Sask. budget includes biodiesel incentive

A five-year, $26 million provincial incentive program for renewable diesel production in Saskatchewan will kick in next month, with a mandatory minimum renewable fuel requirement for diesel to follow 15 months later.

The program, announced Wednesday as part of Saskatchewan’s 2011-12 provincial budget, will provide a grant of 13 cents per litre to eligible producers of renewable diesel — that is, diesel made from renewable materials such as off-grade canola and farm and forest biomass.

The program is to begin April 1 this year, to wind up in 2016. The province’s two per cent renewable diesel mandate is scheduled to kick in on July 1, 2012.

The program “will stimulate value-added production and create jobs in Saskatchewan and ensure a Saskatchewan market for diesel from canola,” provincial Enterprise Minister Jeremy Harrison said in a release.

SaskCanola, the province’s farmer-led canola development commission, hailed the grant program and mandate as recognizing “the significant importance of a growing Saskatchewan biofuel industry in which canola can be the leader,” chairman Brett Halstead said in a separate release.

The federal government’s two per cent renewable content mandate for diesel and heating oil is expected to take effect July 1 this year.

Biodiesel producer Milligan Bio-Tech of Foam Lake, about 90 km northwest of Yorkton, said in another release Thursday that the province’s grants “are consistent with those being provided in the other western Canadian provinces as well as the northern U.S., where most of (the company’s) competition comes from.”

“All of the western provinces will now have mandates in place and this provides the right framework for companies like Milligan to compete and grow,” Milligan CEO Joe Holash said.

Milligan’s biofuel production facility officially opened in June 2009 and since then has “steadily grown its customer base for biodiesel and allied products,” the company said.

Among the provincial budget’s other noteworthy line items for the agriculture and agrifood sectors were:

  • an increase of $32 million in the province’s ag budget, to $418 million in 2011-12, including $320.8 million to “fully fund” farm income stabilization programs;
  • phase two of the province’s education property tax reduction plan, which will see the education mill rate drop from 7.08 to 3.91 on farmland, cutting education property tax rates on farmland to 20 per cent of 2007 levels, at a cost of $31.3 million;
  • expanded agricultural extension services, including new satellite offices at Meadow Lake, Lloydminster, Assiniboia, Moosomin, Estevan, Shaunavon and Wadena, in a two-year pilot project; and
  • a 62 per cent increase in the beer discount provided to off-sale retailers by the provincial liquor and gaming authority, to between $1.78 and $2.43 per dozen, up from $1.10-$1.50 currently.

The Canadian Restaurant and Foodservices Association ripped the latter move in a release Wednesday, saying the province’s otherwise-positive budget was “tarnished by a decision to give beverage room operators a discount on beer at the expense of licensed restaurant operators.”

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