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BIOFUELS

Backing for ethanol boost evaporates

Rapidly rising food prices have opposition parties rethinking their support for the farm-derived fuel

OTTAWA -- Corn farmers counting on a big federal push for biofuels could soon be disappointed as, one by one, opposition parties are pulling their support for government legislation boosting ethanol content in Canadian gasoline.

Citing concern over soaring food prices, the Bloc Québécois is confirming it will vote against the bill when it comes to a final House of Commons vote at third reading. The sudden reversal is particularly unusual, given that the party voted for the bill as recently as May 1.

The Bloc's move comes after the NDP also pulled its support for the bill at the very late stages of the parliamentary process.

Those twin decisions leave the fate of the legislation and possibly the future of Canada's corn-based biofuels industry in the hands of the Liberals - and they, too, are having doubts.

The party's senior critics in areas such as environment, finance and agriculture held a flurry of meetings and discussions last week to discuss whether they should change their position in light of international warnings that ethanol is partly to blame for food inflation.

"There is a chance that the bill will not pass, depending on what we do. We're still negotiating that internally," said Liberal MP Keith Martin, the party's international development critic. "We now know that biofuels aren't what they were all made out to be and the new science must force all of us to rethink our position on biofuels."

Liberal environment critic David McGuinty insists the party's internal debate is over and that Liberals will vote in favour of the bill at third reading.

However, with Liberals holding a majority in the Senate, Mr. McGuinty said, there is a good chance Liberals will make changes to the bill at that point.

"Anything's possible," Mr. McGuinty said.

Manitoba corn farmer Murray Pritchard said he and others had high hopes the federal plan would give them an economic boost.

"I really can't believe that they're going to back away from [ethanol]," he said of the political developments in Ottawa. "I think they're doing a little bit of posturing because of politics."

Mr. Pritchard, who is president of the board of directors for the Manitoba Corn Growers Association, said the federal ethanol target will end up being met by U.S. corn farmers if the opposition puts limits on Canadian corn ethanol.

He also said he does not see a link between corn and high food prices.

"I don't think corn is priced too high yet. It's just been abnormally low for a lot of years and people have gotten used to it," he said. "So an easy place to put the blame is on the price of corn, in my opinion."

The Bloc's change in position occurred last week after Bloc MP Bernard Bigras moved a motion at the Commons environment committee calling for assurances the new law will not lead to an increase in Canadian production of ethanol from corn.

The motion was supported by the NDP, but it was defeated by the Conservatives because the Liberals on the committee abstained.

Critics of ethanol have argued that as the world increases its use of food crops such as corn to produce gasoline, the new demand increases the price - which is good for farmers and bad for food prices. Corn-based ethanol has also been criticized from an environmental point of view as an inefficient way of producing gasoline when compared with other sources such as sugar cane.

All parties support emerging forms of ethanol that can be made from hay and other biological sources that are not food.

However, those sources, often called cellulosic ethanol, are not yet ready to meet the demand that would be triggered by a 5-per-cent ethanol content requirement in Canadian fuel.

In addition to the 5-per-cent target, the Conservative government has announced $2.2-billion in federal support for ethanol.

Of that, $500-million is targeted toward the promotion of cellulosic ethanol.

Environment Minister John Baird has said his government wants to move as quickly as possible away from corn ethanol and into this "next generation" of biofuels.

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