On December 11, 2013, the Ontario government introduced Bill 153, Complying with the International Trade Obligations Act, 2013 (“Bill 153”) to remove domestic content requirements for the construction of future renewable energy generation projects from the Electricity Act, 1998. This proposed legislation is the government’s second and final stage response to a ruling made in May 2013 by the World Trade Organization (“WTO”) that found Ontario’s domestic content rules to be inconsistent with the General Agreement on Tariffs and Trade and with the General Agreement on Trade-related Investment Measures. The government’s first response was to reduce by 50 per cent the minimum domestic content required for all new FIT contracts. These proposed rule changes will not impact existing FIT contracts.

Bill 153 simply proposes to repeal subsection 25.35 (3) of the Electricity Act, 1998, thus eliminating the Minister of Energy’s authority to direct the Ontario Power Authority to establish goals relating to domestic content to be achieved during the time period to be covered by the FIT Program. The compliance measure will take effect once the Bill receives Royal Assent.

Next Steps

Bill 153 will be scheduled for second reading once the Ontario Legislature resumes on February 18, 2014. Once second reading is completed, the Bill may be referred to a standing committee of the Legislature for review and stakeholder input. It will then be called for Third and final reading and Royal Assent will follow shortly thereafter. The government expects the Bill be passed by the spring of 2014.