Thank you for inviting me to speak to you today. This is an important topic that your committee is examining.
I'm here representing the Grain Farmers of Ontario. We are Ontario's largest commodity organization. We represent 28,000 grain and oilseed farmers. We farm on seven million acres. We produce $5 billion in farm gate receipts and employ 90,000 people. We produce 200 million metric tonnes of grain, and that grain is corn, soy, wheat, oats and barley. We play a crucial role in producing food for Canadians and people around the world.
Farm financial sustainability is an integral part of the food system. In recent years our farmers have faced numerous challenges that have impacted markets and input prices. These challenges include the illegal invasion of Ukraine, the pandemic response, China's soybean import restrictions, labour disruptions, the CN strike a few years ago and the seaway strike just this past week in the middle of harvest. These events impose significant costs on farmers, which they cannot pass on: Farmers pay for these costs themselves.
Farmers in Ontario compete directly with farmers in the United States, and the U.S. provides financial support to farmers facing risks and challenges beyond their control. Canada's business risk management suite falls short for grain farmers in Ontario.
If you look back to the situation facing our farmers in 2022, you see that Canada's sanctions and tariffs impacted our farmers specifically. To protect themselves from price shocks, farmers had already booked their fertilizer in advance as they always do, and Canada's removal of Russia and Belarus from the MFN status had an impact. Farmers in Canada had to pay a 35% tariff on fertilizer imports, something their U.S. counterparts did not have to do. The invasion led to a global spike of fertilizer prices. Ontario farmers not only lost their low-cost source of fertilizer, but the replacement costs of the same amount of fertilizer were a lot higher.
The government's support in securing fertilizer supply that spring was appreciated; however, farmers incurred an estimated $200 million in additional costs that growing season. Direct payments to offset these expenses have not been provided, and the business risk management suite does not cover these costs.
Every time we encounter these shocks that I've listed above, we look at the impact and how we could avoid these or plan for these in the future. Two reports I can share with the committee deal with the situation facing farmers on fertilizer supply and then with a comparison with the U.S.
The first report, by Josh Linville, who is a world expert in fertilizer supply, focuses on the importance of securing a stable fertilizer supply. His recommendations include securing global supply guarantees with key countries, considering emergency strategic reserves, addressing supply chain logistics, improving rail transport and costs as well as trucking, and looking at what can be done to improve on-farm storage as well as port storage and offloading—we have a very tight system in Ontario and Quebec—and creating an exemption for the tariffs to ensure unhindered trade flow.
The second report compares funding for farmers in the U.S. and Ontario, showing that U.S. farmers have received more support through their BRM programming over these last few years of challenges. In fact, there's about a 30% difference between what the U.S. farmers are getting and what the Ontario farmers are receiving from the Canadian government.
Longer-term solutions can be also found in Linville's report, which include looking at incentives for building capacity for fertilizer production in eastern Canada.
As we look ahead to the future of global fertilizer markets and other commodity challenges, we see that they will persist. Increasing logistical capacities and production may take years. Implementing these strategies today will help alleviate future supply issues.
In the interim, we'd like to see assessments of risks in the system as well as improvements to BRM programming, specifically to deal with the shortfall in coverage provided by AgriStability, which was intended to address these kinds of risks.
This will go a long way toward increasing resiliency in the food system and keeping farmers in Ontario growing while they face these challenges that are beyond their control.
We appreciate your time and attention to these critical issues affecting our sector and food security. I look forward to your questions.
Thank you again for inviting me to speak with you today.