As federal and provincial agriculture ministers gather in Regina this week to discuss a national biofuel strategy, they are being warned by the industry that they have little time to act.
Last week, industry representatives told MPs that Canadian governments have little more than a year to create a generous and supportive policy for the biofuel industry or a multibillion-dollar opportunity for a new agriculture value-added industry will be lost.
Justin To, a policy analyst with the Canadian Federation of Agriculture, and Canola Council of Canada Ottawa representative Tyler Bjornson teamed up May 16 to plead before the House of Commons agriculture committee for regulations and financial supports as generous as the American policy that is supporting an explosion in ethanol production there.
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“Biofuels is an incredible opportunity for Canada, for jobs in rural Canada, for increased farm income from the marketplace,” said To. “What we would like to see is a co-ordinated approach, much like the U.S.”
That would include rules to favour biofuel plants that are majority owned by producers.
It also would include subsidies and tax incentives to encourage investments in new ethanol and biodiesel plants.
But investment decisions are made in the U.S. now and if Canada does not have an attractive and supportive policy, American plants will be built near the 49th parallel and the Canadian opportunity will be lost because of the competition, they said.
Farmers will end up selling cheap grain feedstock to American plants and Canada could end up importing American ethanol to meet biofuel content requirements.
“I think we have an 18-month window at best,” To said. “Otherwise, investment decisions will be made that exclude Canada. That would be a significant opportunity lost.”
The expectation that Canadian company Iogen will build its first commercial plant in the U.S. after developing a process to make ethanol from cellulose was cited as an example of Canada’s problem.
Bjornson said creation of a biodiesel industry in Canada to help fulfil demand because of a government promise to require five percent biofuel content in all gasoline and diesel by 2010 would create a demand for surplus canola and boost prices.
He said matching one of the key U.S. incentives – aid to the companies that blend biofuel with regular gasoline – would cost up to $390 million in Canada.
An MP asked if Canada could afford such costs.
“If Canada waits too long, we won’t have to worry about that,” said Bjornson. “The investment will go elsewhere.”
At a May 18 news conference in Ottawa, federal agriculture minister Strahl said he recognizes the urgency.
