It looks like Ontario’s FIT program may be in trouble. According to an article in Lexology, a news site for the legal profession, a WTO decision could result in additional costs for equipment and services manufactured in Ontario. Local content is required under the Green Energy and Economy Act.
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.
[…]
In its ruling, 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.
If Canada is to comply with the WTO’s decision then Ontario cannot require local content for green energy projects, eliminating the manufacturing jobs in Ontario for equipment purchased offshore. But if Canada does not comply then other countries may retaliate by imposing sanctions against Canada’s exports. Either way, the cost of building a biogas plant goes up.
Canada has until 18 February 2013 to appeal the WTO decision. If the decision stands, it will restrict Ontario’s efforts at supporting local green industry and technologies.
Building a bio-waste plant in Elmira is now more costly than ever.
Update 10 May 2013: The Record reports that Canada has lost the appeal to the WTO, but the federal and provincial governments have no immediate plans to change the Ontario Green Energy Act legislation.
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