From thestar.com:
The new Ontario requirement that grid-connected solar projects include a minimum amount of local content is causing a stir in Germany, where manufacturers say Canada is breaching its obligations to the World Trade Organization.
...
The new rules, which went into effect Oct. 1, require that small rooftop solar systems contain 40 per cent local content as a combination of labour and equipment.
Larger systems must meet a 50 per cent threshold. Starting in two years that target will rise to 60 per cent.
Energy and Infrastructure Minister George Smitherman established the rule to stimulate investment and green-collar job creation in the province, a benefit aimed at making electricity consumers more agreeable to paying a premium for solar and wind power.
The article doesn't explain the measure in much detail, but it seems likely that a local content requirement for equipment would violate GATT Article III:4. The more difficult issue might be the defense. The argument set out in the quoted portion of the article seems to be something like this: Due to the higher cost of solar/wind power, the only way the government can enact a policy favoring these power sources is to use protectionism to give some benefits to local companies, so as to generate support for the policy.
I see the point, but it's hard to imagine such a defense being accepted by a WTO panel under GATT Article XX, in part because it would be open to abuse (everyone would argue it and it would be hard to disprove).
