Ontario Domestic Content Rules Facing WTO And NAFTA Challenges

Article by Andrew Lord and James Kelsall, Summer Student

Ontario's feed-in-tariff ("FIT") program is currently facing legal challenges from two international parties upset with the domestic content requirements required by the program. Japan is challenging the domestic content requirements at the World Trade Organization ("WTO"). Texas power company Mesa Power ("Mesa") has commenced a dispute under the North American Free Trade Agreement ("NAFTA"). Both Japan and Mesa claim that the domestic content requirements unfairly disadvantage international parties wishing to participate in Ontario's renewable power market by giving preferential treatment to local providers contrary to Canada's free trade obligations under the General Agreement on tariffs and Trade, 1994 ("GATT") and NAFTA.