Canada to appeal WTO ruling on Ontario FiT

• 11 years ago (2012-12-20)
• Junior Isles

Asia 859 Europe 1068 North America 1004

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Canada will appeal against a World Trade Organization (WTO) ruling, which could scupper Ontario’s new green energy Feed-in-Tariff (FiT) programme, aimed at encouraging renewable generation in the province.

The WTO’s ruling claims the programme breaks international trade regulations because it forces companies paid under the FiT scheme to source a proportion of their equipment and services in Ontario.

Both Japan and the European Union complained about those provisions to the WTO.

In the WTO’s 160-page decision it says Ontario breached its obligations under the General Agreement on Tariffs and Trade, because the local-content requirements treat imported equipment and components differently from domestic products.

Notably, the WTO did not uphold the part of the Japanese and European complaint claiming the local content rules amount to an illegal subsidy.

“We recommend that Canada bring its measures into conformity with its obligations under the… GATT,” the ruling said.

A spokeswoman for the Canadian Department of Foreign Affairs and International Trade has said that they will be appealing the decision, as requested by the government of Ontario. An appeal is likely to take many months.

A spokesman for Ontario Energy Minister Chris Bentley said that the province’s position has always been that the FiT programme is consistent with Canada’s obligations under the WTO agreements.

Further, he claimed Ontario’s clean energy policies had already created more than 28 000 jobs.

Lawrence Herman, international trade counsel at Toronto law firm Cassels Brock & Blackwell, said the WTO’s ruling will dampen Ontario’s efforts to build up domestic renewable energy product makers, even if the appeal is eventually successful.

“No one is going to commit any capital to a project while the appeal is pending,” he said. It “blows out of the water a lot of the underpinnings of the Green Energy Act”, which was supposed to lead to a flourishing green energy industry in Ontario, he said.