As an update to
our previous post, the World Trade Organization (WTO) has
released its official ruling on Canada's Appeal
regarding Ontario's Green Energy Act and its Feed-in
Tariff (FIT) program. On Monday May 6, the WTO Appellate Body
upheld the complaints from the European Union (EU) and Japan,
stating that Ontario's Feed-in Tariff (FIT) program
discriminates against foreign suppliers of equipment and components
for renewable energy facilities by requiring minimum thresholds for
domestic content levels, and is not saved as government
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:
Article III:4 of the General Agreement on Tariffs and Trade;
Article 2.1 of the Trade-Related Investment Measures Agreement; and
Articles 3.1(b) and 3.2 of the Subsidies and Countervailing
Measures Agreement (SCM). Specifically, Japan and the EU argued
that the domestic content rules under the FIT program treat
imported products less favourably than domestic ones and therefore
violate the "national treatment" obligations under the
General Agreement on Tariffs and Trade (GATT) and Trade-Related
Investment Measures Agreement (TRIM). The complainants also argued
that the programs constituted actionable subsidies under the SCM.
The initial decision, released in December 2012, found the FIT
program contravened GATT and TRIM but that the complainants had
failed to show the program constituted a subsidy as defined in the
SCM. Canada appealed the decision in February 2013 but in its May 6
report the WTO Appellate Body dismissed the appeal.
What this means for the Ontario's Green Energy Act
is yet to be determined. "As this is the first time Canada has
received a WTO panel ruling arising solely from provincial policy
or legislation, we will work with the Ontario government in order
to respond to the decision," said a Department of Foreign
Affairs and International Trade spokeswoman. However, in formal
terms, the WTO decision is not-binding on Ontario. The province
plans to the review the ruling in consultation with the federal
government before the next steps are determined.
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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.
The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
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