The program is intended to stabilize the Canadian renewable fuel industry and stimulate the local economy. Canada will invest up to $1.5 billion over nine years in biofuel production and has already signed contribution agreements with 23 companies.

While debate continues about ethanol produced from grain generating less greenhouse gas emissions than gasoline on a life-cycle basis, Husky shifted to mostly imported corn for the Minnedosa plant. Canada will require 5 percent renewable fuel content in gasoline by 2010 and 2 percent in diesel by 2011.

Husky's Minnedosa fuels facility has been operating since 1980 and in 2007 expanded production capacity from 10 million to 130 million liters of ethanol per year. Hog producers in Canada and the US fear ethanol development will force farmers to import grain, and corn, raising feed prices. Grain and corn prices worldwide have increased due to ethanol production.