Should taxpayers keep subsidizing the ethanol industry?

Ontario taxpayers are handing tens of millions of dollars to ethanol producers annually, but with a lucrative provincial fund set to expire at the end of this year, the subsidy's future is in question.

Ontario's $520 million fund for ethanol producers expires next year

The GreenField Ethanol plant in Chatham. Premier Kathleen Wynne is non-committal about continuing to subsidize the ethanol industry. Ontario taxpayers have pumped $500 million into the industry over the past decade. (CBC)

Ontario taxpayers are handing tens of millions of dollars to ethanol producers annually, but with a lucrative provincial fund set to expire at the end of this year, it's unclear whether the subsidy will continue. 

Ethanol subsidies are in the news as the result of a CBC investigation. It found the biggest corporate donor to the Ontario Liberal Party is an ethanol company that has received more than $160 million from taxpayers since 2007. 

In total, ethanol producers have received nearly $500 million from provincial coffers since 2007, when then-premier Dalton McGuinty mandated five per cent ethanol content in gasoline and created the 10-year Ontario Ethanol Growth Fund to prop up producers.

Premier Kathleen Wynne supports what the fund achieved but is non-committal about continuing it. 

"It has jump-started an industry, supported agriculture in the province, but that fund will come to an end and I think we now have to look at other ways of supporting our green industries," Wynne said in response to questions from CBC News.  

Suncor Energy Products Inc. is the biggest recipient of Ontario taxpayer funding for ethanol firms, collecting $189.5 million from the province since 2007, according to data in the Public Accounts.

The funding helped build a "competitive and vibrant" ethanol industry in Ontario, said Andrea Kent, president of the Canadian Renewable Fuels Association, an industry lobby group. 

"It has been an unequivocal success," Kent said in an email to CBC News. But with the fund expiring, she said she is "not aware of any similar programs being considered at this time."

The federal government has also shelled out plenty of tax money to the ethanol industry and its fund is also about to expire. The $1.44-billion "ecoENERGY for Biofuels Program" wraps up in March 2017.  

Suncor, GreenField top subsidy list

The biggest recipient of Ontario taxpayer funding for ethanol firms is Suncor Energy Products Inc. Its ethanol plant near Sarnia is the largest in Canada. Suncor has received $189.5 million from the provincial government since 2007, according to data in the Public Accounts. 

The second-biggest recipient is GreenField Specialty Alcohols, a privately-held company headquartered in Toronto. Data compiled by CBC News show the company has received  $163.7 million from provincial taxpayers. 

Ethanol producers in Ontario have received nearly $500 million from provincial coffers since 2007. The Ontario Ethanol Growth Fund is due to expire at the end of this year. ((CBC))

"The ethanol industry is now a major driver of the economy of rural Ontario," said GreenField CEO Bob Gallant, in an email to CBC News. "The industry created thousands of good paying construction and related jobs during a multi-billion dollar capital expansion.  Today it directly and indirectly employs thousands of Ontarians." 

Research by CBC News uncovered that GreenField has donated more than $350,000 to the Ontario Liberals since Wynne became premier in 2013, making it the party's biggest corporate donor.    

PC leader Patrick Brown is personally opposed to government handouts to ethanol companies but his party doesn't have a firm stance on the issue. The three biggest ethanol plants in the province are in PC-held ridings

"My inclination would be to lean against those subsidies but I don't want to presume the process that our grassroots (party) policy process is going to take," Brown told CBC News in an interview.  


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