Last year, a WTO backed complaints from Japan, the US and the European Union about the rules, which require minimum domestic content levels of up to 50% for wind projects.
The panel said the requirement for made-in-Ontario goods and services contravenes the General Agreement on Tariffs (GATT) and the WTO Agreement on Trade-Related Investment Measures.
Although a WTO ruling is not legally binding, experts say Ontario will likely have to roll back the local content provisions or risk having Japan and the EU, which brought the complaints against the FIT programme to the WTO, slap retaliatory duties on Canadian exports.
Speaking about the ruling, John Clancy, EU trade spokesman, said: "Today’s ruling is good news for everyone caring about clean energy and the environment: it has been made clear that use of quality, cost-effective technologies should not be hampered by protectionist measures."
Ontario’s energy minister Bob Chiarelli said the province will talk to the federal government before deciding what to do next.
"We’re reviewing the ruling in consultation with the federal government. I’ll let that process continue before we determine our next steps," he said in a statement.