Thank you, Mr. Chair.
Every year, Canada's freight railways move $380 billion worth of goods, including half of Canada's exports. The Canadian freight rail network is world class by any objective measure. Canada's railways provide the highest safety performance in North America, industry-leading environmental innovation, and strong service.
Since the changes to the National Transportation Act, 1987, rail productivity have more than quadrupled, average wages for rail workers are on the verge of tripling, and rail rates have risen about half as fast as inflation. Today, Canada's freight rates are, on average, the lowest among major market economies, including the United States.
I'll use grain as an example. Farmers pay far more to truck an elevated tonne of grain less than 100 kilometres than it costs the grain company to move that grain 1,500 kilometres by rail from prairie to tidewater. Rail is the greenest mode of ground transportation, and railways are three to four times more fuel-efficient than trucks.
Over 35,000 Canadian railroaders work around the clock in some of the harshest weather to bring Canadian goods safely and sustainably to global markets.
Canada was built by rail. Railways, both passenger and freight, continue to help build and develop this country. While my remarks today are focused on freight, I'd like to underline the critical role of passenger railways in economic and social development.
As this committee considers ways to support the growth of Canadian businesses, the committee should encourage a policy and regulatory framework that allows the Canadian rail network to remain world class.
Extended regulated interswitching, resurrected last year, is a federal policy that puts Canadian jobs and investments at risk. The policy can slow down supply chains and raise costs for Canadian exporters, importers and consumers. Under extended interswitching, U.S. railways can solicit Canadian traffic at below-market regulated rates without any reciprocity for CN and CPKP to do the same in the U.S. That means fewer available carloads for Canadian railroaders to move across Canada. It may also mean less available work for port workers if shipments end up in Seattle rather than in Vancouver, for example. These are good-paying union jobs. That's why Canada's rail unions oppose extended interswitching.
Extended interswitching has been tried before, and it failed. Informed by David Emerson's Canada Transportation Act review panel and by substantial evidence, Transport Canada concluded in 2017 that extended interswitching “was having unintended consequences on the competitiveness of our railways vis-à-vis the U.S. railways.”
Then minister Marc Garneau did not just sunset extended interswitching at that time. He replaced it with long-haul interswitching, a remedy which today still exists, available to shippers up to 1,200 kilometres.
What those advocating for extended interswitching want is to use government policy to secure an unfair advantage at the expense of all other users of the rail network. Extended interswitching hurts Canadian supply chains, workers, consumers, and businesses relying on efficient rail service to remain competitive. It must be immediately repealed.
Short-line railways are also incredibly important links in the supply chain, and they connect communities and businesses to global markets. One in five carloads starts on a short-line in Canada, and short-lines need predictable government funding mechanisms to remain viable alternatives to trucking. Unlike the U.S., there is no dedicated support mechanism for short-line railways at any level in most provinces, despite their outsized impacts. Multiple House committees have recommended greater short-line support, and we respectfully request this committee to do the same.
Canada needs more investment, not less. It should be promoting the fluidity of trade, not creating barriers. The federal government should take action to address supply chain challenges, including the inability to load grain on ships at the port of Vancouver when it rains, and workforce stability, which is a significant challenge right now.
To conclude, over 10 years, railways have invested more than $21.5 billion to enhance the fluidity and resilience of Canada's rail network. Railways are enabling their customers and the economy to grow. The government should help enable this positive growth story for Canada.
Thank you.