Provincial and federal governments ponder ruling against green energy content rules

Thursday, May 9, 2013

by SUSAN MANN

Canada must soon outline how it will comply with a Dec. 2012 world trade body ruling that Ontario’s domestic content rules for solar and wind energy projects discriminate against imports, the European Commission says.

A news release from the commission notes Canadian authorities will have less than two months from May 6 to come up with a plan. May 6 was the date the World Trade Organization Appellate Body dismissed Canada’s appeal of the earlier ruling.

Ontario Energy Minister Bob Chiarelli says by email that they’re reviewing the appellate body’s ruling “in consultation with the federal government. I’ll let that process continue before we determine our next steps.”

He adds that the province is still committed to clean, renewable energy. “Our renewable energy sector has already created more than 31,000 jobs and leveraged billions of dollars in investment. I am confident that Ontario will continue to be a global leader in the clean energy sector.”

The federal government also confirmed it was reviewing the ruling with the province. “As this is the first time Canada has received a WTO panel ruling arising solely from provincial policy or legislation, we will work with the Ontario government in order to respond to the decision,” Department of Foreign Affairs and International Trade spokesperson Caitlin Workman says by email.

Meanwhile, one of the challengers to Ontario’s rules, the European Union, welcomed the appellate body’s ruling. The decision “confirms the EU’s claim that the discriminatory conditions in the support scheme for wind and solar power introduced by Ontario are in breach of WTO rules,” the European Commission says in a May 6 prepared statement posted on its website.

Japan also challenged Ontario’s rules, which requires applicants to the feed-in-tariff programs to have 60 per cent domestic content for solar power generators and 60 per cent for on-shore wind power generators to get contracts. Both regions took their challenge to the WTO in August 2011. In December 2012, a WTO Dispute Settlement Panel concluded Ontario’s program discriminates against imports and is inconsistent with WTO rules.

Canada appealed on Feb. 5 but on May 6 the WTO appellate body dismissed Canada’s appeal and upheld the dispute settlement panel’s decision.

The commission’s statement says under WTO rules the organization’s Dispute Settlement Body will adopt the appellate body’s report within 30 days of May 6. “Canada should present during the following month its plan for implementing the ruling.”

EU trade spokesman John Clancy says in the statement that the ruling “is good news for everyone caring about clean energy and the environment: it has been made clear that the use of quality, cost-effective technologies should not be hampered by protectionist measures.”

The commission says the EU is a significant producer and exporter of wind and photovoltaic power and its exports to Canada could be much higher if measures promoting the use of domestic equipment are axed.

Representatives for the Canadian Solar Industries Association, an Ottawa-based trade association for solar manufacturers, installers, resellers and consultants, couldn’t be reached for comment. BF