Thank you, Mr. Chair.
Through some of the most rugged terrain and challenging weather, Canada's railways move over 380 billion dollars' worth of commodities and consumer goods and approximately half of Canada's exports. Grain accounts for one-fifth of Canadian class I freight traffic.
Canada's railways deliver the highest safety performance in North America with industry-leading environmental innovation and strong service. They do it at virtually the lowest cost anywhere in the world. Over the past decade, the Canadian freight rail sector's accident rate has improved by 19%, and the dangerous goods accident rate by 34%. Even with a capital-intensive environment, railways in Canada maintain some of the lowest freight rates worldwide—11% lower than those in the U.S., and significantly lower than the ones in several European countries, Australia, Japan and India.
Let's take grain as an example. All grain starts in a truck. Grain companies charge more to farmers to truck and elevate a tonne of grain than railways charge to move that same tonne 1,500 kilometres from the Prairies to tidewater. A CPCS study found that the implied MRE rate for regulated Canadian grain is 29% lower than the average Canadian freight rate.
A strong rail sector is essential to a competitive Canadian economy. Over 35,000 Canadian railroaders work night and day in challenging conditions to safely get Canadian goods to global markets.
As this committee studies ways to support Canadian agriculture, we urge you to support policies that would enable continued investment in our transportation system. Smart policies create jobs, lower costs for consumers and improve agricultural supply chains.
However, we have recently seen an increase in shipper rhetoric as well as ill-advised regulatory measures such as extended regulated interswitching, which puts investment, efficiency and good-paying jobs at risk.
Extended regulated interswitching allows U.S. railways to access Canadian traffic at regulated rates, while Canadian railways do not have the same access to U.S. traffic. It creates an unlevel playing field.
If shipments go to Seattle instead of Vancouver, it means fewer carloads for Canadian railroaders and less work for port workers. These are good-paying union jobs.
Using a Winnipeg-to-Vancouver train as our example, the railways have modelled the effects of extended interswitching, and we risk losing up to 44 work days for Canadian railroaders to the U.S. That's equivalent to 11 crews of two moving one train of grain to port and returning with empties. That's why Canada's rail unions oppose extended regulated interswitching.
As Unifor has stated, “Extending the interswitching limit has opened-up the Canadian rail service to unbalanced competition with US-based companies”. Also, Teamsters emphasized that they firmly believe that this change “will lead to the exportation of valuable Canadian union jobs to the United States, including those in the railway and port sectors.” They thus recommend the government “abandon any plans, both current and future, to expand interswitching distances in Canada.”
This committee should not support policies that chase jobs and investments to the U.S. Any continuation of this pilot project will put more Canadian jobs at risk. As a trading nation, Canada's reputation hinges on the reliability of its supply chains. North American supply chains have been recently experiencing labour disruption from coast to coast. As we've seen, these disputes not only affect ports and railways but reverberate through our economy, impacting businesses and consumers alike.
The Canada Labour Code needs to be amended to provide the federal government with tools to rapidly prevent or terminate a work stoppage in Canada's supply chain and impose binding arbitration when the parties are deadlocked. This will help build a resilient system that supports agriculture and the livelihoods of Canadian workers.
Since 2018, CN and CPKC have invested over $1 billion in thousands of new grain hopper cars and billions more in other projects to increase capacity. Canada should promote the flow of trade, not create obstacles. The federal government must act on supply chain challenges, such as the inability to load grain in the rain at the port of Vancouver and labour stability. We urge the committee to explore real capacity solutions by looking at proven approaches in other jurisdictions to address the issue of loading grain in the rain. Action is what's needed now.
In conclusion, strategic policy changes and continued investments are crucial to ensuring Canada's position in the global market. Railways are enabling their customers and the economy to grow.
Thank you.