Feds Cancel E.A. at Plant Facing Provincial Charges

[robert_viera]

Ontario was a net importer of grains even before the advent of biofuels.

Interesting list, Robert.

I see $8M spent in Sask, $19.9M in Alberta, and $445M in Ontario, the net importer. (Nearly $200M on Greenfields alone.)

You'd think that if enhanced grain markets was the reason for the projects, more than a very short tenth of the money might be spent where grain is available....

The towns and cities that were listed are not necessarily where the plants are actually located. The biggest subsidy listed for Greenfield Ethanol is for their plant in Varennes, Quebec. The Permolex plant is actually in Red Deer, Alberta, not Oakville, Ontario. The Rothsay biodiesel plant is in Montreal, Quebec, not Guelph, Ontario.

So it's actually $301.9M in Ontario, $120.4M in Quebec, $43.1M in Alberta, and $8.4M in Saskatchewan.

There are more plants (many of which are in western Canada) that have signed contribution agreements with Natural Resources Canada under this subsidy program, a list of which you can see here:

http://oee.nrcan.gc.ca/transportation/ecoe...nts.cfm?attr=16

Hopefully these will show up on the public disclosure section of Natural Resources Canada's web site in the future, but I'm doubtful now seeing how the 2008-2009 third quarter recipients of this subsidy seem to have disappeared from that web site.

Edited March 28, 2009 by robert_viera

[Progressive Tory]

So when you hear people scaremongering about dire consequences to "the economy", just remember that as long as humans have problems to solve, and needs and wants to be met, there will continue to be jobs, though you may get a different boss now and then.

Biofuels will not help our economy because they are not sustainable. They will only fatten the wallets of those who already have trouble keeping their pants up; raise the price of food and accelerate global warming.

[robert_viera]

There's another federal government program which subsidizes the construction or expansion of biofuel plants. It's called the ecoAgriculture Biofuels Capital (ecoABC) Initiative. It's a $186-million program, but apparently only 18.6% of that has been allocated:

Integrated Grain Processors Co-Operative Inc., Aylmer, Ontario: $3,904,712

North West Terminal Ltd., Unity, Saskatchewan: $5,050,000

Suncor Energy Products Inc., Mooretown, Ontario: $25,000,000

Western Biodiesel Inc., Aldersyde, Alberta: $638,559

Source: http://www4.agr.gc.ca/AAFC-AAC/display-aff...68〈=eng

Note that Suncor has delayed the expansion of it's plant from 2009 to 2011.

Unlike the ecoENERGY for Biofuels program, contributions in the ecoABC program must be repayed, but only if the plant is making more than $0.20/litre.

[blueblood]

You can call it BS because the thought of running cars on corn makes you feel all warm and fuzzy, but it is not a solution. Most environmentalists state that we are at least 10-15 years away from making the industry viable.

Only very large corporate farms will benefit and taxpayers will 'subsidize' the industry. For consumers, we will simply pay more for food and suffer with the effects of accelerated global warming. It's a lose, lose. But then if it makes a pile of money for Conservative financial supporters, like the lobbying group Canadian Renewable Energy, what the heck, right?

If you really want to help farmers, let them grow pot.

You don't know your head from your ass concerning economics and you don't know your head from your ass concerning the ag industry. Those who don't know best be quiet.

If prairie farms converted to pot, the price of pot would crash due to overproduction. There isn't enough pot smokers in the world to be able to smoke the potential amount of pot you want produced. There is also no demand for hemp products as well to justify production.

My job is to make money, not give city people free food out of the goodness of my heart. That policy has been tried and has failed horribly. Ethanol provides a value added industry. Canada is also a top 5 grain exporter world wide, that means when our products are more valuable, that helps the economy, just like oil and gas. Not only does higher grain prices mean more dollars floating around our economy, the companies that are related to agriculture are more valuable to their shareholders. This also provides a bigger tax base for whatever policy the gov't wants to go through. Having a large pile of grain resulting in price crashes like the late 90's is unsustainable agriculture.

Lets talk about environmental benefits. We can write of production as almost all of the land used for ag production was being used anyway to overproduce food. All that's changed is the customer, for all intents and purposes we can write that part off. Then there is the positive energy balance of ethanol, this has been proven time and again at universities, it is not much of a positive, but it is positive nonetheless. Accelerated global warming from the ethanol industry is tinfoil hatism.

