Local Content Rules Should be Expanded, not Scrapped, CAW says

May 10, 2013, 5:10 PM EST


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Governments should continue promoting the use Canadian-content, and other "buy-local" rules, to guide public purchases and direct investment, said CAW President Ken Lewenza.

Lewenza's comments come on the heels of a World Trade Organization appellate body ruling issued Monday May 6, calling for a removal of local-content requirements within Ontario's Green Energy Act. 

"Buy-local policies are one of the most effective tools governments have to retain investment and create jobs, and are consistent with fair international trade practices," Lewenza said.

Monday's ruling marks the final stage of a joint complaint filed by Europe and Japan in 2011. The complaint centred on the province's green jobs strategy, specifically the Ontario content requirements for wind and solar installations. Energy generators are paid an above-market rate for renewable power produced (through an innovative Feed-in-Tariff program), but only if they first prove that a significant portion of the equipment used was manufactured in Ontario. 

Lewenza said these policies are used by governments all over the world, including in various Canadian jurisdictions, and roundly criticizes the WTO for its narrow-view on trade and economic development.

"The WTO should make considerations for the many ways democratically-elected governments choose to develop and enhance their local economies. Ontario's Green Energy Act, while not perfect, aims to leverage existing skills and capacity in the hard-hit manufacturing industry, putting people back to work in a sector that has a bright future," Lewenza said.

"The Act doesn't shut out European, Japanese or other global suppliers, and it's not protectionist. It's an innovative effort to build renewable energy capacity and secure investment. With respect to global trade, that's fair game."

The CAW intervened in the dispute through an amicus curiae (i.e. 'friend of the court') submission in 2012, along with a group of other concerned labour, student and social justice organizations. Among a series of arguments put forward, the group characterized the Green Energy Act as an important policy designed to spur sustainable development and assist Canada in meeting its stated greenhouse gas emission reduction targets - both goals supported by the WTO.

Lewenza said he is encouraged by provincial energy minister Bob Chiarelli's recent comments that the WTO ruling won't result in the immediate dismantling of local content requirements under the Act. As Ontario is not directly bound by the WTO ruling, Lewenza is urging Minister Chiarelli and Premier Kathleen Wynne, to ignore the ruling and stand by the policy.

Lewenza is also calling on the federal and provincial governments to undertake a thorough cost-benefit analysis of the country's participation in existing free trade agreements and treaties (including the proposed Canada-EU Comprehensive Economic and Trade Agreement), to ensure democratically-elected governments are not stripped of the authority to legislate useful job creation and environmental protection policies.

"Trade deals that undermine our ability to create good jobs and protect the environment serve no purpose to Canadians," Lewenza said.

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