News & Updates

World Trade Organization Seeks to Revise Ontario's Feed-in Tariff Program

July 27, 2011

At Japan's request, the WTO's Dispute Settlement Body (DSB) established a panel for the purpose of reviewing the conformity of the Ontario power Authority's FIT-Program with WTO rules. The request is the result of unsuccessful consultations between the parties.

Japan argues that the Ontario Power Authority's FIT-Program and the related measures are inconsistent with Canada's obligations under WTO rules since they constitute a prohibited subsidy and discriminate against equipment for renewable energy generating facilities produced outside of Ontario. In their opinion, the guaranteed tariffs represent a form of financial contribution or income and price support that confers an illegitimate benefit.

Nevertheless, Canada remains confident that the OPA's FIT-Program is consistent with WTO rules and added that the program does not differ from comparable feed-in tariffs developed by other WTO members.

The USA and the European Union requested to join the initial consultations between Canada and Japan and reserved their third-party rights as did Australia, Chinese Taipei, Norway, China, Korea and Honduras.

The process of revising the program will presumably take at least half a year for the purpose of establishing the panel, appointing panelists, reporting the panel results to the parties and other WTO members and adopting of the panel report by the DSB. Since there would also be the option for parties to appeal the panel's result it could take a long time before this matter is settled.

Tags: Renewable Energy