All farms big or small will benefit. They are taxpayers as well and if they want to see their tax dollars fund these massive projects, that's their right. But according to you, the ag industry isn't allowed to have a say in where their tax dollars grow. We aren't your peasants who provide you with food, we are businessmen and our job is to make money. If lighting our grain on fire fits the bill, then flame on.

[blueblood]

There are better ways to help the Ontario corn grower than the global warming accelerant ethanol.

This ought to be rich.

The US has implemented an ethanol policy to help meet its growing energy demand, worldwide energy demand is slated to skyrocket. In the early stages of biofuels, grain prices have taken a permanent paradigm shift upwards. That has helped more than any gov't program, and in fact the increased revenues have more than paid for the gov't investment in the biofuel industry. There is no gov't program that can match that kind of effectiveness.

Please tell me a better one.

[Molly]

US import regulations give them an enhanced impact.

I have to take issue with your claim to 'give city people free food'.

You produce for a primarily export market (so Canadian city people aren't eating much, if any, of what you produce.) and you get a world price-- which a free marketer has to admit, is exactly what it's worth. You aren't 'giving' anyone, anything.

[blueblood]

US import regulations give them an enhanced impact.

I have to take issue with your claim to 'give city people free food'.

You produce for a primarily export market (so Canadian city people aren't eating much, if any, of what you produce.) and you get a world price-- which a free marketer has to admit, is exactly what it's worth. You aren't 'giving' anyone, anything.

Ah but previous policy was centred to overproduction. For what it was worth, it was essentially giving it away. The dairy industry however is the exact opposite.

For all intents and purposes I was essentially giving my product away. Grain supplies were burdonsome, hence the extremely low prices. That however has now changed. Yes prices are significantly lower than they were a year ago, but that is because of the credit crisis. Prices were even lower than that in the boom times due to extreme over supply.

[Molly]

Forgive a really cynical comment/question/observation from someone who's been there:

If it was so very bad, why did a good businessman such as yourself keep doing it?

Speaking as someone who has been there, some of the ag world rhetoric is out of line. You/we expect a completely businesslike approach to other industries (even other ag industries, like dairy), but apply a double standard when it comes to (y)ourselves.

If ag commodity prices are bad, then why should the rest of us penalize ourselves to the tune of a couple of billion $, just to push up the price that you will charge us? If there's no shortage, why should we be willing to pay as though supplies were stretched?

If someone from any other industry tried to feed you the lines you feed us (like that one) you'd be the first to call bs.

When things started to collapse around here, yours was one of the voices suggesting that folks from Ontario should quit making cars that no one wants, come to Alberta and work in the oilpatch. Well, when grain prices were in the toilet, you should have come to Ontario to make cars, instead of giving away your grain.

[blueblood]

Forgive a really cynical comment/question/observation from someone who's been there:

If it was so very bad, why did a good businessman such as yourself keep doing it?

It would cost more to shut down. A person could still pay for their operating costs, however fixed costs are another issue.

Speaking as someone who has been there, some of the ag world rhetoric is out of line. You/we expect a completely businesslike approach to other industries (even other ag industries, like dairy), but apply a double standard when it comes to (y)ourselves.

The deal is we all pay taxes, and the ag sector does pay a lot of taxes and therefore has a say in where it wants its piece of the pie. The fed gov't also believes it to be an important enough sector to have a minister responsible for it. The debate is how do we make for a successful industry, do we do things like we do in the 90's and beg for a lump some and have it scattered and rely on fed gov't to survive, or do we do like the Albertans and invest in improve our sector as they have done with oil and gas. It's a very heated debate in the ag industry. There's the Quebec way which is low production and throwing piles of gov't money at it, or there is the Western way which is investing in value added industries with less money than the Quebec way.

If ag commodity prices are bad, then why should the rest of us penalize ourselves to the tune of a couple of billion $, just to push up the price that you will charge us? If there's no shortage, why should we be willing to pay as though supplies were stretched?

