Canada Loses Ethanol Market to Heavily Subsidized US Producers

Canada has established itself as a major player in the ethanol market through its federal clean-fuel policy, but it's now losing out to heavily subsidized US producers.

The USDA reports that US ethanol exports to Canada have more than doubled in five years, from 1.2 billion litres to 2.9 billion litres, a 135% increase.

This growth has been driven by Canadian demand, but instead of benefiting Canadian plants and workers, the majority of it is being met by American producers who receive subsidies of up to 36 cents per litre.

Canada's ethanol sector anchors one out of every three grain bushels in Ontario, accounts for most of Canada's ethanol production, and supports six ethanol facilities and nearly $1 billion in rural infrastructure.