Thank you, Mr. Chair.
I'll start by saying that I'm a poor substitute for Mr. Amerongen, the chair of the WGEA, who's been unexpectedly detained, but I'll do my best.
As many of you know, the WGEA is a national association of grain companies that handle over 90% of our country's bulk grain shipments. Collectively, they export in excess of $25 billion of grain annually.
Canada's largest trading partners, unfortunately, are exploiting Canadian grain exporter vulnerability as levers toward political objectives due to factors outside the grain sector's control. In response, exporters are being told to diversify markets. What that really means is selling more volume into lower-value and higher-risk markets, which is not sustainable given Canada's high-cost, over-regulated and chronically disrupted grain handling system.
Furthermore, grain exporters already sell to over 80 countries, making our sector one of the most trade-diversified sectors in the Canadian economy.
There are three broad areas where Canada's federal government can provide assistance to grain exporters in managing their business risk.
First, improve business risk management tools for exporters. Second, ensure that supply chains run smoothly. Third, remove unnecessary red tape and reduce government costs.
With respect to the key theme of this meeting, on improving business risk management, this committee has heard extensively from the agricultural sector on how its exporters have borne the brunt of fluctuating political relations with our major bilateral trading partners, notably China. Exporters have no ability, currently, to manage these risks, and that has resulted in massive financial losses. Unlike other sectors, including the automotive, steel and aluminum businesses, Ottawa has left grain exporters to take those losses without any further consideration. This is grossly unfair. This is a business risk that has been wholly generated by government. Government should therefore be looking to help grain exporters mitigate those risks.
In 2025 alone, Canadian grain exporters experienced direct contractual losses of approximately $60 million Canadian. Costs from broader grain market adjustments were in the range of $144 million to $384 million, all due to geopolitical trade tensions.
Grain companies need predictable, consistent and easily accessible business risk management solutions when a foreign government announces or implements an agricultural trade barrier. In our view, tax-based solutions are the most elegant, as they allow exporters to know immediately if their situation would be covered or not. For example, we think a foreign political trade barrier tax credit for agricultural exporters could be created. It could be a refundable tax credit to offset verifiable costs incurred to respond to or mitigate the political trade barrier in question. Examples of these costs include demurrage fees, carrying costs and the price differential for distressed sales.
Additionally, subsidization of contract default insurance could also help exporters deal with diversifying to riskier geographies with riskier customers. EDC does not provide political risk insurance. It does not provide insurance on possible erosion of contract prices on commodities due to political trade barriers, nor does it intend to make program adjustments to cover the risks we've identified. As a result, subsidization of private sector insurance for contract defaults may be the only reasonable avenue to reduce contract default risk. These solutions would mitigate exporter company risk and help keep agricultural products moving leading up to and during geopolitical disruptions. This could in turn help to hold prices steady at the farm gate, as well as reducing demurrage, carrying costs and other penalties that could be attributed to the political trade barrier in play.
On the second theme, of removing unnecessary red tape, perhaps this is the simplest way of enhancing competitiveness to drive trade diversification and better export risk management, simply by making government rules less costly to business. The WGEA submitted a brief to this committee during your discussion of that topic. We will not duplicate our comments there. We think all of those recommendations remain relevant today.
With respect to the third theme, which is ensuring that supply chains run smoothly, Canada's ability to compete in global markets hinges on its ability to move grain from the vast interior of our country to tidewater ports. Understandably, many things can stand in the way of doing that successfully.
With respect to labour, the recurring and chronic threat of railway and port work stoppages jeopardizes our ability to get product to market and adds risk to the transaction. A recent study done by the Anderson Economic Group quantifies the economic impacts of transportation labour disruptions on the Canadian grain sector. A one-week work stoppage on either railway costs approximately $250 million per week, which doubles if both go on strike at the same time, as we saw in 2024.
With respect to infrastructure, the major trade-enabling infrastructure—