You keep forgetting that the ag sector contributes a lot of tax dollars to the system, we just want our tax dollars to go to improving the system. Remember those giant ag biz corporations are kicking in their share of tax dollars as well. Then there are the benefits of the ethanol sector, more jobs, and with higher prices means farmers are contributing to the economy by buying more, and paying more tax. Same goes with ag business companies. Remember, most of our product is exported so higher prices are better for our economy, with the advent of ethanol there wasn't a peep out of farmers about high diesel fuel prices as we knew that higher diesel is better for us. The TSX likes high commodity prices, and a large amount of people have their retirement funds tied up in commodities as the TSX is heavily reliant on commodities.

The same thing applies for Alberta, the more oil and gas went up, the better off they were. You seem to be forgetting the positive effects of inflation.

If someone from any other industry tried to feed you the lines you feed us (like that one) you'd be the first to call bs.

I'm supportive of the oil and gas sector, our country is a richer place because of it. If there was a way to find another market for our auto sector that would make our auto exports more valuable then I'd be all for helping them out, however they are dinosaurs and nobody wants what they produce. People on the other hand want energy.

When things started to collapse around here, yours was one of the voices suggesting that folks from Ontario should quit making cars that no one wants, come to Alberta and work in the oilpatch. Well, when grain prices were in the toilet, you should have come to Ontario to make cars, instead of giving away your grain.

And that's why I drive truck in the winter sometimes, and do contract farming for my neighbours in the summer. And in those days cattle prices were attractive. Little side projects to earn some extra cash. It's called diversifying your income, and ethanol is another (much bigger) way of doing that. Pretty soon with ethanol I might not have to do work off the farm or put extra hours on my machinery.

[Smallc]

Now if you would only take that logic and apply it to the manufacturing sector, you wouldn't seem like such a hypocrite.

[blueblood]

Now if you would only take that logic and apply it to the manufacturing sector, you wouldn't seem like such a hypocrite.

The manufacturing sector makes luxury goods that just aren't in demand. Either they make something people want or shut down. People want my products, not chrysler's. People want oil and gas, the Alberta gov't and presently the SK gov't are facilitating in that.

[Smallc]

People want my products, not chrysler's.

You think that everything manufacturers make is some type of luxury good? Really? Regarding Chrysler, check the Canadian sales charts and get back to me on that one.

Oh, and if people want ethanol so much, why should it have to be subsidized?

Edited March 28, 2009 by Smallc

[blueblood]

You think that everything manufacturers make is some type of luxury good? Really? Regarding Chrysler, check the Canadian sales charts and get back to me on that one.

Oh, and if people want ethanol so much, why should it have to be subsidized?

Car makers around the world are taking a haircut. People don't need cars. Energy and food are higher up on the totem pole as far as importance goes.

Oil and gas are wanted a lot and they're subsidized. Take it up with them. That oil and gas subsidy has helped out Alberta and Saskatchewan become economic powerhouses. Hell, SK is still running a surplus. Hell Manitoba Hydro is subsidizing Geothermal for goodness sakes.

Why are you against a successful ag sector?

[Smallc]

People don't need cars. Energy and food are higher up on the totem pole as far as importance goes.

Without cars, that gas, oil, and ethanol is going to become much less useful. I'm not talking only about car manufacturing though. Over and over you say that manufacturing is dead and we shouldn't help it. It seems that the ethanol industry can't survive without help, so why are we bothering with it?

Oil and gas are wanted a lot and they're subsidized. Take it up with them.

And I don't think they should be. They don't need help.

That oil and gas subsidy has helped out Alberta and Saskatchewan become economic powerhouses. Hell, SK is still running a surplus.

Last I heard, the largest revenue item for the Saskatchewan government comes as a result of potash.

[blueblood]

Without cars, that gas, oil, and ethanol is going to become much less useful. I'm not talking only about car manufacturing though. Over and over you say that manufacturing is dead and we shouldn't help it. It seems that the ethanol industry can't survive without help, so why are we bothering with it?

That's OK the japanese are better at making cars than we are. Hell, they're setting up shop in Ontario. High cost unionized manufacturing is causing problems. Ontario refuses to ride the wave and they are paying for it. Ethanol was coming regardless, the subsidies speeded up the process. If you care to take a look at Jaccard's energy projections in the future, biofuels have a role to play, the gov't here and in the US is fortunately ahead of the curve.

