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Biofuels will flourish as infrastructure diminishes: MTA

Posted: August 1, 2014

WINNIPEG — While Manitoba pushes to become a national leader in biofuel production it will be a bumpy road for vehicles burning the fuel, including truckers, says the Manitoba Trucking Association.

Innovation, Energy and Mines Minister Dave Chomiak said earlier this month that amendments to the Biofuels Act would establish a new grant program to support biodiesel production.

The program will offer a grant of 14 cents per litre to biodiesel producers over a five-year period, beginning immediately. The grant will be capped at 20 million litres per year, which represents roughly the amount of biodiesel required to meet Manitoba’s biodiesel sales mandate.

These amendments will replace the 14 cent per litre fuel-tax exemption that road users, utilizing biodiesel, previously enjoyed.

“We will replace the fuel-tax exemption for Manitoba biodiesel with a production grant, payable directly to provincial producers,” says Chomiak. “We expect paying a grant to provincial producers, rather than a fuel-tax exemption, will be more effective in making producers competitive and thus encourage the local production of biofuels.”

In essence, says the MTA, the government is just creating a cross-subsidy in the process.

“It is truly unfortunate that the Manitoba government has chosen to take tax dollars generated by road users and will use those dollars to subsidize another industry,” says Bob Dolyniuk, executive director of the MTA. “If Manitoba truly wants to subsidize an industry it should subsidize it from general revenues. Tax dollars generated by road users should be re-invested in our highway and road infrastructure and not other areas.”

This shift will redirect $14 million dollars during the five-year period to biodiesel producers when those dollars should be invested into our highway and road infrastructure, adds the MTA.

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