Canola Growers Want Biodiesel Tax Breaks

SASKATOON - Feb 2/07 - SNS -- The Saskatchewan Canola Development Commission (SCDC) has been pressing the need for tax breaks for Canada's fledgling biodiesel industry.

"The biodiesel industry in Canada needs tax parity with the United States if it's going to get off the ground," said SCDC Chair Jim Caughlin.

Caughlin, who farms at Tisdale, was in Ottawa with SCDC Directors Tim Wiens from Herschel and John Serhienko from Blaine Lake to discuss with MPs the environmental and economic benefits of biodiesel and the need for tax parity with the U.S.

"We do not want to export raw canola seed to the U.S. and import biodiesel back," says Wiens. "Parity with the 30 cents per litre refundable tax credit that U.S. bio-diesel receives is the only way that the value added biodiesel facilities will be built in Canada."

"We were pleasantly surprised to see the MPs were knowledgeable about the industry and what needs to be done," said Serhienko. "Our colleagues from Alberta and Manitoba who were also visiting their MPs had similar observations".

Ethanol and biodiesel producers and users in the United States, Europe and many other countries have special tax measures in place to encourage both the production and blending of these fuels. This means the return on investment for producing biodiesel is higher in these countries than it is in Canada.

Domestic biodiesel production would mean better and more stable prices for canola growers at farm gate as well as the opportunity to invest in a new industry. Canada's governments must provide tax parity with the 30 cents per litre tax credit in the U.S. in the short term if Canada hopes to attract any significant canola biodiesel production investments.