Canada’s ethanol and biodiesel plants contribute billions of dollars annually to the Canadian economy, according to a new economic impact assessment.
However, an economist at a leading Canadian agricultural think-tank doesn’t put much faith in the findings.
The study, conducted by the econometric firm Doyletech Corp., concluded that the 28 biofuel plants built or under construction in Canada add $2.013 billion to the economy annually.
Canadian Renewable Fuels Association president Gordon Quaiattini called the study “a message of validation.”
The benefits include $14.1 million returned to municipal governments, $108.8 million to provincial governments and $111.8 million to Ottawa.
“We think that is a great return on the taxpayers’ investment in our industry,” Quaiattini said.
Al Mussell, senior research associate with the George Morris Centre in Guelph, Ont.,, called the assessment “a pretty weak analysis.”
He said the $2.013 billion figure includes $540 million in increased oil exports that he doesn’t believe will materialize. As well, he said the report claims that an ethanol-derived 20 percent premium on corn prices will pad the pockets of grain farmers but have no negative consequences for livestock producers.
“This thing is full of holes.”
Quaiattini countered that the Doyletech study used real-world numbers, accounted for factors such as the opportunity costs for feedstock and the subsidies received by biofuel companies and still came out with a net positive economic contribution for the industry.
“There is clearly a bias within the George Morris Centre when it comes to renewable fuels,” he said.
