Opening Remarks
Thank you Kory (Kory Teneycke - Executive Director, Canadian Renewables Fuels Association) and good morning everyone.

As you know, our government is working to build a cleaner, greener and sustainable energy future for our province. Last week I had the pleasure of speaking at the United Nations Climate Change Conference in Montreal.

And I was proud to say that climate change and air quality are priorities for our government - and are priorities for restructuring our energy system.

Ontario is becoming a leader in the development of new clean energy technology and products.
And fostering the development and use of renewable fuels is an important part of our energy plan.

This morning, I would like to briefly share with you three aspects of Ontario’s Energy Plan that is restructuring our energy system, including:

* REPLACING COAL FIRED GENERATION with cleaner forms of electricity generation;
* Creating a CULTURE of CONSERVATION and energy efficiency;
* Developing a BIO-FUELS INDUSTRY.

Replacing coal fired generation with cleaner forms of energy

Two years ago the Ontario government took bold, extraordinary action to address climate change, and began taking the necessary steps to build a new energy system in the province.

Ontario is the first jurisdiction in North America to phase out coal-fired electricity generation, and will do so by the end of this decade.

Ontario’s leadership and early action to replace coal is the single largest greenhouse gas reduction initiative in this country and is estimated to be as much as 30 megatonnes, or more than 10% of Canada’s overall target.

We’re building new generation capacity - with a focus on renewable power and cleaner power, and a mix of public and private sector participation.

Ontario has set a target that new renewable generation will account for at least 5% by 2007, and 10% by 2010.

And in just two years we have set the wheels in motion to generate 1350 megawatts of power from clean and renewable sources such as wind, water, biomass, and solar.

We’re maximizing one of our major hydro assets by investing almost a $1 billion in a new tunnel to supply more water from Niagara Falls to Adam Beck Generating complex. This will produce an additional 1.6 billion kWh of new clean electricity for Ontario by 2009.

In just two years, we have set the wheels in motion to generate 10,000 MW of new capacity over the next 5 years - more than any other jurisdiction in North America.

The second part of our plan is creating a culture of CONSERVATION in Ontario:

* We have set a goal to reduce the province’s peak demand by 5% in 2007.
* We’ve created the Conservation Bureau within the Ontario Power Authority and appointing Ontario’s first Chief Energy Conservation Officer to help develop province wide programs.
* In just two years, the Government of Ontario has reduced energy consumption in its own operation by 7% through extensive energy retrofits and other innovative conservation measures.
* Ontario is implementing smart metering technology with the goal of installing 800,000 meters by the end of 2007, and all Ontario homes and business by 2007.
* And we are one of the few jurisdictions in North America to introduce comprehensive energy conservation legislation, which will require the participation of the broader public sector in energy conservation initiatives (schools, colleges, universities, municipalities, hospitals, and other public sector organizations).

Bio-Fuels

The third component of our energy plan is CREATING a BIO-FUELS industry in Ontario.

Indeed, Ontario is becoming a leader when it comes to the introduction and adoption of new, greener transportation bio-fuels.
Ethanol

In October we announced the finalization of Ontario Regulation 535/05 - Ethanol in Gasoline that requires that by January 1, 2007, gasoline sold in Ontario will contain an average of five percent ethanol.

And we have also created a $520 million Ontario Ethanol Growth Fund (OEGF). The Growth Fund will contribute to developing a healthy ethanol industry and encourage the development of ethanol plants in Ontario.

The Growth Fund has four components:

* Capital Grants or Loan Guarantees will be available to offset a portion of the cost of expanding or constructing new ethanol production facilities.
* Operating Grants will be available from 2007 until 2017 to help ethanol manufacturers remain competitive by offsetting some of the risks posed by fluctuating market conditions.
* An Independents’ Fund will provide financial support to independent gasoline distributors who currently blend ethanol and may need assistance to meet the requirements of the RFS beginning in 2007.
* And an Industry Research and Development Fund will help bio-based businesses develop research and investment opportunities in the ethanol manufacturing sector, and to help create a platform for a wider bio-based economy.

