Thank you, Madam Chair and members of the committee.
Fertilizer Canada represents fertilizer producers and manufacturers, importers, wholesalers and retail distributors of nitrogen, phosphate, potash and sulphur. Together our members contribute over $42 billion annually to Canada's economy and....
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We support more than 118,000 Canadian jobs.
Fertilizer is essential to feeding Canada and the world. It contributes to roughly half of all global food production. At 23 million tonnes per year, Canada is the world's largest potash producer, supplying approximately 40% of global exports. Canada is also the most sustainable producer of potash, with emissions 50% lower than those of Russia or Belarus.
The current conflict in Iran is a reminder that fertilizers are a globally traded commodity and highly sensitive to geopolitical shocks. The conflict's shutdown of the Strait of Hormuz has created volatility in nitrogen, phosphate and sulphur markets, pushing prices sharply higher and raising concerns about meeting demand. An event far from Canadian farms, such as the war in Russia and Ukraine, a ship blocking the Suez Canal or instability in the Middle East, can rapidly tighten fertilizer markets and drive up global prices.
Canadian potash exports to the Mercosur region are a success story. Brazil is Canada's top potash market outside the U.S. Potash is also our largest export to Brazil and Uruguay, accounting for over half of all Canadian exports to Brazil by value. This success is due to a stable open trading relationship and the capacity to supply one of the world's growing agricultural markets.
Brazil's soils are inherently potash-deficient. Potash fertilizers allow farmers in Brazil to supply vital potassium to their crops, including corn, sugar cane, soybeans and coffee.
Canadian fertilizer producers are not just selling into Mercosur; we have a strong on-the-ground presence to meet growing demand. Canpotex has a permanent sales office, which they've had since 2018; K+S Potash operates a distribution centre in São Paulo; Mosaic has a significant footprint in South America with over 6,000 employees; and Nutrien operates in South America with 3,000 people across Brazil, Argentina, Chile and Uruguay.
Canadian potash is a key strategic asset for our trade with Mercosur countries, but our prosperity as a trading nation depends on our ability to move goods efficiently to global markets. Supply chain disruptions, often due to labour disputes at Canada's railways and ports, have resulted in lost market opportunities, eroding Canada's reputation as a reliable trading partner. When Canadian potash exports stall, Russian and Belarusian producers immediately move in to secure contracts and deepen their foothold in key markets.
Following the 2023 Port of Vancouver labour disruption, Canada lost market share to Russia and Belarus in Indonesia and Malaysia, sales that have yet to fully return. Even without disruptions, getting potash to global markets is no easy feat. Canadian potash is mined in Saskatchewan, travelling over 1,700 kilometres by rail to reach the closest port of export. Vancouver remains the most efficient and most cost-effective way to ship potash to Brazil's agricultural market.
We want Canadian potash to continue to be a success story in Mercosur markets. Fertilizer trade works best when it is predictable, tariff-free and insulated from broader trade disputes. One practical step to consider is addressing Brazil's vessel-based import tax, which applies to bulk shipments, including potash. This tax imposes an 8% levy on ocean freight and discharge costs. Securing relief for Canadian potash would provide a clear competitive advantage in a market in which we compete directly with low-cost producers like Russia.
Maintaining stable open market access while advancing targeted improvements like this will be key to growing exports in the region and reinforcing Canada's position as a reliable supplier. We strongly support efforts to deepen our trade relationships with Mercosur, along with Canada's broader trade diversification and export growth objectives.
Thank you for inviting me.
I look forward to your questions.