Thank you very much, Mr. Chair and members of the committee, and our apologies. Gord Quaiattini, the president of the Canadian Renewable Fuels Association, came down with the flu last night, so I'm here, and happy to be here.
Thanks very much for inviting the Canadian Renewable Fuels Association to be part of this hearing. We welcome the chance to be here and tell the story of the Canadian biofuels sector, which includes, of course, ethanol, biodiesel, cellulosic ethanol, and large, advanced biofuels.
The story is one of new jobs, economic growth, energy diversity, environmental benefits, and rural opportunity, and it's a story that continues to be written each and every day. With the recent announcement of the regulations that put the renewable fuels standard into effect, there could hardly be a better time to share with you the remarkable contribution our industry has made and to help chart the still greater opportunities that lie ahead.
All this is possible thanks to a successful partnership between the government and the industry. Parliament has led and ethanol and biodiesel in Canada have delivered.
I want to acknowledge the strong support our industry has received from the federal government and from this Parliament. That began more than a decade ago with the ethanol expansion program and continues to this day with smart new policies that create the conditions for commercial success. I would encourage you to regard the renewable fuels standard, coupled with the ecoENERGY program, as levers that help open market access and deliver private sector financing for the commercialization of new plants. These tools have worked and they continue to work.
Today, there are 14 ethanol plants and eight biodiesel plants in operation across Canada. A further two ethanol plants and three additional biodiesel facilities are currently under construction. Collectively, these refineries represent a total annual production capacity of 1.95 billion litres—just under two billion litres of renewable fuels—and provide employment to thousands of Canadians, most of them in rural communities.
Indeed, if there were a single phrase that best describes Canada's renewable fuel sector, it would be “delivering results”. These are results that have generated a positive return on investment, have helped advance the priorities of this government and this Parliament, and have directly benefit Canada and Canadians.
Allow me to begin by talking about jobs and growth, particularly in the context of a still recovering world economy, probably one of the most vital priorities of all. The biofuels industry has already become a valued engine of economic opportunity, particularly for rural Canada, where our plants are usually built to ensure proximity to feedstocks.
The benefits could not be more clear: the creation of new employment from facility construction through to operations, indirect employment and economic spinoff benefits, a broadened tax base for local and regional governments, and higher incomes and earnings for farmers.
In March of this year, Ottawa-based Doyletech Corporation did an independent survey, the first of its kind, dedicated to measuring the economic impact of Canada's biofuel sector. It detailed the following: 12,616 new direct and indirect jobs have been created since 2006 to support the construction of new production facilities, and each year, as many as 1,400 new jobs are created to support ongoing operations. In economic activity from plant construction, $2.8 billion has been generated, and approximately $700 million in economic activity is generated annually from ongoing operations of these same facilities. Nearly all of this is in rural Canada.
With regard to tax revenues, combining both construction and operating phases, the biofuels sector helps to widen the tax base and pay for valuable services at local, provincial, and federal levels. This has represented more than $82 million for municipal governments, more than $500 million for provincial governments, and nearly $700 million in tax revenue at the federal level.
These aren't projections or estimates. These are real facilities built with bricks and mortar, creating real jobs, generating real economic activity, and drawing in real tax revenues.
We now turn to the environmental benefits. As you know, the transportation sector accounts for a little more than 25% of Canada's overall GHG emissions. As a consequence, there are few more effective ways to shrink our carbon footprint than to reduce our reliance on fossil fuels. That's precisely what renewable fuels do.
Here are a few key facts. The federal renewable fuel standard alone will cut carbon emissions by 4.2 megatons, the equivalent of removing a million cars from our nation's highways each and every year. The IEA reported in late 2009 that by 2015, grain-based ethanol will have increased its GHG reductions compared to those for gasoline by 55%.
Ethanol helps to reduce tailpipe and toxic emissions as well.
Finally, according to Natural Resources Canada, ethanol production uses as much as 40% less energy than does the equivalent fossil fuel production, a figure that goes to 90% when we talk about cellulosic technologies.
Notwithstanding these facts, we know that some continue to question the net environmental benefits of renewable fuels. Skepticism, in some cases advanced by interests that see our industry as a threat to theirs, has been in large supply. So I'd like to try to set the record straight.
Just last November, the most comprehensive and thorough report yet examined the environmental benefits of Canadian renewable fuels. Conducted by Cheminfo Services Inc., the study came to some definitive conclusions. It found that Canadian-produced ethanol, and I'm speaking here of first-generation ethanol using corn and wheat as feedstocks, reduced GHG emissions at a rate of 63% compared to traditional fossil fuels. For Canadian biodiesel, using animal fats and waste grease as feedstocks, the results were even more impressive. Greenhouse gas emissions fell by a rate of 99% compared to gasoline. These are the facts. They're contemporary, they're clear, and they are the consequence of independent expert analysis. To those who suggest otherwise, I would ask that they table their studies that assess actual Canadian facilities of their plants and submit their methodology to independent assessment. When it falls to making policy decisions, they should be based on the same intellectual rigour as renewable fuels.
In summary, whether we're talking about jobs, economic growth, GHG reductions, energy balance, or creating new opportunities in rural Canada, the conclusion is indisputable. The partnership between government and industry is delivering results and achieving tangible benefits.
In conclusion, allow me to make one final point. I've been talking deliberately and have placed the emphasis on the story to date on the results we have created and are delivering now. But there is an even more compelling story to be told: the story of where we are headed and of the commercialization of so-called advanced biofuels. While sometimes struggling to keep pace with massive investments the U.S. federal government is undertaking, Canada is nevertheless ideally positioned to seize the role of leadership. Provided we maintain our focus and extend our partnership, Canada can compete and win in this increasingly important international sector. New renewable fuels that build on first-generation know-how to create even greater gains in environmental technology and economic terms are being developed as we speak. Demonstration plants are up and running, using waste wood in Quebec and British Columbia, discarded corn cobs, and other agricultural residue in Ontario. The technology works. The opportunity is proven.