Good morning. Thank you, Mr. Chair and members of the committee, for the opportunity to appear today to discuss the propane market in Canada. My name is Guy Marchand, and I'm here with Andrea Labelle, who's the general manager.
We look forward to making a short presentation on the propane industry in Canada and answering your questions afterwards.
In order to be respectful of the time we have today, I'll be briefly covering what the Canadian Propane Association is, the propane industry in Canada, and propane's benefits and uses, which will allow for more time to cover the 2013-14 winter, the winter ahead, and then finally, questions and answers at the end.
The Canadian Propane Association offices are headquartered here in Ottawa, and we have a presence in each region of the country. We have over 400 members representing producers to retailers, and everything in between. Notably, in 2014 alone, the CPA has trained and will have trained, through our Propane Training Institute, nearly 35,000 students on the safe handling of propane. We also have a wholly owned subsidiary, which is also operating as a non-profit, that handles emergency response activities for LPGs by rail and road, as well as for newly formed flammable liquids by rail. In addition the CPA is an industry advocacy organization working with government regulators nationwide.
Canada produces approximately 11 billion litres of propane per year. Our economic contribution is approximately $16 billion, $1 billion of which goes to taxes and royalties, and we employ more than 20,000 Canadians. The propane industry is regulated by a number of federal, provincial, and municipal codes: the Transportation of Dangerous Goods Act, better known as TDG; environmental emergency regulations; CSA codes adopted into provincial regulations; and finally, municipal zoning bylaws.
Propane is primarily transported by rail, pipeline, and trucks. Prices are influenced by many factors, primarily supply and demand, and crude and natural gas prices. As with other commodities, prices are not set by individual companies. Mont Belvieu, Texas, is where the price reference point is in North America. Propane is then purchased on the wholesale market by distributors and retailers. We are part of an integrated North American market that determines the price, and are part of a well-developed infrastructure across Canada and the U.S.
As far as exports go, the U.S. is Canada's only export market, and in turn the U.S. exports overseas. Over the last few years Canadian exports accounted for 40% to 50% of demand, and they are shipped primarily by rail.
Propane is a safe, clean, abundant, cost-effective, and portable energy source. It's a Canadian story. Some current uses of propane include industrial use in mining; use in construction, including as temporary heat source and for forklifts; residential use for heating, cooking, outdoor living, and lawn care; transportation for government and private fleets, as well as school buses; agricultural use for barn heating and crop drying; and use as a petrochemical feedstock.