domestic content
requirements of Ontario's Feed-In Tarriff (FIT) program. Much
like the interim report, the final ruling finds that the FIT
program violates the WTO rules that forbid treating domestic
suppliers and products differently from foreign ones.
To quickly summarize the claim, the EU and Japan first 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). As outlined
in the WTO's 160 page decision, the three
member panel has found that the FIT program discriminates against
foreign suppliers of equipment and components for renewable energy
facilities under GATT and TRIM, but not under SCM.
"In the light of the findings set out in the foregoing
sections of this Report, we conclude that Japan [and the European
Union] ha[ve] established that the "Minimum Required Domestic
Content Level" prescribed under the FIT Programme, and
implemented through the individual FIT and microFIT Contracts
executed since the FIT Programme's inception, places Canada in
breach of its obligations under Article 2.1 of the TRIMs Agreement
and Article III:4 of the GATT 1994.
On the other hand, in the light of the findings set out in the
foregoing sections of this Report, we conclude that Japan [and the
European Union] ha[ve] failed to establish that the FIT Programme,
and the individual solar PV and windpower FIT and microFIT
Contracts executed since the FIT Programme's inception,
constitute subsidies, or envisage the granting of subsidies, within
the meaning of Article 1.1 of the SCM Agreement, and thereby that
Canada has acted inconsistently with Articles 3.1(b) and 3.2 of the
As a result, the report recommends that "Canada bring its
measures into conformity with its obligations under the TRIMs
Agreement and the GATT 1994."
In the meantime, Canada has already announced that it plans to
appeal the WTO ruling. As the Globe and Mail reports, "A spokeswoman
for the federal Department of Foreign Affairs and International
Trade said that 'as this is the first time Canada has received
a WTO panel ruling arising solely from provincial policy or
legislation, the government of Canada will be appealing the
decision as requested by the government of
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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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