Mr. Chair, it is indeed a pleasure to be here with Minister Raitt and our support teams to talk about this and the attention this committee is bringing to this critical issue for our farmers, our commodity shippers, and of course, for our overall economy here in Canada.
As you know very well, over the past month the backlog of grain and other commodities as well has negatively impacted our economy here in Canada. Agriculture is a key component of Canada's economic success, accounting for one in every eight Canadian jobs. Our hard-working farmers do more than put food on our tables. They drive jobs and economic growth across Canada, exporting more than $50 billion last year alone to markets around the world. Last year Canadian grain farmers produced a record crop for our growing global marketplace that is hungry for Canadian products. As is the case in most resource sectors across western Canada, farmers are also having difficulty getting their world-class products to market.
To help address these issues, three weeks ago our government brought in an order in council requiring a minimum of one million tonnes of grain to be moved each week, backstopped by penalties of up to $100,000 a day. The volume requirement of one million tonnes was not chosen arbitrarily. This is a tonnage commitment by both CN and CP that will move grain in an efficient manner while not hampering movement of other commodities. That last part is key, Mr. Chair, as our government has been clear that we do not want to incent one commodity by disincenting another.
That OIC was aimed to help get the grain moving faster in the short term. At the same time, we promised to introduce legislation that would address the medium- and long-term challenges that this backlog has highlighted. Last Wednesday our government delivered on that promise. This emergency legislation will put into law clear and achievable measures to support a world-class logistics system against Canada's agricultural products and other commodities to market in a predictable and timely way.
There are four key components to this bill.
First, we will require additional, more timely, and accurate data from the railways to increase the transparency of railway, port, and terminal performance across the entire supply chain, including reporting on a corridor-by-corridor basis.
Second, we will amend the Canada Transportation Act to include the authority to set volume requirements in extraordinary circumstances in order to mandate, for instance, that certain grain volumes be moved in peak periods similar to the direction the OIC took. This change will provide greater predictability for all shippers by allowing for specific volume performance requirements should they be required to meet demand. It will also help to ensure the entire supply chain is prepared in advance to respond to peak demands.
Third, our government is creating the regulatory authority to enable the Canadian Transportation Agency to extend interswitching distances to 160 kilometres, from the 30 kilometres that was set in 1987. This is for all commodities across the Prairies. Expanding this distance will increase the access that all prairie shippers have to the lines of competing railway companies, leading to increased competition. Specifically with respect to grain, with this increase 150 grain elevators will now have practical access to more than one railway compared to the 14 that have that claim today. It's a gain of some tenfold. This will increase competition among railways and give shippers access to alternative rail services by getting more elevators within that scope.
Fourth, we will amend the Canadian Grain Act to strengthen contracts between producers and shippers. The amendment will provide the Canadian Grain Commission with the authority to regulate grain contracts between farmers and grain elevators. If necessary, regulations could be created in contracts that will require grain companies to compensate producers if they do not honour their contracts in a timely way.
In addition, we are establishing regulatory power to add greater clarity to service level agreements as requested by all shippers across Canada. These measures will be concrete and comprehensive. We also announced an accelerated review of the Canada Transportation Act, with an initial focus on rail transportation.
Mr. Chair, last week the Minister of Transport and I held a stakeholder round table in Winnipeg on the contents of this bill. I then held subsequent round tables in Saskatchewan and Alberta. We met with a wide cross-section of shippers who play an important role in powering our economy now and well into the future.
All shippers highlighted the importance of the measures in this bill and appreciated the work being done by all parliamentarians to move this legislation ahead expeditiously. Our common goal is to improve Canada's rail system for the transportation of goods over the long term, for improved capacity, predictability, planning, and accountability for all commodities within the supply chain. This bill will help entrench Canada's reputation as a world-class exporter of all commodities. Our government means business when it comes down to getting our commodities moving to the marketplace.
Shippers and our overall economy require a system that works today and tomorrow with the capacity to move what is produced. The entire supply chain must work to build the capacity for our shippers to meet our growth plans well into the future. Our government remains focused on a way forward that will benefit all shippers, while continuing to grow our resource economy.
The legislation we have introduced will strengthen Canada's ability to leverage our trade agreements and maintain our reputation as a reliable supplier of high-quality produce.
We're taking immediate action with this legislation. Farmers and indeed all shippers are counting on all sides of the House of Commons to do the right thing and help us get these critical measures in play as quickly as possible.
Mr. Chair, I look forward to any questions the committee may have.