Ottawa says it is going ahead with an environmental promise made during the election campaign to increase the use of ethanol in gasoline.
Environment Minister Rona Ambrose says the provinces are on board with a plan to have all Canadian gasoline contain five per cent ethanol by 2010.
Ambrose made the announcement in Saskatchewan, where a lot of ethanol grain is produced.
So far, Ambrose and her provincial and territorial counterparts have simply agreed to work on the blueprint for how to use more renewable fuels.
The Canadian Renewable Fuels Association, which represents companies that make ethanol and biodiesel, says Ottawa's plan is a step in the right direction.
But there are already signs of the kind of political disagreement which could be ahead.
Most of Canada's ethanol is made from corn imported from the United States. In return for joining in, Saskatchewan wants to replace the American corn with wheat, corn and straw from Western Canada.
Also some environemntalists think the federal government is simply trying to divert public attention from its lack support for the Kyoto protocol.
Three federal departments and their provincial and territorial counterparts are taking the summer to draft a plan on renewable fuels.
They'll meet again in November.