10/03/2011 03:00 EDT | Updated 12/03/2011 05:12 EST

Green Energy Act Sufferers Seeing Red

Flickr: Scott Meis Photography

Dalton McGuinty and Kermit the Frog each know from experience, it's not easy being green. For Ontario taxpayers, the legal reality of defending McGuinty's green energy dream isn't getting any easier either with Trillium Power's announcement this week of a $2.25 billion dollar action against the Province of Ontario. This is in addition to Texas oil baron and billionaire T. Boone Pickens' $775 million dollar legal action announced earlier this summer.

What do Trillium Power and Pickens both allege was the result of separate failures to gain approvals for their industrial wind projects? Political interference stopped them in their tracks.

According to the Globe and Mail, Trillium Power's statement of claim alleges Ontario's offshore moratorium, which scrapped their 450 megawatt offshore proposal near Kingston, Ontario was due to the "the criticisms of potential voters in swing ridings who oppose near-shore wind power installations in the 2011 provincial election." The statement of claim also includes zingers like "the only science involved in the... decision was political science."

T. Boone Pickens filed a $775 million dollar claim under the North American Free Trade Agreement against the Government of Canada (the signatory to the agreement and liable for the actions of provinces) claiming Mesa Energy was denied feed-in-tariff contracts due to "...unfairness, the abuse of power and process, and undue political influence in the regulations of renewable power in Ontario."

Neither Trillium Power or Mesa Energy's claims have been proven in court, but also aren't the only examples of political interference in the approvals process for energy projects in Ontario. Both the gas fired plant in Oakville and the plant in Mississauga were cancelled in marginal Liberal ridings after local opposition politicized their fights, pledging to hold the Liberals accountable. While neither of those companies has filed any legal action against the government at this time, it's expected those two cancellations could cost Ontarians over two billion dollars.

Pickens' NAFTA challenge isn't the only example of international stakeholders seeking to leverage Canada's trade obligations to challenge Ontario's Green Energy Act.

Japan and the European Union have each filed separate challenges with the WTO, which require the Federal Government to defend Ontario's law.

Japan's challenge is focused on the domestic content requirement that is part of the feed-in-tariff program as the Japanese government argues the made in Ontario provision is illegal under Canada's international treaty obligations and amounts to an illegal subsidy. Filed in September 2010, the mandatory attempts by the governments of Japan and Canada to settle this dispute informally have failed and a panel has been set up by the WTO to begin formal hearings.

The European Union filed it's own claim against Canada over Ontario's Green Energy Act in August 2011 claiming the Green Energy Act domestic content requirements were inconsistent with Canada's international trade obligations that make use of domestic projects as a condition of access illegal. According to the EU, between 2007-2009 exports of wind and solar technology to Canada were between 300 to 600 million euros and would be higher if the domestic content requirement was removed.

McGuinty's Green Energy Act has failed to provide the thousands of high value jobs he has spent the last two years claiming it would. Canada's reputation as a free trader is being challenged by important members of the global community. All of this for an eight turbine industrial wind project -- which is the only project to be approved since the Green Energy Act was passed two years ago.

The estimated $5 billion dollars of legal liability the province faces demonstrates how badly the Green Energy Act failed to meet any of the premier's objectives, but sadly it's Ontarians who will pay for years to come to clean up the mess the legacy of Ontario's Green Energy Act has created.