Oh, I'm sorry.
Third, why are we committed to success? Success can be defined in many ways. I feel that in the eyes of the local producers, taking the risk by being directly involved in a venture that makes a positive contribution to the area in the form of employment, taxes, community diversity, and related business activities is a success unto itself. Add to this the value-added component I addressed above, and that makes it more successful in their eyes.
When we take the current environmental concerns around greenhouse gases and global warming and the known negative effects of using fossil fuels into consideration, there is a strong desire to be involved in a project such as this. These are all factors that make us want to succeed.
At the risk of repeating myself, I think it's appropriate to reinforce the fact that this undertaking exemplifies the concept of value added.
The rural municipality of Bifrost and the town of Arborg are small communities in Manitoba. They're at the northern fringe of agriculture in central Manitoba in a region that is confined by two large bodies of water: Lake Winnipeg to the east and Lake Manitoba to the west. They are communities isolated from large centres, and therefore isolated from where the agricultural products of their farms are processed into what the consumer sees. So it can be safely stated that when a rare opportunity like producing biodiesel materializes, the community will embrace it.
This is indeed what has happened here. We have found a business that has a design capacity that ties directly into the feedstock availability of the immediate area and in turn produces a fuel that powers most types of agricultural equipment. It is a full-circle opportunity for the farming community, not only in Manitoba but in rural Canada.
Fourth is hurdles and challenges we have encountered. This statement is a bit misleading, in that it implies the past tense. We are still encountering hurdles and challenges.
The largest hurdle we are experiencing is financing. As mentioned earlier in this presentation, Bifrost Bio-Blends will be starting out small and will grow as the biodiesel market develops. This decision was made as the result of reluctance on the part of the financial community to underwrite a biodiesel venture. Our project was not the only one delayed and essentially hobbled because of this refusal to loan funds.
It is a new industry in Canada—not new around the world, but still new to Canada. Essentially, the success of such a venture is difficult to substantiate because it is so new to the financial arena. The reluctance is understandable but nonetheless difficult to accept.
It is at times like this that government has to be involved, government has to take a lead, government has to react quickly, especially when the government has made a commitment to greenhouse gas reduction. Our experience has not been with Agriculture Canada but with Natural Resources Canada because of the environmental connection. However, small-scale biodiesel ventures like ours also fall under agriculture. They likely fall under government umbrellas as well; Industry Canada is one that comes to mind.
While the federal government's intentions have been good, government has been slow to react to the needs of business development. I've mentioned that our biggest hurdle has been financing, and for expediency I will just list the other issues we face and suggest where government might play a supporting role.
We need some form of made-in-Canada protection for small agri-based industry. It's difficult to compete with the Archer Daniels Midlands of the world. It is discouraging to see Canadian canola leave Canada and come back as biodiesel. This is starting to happen and is happening at the expense of Canadians—and more specifically, of rural Canadians.
The discrepancy between the incentive programs in Canada and the U.S. is huge. As we speak, biodiesel plants are operating all over the U.S. Midwest, while Canadian ones remain on the drawing board. We have to react faster, and unfortunately, we need government assistance to do so.
Waiting until 2012 is waiting too long for a 2% biodiesel mandate. With the right support from government, we think this goal could be met sooner. To encourage the use of biodiesel in the agricultural sector, the elimination of the 4% federal tax on renewable fuels would be beneficial.
Product distribution and integration into the existing commercial fuel supply are going to be issues. The petroleum industry is viewing renewable fuels as direct competition to its industry. To overcome this, government policy has to come into play, especially for a government that is supportive of greenhouse gas reduction. Education programs promoting the benefits of biodiesel to the general public are needed.
Support from government by using renewable fuels in federal fleets would go a long way to developing a market. While we think we understand the constraints in which government must operate, we likely do not realize the full extent of these, so no comments will be made in this regard at this time.
As a last statement, I would strongly suggest that how policy is initiated and administered must be re-examined to facilitate a faster response to the needs of rural initiatives. We feel one response is to be informed and therefore aware of the programs already in place. We can't blame government for that. It is largely our own responsibility to seek them out. But there must be a better way of ensuring that qualifying parties are informed. In our case, the ACAAF program comes to mind—MCAP, I believe it's called, in Manitoba.
In closing, I would like to state the obvious about our project. It has terrific environmental benefits, in that it will produce a product that is both renewable and green. With the focus on the global impact of fossil fuels, locally grown canola provides a feedstock to produce an attractive alternative. The process of making biodiesel is, in itself, green. The process does not pollute the environment. Air and water emissions don't exist and the small quantity of solids generated is totally biodegradable and will be used as a fertilizer.
Opportunities such as the one we're seeing in biodiesel don't happen often. The time we have to react is short. Endorsing and encouraging small-scale agri-based industry in rural Canada will have a positive impact on the local economy through employment and the related spinoffs that a viable business has in the community. We need policies in place to provide timely support to opportunities when they present themselves.
On behalf of our group, I would like to thank you for this opportunity to express our thoughts.