Thank you for the opportunity to appear today regarding the study of the pre-budget consultations in advance of budget 2019.
As introduced, my name is Jack Froese. I am a fourth-generation family farmer from southern Manitoba and currently serve as president of the Canadian Canola Growers Association. CCGA is a national association of canola farmers, with members from Ontario to British Columbia. I'm here today with Rick White, CCGA's chief executive officer.
The canola sector has a plan for sustainable growth that will contribute to the government's growth target of $75 billion of agricultural exports by 2025. Our sector contributes $26.7 billion to the economy and employs 250,000 Canadians. We are export-dependent and appreciate the government's efforts on trade. We look forward to a successful resolution to NAFTA, a swift ratification of CPTPP and moving ahead with an FTA with China.
Today I would like to discuss the most pressing issues for Canada's 43,000 canola producers: taxation, the Pest Management Regulatory Agency and a long-term plan for Canada's transportation infrastructure.
First, a competitive tax environment in Canada supports industry and stimulates economic growth and innovation. Taxation levels are important considerations that influence competitiveness and investment decisions throughout the value chain. For agriculture, value chains are global, and Canadian farmers compete with farmers in other countries for market access and for investment dollars, be it investment in research and bringing in a new crop protection product or seed variety to our market, or in Canadian infrastructure.
The recent taxation changes in the United States are expected to negatively impact Canada's long-term competitiveness. To ensure alignment, we recommend lowering the combined federal and provincial corporate tax rates to 20% and matching the accelerated capital cost allowance provisions available to U.S. companies. This would help ensure that our entire value chain remains competitive and enables investments in the industry infrastructure required to grow our exports and generate economic spinoffs for Canada's middle class.
I would like to extend my appreciation for the new approach to passive investment held within a corporation, announced in budget 2018. To see farm businesses continue to innovate and invest in our economy, CCGA recommends indexing the $50,000 adjusted aggregate investment income and excluding farm rent from passive income. Indexing the limit maintains its value year to year. Renting farm land is a common form of passive income, particularly for farmers looking to transition the farm to the next generation and prepare for retirement.
Second, farmers use a variety of crop protection products to effectively manage weed, insect and disease problems that threaten their crops. We rely on the Pest Management Regulatory Agency to provide a predictable, transparent science- and evidence-based regulatory approval process to ensure the safety of these products while providing an attractive environment for companies developing crop inputs to invest in the Canadian market.
In recent years, the agricultural sector has experienced various challenges with the re-evaluation process. Farmers are very concerned that they'll lose access to effective solutions due to incomplete processes and lack of real-world data, and more largely, that investors will start doubting the Canadian investment climate. The high number of re-evaluations included in the agency's work plan and the pace of scientific advancements highlight the need to outfit the agency to appropriately keep pace. To this effect, it is crucial that the PMRA have the resources it needs to appropriately, effectively and efficiently make robust science- and evidence-based decisions that lead to the safe and sustainable use of crop protection products in Canada.
Lastly, we recommend that the government coordinate and invest in long-term strategic infrastructure improvements. Investments need to continue in the supply chain to consistently and efficiently service our global customers. This is core to our reputation as a trusted supplier of high-quality grains and oilseeds, and to achieving a diversified export program. On average, prairie farmers' grains travel 1,500 kilometres to reach an export port. Transportation corridors such as the Vancouver gateway need considerable funding to be upgraded to handle not simply the goods of today but the increased volumes of the future as Canada works to diversify its trade flows.
Government initiatives such as the modernization of the Canada Transportation Act and the national trade corridors fund are good starting points, but a long-term, ambitious and fully resourced plan is required.
This will not be easy, as it will require multi-party collaboration among government, the provinces, municipalities, railways, terminal asset-owners and the port. Long-term strategic investments would proactively position Canada as an export powerhouse and provide the infrastructure to reliably and consistently service global markets. We need to think and invest in the future, and that needs to start today.
In conclusion, I would like to thank you for including the canola growers in your deliberations.