CANADA - CERTAIN MEASURES AFFECTING THE RENEWABLE ENERGY GENERATION SECTOR
Document: Request for Consultations by Japan
Date: 16 September 2010
Document codes: WT/DS412/1; G/L/926; G/TRIMS/D/27; G/SCM/D84/1
Complainant: Japan
Respondent: Canada
Third parties: Australia, Brazil, China, El Salvador, EU, Honduras, India, Saudi Arabia, South Korea, Mexico, Norway, Taiwan, U.S.
Dispute stage: Appellate Body
Agreements cited: Art. XXIII:1  GATT 1994Art. 1.1, 3.1(b), 3.2  Subsidies and Countervailing Measures (SCM)Art. III:4  GATT 1994Art. 2.1  Trade-Related Investment Measures (TRIMs)

CANADA - CERTAIN MEASURES AFFECTING THE RENEWABLE
ENERGY GENERATION SECTOR

Request for Consultations by Japan

 The following communication, dated 13 Septem ber 2010, from the delegation of Japan to the
delegation of Canada and to the Chairman of the Di spute Settlement Body, is circulated in accordance
with Article 4.4 of the DSU.

Upon instructions from my authorities, I hereby wish to convey the request of the
Government of Japan for consultations with the Go vernment 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 measures relating to domes tic content requirements in the f eed-in tariff program (the "FIT
Program").
1
The measures that are the subject of this request are those taken by the Government of
Canada or its provinces relating to the FIT Program established by the Canadian province of Ontario
in 2009 providing for guaranteed, long-term pricing fo r the output of the renewable energy generation
facility that contain a defined percentage of dom estic content. These measures include, but are not
limited to, the following:
(1) the Electricity Act, 1998 , as amended, 2 including in particular Part II.1 (Ontario
Power Authority 3) and Part II.2 (Management of El ectricity Supply, Capacity and
Demand) thereof, including in particular Section 25.35 (Feed-in tariff program);
(2) an Act to enact the Green Energy Act, 2009 and to build a green economy, to repeal
the Energy Conservation Leadership Act, 2006 and the Energy Efficiency Act and to

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 The latest amendment was by: 2010, c.8, s.37.
3 The Ontario Power Authority ("OPA") is a not-for-profit corporation without share capital, and the
governance and the structure by-law may be made only with the approval in writing of the Minister of Energy
and Infrastructure (the "Minister"). See, e.g., Electricity Act, 1998, Sections 25.1(1) and 25.16(3).
WT/DS412/1, G/L/926,
G/TRIMS/D/27, G/SCM/D84/1

amend other statues (the "Green Energy and Green Economy Act, 2009"), including
in particular Schedule B amending the Electricity Act, 1998;
(3) an Act to amend the Electricity Act, 1998 and the Ontario Energy Board Act, 1998
and to make consequential amendments to ot her Acts (the "Electricity Restructuring
Act, 2004"), including in particular Schedul e A, Section 28, enacting Part II.1 of the
Electricity Act, 1998;
(4) FIT direction dated September 24, 2009, from George Smitherman, Deputy Premier
and Minister of Energy and Infrastructure, to Colin Anderson, Chief Executive
Officer, Ontario Power Authority, directing OPA to develop a FIT Program and
include a requirement that the applicant submit a plan for meeting the domestic ( i.e.,
Ontario) content goals in the FIT rules;
(5) the FIT Rules, Version 1.3.1 issued on 2 July 2010 and amended on 13 August 2010
by the OPA, and the microFIT Rules, Version 1.5 issued on 25 August 2010;
(6) the FIT Contract, Version 1.3.1 (2 July 2010), including General Terms and
Conditions, Exhibits, and Standard Definitions, issued by the OPA, and the microFIT
Contract, Version 1.5 (25 August 2010), including Appendices, issued by the OPA, as
well as individual FIT and microFIT Contracts executed by the OPA with renewable
energy suppliers in Ontario;
(7) the FIT Application Form (1 December 2009), and online microFIT Application,
issued by the OPA;
(8) the FIT Price Schedule (13 August 2010), and the microFIT Price Schedule
(13 August 2010), issued by the OPA;
(9) the FIT Program Interpretations of the Domestic Content Requirements (December
14, 2009), issued by the OPA; and
(10) any amendments or extens ions of the foregoing, a ny replacement measures, any
renewal measures, any implementing measures, and any related measures.
The Government of Japan believes these me asures discriminate against equipment for
renewable energy generation facilities produced outsi de Ontario, and also constitute a prohibited
subsidy. Specifically, Japan is concerned that the measures in question, as authorized, established,
and implemented, are inconsistent with Canada's obligations under, but not limited to, the following
provisions:
(1) Articles III:4 and III:5 of the GATT 1994;
(2) Article 2.1 of the TRIMs Agreement; and
(3) Articles 3.1(b) and 3.2 of the SCM Agreement.
The measures listed above appear to be inc onsistent with Articles III:4 and III:5 of the
GATT 1994 because: the measures appear to be laws , regulations or requirements affecting the
internal sale, offering for sale, purchase, transpor tation, distribution, or use of equipment for
renewable energy generation facilities that accord less favorable treatment to imported equipment
than that accorded to like products originating in Ontario; the measures could be internal quantitative
WT/DS412/1, G/L/926,
 G/TRIMS/D/27, G/SCM/D84/1

