Tuesday, September 14, 2010

Japan files WTO complaint against Ontario's green energy legislation

Apparently they have a problem with the local content requirements:
The Japanese government has filed a complaint against Canada with the World Trade Organization, saying that Ontario’s green energy plan unfairly pressures its producers of clean power to buy hardware from manufacturers in the province.

Ontario’s new alternative energy structure pays very high prices for wind and solar power, as long as producers source a significant proportion of their equipment in the province. The program has so far been very successful in drawing manufacturers to set up shop in Ontario.

But Japan says the local-content provisions breach portions of the General Agreement on Tariffs and Trade, and fall under the definition of a “prohibited subsidy.” It has asked for “consultations” with Canada under the WTO process, the first stage of a formal trade dispute.

From the Globe. This is unfortunate, because if this complaint is upheld it could gut the entire clean energy program:
Still, Mr. Atcheson said that if Japan eventually wins its claim, it could be a disaster for Ontario’s alternative energy plans. The prices the province pays for green energy – for certain types of solar power it is almost 20 times the rate customers pay – can only be justified if Ontario gets significant employment benefits from new development, he said. The province can’t afford to pay high prices for renewables “unless they are creating some jobs,” he said.
Yikes. Let's hope sense prevails.

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