Mr. Speaker, in response to (a), the federal government has been developing an integrated federal renewable fuels strategy with four key elements: a regulation to establish demand; programs to support farmer participation in the industry; a production incentive to stimulate domestic production; and programs for next generation technologies.
Last December, the first two elements of the strategy were announced. First, to stimulate demand the government intends to regulate an annual average renewable content of 5% in gasoline by 2010 and intends to regulate a 2% requirement for renewable content in diesel fuel and heating oil by 2012. The intent to regulate was gazetted December 31, 2006, while discussions, consultations for this regulation and studies will continue to be undertaken throughout 2007.
Second, the government announced that $200 million will be delivered to assist farmers and rural communities seize new market opportunities in the biofuels sector. The $200 million will fund the ecoagriculture biofuels capital initiative, ecoABC, which will help bolster the development of biofuels with farmer participation. EcoABC is a federal four year initiative to provide repayable contributions of up to $25 million per project to help farmers overcome the challenges of raising the capital necessary for the construction or expansion of biofuel production facilities. Program details for ecoABC were announced April 23, 2007.
The government also recently announced an additional $10 million for the biofuels opportunities for producers initiative, BOPI, which helps agricultural producers develop sound business plans, as well as undertake feasibility studies or other studies to support the creation and expansion of the biofuels production capacity. Total funding for this program is now $20 million.
The final two elements of the strategy were announced in budget 2007. First, up to $1.5 billion over seven years will be allocated towards operating incentives for producers of renewable fuels. Incentive rates will be up to $0.10 per litre for ethanol and up to $0.20 per litre for biodiesel for the first three years, then decline thereafter. This program will ensure that Canada’s renewable fuels industry remains competitive, and is well placed to meet the intended regulatory requirements.
Budget 2007 also makes $500 million over eight years available to Sustainable Development Technology Canada, SDTC, to invest with the private sector in establishing large-scale demonstration facilities for the production of next generation renewable fuels. These new technologies, such as cellulosic ethanol, will allow renewable fuels to be produced from a diverse range of feedstocks in which Canada has a biomass advantage, including municipal waste, and agricultural and wood residues. The use of these feedstocks has the potential to substantially improve the environmental benefits of renewable fuels.
In response to (b), Agriculture and Agri-Food Canada, AAFC, has overall responsibility for the renewable fuels strategy with Environment Canada, EC, and Natural Resources Canada, NRCan, responsible for contributing key strategy measures.
Environment Canada is the lead department responsible for creating domestic demand through the ethanol and biodiesel mandates.
AAFC is responsible for ecoABC and BOPI, the measures that provide opportunities for farmer participation.
NRCan is the lead department responsible for the production incentive, which is designed to encourage renewable fuels production to meet regulated demand.
NRCan, in collaboration with EC, is responsible for the development of next generation renewable fuels through the funding relationship with SDTC.
In response to (c), the government is providing opportunities for farmers to participate in the renewable fuels industry through the BOPI and ecoABC programs. EcoABC provides capital funding assistance for projects with a cumulative farmer participation rate of 5% or more, so farmers with smaller amounts to invest can work together with larger investors to trigger assistance under ecoABC.
In response to (d), all government programs have service standards in terms of being responsive to clients. However, one of the major challenges facing program administrators is receiving the necessary information from project proponents. Every effort is made to make applicants aware of these information requirements as there is a need to have adequate information to make informed program decisions using taxpayer funds.