The Minister of Agriculture and Agri-Food

Speaking Notes for the Minister

Check Against Delivery

Minister Strahl announces cash for biofuels farming opportunities

Calgary, Alberta
July 17, 2006

Opening remarks

Thank you and good afternoon, ladies and gentlemen.

It's a pleasure to be part of this important discussion around the development and growth of a biofuel industry in Canada, and in particular, the bio-diesel side of that development.

I want to thank both the Canola Council and the Alberta Canola Producers Commission for all you do to advance the biofuels industry in Canada. There's no question that your leadership and vision are helping to chart a positive path forward for the sector.

I also want to commend both organizations for taking the initiative in bringing this forum together.

It is through networking and collaborative exercises such as this conference that we can best ensure that we are all on the same page and have the same vision for how to shape a strong future for biofuels in Canada.

Outline

This afternoon, I would like to focus briefly on three points:

1. The Government's commitment to renewable fuels;
2. Where we are at currently; and
3. Where we are heading.

Commitment to biofuels

This Government is very excited about the potential of biofuels in Canada: Biofuels provides an opportunity

to promote a cleaner and healthier environment;
to stabilize and diversify farm family incomes through new opportunities; and
to foster economic development and cooperation in rural and remote communities across Canada.

But we want to be sure that farmers and rural communities benefit from increased biofuels production, and have access to the expertise needed to come up with sound, viable business proposals that will be able to attract investment dollars and deliver returns.
To this end, I am pleased to announce today that the federal government is investing $11 million in programs that will help producers and rural communities benefit from the expanding biofuels industry.
The funding will be allocated through the regional industry councils that currently deliver the Advancing Canadian Agriculture and Agri-Food (ACAAF) Program in their respective provinces and territories.
$10 million will go to the Biofuels Opportunities for Producers Initiative, while the remaining $1 million will flow through the Co-operative Development Initiative.
These dollars are earmarked for this fiscal year and are part of our commitment in the budget of an additional $1.5 billion to the agriculture and agri-food sector.
This new investment will help farmers and rural communities hire technical, financial and business planning experts to assist in developing sound business proposals and feasibility studies to support biofuel production capacity, as well as helping with the start-up or expansion of co-operatives to get into biofuels.
As you know, the Government has committed to a five-per-cent average renewable content requirement in Canadian transportation fuel by 2010, which I believe is going to provide significant new opportunities for producers.
The investment I'm announcing today will help them develop those opportunities.
To meet the five-per-cent mandate with Canadian supplies, we would have to more than double current production to the range of 3 billion litres a year, which would require up to eight million tonnes of grains, oilseeds and biomass.
There's no question that reaching this goal will require a very significant increase in production.
To help get there, I am working with my colleagues at Environment and Natural Resources towards a national biofuels strategy which is expected to go to Cabinet in the fall.
This national strategy will need a strong agricultural component - meaning that producers will be able to participate in and benefit from the biofuels value chain.
We are constantly looking for ways to facilitate farmers to take an ownership stake in biofuels production facilities, as a way to improve income and encourage rural economic development. These facilities could be located in rural areas across Canada.
The $11-million investment I mentioned a few minutes ago will go some distance in helping achieve those objectives.

Where are we now

The Government of Canada, along with the provinces and industry, are working hard toward expanding the biofuels sector. In May, I, along with Ministers Ambrose and Lunn met with my provincial and territorial counterparts.
We came away from that meeting with strong buy-in on all sides to develop a national biofuels strategy - and also commitment to ensure that agriculture is a key player at the table.
Because fuel is a shared jurisdiction, the provinces and territories need to be on board every step of the way and much of our work will be focused on ensuring consensus on a common collective vision of the path forward.
As well as the provinces and territories, the Government is also consulting with industry and farm groups.
Last month, I hosted an agriculture roundtable with a number of important players, including the Canola Council.
I was pleased with the interesting ideas that came out of the meeting on how best to stimulate farmer involvement in biofuels production. There was general agreement that a key focus of the biofuels strategy should be on elements to encourage farmer and producer participation.

Looking ahead

So where to from here?
Over the summer, we three federal ministers are working with our provincial and territorial colleagues and consulting with our respective stakeholders to develop our contributions to a national renewable fuels strategy that will be coherent and compatible with everyone's jurisdiction.
The agricultural aspects of the issue were topics of considerable discussion last month when I met with my provincial and territorial colleagues at our annual meeting in Newfoundland.
The three federal Ministers and our provincial renewable fuel counterparts are planning to meet again later in the fall to review recommendations on elements of a national renewable fuel strategy.
Clearly, farmers, their families and rural communities can benefit from enhanced biofuels production in Canada.
The federal Government wants to ensure that farmers are ready to take advantage of the opportunities that will be created by our biofuels strategy by being able to develop the kind of sound, viable business proposals that can generate good returns to investors over time.
These initiatives will not only help provide new opportunities to farmers, they will also help lay the foundation for Canada's national Biofuels Strategy.
The bottom line is giving farmers and renewable fuels producers the chance to get into businesses that make sense for them and make a good return on investment in the long-term. It will also contribute to our energy security by developing new sources of supply.
So I am keen to hear your ideas about what we can do to make that happen.
Beyond meeting immediate capacity requirements, we also need to stress the role of science in moving beyond biofuels and finding new ways for the oilseeds sector, and agriculture as a whole, to participate in the new bioeconomy.
For instance, exploring the whole field of biorefining and making more efficient use of biomass feedstocks; and further down the road, developing oilseed crop varieties specifically for these new industrial applications, while ensuring that will not compromise the integrity of canola oil intended for food use. As I mentioned a moment ago, my Cabinet colleagues and I are working towards a national biofuels strategy expected to go to Cabinet this fall.
We see biofuels as a first step in the direction of extracting more products - and more valuable products - from agricultural biomass.

Closing

Whatever direction is taken, it is critical that solutions be market-based and that farmers and renewable fuels producers have an opportunity to develop sound business proposals and feasibility studies to support their involvement in biofuels production capacity.
Biofuels offer the opportunity to address climate and air quality concerns, to diversify and to build a positive, market-based industry that holds positive long-term benefits for Canada's rural communities.
To get there, all sides need to work together to build a competitive industry on a solid economic foundation that brings value to producers and everyone in the chain.
There's no doubt that this meeting is a concrete step in the right direction.
I look forward to continued collaboration with the Canadian oilseeds sector to develop a national biofuels strategy that will benefit farmers, producers and all Canadians.
So thank you again for all you do for the sector and all the best for the remainder of the conference