This week, Ontario's Minister of Energy introduced Bill 153, Complying with International Trade Obligations Act, 2013, which, if passed, would eliminate the statutory requirement for domestic content in Ontario's Feed-in Tariff (FIT) Program. Ontario's FIT Program is North America's first comprehensive guaranteed pricing structure for renewable energy production.
Bill 153 comes on the heels of a December 2012 decision of the World Trade Organization (the "WTO") (which was subsequently upheld on appeal in May 2013), which held that Ontario's FIT Program was inconsistent with Canada's international trade obligations. The process of bringing Ontario's FIT program into compliance with the WTO ruling began in August 2013, when the Minister of Energy directed the Ontario Power Authority to reduce domestic content requirements for new FIT contracts to lower minimum levels. Bill 153 is the last step in the process, eliminating the statutory requirement that Ontario's FIT Program include domestic content.
This legislation is not expected to have any impact on existing FIT contracts, but will result in reduced tariffs for future FIT contracts as a result of the removal of domestic content requirements and to reflect increasing declines in technology prices.
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