QUESTION PERIOD — Environment and Climate Change
Clean Fuel Regulations
April 22, 2026
Senator Moreau, I’m sure that many members of this chamber will be surprised to learn that Canada is the United States’ number one export market for ethanol. American ethanol, which supplies 60% of the Canadian market, can be produced more cheaply than Canadian ethanol because the U.S. government subsidizes American farmers and American ethanol plants. Meanwhile, the Canadian government applies an industrial carbon tax to ethanol plants operating in Canada, but no surcharges apply to the ethanol we import.
While American plants expand every year to meet Canadian demand, Canadian ethanol plants haven’t grown since 2018. Canadian producers sell into the Canadian market at the same price as their U.S. counterparts, meaning their profits are much lower. Is the government contemplating changes to ensure that Canadian ethanol producers can compete on a level playing field?
Thank you, Senator Lewis. That’s a very important question, and I agree with the preamble of your question.
The Clean Fuel Regulations strengthen our economy and energy security and protect our climate to keep life affordable. On September 5, 2025, the government announced a new set of measures to support industries impacted by recent global trade pressures, including the biofuel sector.
I can inform you that, as part of these, the government will provide targeted amendments to the Clean Fuel Regulations to support the domestic biofuel sector while maintaining the regulations’ primary focus on reducing emissions from fuels.
Thank you for that, Senator Moreau. Ethanol is blended into every tank of gasoline sold to Canadian consumers and drivers. This policy is a made-in-Canada trade irritant that is hindering our Canadian ethanol producers. The comment period for amendments to Canada’s Clean Fuel Regulations was closed on January 15, 2026. Stakeholders are looking forward to Environment and Climate Change Canada, or ECCC, publishing the updated regulations.
Thank you again. I can confirm that the government is currently reviewing the submissions it received on the discussion paper and will develop amendments in consultation with provinces and territories, as well as stakeholders. That discussion is already taking place.
