Ottawa Announces Canola Sector Supports

The federal government is rolling out a suite of new measures to strengthen Canada’s canola sector and broader agriculture industry against mounting trade and policy challenges.  

The initiatives, announced Friday, include immediate incentives for domestic biofuel producers, expanded loan and cash advance programs for farmers, and long-term trade diversification strategies aimed at reducing reliance on a handful of key markets. 

At the heart of the plan is a new Biofuels Production Incentive valued at more than $370 million over two years, set to run from January 2026 through December 2027. The program will provide per-litre payments to Canadian producers of biodiesel and renewable diesel, capped at 300 million litres per facility. 

The move comes in response to U.S. subsidies and policy changes that have placed Canadian facilities at a disadvantage, leading many to idle operations or close altogether. Without intervention, officials warn, Canada risks losing domestic production capacity, deepening reliance on U.S. imports, and weakening demand for homegrown feedstocks such as canola. 

The government said it will introduce targeted amendments to the Clean Fuel Regulations to facilitate the incentive, while maintaining the regulations’ core focus on reducing the carbon intensity of Canadian fuels.  

On the financing side, the government is doubling down on supports through the Advance Payments Program (APP). The APP provides low-interest cash advances of up to $1 million, with a portion interest-free. Earlier this year, the interest-free limit was raised to $250,000. To address ongoing volatility, the government is now temporarily doubling that limit to $500,000 for canola producers through the remainder of the 2025 program year and into 2026.