regulations relating to the mixture, processing or use of a specified amount or proportion of
equipment for renewable energy generation facilitie s which require that equipment for renewable
energy generation facilities must be supplied fro m Ontario sources; and the measures appear to
require the mixture, processing or use of equi pment for renewable energy generation facilities
supplied from Ontario in specified amounts or proporti ons, being applied so as to afford protection to
Ontario production of such equipment, contrary to the principles of Article III:1 of the GATT 1994.
In addition, the measures listed above appear to be inconsistent with Article 2.1 of the TRIMs
Agreement because the measures appear to be trade-relate d investment measures that are inconsistent
with the provisions of Article III of the GATT 1994.
Finally, it appears that a subsidy is gran ted under the measures listed above within the
meaning of Article 1.1 of the SCM Agreement because there would be a financial contribution or a
form of income or price support, and a benefit is thereby conferred. And the subsidy would be a
prohibited subsidy under Articles 3.1(b) and 3.2 of the SCM Agreement because it appears to be
provided "contingent … upon the use of domestic ove r imported goods", namely contingent upon the
use of equipment for renewable energy generation facilities produced in Ontario over such equipment
imported from countries such as Japan. As the subsid y falls under the provisions of Article 3 of the
SCM Agreement , it would therefore be deemed to be specific under Article 2.3 of the SCM
Agreement.
Article 4.2 of the SCM Agreement requires that requests for consultations under Article 4.1 of
the SCM Agreement include a statement of available evidence with regard to the existence and nature
of the subsidy in question. The available evidence is listed in the Annex to this request.
The Government of Japan considers that the measures in questions also nullify or impair,
within the meaning of Article XXIII:1 of the GA TT 1994, benefits accruing to Japan directly or
indirectly under the cited Agreements.
The Government of Japan reserves the right to request the Government of Canada to produce
further information and documents regarding the measures in question. The Government of Japan also
reserves the right to raise further facts and claims under other provisions of the covered agreements
and address additional measures during the course of consultations.
The Government of Japan looks forward to r eceiving a reply from the Government of Canada
to this request and to fix a mutually convenient date to hold consultations.

WT/DS412/1, G/L/926,
G/TRIMS/D/27, G/SCM/D84/1

ANNEX

Statement of Available Evidence with Regard

to the Existence and Nature of the Subsidies in Question

Japan's request for consultations dated 13 Se ptember 2010 identifies the prohibited subsidies
that are the subject of this request for consultations.
The evidence set out below is evidence availabl e to Japan at this time regarding the existence
and nature of those subsidies. Japan reserves the right to supplement or alter this list in the future, as
required.
The evidence presently available to Japan includes the following:
• The Electricity Act, 1998, S.O. 1998, c. 15 (Can. Ont.), as amended, http://www.e-
laws.gov.on.ca/html/statutes/english/elaws_statutes_98e15_e.htm
• The Green Energy and Green Economy Act, 2009, S.O. 2009, c. 12 (Can. Ont.),
http://www.ontla.on.ca/bills/bills-files/39_Parliament/Session1/b150ra.pdf
• The Electricity Restructuring Act, 2004, S.O. 2004, c. 23 (Can. Ont.),
http://www.ospe.on.ca/pdf/gr_legislation_Bill_100_Electricity_Restructuring_Act_2004.pdf
• FIT direction from George Smitherman, Deputy Premier and Minister of Energy and
Infrastructure, Province of Ontario, to Colin Anderson, Chief Executive Officer, Ontario
Power Authority (September 24, 2009),
http://www.powerauthority.on.ca/Storage/106/15420_FIT_Directive_Sept_24_09.pdf

