CANADA PLANNING TO RETAIN PROGRAM SUPPORTING ETHANOL
Jan. 2, 1995
The Canadian government will continue a tax incentive program to encourage production and use of ethanol as an alternative motor fuel. The program provides an 8.5 (Canadian)/l. tax exemption on ethanol and a line of credit that gives producers access to $70 million in government guaranteed loans until 2005. The program is sponsored by the federal Agriculture Department. Ottawa also will encourage use of ethanol fuel blends in government vehicles and invest $1.6 million this year and the
The Canadian government will continue a tax incentive program to encourage production and use of ethanol as an alternative motor fuel.
The program provides an 8.5 (Canadian)/l. tax exemption on ethanol and a line of credit that gives producers access to $70 million in government guaranteed loans until 2005.
The program is sponsored by the federal Agriculture Department.
Ottawa also will encourage use of ethanol fuel blends in government vehicles and invest $1.6 million this year and the following 2 years on research into cutting ethanol production costs.
The program will be eliminated when ethanol sales reach $336 million/year, or about 1% of gasoline sales. Current production is about 26 million l./year, of which about 4 million l./year is imported.
The Canadian Petroleum Products Institute complains that the incentive runs counter to government statements opposing business subsidies. Ottawa contends the program will create jobs.
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