On October 4, 2016, Canada’s Ecofiscal Commission (EFC) published a report, Course Correction: It’s Time to Rethink Canadian Biofuel Policies, arguing for the termination of biofuel subsidies. The report claims that Canadian biofuel policies have reduced greenhouse gas (GHG) emissions an average of three million tonnes annually, accounting for less than 0.5 percent of Canada’s total GHG emissions. Annual costs of the biofuel policies were estimated to be C$640 million, resulting in an estimated average per-tonne cost of GHG emission reduction ranging between C$128 and C$185. The report then argues for increased carbon pricing policies over the production subsidies and biofuel mandates that are currently in place as a more cost effective strategy for reducing GHG emissions.
Renewable Industries Canada (RIC) has spoken out against the report, calling the study “skewed, flawed, and unacceptable,” as it ignores independent biofuel cost benefit analyses as well as current government data (data used in the study was from a report published in 2010). RIC claims that biofuel mandates have returned over C$5 billion to the Canadian economy, created 14,000 jobs since 2007, and provided a C$3.7 billion net return on government investments. RIC does support carbon pricing policies, but argues that the best approach to reducing GHG emissions is a holistic approach that includes a variety of policies, incorporating carbon pricing as well as biofuel mandates.