MARKETING SKILLS ARE REQUIRED TO BE COMPETITIVE
by David Morris
David
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The environment has become a key priority for Canadians and the world has made leaps and bounds in science and technology. These factors are combining to create a business environment where green truly is the color of money.
Ethanol production is a great example of this changing reality. It combines solid economic growth in rural communities in Canada with environmental gains for the entire country.
It's for this reason that the Government of Canada recently invested close to $80 million to help fuel a five-fold increase in Canada's ethanol production.
This money - which I announced in mid-February with my colleague, the Honourable R. John Efford, Minister of Natural Resources Canada - will create new opportunities for Canada's farmers and offer a big boost to the rural economy. The funds come from the federal Ethanol Expansion Program and will help seven companies construct new facilities in five provinces.
A total of 17 companies applied for round one funding and winners were selected through a competitive process. This strong industry response is encouraging and I would urge any organizations not successful the first time around to continue to strengthen their business plans and apply for round two, which will be held later this year.
This second wave of projects will help us build on already significant gains. Canada's ethanol production is currently about 200 million litres per year and will increase to almost a billion litres as a direct result of the round one projects.
Ethanol is an emerging industry and this increase in capacity will go a long way towards establishing a foothold for this fuel in the Canadian marketplace. This is good news for the environment as gasolines blended with ethanol can reduce greenhouse gas emissions by four to five per cent.
This initiative will help Canada address climate change and meet its commitments under the Kyoto agreement. Canada's target is to have 35 percent of Canadian gasoline contain 10-per cent ethanol by 2010. This would be the equivalent gain of taking 400,000 vehicles off the road.
Expansion in ethanol production is also good news for rural Canada. Growth in the ethanol industry will create new markets for farmers and create regional development opportunities. Ethanol is typically made from starch contained in agricultural crops such as corn, wheat and barley. Research is also progressing on technology that allows ethanol to be produced from agricultural residues like straw and corn stalks.
The increased ethanol production fueled by this new program will require close to two million tonnes of corn and grain. In some cases, farmers will enter directly into supply contracts with the ethanol production plants, which means investment in local communities.
Increased ethanol production will create 700,000 tonnes of high-protein animal feed (dried distiller's grains) as a byproduct - a definite bonus for agricultural producers.
This economic gain for rural Canada is coupled with job creation and regional development. Each new plant will create 40 to 50 new long-term jobs on top of the benefits created during construction, which is estimated at $500 million for the seven projects combined.
The Ethanol Expansion Program is just one component of the Government of Canada's strategy for development of the bio-fuels industry. This strategy also includes the extension of the National Biomass Ethanol Program, research and development under the biotechnology component of the Technology and Innovation Strategy, and an investment in biodiesel.
The Government of Canada is also promoting greater use of ethanol through consumer awareness campaigns and ongoing education initiatives. There are currently more than 1,000 retail locations selling ethanol-blended gasoline in Canada.
All of the actions listed above are combining to create an exciting new direction for the farm sector and the rural economy and at the same time are helping Canada carry out its climate change strategy. Being able to address these key priorities simultaneously is truly a win-win situation for Canadians.
Companies that will receive round one funding under the Ethanol Expansion Program include: Commercial Alcohols, Inc., Varennes, QC; Husky Oil Marketing Company, Minnedosa, MB; Husky Oil Operations Ltd., Eloydminster, SK; NorAmera BioEnergy Corp., Weyburn, SK; Okanagan Biofuels Inc., Kelowna, BC; Seaway Grain Processors, Inc., Cornwall, ON; and Suncor Energy Products Inc., Sarnia, ON.
The Government of Canada will sign contribution agreements with these successful companies in the coming weeks. Some are expected to begin construction in the spring, with operational facilities completed 12-18 months later.
If you have any comments about this
column, please don't hesitate to contact me at:
http://www.agr.gc.ca/contacts/emailmine.phtml.
Or you can write to me at:
The Honourable Bob Speller, P.C., M.P.
Agriculture and Agri-Food Canada
Sir John Carling Building 930 Carling Avenue
Ottawa, Ontario, K1A OC5