Sat Feb 23, 2013 11:40am EST
* Ottawa seeking to cut deficit
* Suncor, Husky, Maple Leaf Foods received funds
Feb 23 (Reuters) - The Canadian government plans to end its subsidy for production of biofuels when its current program ends in 2017, a newspaper reported on Saturday.
The Globe and Mail quoted a letter from Natural Resources Minister Joe Oliver to the biofuels industry on Thursday explaining that Ottawa needed to cut spending to tame its deficit.
Oliver said that the ethanol industry now produces the necessary volume of renewable fuel for Canada to meet its target of 5 percent ethanol in the country's gasoline supply, the newspaper reported.
But the minister also noted that the Canadian biodiesel industry had been unable to produce enough of that fuel, forcing some refiners to import to meet a 2 percent biodiesel target.
The production of fuel from feed stocks such as corn, wheat, canola and animal fat has been lauded as a way for Canada to reduce greenhouse gas emissions.
However, ethanol and biodiesel fuel producers have required government subsidies and some critics complain that demand for fuel production has driven up the price of grain.
The government's ecoENERGY for Biofuels program was originally to have spent C$1.5 billion ($1.47 billion) supporting the industry between 2008 and 2017. It has actually committed only C$1 billion and stopped taking new applications for support in 2010, the newspaper said.
Ottawa plans to keep its existing commitments but wind down the program in 2017, the paper said.
Yet another country begins cutting the corruption with bio-fuels. China has already set date certain ending all ethanol production from food. Europe slapped on tariffs. They cannot afford to be paying more than $4.50 per gge when they could import our gasoline under $3gge. Now Canada is limiting and moving to end all supports.
Exactly what America should be doing. Allow conversion of natural gas to compete on the ethanol mandates which would give the American stills time to wind down or finding something productive rather than destructive to produce.
Could it be that canada has so much tar oil that they don't need it anymore. As with us having so much nat gas. Remember they are losing money on their oil becuase they have so much of the tar sand oil.