How do you know that a local-job creation bill is working and actually building resilience into a local economy? Multi-national corporations, through the World Trade Organization, want to shut it down. In my previous blog post entitled: Good Ideas into Great Jobs, I suggested that Alabama policymakers should emulate a package of job creation measures enacted in Ontario, Canada. I wrote:

Ontario enacted its Green Energy Act in 2009. Since its enactment, 30 companies have publicly announced plans to set up or expand manufacturing facilities in Ontario that produce equipment for wind or solar power projects.  Ontario’s clean energy program is built around a strong commitment to local manufacturing and it has attracted as many as 43,000 new jobs at a reasonable cost per job.  The two primary planks provide alternative energy producers preferable rates and a local-content rule. Ontario announced the approval of 184 renewable energy projects worth $8 billion under theis Feed-In Tariff program.  The Ontario Green Energy Act includes these major components:

  • A Feed-In-Tariff program, which allows individuals and companies to sell renewable energy — like solar, wind, water, biomass, biogas and landfill gas — into the grid at set rates.
  •  Domestic content requirements, which would ensure at large percentages (60%) of wind projects and solar projects be produced and manufactured in Ontario.

The policies are exceeding expectations:

By most accounts, the plan is working. Reuters reported in March that Ontario’s green energy strategy was making the province “a magnet for global heavy hitters in the green energy sector, drawn by alluring subsidies at a time when incentives are being scaled back elsewhere.” Said one energy analyst, “I’m sure any major player in the clean energy space is looking at Ontario, now that they’ve put the sign out that they’re open for business and willing to have attractive incentives.

Clearly not everyone is impressed. Japan is a major exporter of solar technology with well known brands such as Sanyo, Mitsubishi and Sharp. Many Ontario solar power firms use these brands in residential or larger-scale business installations. But when local content quotas go up to 60 per cent in March, it will be difficult for companies not producing solar modules in Ontario to qualify for high feed-in tariffs.

Japan filed a complaint via the WTO; it is now being reported that the Obama adminsitration is deliberating whether to get involved in the WTO attack by Japan on Canada’s green jobs program. (Could it be that Japan is miffed that their chief competitor, South Korean Samsung was awarded a a 7 billion dollars contract?)

Japan’s trade challenge Monday of the McGuinty government’s green energy program could mean lost jobs and higher clean energy rates for Ontarians.

Tokyo took its fight against the Ontario Green Energy Act, introduced in May 2009 and focusing on solar and wind power, to the World Trade Organization (WTO) in Geneva. The provincial Liberal program promises creation of 50,000 jobs for Ontarians within its first three years, and aims to make Ontario “a leading green community in North America.”

While Ontario is the target, the Japanese challenge is against Canada. Tokyo is expected to argue the Ontario plan violates international trade law by providing subsidies for solar and wind power development and unfairly favouring local companies for procurement.

If Japan’s challenge succeeds, it could derail green programs across Canada.

Calling it a “test case globally,” Council of Canadians chair Maude Barlow told the Star it threatens policies designed to decrease greenhouse gas emissions.

“Why should the Ontario taxpayer be paying high rates for clean energy if it is going to the profit margins of big corporations from Japan or Europe?” she asked.

The challenge is the latest in a series of attacks on the ability of Canadian governments to set independent policy, without interference from foreign states, influenced by their corporate lobbies. It’s a pile-on that potentially puts every aspect of procurement, job creation and social policy under the microscope and derails “Made in Canada” programs.

These type policies enable communities to provide some level of economic resilience. I hope the Obama administration decides not only to not weigh heavily on the side of Japan, but actually oppose their WTO challenge in favor of local communities.