Ottawa’s push for biofuels raises concerns over food security and environmental costs

The federal government is pledging hundreds of millions of dollars to bolster Canada’s biofuel sector, but critics warn that diverting farmland from food to fuel could drive up grocery bills, strain ecosystems and undercut climate goals.

On Sept. 5, Ottawa announced that it would provide $370 million in production incentives to domestic biodiesel and renewable diesel producers. Officials say the funding is intended to shield Canadian farmers and processors from trade disruptions and foreign tariffs while creating more demand for crops such as canola. The government also plans to amend the Clean Fuel Regulations to favour domestic feedstocks and reduce reliance on imported fuels.

Supporters describe the move as a win for producers facing volatile markets. But research shows the expansion of biofuels carries significant trade-offs. A 2016 report from the Ecofiscal Commission concluded that subsidies and mandates often benefit first-generation biofuels made from food crops, which can have weaker environmental performance than advanced alternatives.

One of the most pressing concerns is food security. Studies have found that diverting land to fuel production reduces the amount of food available for people, raising prices and intensifying competition for land, fertilizer and water. While Ottawa argues the global impact on food costs will be small, the effect on Canadian consumers, particularly in low-income or remote communities, is less certain.

The environmental footprint of biofuel expansion is another issue. Converting forests, grasslands or wetlands to cropland releases stored carbon, potentially offsetting the climate benefits of replacing fossil fuels. Monoculture farming for crops like canola also puts pressure on biodiversity and wildlife habitat. A University of British Columbia study has flagged risks to soil health and species loss if crop production intensifies without safeguards.

Water use and pollution pose additional challenges. Fertilizers and pesticides used in large-scale agriculture can run off into rivers and lakes, degrading water quality. Increased irrigation can put pressure on aquifers, particularly in areas of the Prairies already facing drought. Soil erosion and depletion may further reduce the long-term productivity of farmland.

Beyond environmental impacts, there are ethical and socioeconomic questions. As crop demand for fuel grows, small farmers may struggle to keep pace with industrial competitors. Some experts warn that subsidies and regulatory changes risk consolidating power in the hands of large agribusinesses while leaving vulnerable populations to shoulder higher food costs.

The federal government insists the incentives will help cut emissions, support farm incomes and strengthen Canada’s energy independence. Yet past reviews of biofuel policy suggest those outcomes are not guaranteed. The Ecofiscal Commission found that Canada’s existing biofuel mandates cost taxpayers billions while achieving relatively small greenhouse gas reductions.

With billions more in subsidies now on the table and regulatory reform underway, the debate is whether Canada’s push for homegrown biofuels will deliver on climate goals without sacrificing food affordability and ecological health.