A controversial program that paid out hundreds of millions of dollars to entice ethanol companies to set up in Ontario is being allowed to expire at year’s end.

Established in 2005, the $520-million Ontario Ethanol Growth Fund was used by companies to build seven plants that now produce more than 1.1 billion litres of ethanol a year. Provincial regulations mandate that gasoline sold in Ontario contain at least five per cent ethanol.

Asked about the program’s future, an Ontario Agriculture Ministry spokesperson said by email that the ministry is unaware of any plan to replace or extend it when it expires Dec. 31.

“The program has been very successful in helping to create a vibrant ethanol industry and to grow Ontario’s bio-economy,” the spokesperson wrote.

The province credits the program with improving air quality and creating and retaining 300 skilled jobs in rural Ontario, as well as 7,500 jobs during construction.

Ontario’s farm sector has strongly backed government programs for the ethanol industry, which provides corn farmers an additional market.

Mark Brock, chair of Grain Farmers of Ontario, said the ethanol program did its job.

“It is a prime example of how a fund should work to help a fledgling industry grow,” Brock said Thursday.

From discussions with ethanol companies, Brock said he understands the fund is no longer critical to their operations.

Ethanol remains a significant market for Ontario corn farmers, he said, adding that Grain Farmers of Ontario would like to see the mandated amount in gasoline increased.

Originally touted as clean, renewable energy, ethanol has been criticized for delivering modest environmental benefits at a huge cost.

A report this month by Canada’s EcoFiscal Commission, a group of Canadian economists, urged an end to ethanol subsidies because of the high cost relative to the benefits.

jminer@postmedia.com

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Ontario ethanol plants

Amaizeingly Green LP, Collingwood

GreenField Ethanol, Chatham

GreenField Ethanol, Johnstown

GreenField Ethanol, Tiverton

IGPC Ethanol Inc., Aylmer

Kawartha Ethanol Inc., Havelock

Suncor St. Clair Ethanol Plant, Sarnia-Lambton