And I don't think they should be. They don't need help.

And then they go tell that particular gov't to go piss up a rope. It happened in Alberta when they cranked up the royalties. SK's share in the oil business rose. The NFLD gov't was told a long time to go piss up a rope, and for a while SK was. A friendly business environment is what helps things out.

Last I heard, the largest revenue item for the Saskatchewan government comes as a result of potash

And who is the biggest user of potash pray tell?

I'll give you a hint it starts with C and ends in N

And where does more and more of that go?

starts with an E.

[Smallc]

Its ok, you can be a hypocrite....I just had to point it out.

[blueblood]

Its ok, you can be a hypocrite....I just had to point it out.

How am I a hypocrite

Fundamentals for energy = strong

Fundamentals for high priced unionized manufacturing = weak

Where should the gov't invest?

[Smallc]

Fundamentals for energy = strong

Fundamentals for high priced unionized manufacturing = weak

Is that your expert economic opinion? Manufacturing isn't dead yet, and there's no way that we should just let it die.

[blueblood]

Is that your expert economic opinion? Manufacturing isn't dead yet, and there's no way that we should just let it die.

The Ontario/Quebec style of manufacturing is an exercise in futility. It's dead. If they think they can compete with other countries producing the same goods when those other countries can produce them for cheaper, your dreaming.

Not only that the energy sector is drawing a large amount of workers, and the energy sector pays well. Canadians are much more able to produce energy than manufactured goods. If the ag sector can clue into that, surely Ontario and Quebec can as well.

[Smallc]

Yes, it would be a great idea to all of our eggs in the energy basket....Ontario and Quebec have diverse manufacturing sectors. We only hear about the negative stories. It's important to keep that in perspective. Manufacturing will always take place in Canada...even in Ontario in Quebec.

[blueblood]

Yes, it would be a great idea to all of our eggs in the energy basket....Ontario and Quebec have diverse manufacturing sectors. We only hear about the negative stories. It's important to keep that in perspective. Manufacturing will always take place in Canada...even in Ontario in Quebec.

that's the beauty of ag, if energy slows down, we can shift to food. Ont. can take a lesson from MB and SK. Small scale yet effective/effecient manufacturing, mining, energy, ag, services all at the same level. Our economy is very diversified. Ont. and Que. put all of their eggs in one basket in the man. sector and got hosed. MB and SK is very diversified and when energy goes up it helps us not hinders us as was the case in Ont. and Que.

[Smallc]

Ont. and Que. put all of their eggs in one basket in the man. sector and got hosed.

Ontario and Quebec have economies that are just as diversified as..Alberta for example. When the US market picks up again, they'll do better. That's the real problem right now. Energy isn't always the answer...BC and Alberta are both suffering second only to Ontario through all of this.

[blueblood]

Ontario and Quebec have economies that are just as diversified as..Alberta for example. When the US market picks up again, they'll do better. That's the real problem right now. Energy isn't always the answer...BC and Alberta are both suffering second only to Ontario through all of this.

It'll be SK and MB that will be the new powerhouses, offshore manufacturing is more and more attractive. Ontario/Que was in decline before the economic trouble, the recession just sped up the process. The fundamentals related to energy suggest otherwise.

A lot of investors are pouring their money into energy as we speak.

[Smallc]

A lot of investors are pouring their money into energy as we speak.

That's nice, but we can't depend on that to be good forever. Quebec and Ontario were enjoying massive growth before this took place. They'll return to that growth again some day. You have to remember that Quebec and Ontario are not just manufacturing areas.

[Molly]

Yeah. As I told an old buddy from the prairies, even bad times in Ontario are pretty darned good. The economy is highly diversified, and fairly heavily domestically dependent, compared to other provinces.

It's still a land of plenty, even now. There's still enough momentum to carry a tremendous amount of dead weight. If someone actually took a pair of scissors to the red tape and waste- scissors as sharp as those in any number of other provinces less accustomed to consistent easy wealth- every budget in the place would register a healthy surplus, even now.

(Harris committed some colossal screw-ups, but was working on the right theory.)

Edited March 29, 2009 by Molly