CANADA – MEASURES RELATING TO THE FEED-IN TARIFF PROGRAM
Document: Request for Consultations by the European Union
Date: 16 August 2011
Document codes: WT/DS426/1; G/L/959; G/TRIMS/D/28; G/SCM/D87/1
Complainant: EU
Respondent: Canada
Third parties: U.S., Japan, Australia, China, Taiwan, India, Saudi Arabia, Brazil, South Korea, Mexico, Norway, Turkey, El Salvador
Dispute stage: Appellate Body
Agreements cited: Art. 3.1(b), 3.2, 1.1  Subsidies and Countervailing Measures (SCM)Art. III:4  GATT 1994Art. 2.1  Trade-Related Investment Measures (TRIMs)

CANADA – MEASURES RELATING TO THE FEED-IN TARIFF PROGRAM

Request for Consultations by the European Union

 The following communication, dated 11 August 2011, from the delegation of the
European Union to the delegation of Canada and to the Chairperson of the Dispute Settlement Body,
is circulated in accordance with Article 4.4 of the DSU.

The European Union ("EU") hereby requests c onsultations with the Government of Canada
pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of
Disputes ("DSU"), Article XXII:1 of the General Agreement on Tariffs and Trade 1994
("GATT 1994"), Article 8 of the Agreement on Trade-Related Investment Measures (the
"TRIMs Agreement"), and Articles 4(1) and 30 of the Agreement on Subsidies and Countervailing
Measures (the " SCM Agreement "), regarding Canada's measur es relating to domestic content
requirements in the feed-in tariff program (the "FIT Program").
1
The issues which the European Union would like to raise in the course of the consultations
include, but are not limited to, the following measures:

 the Electricity Act, 1998 2, as amended, including in particular Part II (Independent
Electricity System Operator), Part II.1 (Ontario Power Authority) and Part II.2
(Management of Electricity Supply, Capacity and Demand) thereof, including in
particular Section 25.35 (Feed-in tariff program);
 an Act to enact the Green Energy Act, 2009 , to repeal the Energy Conservation
Leadership Act, 2006 and the Energy Efficiency Act and to amend other statutes (the
"Green Energy and Green Economy Act, 2009 ")
3, including in particular Schedule B
amending the Electricity Act, 1998;
 an Act to amend the Electricity Act, 1998 and the Ontario Energy Board Act, 1998
and to make consequential amen dments to other Acts (the " Electricity Restructuring
Act, 2004")4, including in particular Schedule A, Sections 29-32, enacting Part II.1 of

1 "FIT Program" referred to in this request includes both projects over 10 kilowatts and projects of
10 kilowatts or less (microFIT). See http://fit.powerauthority.on.ca/;
http://fit.powerauthority.on.ca/Page.asp?PageID=1115&SiteNodeID=1052; and
http://microfit.powerauthority.on.ca/.
2 S.O. 1998, c. 15, Sched. A.
3 S.O. 2009, c. 12.
4 S.O. 2004, c. 23.
WT/DS426/1, G/L/959,
G/TRIMS/D/28, G/SCM/D87/1

the Electricity Act, 1998, and Sections 33-38, enacting Part II.2 of the Electricity Act,
1998, and Schedule B, Sections 17-18, en acting Sections 78.3-78.4 of the Ontario
Energy Board Act, 1998;
 Ontario Regulation 578/05 made under the Ontario Energy Board Act, 1998 entitled
"Prescribed Contracts Re Sections 78.3 and 78.4 of the Act";
 Independent Electricity System Operator ("IESO") Market Manual, including in
particular Part 5.5 ("Physical Markets Settlement Statements");
 IESO Market Rules, including in partic ular Chapter 7 ("System Operations and
Physical Markets"), Chapter 9 ("Settlements and Billing") and Chapter 11
("Definitions");
 FIT direction dated 24 September 2009, fro m George Smitherman, Deputy Premier
and Minister of Energy and Infrastruct ure, to Colin Andersen, Chief Executive
Officer, Ontario Power Authority ("OPA"), directing OPA to develop a FIT Program
including a requirement that the applican t submit a plan for meeting the domestic
(i.e., Ontario) content goals in the FIT rules;
 individual FIT and microFIT contracts executed by the OPA since the inception of
the FIT Program on 24 September 2009
5;
 the FIT Rules, Version 1.4 (8 December 2010), and the microFIT Rules, Version 1.6
(8 December 2010), issued by the OPA;
 the FIT Contract, Version 1.4 (8 Dece mber 2010), including General Terms and
Conditions, Exhibits, and Standard Definitions, the microFIT Contract, Version 1.6
(8 December 2010), including Appendices, and the Conditional Offer of microFIT
Contract, Version 1.0, issued by the OPA;
 the FIT Application Form (1 December 2009), and online microFIT Application,
issued by the OPA;
 the FIT Price Schedule (13 August 2010), and the microFIT Price Schedule
(13 August 2010), issued by the OPA;
 the FIT Program Interpretations of the Domestic Content Requirements
(14 December 2009, as updated on 4 October 2010 and 26 April 2011), issued by the
OPA; and
 any amendments, revisions or extensions of the foregoing, any replacement measures,
any renewal measures, any implementing measures, and any related measures.6

5 These contracts include, but are not limited to, those referenced at
"http://fit.powerauthority.on.ca/Storage/10989_FIT_Contracts_Offered_April_8_10_-Applicant_Legal_Name_
Order3.pdf" and " http://fit.powerauthority.on.ca/Storage/11216_FIT_Contract_Awards_-_Final_List_-
_February_24,_2011.pdf".
6 The request encompasses all versions of thes e measures adopted sin ce the inception of the
FIT Program on 24 September 2009.
WT/DS426/1, G/L/959,
 G/TRIMS/D/28, G/SCM/D87/1

The EU considers that the above-mentioned me asures are inconsistent, among others, with
Canada's obligations under the following provisions:

 Articles 3(1)(b) and 3(2) of the SCM Agreement, because the measures are deemed to
be subsidies within the mean ing of Article 1.1 of the SCM Agreement that are
prohibited insofar they are provided contingent upon the use of domestic over
imported goods, namely contingent upon th e use of equipment for renewable energy
generation facilities produced in Ontario over such equipment imported from other
WTO Members, including the EU;
 Article III:4 of the GATT 1994, because the measures accord less favourable
treatment to imported equipment for rene wable energy generation facilities over like
products originating in Ontario; and
 Article 2.1 of the TRIMs Agreement , in conjunction with paragraph 1(a) of the
Agreement's Illustrative List, because the measures are trade-related investment
measures inconsistent with Article II I:4 of the GATT 1994 which require the
purchase or use by enterprises of equipment for renewable energy generation
facilities of Ontario origin.
The European Union reserves the right to address additional measures and claims under other
provisions of the WTO Agreement regarding the above matters during the course of the consultations.

The European Union looks forward to receiving in due course a reply from Canada to this
request. The European Union is ready to consider with Canada mutually convenient dates to hold
consultations in Geneva.