Thank you, Mr. Chair.
I want to thank the committee for the invitation tonight to speak to you.
My name is Greg Northey, and I'm the vice-president of corporate affairs with Pulse Canada.
Pulse Canada is a national association representing over 25,000 pulse growers, as well as the processors and exporters of Canadian pulse crops, including peas, lentils, chickpeas, dry beans and fava beans. Canadian pulses are among the most sustainable sources of protein in the world. In 2021 alone, Canadian pulses, thanks to their nitrogen-fixing capabilities and the modern agricultural practices of pulse growers, removed 3.6 million tonnes of carbon dioxide from the environment. This is the equivalent of taking 1.1 million cars off the road in a single year.
In addition to our environmental contributions, the pulse industry is a significant economic driver, accounting for roughly 26,000 Canadian jobs and delivering $6.3 billion in annual economic activity. This is in part thanks to the fact that Canada is the world's largest exporter of pulse crops. We send billions of dollars' worth of pulses to over 120 markets around the world.
To do this economically, Canada's pulse industry and the entirety of Canadian agriculture rely on timely and predictable rail service.
In its final report, the national supply chain task force identified the key persistent issue that consistently threatens the competitiveness, productivity and growth of Canadian agriculture exporters. It says, “Railways are the only source of transport for many shippers, giving rail companies pricing and service discretion that is not balanced by normal market forces.” Simply put, railways are monopolies, and the lack of competition between them results in unreliable and unpredictable service for shippers.
That is why Pulse Canada was pleased to see important transportation measures that explicitly focus on incenting and improving a competitive dynamic within the rail sector included in Bill C-47. Key among these measures is the proposal to implement a pilot on extended, regulated interswitching. It is extremely positive that the government has recognized the pro-competitive value of extended interswitching and the positive economic benefits that competition delivers.
Competition unlocks the full potential of Canadian shippers, improves innovation and collaboration among Canada's class 1 railways and supports Canada's overall economic growth. When extended interswitching was in place from 2014 to 2017, it was the first time that competitive forces were introduced to a monopoly rail market ever. Even in this limited sample, the results were positive as shippers adjusted to the new market dynamic.
How could they not be? It is well known that competitive forces improve economic outcomes and productivity.
The previous extended interswitching period was also beneficial for the overall rail system. Railway operating ratios remained low, system average train speeds, car velocity and yard productivity increased in that time, and dwell times decreased. Importantly, movement of Canadian grain on both CN and CP also increased.
Extended interswitching has proven to be a vital tool for Canadian shippers, and Pulse Canada and our allies urge this committee and all members of Parliament to look to the successes of the last pilot as the foundation on which to build a more permanent extended interswitching program that will benefit Canada for decades to come.
In fact, to further strengthen this pro-competitive policy, the Government of Canada can improve it by setting the extended interswitching distance to 500 kilometres to ensure competitive market forces are available to a large group of captive shippers, which is only fair; ensuring that extended interswitching is available to all North American railways with operations subject to the Canada Transportation Act to further integrate our North American market and shorten the distance goods need to travel; promoting investment in rural rail infrastructure so that interchanges can accommodate larger trains and further unlock productivity and efficiency gains; and assuring that the pilot lasts a minimum of five years to unlock the full potential of competition.
This five-year extension is key, as presently shipments can be booked for up to 12 months in advance, meaning two-thirds of the pilot may expire with the 18-month pilot that's proposed now before a shipper can make use of the new competitive regulations.
To close, extending the interswitching is a policy that works for Canadian shippers, railways and consumers. We urge this committee to move this proposal through to completion and consider improvements in needed competition for Canadian rail shippers.
Thank you.