CANADA - CERTAIN MEASURES AFFECTING THE RENEWABLE ENERGY GENERATION SECTOR
Document: Request for the Establishment of a Panel by Japan
Date: 7 June 2011
Document codes: WT/DS412/5
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 the Establishment of a Panel by Japan

 The following communication, dated 1 June 2011, from the delegation of Japan to the
Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

 My authorities have instructed me to request the establishment of a Panel on behalf of the
Government of Japan ("Japan").

 On 13 September 2010, Japan requested cons ultations with the Government of Canada
("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 ("TRIMs
Agreement"), and Articles 4.1 and 30 of the Agreement on Subsidies and Countervailing Measures
("SCM Agreement"), with respect to Canada's measures re lating to domestic content requirements in
the feed-in tariff program ("the FIT Program").
1 The request was circulated on 16 September 2010 as
document , , ,

 Consultations were held on 25 October 2010 with a view to reaching a mutually satisfactory
solution. Unfortunately, the consultations failed to resolve the dispute.

 As a result, Japan respectfully requests that a Panel be established to examine this matter
pursuant to Articles 4.7 and 6 of the DSU, Article XXIII of the GATT 1994, Article 8 of the TRIMs
Agreement, and Articles 4.4 and 30 of the SCM Agreement.

 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 prici ng for the output of renewable energy generation
facilities that contain a defined percentage of dom estic content. These measures include, but are not
limited to, the following:

 the Electricity Act, 1998 ,
2 as amended, 3 including in particular Part II (Independent
Electricity System Operator), Part II.1 (Ontario Power Authority) and Part II.2

1 The reference to "FIT Program" in this request includes both projects over 10 kilowatts and projects
of 10 kilowatts or less ( i.e., microFIT). See http://fit.powerauthority.on.ca/;
http://fit.powerauthority.on.ca/what-feed-tariff-program; and http://microfit.powerauthority.on.ca/.
2 S.O. 1998, c. 15, Sched. A.
3 The latest amendment was by: 2010, c. 15, s. 223.

(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 and to build a green economy, 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 "),4 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"),5 including in particular Schedule A, Sections 29-32, enacting Part II.1 of
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
and include a requirement that the applicant 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;
6
 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;

4 S.O. 2009, c. 12.
5 S.O. 2004, c. 23.
6 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.

 the FIT Price Schedule (13 August 2010), and the microFIT Price Schedule
(13 August 2010), issued by the OPA;
 the FIT Program Interpretations of th e Domestic Content Requirements (14
December 2009, as updated on 4 October 2010 and 26 April 2011), issued by the
OPA; and
 any amendments or extens ions of the foregoing, a ny replacement measures, any
renewal measures, any implementing measures, and any related measures.
7
 These measures are inconsistent with Canada's obligations under the SCM Agreement , the
GATT 1994, and the TRIMs Agreement because they constitute a pr ohibited subsidy, and also
discriminate against equipment for renewable ener gy generation facilities produ ced outside Ontario.
In particular, Japan considers that these measures are inconsistent with the following provisions:

1. Articles 3.1(b) and 3.2 of the SCM Agreement , because the measures are subsidies
within the meaning of Article 1.1 of the SCM Agreement that are provided contingent
upon the use of domestic over imported goods, namely contingent upon the use of
equipment for renewable energy generati on facilities produced in Ontario over such
equipment imported from other WTO Members such as Japan;
8
2. Article III:4 of the GATT 1994, becau se the measures accord less favourable
treatment to imported equipment for renewable energy generation facilities than
accorded to like products originating in Ontario; and
3. 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 III :4 of the GATT 1994 which require the
purchase or use by enterprises of equipment for renewable energy generation
facilities of Ontario origin.
 Further, Japan considers that Canada's measur es nullify or impair benefits accruing to Japan
directly or indirectly under the cited Agreements in a manner described in Article XXIII:1 of the
GATT 1994.

 Japan requests the establishment of a Panel w ith standard terms of reference in accordance
with Article 7.1 of the DSU.

Application Form, microFIT Application, FIT Price Schedule, microFIT Price Schedule, and FIT Program
Interpretations of the Domestic Content Requirements. Japan's request, however, encompasses all versions of
these measures adopted since the inception of the FIT Program on 24 September 2009.
8 As subsidies falling under the provisions of Article 3 of the SCM Agreement , the measures are
deemed to be specific under Article 2.3 of the SCM Agreement.