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Canadian Ethanol Industry

Canadian Production Capacity

The Canadian ethanol industry is substantially smaller than the U.S. industry. Current production capacity is around 240 million litres per year, or about 3% of current U.S. production capacity. This includes fuel ethanol as well as ethanol used for industrial purposes.

Source: Canadian Renewable Fuels Association
Current Capacity
Company Location Capacity Feedstock
Pound-Maker Agventures Ltd. Lanigan, SK 12 m litres Wheat-partnered with a feedlot
API Grain Processors Red Deer, AB 26 m litres Wheat-fractionation with power co-generation
Mohawk Oil Minnedosa, MB 10 m litres Wheat
Commercial Alcohols Inc. Tiverton, ON Chatham, ON 23 m litres 150 m litres


Tembec Temiscaming, QC 17 m litres Forestry-based residue food and industrial uses
Planned Capacity
Seaway Valley Farmer's Energy Co-operative Inc. Cornwall, ON 66 m litres Corn-production is expected to start toward the end of 2002
Commercial Alcohols, Inc. Varennes, Qué. Chatham, Ont. 150 m litres 150 m litres

Corn-expansion to 300 m litres total production

Geographic Distribution of Canadian Ethanol Production

The Canadian ethanol industry is fairly concentrated in Ontario. Roughly 75% of the total production capacity is located in that province and is owned by Commercial Alcohols Inc. In addition, Ottawa's Iogen Corporation is Canada's leader in enzyme research and has plans to build a pilot plant to test its enzymatic cellulose feedstock conversion technology. The Seaway Valley Farmer's Energy Co-operative, Canada's only co-operatively owned ethanol production facility, is also located in Ontario. It is expected to begin producing ethanol from corn by the end of 2002.

Western Canada is home to three ethanol production facilities, one in each of the prairie provinces. The three plants make up roughly 20% of Canada's current production capacity. Both Saskatchewan and Manitoba are planning to expand ethanol production, but it is too early to tell what the new production capacity will be or how the industries will be structured.

The Importance of Ethanol in Canada

Unlike the U.S., Canada has no federal policy regarding renewable fuel usage, oxygenated fuels, or ethanol production. Incentives are typically provided by provincial governments, and vary from province to province. The Saskatchewan government has passed legislation that will allow for the mandated use of 10% ethanol blended gasoline across the province. It is only the second jurisdiction in North America, behind Minnesota, to pass legislation that allows the governement to mandate the use of ethanol blended gasoline.


Both Saskatchewan and Manitoba are considering substantial expansion of their respective ethanol industries. As evidenced by the development of the U.S. industry, ethanol production can become an integral part of the agricultural sector and rural economies. In that respect, an expanded ethanol industry is seen by many to an important opportunity for the prairie provinces to bolster a struggling agricultural sector. Ontario corn farmers already view ethanol production as an opportunity for local economic development, illustrated by the formation of the Seaway Valley Farmer's Energy Co-operative.

Energy Security

Energy security seems to be less of an issue in Canada than in the U.S., although the concerns surrounding energy supplies apply to both nations. This could be due to the lack of a national policy regarding renewable fuels in Canada. Because there is no national funding program for ethanol in Canada, there is no opposition to federal ethanol "subsidies". The U.S. federal government seems to be putting more emphasis on renewable energy, and has extended the ethanol program to 2007. Energy security is one of the many issues that are being raised to maintain support for renewable energy subsidies. If the Canadian government develops a national renewable energy program, perhaps energy security and ethanol production will become linked issues here as well.