WINNIPEG, Man. — The Manitoba Trucking Association is concerned that a new grant program to subsidize biodiesel production will create a cross-subsidy that will hurt biodiesel users.

The amendments to the Biofuels Act, introduced by Manitoba’s Minister of Innovation, Energy and Mines David Chomiak, would replace the 14 cent per litre fuel-tax exemption that road users, utilizing biodiesel, previously enjoyed with a new grant program that will subsidize biodiesel producers.

Minister Chomiak has said the shift will be more effective in making producers competitive and encourage the local production of biofuels, but the MTA says that with Manitoba’s biodiesel mandate, the major fuel companies will be importing biodiesel into Manitoba to satisfy the mandated average blend.

The association argues that this shift will create a cross subsidy, as road users will be subsidizing biodiesel producers with the taxes they pay when they burn biodiesel. 

“It is truly unfortunate that the Manitoba Government has chosen to take tax dollars generated by road users and will use those dollars to subsidize another industry,” said MTA executive director Bob Dolyniuk.  “If Manitoba truly wants to subsidize an industry it should subsidize it from general revenues. Tax dollars generated by road users should be re-invested in our highway and road infrastructure and not other areas.”

The MTA says the $14 million dollars that will be redirected to biodiesel producers should be invested into the province’s highway and road infrastructure instead.