Ontario FIT program deemed discriminatory

16. October 2012 | Applications & Installations, Industry & Suppliers, Markets & Trends, Trade cases | By:  Becky Beetz, Cheryl Kaften

According to the International Centre for Trade and Sustainable Development (ICTSD), which was citing a confidential interim WTO dispute settlement report, a panel has agreed that Ontario’s FIT system violates WTO rules.

Ontario solar photovoltaic installation

There are complaints that Ontario's domestic content requirement is unfair.

Japan and the EU claim Ontario is breaching international conventions by requiring new solar and wind facilities to be built with 60% and 25% of locally manufactured components, respectively.

On the back of the two complaints – DS412 (Canada-Renewable Energy) and DS426 (Canada-Feed-in Tariff) – submitted in 2010 and 2011, the World Trade Organization (WTO) held a hearing in Geneva this March, where a three-person panel heard the opening arguments. The main point raised was that Ontario's FIT program unfairly discriminates against foreign renewable energy products with its domestic content clause. A number of further hearings were also held.

While a final determination is scheduled for late this November, the interim WTO report, said to have been circulated on September 20, has reportedly indicated that the content requirement "violates the WTO’s non-discrimination principle enshrined in the General Agreement on Tariffs and Trade (GATT) and the WTO Agreement on Trade-Related Investment Measures (TRIMS)."

The claim that the FIT program also constitutes illegal subsidies is said to have been rejected, however. 

ICTSD adds that Europe and Japan have both had the chance to submit their comments on the interim report. "Following the example of most WTO panels to date, however, the panel is not expected to substantially depart from its preliminary findings when it issues its final ruling in November," it said.

Third parties to both disputes include Australia, Brazil, China, El Salvador, Honduras, India, Korea, Mexico, Norway, Chinese Taipei (Taiwan), Saudi Arabia and the United States.

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