I am no expert, but I do know that there is a lot going in that field, although not necessarily in Canada.
In terms of biofuel research, I believe Nova Scotia is doing work on algae, in partnership with the National Research Council of Canada.
With respect to land biofuels, the Camelina sativa and Brassica carinata plants have been used to produce a biofuel that Porter used for a Dash 8 flight. The mixture was a blend of 49% of the first plant biofuel, 1% of the second plant biofuel and 50% regular gas. Research is being done in that area, because these plants can be grown here. The goal is to engineer varieties that can grow in the Canadian climate, similar to what has already been done with wheat varieties. The idea is to come up with plant varieties that could stand up to the climate and parasites and that could be grown on land not currently being used for food production.
Keep in mind that producing biofuels must not mean that you are taking food away from people or cattle. The objective is to produce varieties that could be grown on land that does not serve those purposes. The same goes for algae, which does not require land. It is renewable and efficient. Research in that area is happening in Canada.