• OPA, FIT Program Website, and contents therein,
http://fit.powerauthority.on.ca/Page.asp?PageID=1115&SiteNodeID=1052
• OPA, microFIT Program Website, and contents therein, http://microfit.powerauthority.on.ca/
• OPA, Feed-In Tariff Program: Program Overview (2 July 2010),
http://fit.powerauthority.on.ca/Storage.asp?StorageID=10507
• OPA, Micro Feed-In Tariff Program: Program Overview (25 August 2010),
http://microfit.powerauthority.on.ca/pdf/microFIT-Program-Overview.pdf
• OPA, Feed-In Tariff Program: FIT Rules, Ver. 1.3.1 (13 August 2010),
http://fit.powerauthority.on.ca/Storage/102/11119_FIT_Rules_Version_1.3.1_August_13.pdf
• OPA, Feed-In Tariff Program: microFIT Rules, Ver. 1.5 (25 August 2010),
http://microfit.powerauthority.on.ca/pdf/microFIT-Rules.pdf
• OPA, FIT Contract, Ver. 1.3.1 (2 July 2010),
http://fit.powerauthority.on.ca/Storage.asp?StorageID=10775
• OPA, microFIT Contract, Ver. 1.5 (25 August 2010),
http://microfit.powerauthority.on.ca/pdf/microFIT-Contract.pdf
WT/DS412/1, G/L/926,
 G/TRIMS/D/27, G/SCM/D84/1

• OPA, FIT Contract Form of Domestic Content Plan, OPACM- FORM-DOMESTIC
CONTENT PLANT (2010-04) (11 August 2010),
http://fit.powerauthority.on.ca/Storage/102/11118_FIT_Domestic_Content_Plan.pdf

• OPA, microFIT Domestic Content Grid, http://microfit.powerauthority.on.ca/pdf/microFIT-
Domestic-Content.pdf
• OPA, FIT Appendix I – Standard Definitions, Ver. 1.3.1 (July 2, 2010),
http://fit.powerauthority.on.ca/Storage.asp?StorageID=10638
• OPA, FIT Application Form (1 December 2009),
http://fit.powerauthority.on.ca/Storage.asp?StorageID=10662
• OPA, online microFIT Application, http://microfit.powerauthority.on.ca/microFIT-Program-
Rules/Submitting-an-application/index.php
• OPA, FIT Price Schedule (13 August 2010),
http://fit.powerauthority.on.ca/Storage.asp?StorageID=10620
• OPA, microFIT Price Schedule (August 13, 2010),
http://microfit.powerauthority.on.ca/pdf/microFIT-Program-price-schedule.pdf
• OPA, Interpretations of the Domestic Content Requirements (14 December 2009),
http://fit.powerauthority.on.ca/Storage/99/10869_Questions_and_Answers_on_Domestic_Co
ntent_Grid_Cells_Dec_14_09.pdf
• OPA, Draft Domestic Content Interpretations (last updated 19 July 2010),
http://fit.powerauthority.on.ca/Page.asp?PageID=924&ContentID=10618 (past requests for
feedback on draft interpretations);
http://fit.powerauthority.on.ca/Page.asp?PageID=924&ContentID=10662&SiteNodeID=1054

(proposed changes to FIT Contract, Exhibit D, posted June 29, 2010);
http://fit.powerauthority.on.ca/Storage/100/10908_Domestic_Content_Exhibit_D_-
_Draft_March_11_10.pdf (proposed changes to FIT Contract, Exhibit D, posted
11 March 2010)
• OPA, FIT Program Domestic Content FAQ (2010),
http://fit.powerauthority.on.ca/Page.asp?PageID=834&ContentID=10544
• OPA, FIT Program Pricing and Payment FAQ (2010),
http://fit.powerauthority.on.ca/Page.asp?PageID=834&ContentID=10511
• OPA, FIT Program Resources – Domestic Content (2010),
http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10598
• OPA, FIT Program Contract Management – Settlement (2010),
http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10393
• OPA, FIT Program Participation and Eligibility – Domestic Content (2010),
http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10605
WT/DS412/1, G/L/926,
G/TRIMS/D/27, G/SCM/D84/1

• Press Release, OPA, Ontario's Feed-In Tariff Program Backgrounder (10 March 2010),
http://fit.powerauthority.on.ca/Storage/100/10899_FIT_-_CAE_Event_-_Backgrounder_-
_FINAL.pdf
• Press Release, OPA, Ontario's Landmark Green Energy Plan Delivers (10 March 2010),
http://fit.powerauthority.on.ca/Storage/100/10898_FIT_-_CAE_Event_News_Release_-
_FINAL.pdf
• Ontario, Legislative Assembly, Official Report of Debates (Hansard), No. L112 (23 February
2009) (exchange between Hon. George Smitherman and MPP Paul Miller on "Green Power
Generation"), http://www.ontla.on.ca/web/house-proceedings/house_detail.do?Date=2009-02-
23&Parl=39&Sess=1&locale=en#P201_38409
• Independent Electricity System Operator, The Power System,
http://www.ieso.ca/imoweb/siteShared/power_system.asp
• OPA, 2010-2012 Business Plan (September 2009),
http://www.powerauthority.on.ca/Storage/108/15587_A-2-1_2010-
2012_OPA_Business_Plan_Final_Oct__1.pdf