Canada Pledges Money, Regulatory Reform to Boost Biofuels

September 08, 2025

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by Ed White (Reuters) The Canadian government on Friday (September 5, 2025) promised hundreds of millions of dollars and less onerous regulations to boost biofuels production, which the country's agriculture minister said faces tough U.S. competition.

Prime Minister Mark Carney made support for biofuels and the canola industry one of six areas highlighted in an aid announcement designed to help companies deal with damage from U.S. tariffs and trade disruptions.

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Canadian canola, an ingredient in some biofuels, is also facing high duties and tariffs in China, the largest export market for canola seed.

The government pledged C$370 million ($267.79 million) in production incentives for Canadian biofuels producers and also said it would overhaul Canada's biofuels regulations.

Canadian biofuels producers and the canola industry have complained for years that the U.S. provides more incentives for biofuels production than those in Canada, discouraging Canadian output. A Canadian government investigation into U.S. biofuels supports concluded in May that U.S. programs do not qualify as "dumping and subsidizing" that have hurt Canadian producers, though.

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Canadian producers have also complained that regulations are confusing and an obstacle to investment in the sector. During the April election, Carney pledged to improve the situation.

Canada's largest renewable diesel facility, owned by Imperial Oil (IMO.TO), opens new tab, which will use canola oil as one of its feedstocks, went into production in July. However, another major project was shelved this year over regulatory and trade concerns in Canada and the U.S.

Biofuels demand has become a key component in the world price of canola, as production in the U.S. and other countries has expanded in recent years and consumed a greater proportion of world vegetable oil crops. ($1 = 1.3817 Canadian dollars) READ MORE

Related articles

Carney says trading relationship with the United States has become a vulnerability (CBC/Yahoo! News; includes VIDEO)
Canada to give automakers a break on EV sales target, offers tariff aid (Reuters/Yahoo! Finance)
Government of Canada launches initiative to keep small- and medium-sized businesses growing in the face of trade challenges (Pacific Economic Development Group Canada/CNW Group/CISION)
Carney pledges $370M in incentives for canola sector (The Canadian Press/Yahoo! Finance)

Excerpt from Pacitic Economic Development Group Canada/CNW Group/CISION: The Regional Tariff Response Initiative will be delivered by PacifiCan in British Columbia to help B.C. businesses respond, adapt, and continue to compete -- Canadian businesses face economic uncertainty as tariffs disrupt international export markets and global supply chains. In this moment of volatility, Canada is standing firm — defending its industries, building new pathways for growth, and investing in long-term strength.

Today (September 5, 2025), the Honourable Gregor Robertson, Minister of Housing and Infrastructure and Minister responsible for Pacific Economic Development Canada (PacifiCan), announced that PacifiCan will deliver the Regional Tariff Response Initiative (RTRI) in British Columbia to help B.C. small- and medium-sized businesses affected by tariffs improve productivity, expand and diversify export markets, optimize supply chains, and boost domestic trade within Canada.

On September 5, 2025, the Government of Canada announced it was more than doubling the RTRI national investment from $450 million to $1 billion over three years. This investment in small- and medium-sized businesses will help them respond to trade shocks, adapt to new realities, and build for the future. Delivered through Canada's regional development agencies (RDAs), the initiative supports the growth of small- and medium-sized businesses most vulnerable to trade volatility.

Businesses and organizations in British Columbia will be able to access information about the Regional Tariff Response Initiative on PacifiCan's website. Program details and an online application will be available on September 15, 2025.

Quotes

"British Columbians have the determination, talent and ambition to thrive at home and in markets around the world. With this investment, PacifiCan is empowering local businesses to find new pathways for growth and contribute to one Canadian economy – building prosperity here in B.C. and across the country."

-The Honourable Gregor Robertson, Minister of Housing and Infrastructure and Minister responsible for Pacific Economic Development Canada

Quick facts

The Government of Canada has a comprehensive plan to fight back against U.S. tariffs, while supporting Canada's interests, industries, and workers.
The Regional Tariff Response Initiative (RTRI) invests in small- and medium-sized businesses affected by tariffs, helping them adapt to new realities, open doors to new markets, boost productivity, reduce costs, and strengthen domestic supply chains.
The RTRI is part of a broad set of tariff support measures, including the Large Enterprise Tariff Loan Facility, the Business Development Bank of Canada's Pivot to Grow initiative, and support for the steel sector through the Strategic Response Fund. Together, these efforts are a commitment to reinforcing Canada's industrial strength and defending good jobs across the country.
On July 16, 2025, the Government of Canada announced a suite of measures to support the domestic steel industry, including up to $150 million in targeted support through the RTRI for businesses in the steel sector. These investments are part of a broader package that also included enhancements to the Strategic Response Fund, Labour Market Development Agreements, and the Large Enterprise Tariff Loan Facility.
PacifiCan is the federal economic development agency dedicated to British Columbians. PacifiCan works with partners who are building innovative businesses, creating good jobs, and supporting inclusive growth throughout our province.

READ MORE

Excerpt from Canadian Press/Yahoo! Finance: Ottawa has announced $370 million in new support for Canadian canola producers facing massive tariffs from China.

The federal government said Friday that a new biofuel production incentive is meant to address "immediate competitiveness challenges" after China hit Canadian canola with a 75.8 per cent tariff last month.

The measure was widely seen as a response to Canada’s 100 per cent tariff on Chinese electric vehicles.

The funds are meant to "assist domestic producers and restructure their value chains," Prime Minister Mark Carney said in prepared remarks as he announced a suite of supports for tariff-affected sectors in Mississauga, Ont.

Carney also said the government will amend its Clean Fuel Regulations to "spur the development of a vibrant biofuels industry in Canada."

And he said the government will temporarily increase the amount producers can receive in interest-free advances to $500,000, and boost funding to support diversification to new markets.

A day earlier, Carney's office said Nova Scotia MP Kody Blois plans to join Saskatchewan Premier Scott Moe for a three-day trade mission to China starting Saturday to "engage constructively with Chinese officials." Officials hope to also address other "trade irritants" on the trip, the statement said.

Moe's office said in an emailed statement Friday that the Saskatchewan government is pleased with the financial support for canola producers.

"However our focus remains on the removal of Chinese tariffs on canola. This is why Premier Scott Moe is travelling to China with the parliamentary secretary to the prime minister to engage with government and industry leaders."

China is the second-largest importer of Canadian canola products, behind only the United States.

Canada exported about $14.5 billion worth of canola products last year, according to the Canola Council of Canada, of which about $4.9 billion went to China.

The president of the Agricultural Producers Association of Saskatchewan welcomed the federal supports, many of which the group had already been calling for.

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In a news release, Prybylski's group said it would have liked to see federal support for pulse producers, who have also been hard hit by trade disruptions.

The canola seed tariff came into force nearly a year after Beijing launched an anti-dumping probe into the crop.

China’s Ministry of Commerce has argued Canadian canola companies were dumping the product into the Chinese market, hurting its domestic canola oil market.

Ottawa and farmers have denied dumping, saying exporters are following rules-based trade.

Two canola industry groups said in a joint statement Friday that China's commerce ministry has extended its anti-dumping investigation until March of next year. It had been due to be complete this month, with the possibility of a six-month extension.

The Canola Council of Canada and the Canadian Canola Growers Association said they're "hopeful this extension signals a willingness by the Canadian and Chinese governments to work toward a timely resolution" to the matter. READ MORE