Corn farmers and ethanol producers say regulatory changes are needed to keep Canadian investment, jobs and agricultural demand from shifting south of the border.
Canada's ethanol industry is renewing pressure on the federal government to finalize long-promised changes to the Clean Fuel Regulations (CFR), arguing that delays are allowing imported U.S. ethanol to capture a growing share of Canada's expanding market.
The call comes from the Farms and Fuels Alliance (FFA), a coalition representing Canadian corn growers and domestic ethanol producers.
In a recent letter to Prime Minister Mark Carney, the alliance joined Renewable Industries Canada in requesting targeted amendments to the CFR, including the introduction of a minimum 1.4-times credit multiplier for ethanol produced in Canada. Industry groups say the measure would help level the playing field as American ethanol producers benefit from support through the U.S. 45Z Clean Fuel Production Credit while continuing to compete in the Canadian marketplace.
The debate highlights a growing concern within Canada's biofuels sector. While Canadian policies have helped expand demand for lower-carbon fuels, industry leaders argue that an increasing portion of that demand is being supplied by imported ethanol rather than domestic production. According to the Farms and Fuels Alliance, the federal government's promised regulatory solution has yet to be published despite the competitiveness issue being identified more than a year ago.
Industry representatives contend that the proposed multiplier would provide a practical adjustment within the existing regulatory framework rather than creating a new subsidy program. Andrea Kent, Vice President of Policy and External Relations at Greenfield Global, said the proposal reflects a significantly different North American market environment and would give Canadian ethanol producers a fair opportunity to compete for market share created by Canada's own clean fuel policies.
The policy discussion has direct implications for Canadian agriculture, particularly corn production in Ontario. Jeff Harrison, Chair of Grain Farmers of Ontario, noted that ethanol manufacturing consumes roughly one-third of the province's corn crop, making the sector an important source of demand for farmers. Harrison also pointed to consumer benefits, citing estimates that ethanol blending reduced Canadian wholesale gasoline costs by approximately 7.4 cents per litre in 2024.
Supporters of reform warn that without a timely response, Canada risks missing investment opportunities in domestic renewable fuel production. The alliance says growing ethanol demand could increasingly support agricultural activity, processing capacity and economic development outside Canada rather than creating value within the country's rural economy.
The urgency has intensified following announcements that Canada is expected to become a billion-gallon, or roughly four-billion-litre, export market for U.S. ethanol. Industry leaders argue that as long as imported ethanol receives the same treatment under Canada's regulations while benefiting from American production incentives, domestic producers will remain at a competitive disadvantage.
Kevin Norton, CEO of Alco Energy Canada, said the industry's request is straightforward: finalize a minimum 1.4x multiplier for Canadian-made ethanol before the end of 2026. Supporters believe the move would strengthen domestic biofuel production, support corn growers and help ensure that the economic benefits associated with Canada's clean fuel policies remain within the country.
For Canadian farmers, the outcome of the regulatory review could influence future demand for corn, investment in agricultural processing and the broader role of biofuels in supporting rural economic growth. As Ottawa weighs the proposed amendments, producer groups and ethanol manufacturers will be watching closely for signs that the government is prepared to act before year-end.