In virtually every opinion poll taken across Canada, environmental issues rate high on the public radar screen, just behind health care and education as key issues of concern. It’s little wonder, then, that government policy reflects this reality, with everything from Canada’s Agricultural Policy Framework to Ontario’s new Nutrient Management Act emphasizing the need for our agriculture industry to embrace environmental responsibility.

And as an industry, we’ve long done so, incorporating an array of production practices geared towards protecting the environment. And increasingly, agriculture also provides answers to environmental challenges, by providing the source of renewable, biobased feedstocks that offer an environmentally friendly alternative to fossil fuel use.

Plant-based fuel ethanol is a primary example – processed from grain (primarily corn) and other agricultural feedstocks and blended with gasoline, this renewable fuel reduces greenhouse gas emissions, thereby improving air quality. In Ontario, which experienced a record number of ‘smog advisory’ days this past summer, interest in ethanol continues to rise.

Political momentum at both the federal and provincial levels is building towards the establishment of a renewable fuels mandate; at the same time, public commentary questioning the environmental and social benefits of ethanol is increasing as well.

First, the government side. As we reported in the last issue of Ontario Corn Producer, the Province of Ontario Select Committee on Alternative Fuel Sources released their final report this past June. It included 141 recommendations to “support the development and application of environmentally sustainable alternatives to our existing fossil [carbon-based] fuel sources,” including assessing the potential to expand ethanol and biodiesel production capacity in Ontario and establishing a low-level ethanol content requirement in Ontario gasoline. The provincial government has now officially accepted that report and committed to assuming a leadership role on alternative fuels use, which includes producing a progress report on these initiatives by the end of the calendar year.

The provincial Liberal party has also announced as part of their party platform a ‘Clean Air Plan’ which would include a requirement for all gasoline sold in Ontario to contain at least 5 per cent ethanol by 2007, rising to 10 per cent by 2010.

Although federal government plans in this area have yet to be announced, studies are underway to explore the environmental, economic and social benefits of adding incremental amounts of ethanol, and it is expected that a renewable fuels mandate will not be far behind. Prime Minister Chrétien’s commitment to ratification of the Kyoto Accord makes such a mandate even more likely, as a result of its potential for helping Canada to meet its commitments under that agreement.

But as these plans converge, making a firm commitment to renewable fuel sources such as ethanol almost inevitable, the anti-ethanol voices grow louder. Disparate media sources – from the regional farm press to national newspapers – are playing out the issue in a public debate.

As an association, OCPA has long supported the increased production and use of corn ethanol. As well as increasing markets for corn, it provides significant social, economic and environmental benefits. A more detailed discussion of those benefits is provided elsewhere in this issue.

As members of the Canadian Renewable Fuels Association, we also support a Renewable Fuels mandate.
But proactive measures are needed in order to ensure that we derive the maximum potential benefits from such a mandate. Currently, Canada produces approximately 240 million litres of ethanol annually, 175 million from corn at two Ontario plants. Another 100 million litres of ethanol is imported each year. A mandate that would increase the demand for ethanol, without the capability to build our production capacity in order to meet that demand, just isn’t enough. Although the outlook for expansion of ethanol manufacturing capacity in Ontario seems very positive, production incentives to encourage the establishment of Ontario plants are essential to capture the added benefits of substantial rural economic development and sustainability.

Such proactivity is evident in other jurisdictions, such as the state of Michigan, which has established an Agricultural Processing Renaissance program - a partnership between the Michigan state government and local municipalities that offers exemptions of state and municipal taxes for extended periods for processors of agricultural products in designated areas. The goal? To stimulate economic development in geographic areas where development has been stagnant.

Elsewhere in Canada, Saskatchewan passed new ethanol laws this past July, providing grants to offset fuel taxes on ethanol produced and used in the province. An agreement has now been reached for the construction of three new plants in the province.

It is time for Ontario to seize the opportunity to capitalize on its natural advantages as a site for ethanol production – the availability of feedstock, close proximity to major markets and market demand for both ethanol and its co-products – and embrace a leadership role on alternative fuel production and use.