Good afternoon. I'm joined here, as you said, by my colleague Steve from our Winnipeg office. Steve's a leading expert on rail policy. Thanks for inviting us to speak today about your study on the agriculture supply chain in Canada.
CCGA is the voice of Canada's 43,000 canola farmers. In any given year, over 90% of Canadian canola, in the form of raw seed or the two processed products of oil and meal, is ultimately destined for the export market to more than 50 countries. In 2020, 13.7 billion dollars' worth of canola was exported. We're the world's largest producer and exporter of this high-value oilseed. Our industry is estimated to support 207,000 jobs and to contribute $29.9 billion to the Canadian economy annually.
Canola farmers rely on rail transportation to move their products to export customers and to keep those product prices competitive with the global oilseed market. On average, canola travels 1,500 kilometres from farm to tidewater to be in export position. Farmers independently strive to maximize both the quantity and the quality of their production each year. Once the canola is harvested, they sell it into the system based on their specific marketing plan, with the overall goal of capturing the highest possible prices at any given time in a dynamic and ever-fluctuating global commodity market.
The transportation of grain is one of several commercial elements that directly affect the prices offered to farmers. When issues arise in the supply chain, the prices farmers receive for their grain can drop, even at times when commodity prices are high in the global marketplace.
In periods of prolonged rail disruptions, the worst-case scenario is when space in grain elevators becomes full and grain companies stop buying grain and accepting deliveries from farmers. This can occur even when a farmer has a contract for delivery in place, potentially straining their ability to cash-flow their operations. This is a major reason that western Canadian farmers have such a vested interest in transportation. It directly affects an individual farmer's income. Beyond that, they rely on the service of Canada's railways to move grain to export position. There's no alternative now or into the near future.
The modern grain supply chain is predicated on having the right grain in the right place at the right time. There are a lot of moving parts in this complex system.
Let me turn to the specific question at hand—the current situation and difficulties in the agriculture supply chain. Our perspective is on two different levels, both the here and now and into the future. Then I'll offer suggestions as to the role the federal government can play.
In crop year 2020-21, the railways set a new benchmark in the movement of western Canadian grain, shipping over 61 million tonnes. Within that, over 52 million tonnes fell under the maximum revenue entitlement regulation, setting a new volume record. For the first time, both CN and CPR each earned over $1 billion. All stakeholders benefited from the strong supply chain performance. It showed what can be done when the grain handling and transportation systems work effectively.
This year has been an illustration of great contrasts, good and bad, and has given us yet another illustration of how fragile the agriculture supply chain in Canada really is. This time the source of disruption was severe weather that severed the critical railway artery, twice in five months, in the same general area in British Columbia.
Since fully reopening on December 5, the railway system recovery has been an ongoing struggle that has been witnessed by performance metrics observed by Canada's grain shippers. This could have been an extremely bad situation for the entire agriculture sector, but to some degree the negative impacts on farmers were mitigated by a 40% smaller crop last year, due to the western Canadian drought and the strong export program in the weeks before the railway disruption. However, there have been significant costs accruing to the exporters, largely due to contractual costs associated with grain vessels.
This has had a major impact on the grains sector due to the export profile of our commodities. Currently, 70% of western Canadian bulk grain is destined for the port of Vancouver. This is enabled by significant investment by grain exporters in the port of Vancouver over the last decade. The current and future importance of this particular west coast export outlet cannot be understated.
When we look to 2030, we anticipate further rising demand for our products, both domestically and internationally. As a country, we need to prioritize and coordinate an approach to critical infrastructure. There's work being done, but it needs to be expanded. It is complicated, as the ownership of tunnels, bridges, railway lines and roads varies.
I could point to the north shore grain terminals in the port of Vancouver as a prime example. There's one rail line that transits through a tunnel and then over a lift-bridge, both owned by that railway, to access the four grain terminals on the north shore. This route also serves the other bulk commodity terminals, such as for sulphur and coal. There's no backup routing to serve these terminals in the event of a disruption on the tunnel or bridge.
In conclusion, as witnessed last fall, when critical supply chain infrastructure is imperilled, the entire system can be affected. The 2015 report of the Canada Transportation Act review took a comprehensive look at the governance and coordination of investment and project planning, and made a variety of recommendations on how to do this.
We need to get back in the business of nation-building projects. Canadian farmers and industry will need an effective and responsive rail-based transportation system, for transportation not just of the current crop sizes, but also of those of the future. Moreover, farmers will need to capitalize on the opportunities for Canada's existing and future trade agreements. They can't do so without a reliable and efficient rail system that grain shippers and our global customers have confidence in.
Thank you.