End subsidies to biofuel industry, think tank urges

February 5, 2009

OTTAWA—Canada’s federal and provincial governments should end their subsidies to the biofuel industry, says a new report by the Canadian Centre for Policy Alternatives (CCPA).

The report, by Edward R. Boyle, questions whether governments can afford such expensive and wasteful subsidies in the current economic climate.

“With federal finances sliding into deficit for the first time in a decade, will the Harper government cut provincial transfers for health and social programs while maintaining multi-billion-dollar biofuel subsidies?” asks Boyle.

According to the report, ethanol and biofuels subsidies are bad public policy because most biofuels increase, rather than reduce, greenhouse gas emissions once all the energy impacts are taken into account, they are a waste of public money, and they have been a major factor in the reduction of global food supplies and resulting food price increases.

According to the International Monetary Fund and the International Food Policy Research Institute, biofuels demand accounted for about 30% of the spike in food prices that led to food riots in a number of countries, and Oxfam estimates price increases threatened with starvation another 290 million of the world’s poor.

The report calls for a moratorium on new subsidies and blending mandates followed by the elimination of subsidies to the biofuel industry.

“An industry born of politics and fuelled by public money will die of politics if governments take its subsidies away,” concludes Boyle.


Feed People First: How biofuels are contributing to global food shortages and price increases is available on the CCPA website: http://www.policyalternatives.ca

For more information contact Kerri-Anne Finn, CCPA Senior Communications Officer, at 613-563-1341 x306.