Thank you very much, Mr. Chair, and good evening.
On behalf of the Canadian Renewable Fuels Association, I want to thank you for the opportunity to speak to you here today.
CRFA member and supporting organizations provide Canadians with renewable, clean-burning ethanol and biodiesel fuels that help fight climate change and combat pollution, like smog. At the same time, our members provide the platform to develop the next generation of biofuels. With the committee's questions in mind, I would like to move directly to our recommendations.
Given the current climate of fiscal restraint, the CRFA understands that it has become increasingly vital to ensure existing economic programs continue to be efficient and are achieving their desired goals for economic growth and job creation. Over the past decade, government programs and grants supporting renewable fuels production have created some 14,000 full-time jobs and billions of dollars in economic activity.
The ecoEnergy for biofuels program, which has been a central element of this government's renewable fuels strategy, is one that I would like to highlight. Encouragingly, this program has been shown to be highly effective at generating industrial expansion and job creation in Canada's ethanol industry. However, in terms of renewable diesel, there is more work to be done. To this end, we believe modest changes to the program are necessary to ensure that the objective of building out 600 million litres of biodiesel production can be met.
Specifically, the CRFA recommends that the government reopen the ecoEnergy for biofuels program for renewable diesel fund to new project applications, and require existing program projects that were not substantially completed by September 30—the cut-off date—to reapply. As detailed in our submission, we would also like to see attached conditions to new applications to demonstrate their viability.
I want to be clear that our recommendations are in no way intended to detract from the tremendous help the government's ecoEnergy program has been in creating a vibrant and competitive biofuels production industry in Canada. However, the unfortunate reality is that the contribution agreement period for biodiesel has lapsed and only one new biodiesel plant has been constructed as a result of the program.
I think it's important to emphasize that these modest adjustments would require no new federal dollars. We believe that the funds committed in previous budgets can be directed to shovel-ready projects that are prepared to move forward in Canada today. Doing so could generate more than 1,350 direct and indirect jobs and could contribute almost 400 million additional litres of new production capacity in the Canadian market by the end of 2014.
Expanding Canada's biofuels industry creates jobs and environmental benefits that all Canadians can profit from. This is why the government must continue to ensure that the right conditions are in place to drive innovation and attract job-creating investment dollars to Canada. We have seen the success of an operating incentive as part of an integrated strategy aimed at stimulating the creation of ethanol plants and believe that the same support for next-generation ethanol projects would provide the security needed to attract private capital investment during the critical commercialization phase.
For this reason, CRFA proposes an operating incentive of 15¢ per litre for next-generation ethanol projects that can be funded directly by using the unused ethanol money remaining as part of the ecoEnergy for biofuel program, which we estimate to be at approximately $50 million. Here we are asking for previously allocated funds for ethanol to be redirected to benefit next-generation ethanol producers.
Another area of vital interest to our industry is Sustainable Development Technology Canada. Our members have relied heavily on programs like the SDTC NextGen Biofuels Fund. While there is no doubt that the global recession has slowed the development of some exciting technologies, there continues to be considerable advancement by the Canadian renewable fuels industry. It is our understanding that over 60% of the $500 million allocated in the NextGen Biofuels Fund is already committed and that many project announcements are imminent.
Moreover, by the end of this year, we understand that the fund will be almost 80% committed. Knowing that the program was originally designed to run until 2015 and pay out beyond 2017, I would posit that we are on the right track. Not everyone shares that view, however. Despite planned investments and commitments from the SDTC board, some stakeholders from other sectors have asked the government and this committee to recommend reprofiling the program fund sector into other areas outside the renewable fuels sector. Regardless of what others may suggest to you, those funds are not idle. The CRFA believes it would be a mistake to reposition these already committed funds at this critical time and that doing so would send a very negative message to innovators, private investors, and Canadian clean-tech entrepreneurs. We recommend that the fund and the qualification for applicants be preserved as is.
I sincerely appreciate this opportunity to speak to you on behalf of the Canadian renewable fuels industry, and I'll be happy to answer any questions you may have.
Thank you.