NEWS: Ontario's Green Energy Act prompts 'trade' concerns

The Japanese news agency Kyodo News International reports that, "Japan will file a complaint with the World Trade Organization against Canada possibly (this) week, saying it should not allow the provincial government of Ontario to treat local firms favorably in subsidizing the cost of solar and wind power generation, government sources said Saturday. Japan believes the subsidy program under which Ontario buys electricity produced with solar and wind power equipment that incorporate certain levels of locally produced components contravenes WTO rules that ban unfair treatment of import products, except tariffs, the sources said."

"The Ontario government has been running the program partly to expedite environmentally friendly power generation on the strength of renewable energy such as sun rays and wind power. With the envisioned litigation, Japan also wants to prevent protectionist moves from gaining momentum across the world in the name of conserving the environment, they said. Japan has been asking Canada to review the subsidy program, but the Canadian side has remained reluctant to comply with the request, prompting Tokyo to decide to bring its complaint to the WTO, the sources said."

The Globe and Mail adds that, “The Japanese mission to the WTO said the dispute centres on guaranteed long-term pricing for solar and wind generators made with a certain percentage of locally-produced components. Ontario, Canada’s most populous province, launched an incentive program for renewable energy producers last October, aiming to create jobs and eliminate coal-fired power generators. Tokyo believes that the pricing guarantees offered by Ontario in the wind and solar sectors constitute subsidies that violate Canada’s obligations under international trade law.”

“The request for consultations by Tokyo is the first step in a WTO dispute. If the two sides do not reach an agreement on their own, a WTO panel would be set up to arbitrate the dispute in a process that could eventually lead to retaliation.”

The Globe and Mail reported in March 2010 that, “As a proposed large-scale free-trade and economic-integration pact (the Canada-EU Comprehensive Economic and Trade Agreement) between Canada and the 27 European Union countries enters a crucial stage of negotiations, Canadian and European officials say the deal’s biggest obstacle is the province of Ontario. ...Europeans say that a particularly contentious point is Ontario’s new Green Energy Act. This energy-efficiency bill is also a job-creation program that specifies projects that hire Ontario residents and use Ontario companies, offering subsidies to local suppliers of energy-efficient products and services.The EU negotiators said in a position paper they tabled in the negotiations this year that the Ontario legislation is a perfect example of the sort of protectionist legislation that would prevent European access to markets and make CETA unworkable.”

Trade campaigner Stuart Trew writes about CETA and the Green Energy Act at http://www.canadians.org/tradeblog/?p=850.

Energy campaigner Andrea Harden-Donahue's March 2009 analysis on the Green Energy and Green Economy Act can be read at http://www.canadians.org/energy/documents/Written%20submission%20Green%20Energy%20Act.pdf.

The Kyodo news report is at http://www.istockanalyst.com/article/viewiStockNews/articleid/4490296.