Thank you, Mr. Chair.
Thank you to the committee for having me here today and for allowing us to share our comments about the preparation for budget 2019.
The Canola Council of Canada is a value-chain organization that represents the whole canola industry in Canada. We represent the 43,000 canola farmers across the country, mostly in western Canada, but some in the Ontario and Peterborough area, Northumberland, and so on. We also represent the processors who take the seed and turn it into oil and meal for export markets, and canola oil and canola meal for animal feed; the seed companies that develop innovative seed technologies to provide to the producer to increase their production capabilities and fight diseases, and so on; and the exporters of raw seed. We work on behalf of the whole industry.
Canola is Canada's most valuable field crop, returning $9.9 billion to Canadian farmers. It has the largest acreage in western Canada, currently. We think that the canola industry is a real engine of economic growth in western Canada, in terms of production processing, grain handling and sales.
Innovation and competitiveness are essential to the success of the canola industry. Canola is a Canadian invention and is often the single-biggest income for Canadian farmers. Innovation has helped canola be competitive on the world stage. More than 90% of canola grown in Canada is exported around the globe. We're highly dependent on export markets and innovation.
Our industry has a strategic plan that we call “Keep it Coming 2025”, to increase production of canola from a current level of about 21.3 million tonnes last year to 26 million tonnes. There is certainly strong global demand for canola.
Our challenge is with our research work and so on, to ensure that we can grow more canola on every acre of land in western Canada. We have a goal of achieving that 26 million tonnes. We'll have more canola available for export markets.
To put this into perspective, if we achieve this plan, we would be adding $4.5 billion to Canadian canola exports. Every incremental bushel that we grow is going to be exported.
The Government of Canada has set a target, and we think it's an excellent target to set, of $75 billion of exports by 2025. It means an increase of about $20 billion in value of exports between now and 2025. If canola is successful in achieving that, we would contribute $4.5 billion to that target. Innovation is really critical to all of that.
We have four recommendations for the committee related to the 2019 budget.
The first I would like to speak to is corporate tax policies. Tax policies influence investment decisions throughout our value chain. For Canada to be an attractive place to invest in the canola industry, our corporate tax policies really need to be competitive with the U.S., with whom we compete within the oil market.
For example, as part of our Keep it Coming plan, we want to increase the amount of value-added processing and to turn this plan into investments that create jobs in processing plants. In that regard, the most important element is to match the accelerated capital cost allowance currently in place in the United States.
The processing industry in Canada has invested very significantly in recent decades to increase our processing capacity in western Canada. That allows us to take exports of raw seed, process it in Canada, and turn it into a higher value, differentiated product in international markets. We take a relatively low-value product and turn it into a higher value product. That's been very successful in the last decade in western Canada, and a key element of that is the investment climate and tax policies related to it.
The second is that enabling competitiveness in the canola industry also requires carbon pricing systems that keep us competitive. For example, Canada's canola processes are energy-intensive. As I mentioned, they are very much trade-exposed. A carbon pricing system needs to encourage greenhouse gas reductions while not impeding the competitiveness of the sector. The pricing system should be accessible and equitable for the entire industry.
When it comes to reducing greenhouse gas emissions, canola can also make a unique contribution. This brings me to the third recommendation, which is implementing a clean fuel standard that is focused on liquid fuels by the end of 2019.
When canola is used as a biodiesel, it produces up to 90% fewer greenhouse gas emissions compared to regular fossil diesel. As liquid fuels are the largest segment of carbon fuel use, biofuel made from Canadian canola provides an excellent opportunity to significantly reduce greenhouse gases while spurring innovation and clean growth.
Finally, China is an important market where we see tremendous growth potential for the canola industries. We're eager to have a discussion with China about removing tariffs and non-tariff barriers that are a challenge to accessing that market. Our industry estimates that if we were able to eliminate tariffs on our products, that would support an additional 33,000 Canadian jobs and increase the value of our exports by $1.2 billion annually. We urge the government to engage at a very senior level with the government of China in negotiations to enhance trade.
In closing, remaining competitive and innovative is essential to our industry. These are our four recommendations: adjusting corporate tax policies to address the competitiveness gap with the United States; ensuring carbon pricing assistance that keeps our industry competitive; implementing a clean fuel standard that is focused on liquid fuels in 2019; and starting trade investments with China.
Thank you very much.