Ethanol plant receives $7.3 million in Government of Canada funding

07/06/05

This release is also available in French



COLLINGWOOD, ONTARIO -- A recently closed starch plant in Collingwood will be converted to produce ethanol fuel, helping Canada address climate change by increasing the supply of this cleaner, renewable fuel, the Honourable Andy Mitchell, Minister of Agriculture and Agri-Food, announced today. Power Stream Energy Services Inc. has been allocated approximately $7.3 million from the Government of Canada's Ethanol Expansion Program (EEP) to convert the recently closed Nacan cornstarch plant into a facility that will produce 52 million litres of ethanol annually. The plant is expected to employ about 45 people when operational.

"Power Stream's plan shows what can happen when innovation, determination and community spirit come together," said Minister Mitchell. "Reopening this plant will lead to new jobs and it will help Canada address climate change. I congratulate Power Stream for helping demonstrate both the importance and flexibility of the EEP."

"We are delighted to have the financial and logistical support of Natural Resources Canada and Agriculture and Agri-Food Canada in making this extremely worthwhile project a reality," said Curtis Chandler, Executive Director of Power Stream Energy. "The ethanol production from the Collingwood facility will help meet national and provincial renewable fuel targets and the plant corn supply and labour pool will be drawn from the local community. This makes the project a national, provincial and local success in our view."

Power Stream Energy Services Inc. is a leading Canadian energy risk management provider and has deep roots in North America's deregulated energy markets. Its principals have successfully developed and operated various aspects of the energy value chain, including commodity brokerages, natural gas marketing companies and natural gas storage facilities.

The Collingwood plant is one of five successful proposals that has been allocated a total of approximately $46 million in funding through the second round of the EEP, which is administered by Natural Resources Canada and Agriculture and Agri-Food Canada. These projects, in addition to six projects that were allocated $72 million in the first round of EEP, will increase Canadian production to 1.4 billion litres per year. This is enough ethanol to achieve, two years ahead of schedule, the Government's target of having a blend of 10-percent ethanol in 35 percent of all gasoline in Canada by 2010. Additionally, the $118 million in funding the Government of Canada has allocated under the EEP will result in close to a $1-billion investment from the companies involved in the projects.

In addition, the three projects in Ontario, combined with the projects that were allocated contributions under Round 1 of the EEP, are expected to increase ethanol production in the province to almost 800 million litres per year. This is enough capacity to meet the requirement, announced by the Government of Ontario, that gasoline sold in the province contain an average of five-percent ethanol by 2007.

The EEP is one part of the Government of Canada's renewable-fuels strategy that also includes support for research and development, exemptions from federal fuel excise taxes and consumer awareness activities. The original funding for this program was provided in Budget 2003 and is part of the Government of Canada's overall commitment to climate change action.

The Government of Canada's approach to climate change is focused on making the right choices for Canada. This will ensure that the actions taken contribute to long-term goals of building a sustainable economy for the 21st century, a healthier environment and strong communities, while affirming Canada's place in the world.

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