Thank you for the invitation to appear here today. My name is Rich White, and I am the president and CEO of the Canadian Canola Growers Association, or CCGA. I am joined today by Dave Carey, our vice-president of government and industry relations.
CCGA represents Canada's 43,000 canola farmers on issues that impact their farms' success. It is led by a farmer board of directors, with representation from provincial grower associations from Ontario west to B.C. CCGA is also the largest administrator of Agriculture and Agri-Food Canada's advance payments program.
Canola is Canada's largest agricultural commodity, earning farmers $13.7 billion in farm cash receipts in 2022.
Canada exports 90% of the canola we grow to approximately 50 countries as seed, oil or meal. Exports were valued at $14.4 billion in 2022. Canada is the world's largest exporter of canola. International trade underpins the canola sector's $29.9-billion annual economic contribution that supports 207,000 Canadian jobs.
Rail is the only practical means of transportation to move canola from the areas of production to port. Canola on average travels 1,520 kilometres by rail from farm to tidewater to be in export position.
Transportation of grain is one of several commercial elements that directly affect the price offered to farmers. When issues arise in the supply chain, the price farmers receive for their grain can drop, even at times when commodity prices may be high in the global marketplace.
Additionally, recent announcements in the Prairies over the last two years of five new canola processing facilities or expanded capacity of existing facilities signal that demand for canola is on the rise. These private investments of over $2 billion will increase Canadian processing capacity by over 50% of what it was in 2020. Increased rail capacity will be required to move more produce, and the reliability and timeliness of rail service will be critical to enable Canada's farmers to meet this demand.
At full build-out, this increase in domestic processing will likely create a shift in dominant trade flows of canola products, with less raw seed being destined for the west coast for export and more canola oil being transported domestically, especially to supply the expanding renewable fuel sector in North America.
As such, we are very pleased to see the budget recognize the need to incentivize competition in our class 1 railways by proposing a pilot trial to increase the extended interswitching limits in the Prairies. If done correctly, this pilot will promote fair competition, reduce transportation costs and enable Canada to build its reputation as a reliable supplier of canola. To further strengthen this policy, this commitment should seriously consider the following three points:
One, set the extended interswitching distance to 500 kilometres to ensure competitive market forces are available to all grain elevators and major agriculture producing regions. Under the 160-kilometre radius proposed, there are significant regional geographies in the three prairie provinces that remain outside of the pilot, producing an uneven playing field based on physical location.
Two, ensure that extended interswitching is available to all North American railways to further integrate the North American—