EU and US join Ontario Fit dispute

CANADA: The United States and the European Union want to join consultations on a complaint by Japan to the World Trade Organization (WTO) over Ontario's feed-in tariff (Fit) program.

Wolfe Island wind farm: included in the Fit list
Wolfe Island wind farm: included in the Fit list

At the heart of the dispute are the domestic content requirements for projects installed under the Fit program, which offer above-market guaranteed prices to renewable energy producers.

In order to qualify, projects must meet a minimum percentage of their project costs using local goods and labour. The made-in-Ontario requirement starts at 25% and increases to 50% by 2012 for wind projects. In the case of larger solar projects, the current 50% minimum jumps to 60% next year.

In letters to the WTO, both the US and the EU argue they have a significant interest in the talks, which Japan launched September 13.

The European Union's submission to the WTO said: "The renewable energy generation sector is of key interest for the EU importers, exporters and investors.

"Therefore the EU has a substantial trade interest in the present dispute as well as a systemic interest in the correct implementation of international trade agreements."

It its letter, the US said: "[The US] is a major innovator of renewable energy and related technologies and is a primary source of Canadian imports of products used in the production of renewable energy."

In its original complaint, Japan argued that the provision violates longstanding rules of the Geneva-based WTO prohibiting subsidies that are contingent on the use of domestic over imported goods.

It requested consultations with Canada on the issue, the first step in a formal challenge. If consultations fail, the complaint goes before a panel for a ruling.

Ontario Energy Minister Brad Duguid has said he is confident the legislation is consistent with the province's trade obligations.

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Sign up now
Already registered?
Sign in