The Ontario Ministry of Agriculture, Food and Rural Affairs released program details regarding the capital assistance and operating grant components of the OEGF on October 7, 2005. The deadline for submitting proposals for these two components was November 10, 2005.

A due diligence review process to review and evaluate proposals is currently underway. The Minister of Agriculture, Food and Rural Affairs may be in a position to make decisions and announcements regarding OEGF capital assistance and operating grants before the end of the year.

And to further demonstrate our government’s own bio-fuel commitment, Ontario government fuel purchases currently include 10% ethanol blends (of a total 13.5 million litres).
Biodiesel

Ontario is also developing a Bio-Diesel Strategy to facilitate continuous development and change in this area.

Staff of the Ontario Ministry of Agriculture, Food and Rural Affairs continue to work with industry and their counterparts in other ministries toward a biodiesel strategy that supports a key commitment of our government.

It is estimated that about five million litres of biodiesel were sold in Ontario in 2004.

Since June 2002, biodiesel has been exempt from the 14.3 cent per litre tax payable under the provincial Fuel Tax Act.

And since 2003, the federal government has also provided a tax exemption of four cents per litre for biodiesel.

The federal government has also been developing a Canadian biodiesel standard providing specifications for biodiesel blends from B1 to B5 with low sulphur diesel fuel.

All of this activity is spurring the development of a homegrown bio-fuels industry right here in Ontario. For example, I understand that BIOX Corporation, a biodiesel technology provider, is in the final stages of constructing a 60 million-litre biodiesel facility in Hamilton that is anticipated to be fully operational within a few weeks.

Topia Energy retails biodiesel in three Ontario on-road locations and at one marine facility and UPI sells biodiesel to the agricultural sector in southwestern Ontario.

Interest in purchasing and using biodiesel in Ontario fleets appears to be increasing.

Biodiesel blends are also being used in several municipal transit and fleet vehicles in Ontario, including Guelph and Brampton.

Fleet Challenge Ontario has been working on co-operative purchasing of biodiesel with fleets across the province.

And the Ontario Soil and Crop Improvement Association has received federal funding to evaluate biodiesel use at a B5 level in agricultural equipment during eleven consecutive months of on-farm activity starting in 2006. Six on-farm demonstrations are being proposed.
Economic Benefits

It’s no secret that energy stimulates our economic growth, sparks the innovation of our businesses and makes our communities strong and vibrant.

By boosting the domestic production and use of renewable fuels, we will not only enjoy cleaner air but we will also create new jobs and new opportunities.

The Ontario Ethanol Growth Fund will encourage the construction of ethanol plants in Ontario, bringing new investment, new jobs and new opportunities to our rural communities.
Environment Benefits

Bio-fuels are also good for Ontario’s environment.

Burning cleaner, greener fuels will help us improve our air quality and the health of all Ontarians.

Our renewable Fuels Standard for ethanol, alone, will reduce annual greenhouse gas emissions by about 800,000 tonnes.

Bio-fuels also reduce our dependence on further use of non-renewable fossil fuels.

While there are still some issues that need to be addressed, including a possible federal duty on U.S. grain corn imports, the economic and environmental potential for biofuels is considerable.
Closing Remarks

The message I want to leave with you this morning is that the Ontario government is committed to fostering the development and use of renewable fuels, for the benefit of our environment and the benefit of our economy.

One thing that impressed me in Montreal was the wide range of efforts that are being made in communities all over the world to reduce green house gas impacts.

The bio fuels sector has an important role to play in a more sustainable energy sector and it is with your continued efforts that we can build a cleaner, greener and healthier future for all Ontarians.

Thank You.

Notes for remarks By
The Honourable Donna Cansfield, Minister of Energy
2005 Canadian Renewable Fuels Summit
Toronto, Ontario
December 14, 2005

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