Mr. Speaker, we are here tonight because we are dealing with a record crop in western Canada. All players in the supply chain are looking at solutions for getting grain more quickly to port. Let me share what Mr. Gary Stanford, president of the Grain Growers of Canada, said:
We had a record crop last year with a significant increase in yields. A buoyant farm economy, better genetics, increased usage of new and better fungicides, overall better agronomics, and better utilization of micro-nutrients in fertilizer application were all contributing factors
As many in the industry have said, higher crop volumes are expected to be the new normal, and our government is taking action to help the industry prepare for that.
Our government also understands the challenges that Canadian farmers are facing. Canadian farmers face some of the longest inland distances to market of any exporting nation. On the Prairies, grain travels an average of 1,500 kilometres to reach a port terminal. In addition, in 2012 farmers paid over a billion dollars to move grain by rail. Grain growers deserve an efficient, reliable, and predictable rail service to get their crops to market.
World demand is growing and while the bumper crop is posing frustrations for our grain farmers, it also represents an opportunity for the industry to find new efficiencies. That is why we are working with stakeholders on a number of fronts to make the supply chain more competitive. Over the past months, the minister has met on several occasions with key players throughout the grain sector to find long-term solutions. With the new reality of larger crops, this holistic approach is the best way forward, and is certainly much more constructive than pointing fingers. That said, as we are working with stakeholders to identify improvements going forward, we expect all players in the supply chain to step up their game.
I would like to talk about an important action our government is taking to protect the economy and Canadian grain producers.
Our government is concerned about the potential repercussions of the CN strike on hard-working Canadian farmers, the manufacturing sector and exporters. We were disappointed to learn that the union representing CN workers, Teamsters Canada, gave its strike notice. A strike would have damaging effects on our economy, farmers in the Prairies, auto workers in Ontario and proud forestry workers in Quebec.
The total impact of a work stoppage is estimated at $450 million per week.
Canadian farmers have harvested record crops. At the same time, our government has opened markets for our exporters. Our government is working hard to support growth in this sector, and a devastating strike would threaten our grains and our gains and would hurt workers and their families. Today, at the Port of Vancouver, container ships are waiting to be loaded for export. Our government will not allow other obstacles to prevent Canadian exports from getting to market. A strike would compromise our recovery.
Therefore, our position is clear. Our economy must be protected. Our product has to get to market. We must protect jobs. That is why, today, our government is taking action to protect the Canadian economy and Canadian farmers by giving notice of a bill to get CN back on track.
I have received confirmation that our government welcomes a tentative deal to protect Canadian jobs and the economy and to prevent a strike at CN Rail. Our Minister of Labour said:
I am pleased that the parties continue to make every effort to settle their differences. It is essential that employers and unions work together to come to agreements that are in the best interests of everyone involved.
They are reaching a tentative agreement, but of course this still has to be finalized. I would ask the members of the opposition to support the type of legislation we are proposing if this tentative deal is not finalized.
As well as taking action on a potential CN strike, our government has taken steps to improve the performance of the entire rail supply chain. This includes investing $1.5 million in a special crops Canada-led multi-sector collaboration project of the pulse, oilseeds, and grain industries to improve supply chain efficiency and reliability; passing the Fair Rail Freight Service Act, which creates a process to establish service agreements; investing $25 million to support grain shipments through the Port of Churchill; and implementing marketing freedom for western Canadian wheat and barley growers.
We are also working to help farmers get their crops to market by bringing industry groups together through groups such as the commodity supply chain table, the crop logistics working group and value chain round tables to facilitate comprehensive industry-led solutions.
On Monday, we further acted to respond to early recommendations of the crop logistics working group by pursuing enhancements to the grain monitoring program to improve the frequency of reporting, and by committing to providing an ongoing forum for representatives across the industry to discuss improvement throughout the supply chain.
The crop logistics working group has clearly identified a need for a fuller measurement of the transportation system from farm to point of sale. The working group said that a broader, more timely system is needed to deliver the kind of information required to support the efficient functioning of the crop logistics system. In other words, to improve productivity, timely and transparent measurements are needed.
Building on their recommendations, we are taking action to expand the mandate of the grain monitoring program to incorporate that information and to increase the frequency from quarterly reporting to monthly reporting. Expanded monitoring will provide a much clearer picture for all players, helping them to improve planning and to cut overall costs.
The proposed expanded range of metrics and reporting frequency would include railway order fulfillment information; weekly loads on wheels by carrier; the covered hopper car fleet size and grain service for both mainline carriers by class of service on a weekly basis; terminal unload performance by railway; western Canada railway grain traffic to eastern Canada, United States, and Mexican destinations; U.S. grain traffic to western Canadian destinations; and western Canadian grain traffic shipped to port in containers.
Our common goal is a more transparent system, so that all players in the supply chain, especially farmers, have the information they need to make the right decisions for their businesses and for our economy as a whole. Together, a better flow of information will help build a more reliable, predictable, and efficient transportation system.
These concrete actions build on our previous investment of $1.5 million under Growing Forward 2 to identify key areas of improvement in the supply chain and develop the tools and technical support to get there. This is a five-year, long-term collaborative industry effort led by Pulse Canada.
With matching industry investment, the goal is to improve the efficiency and reliability of the supply chain from farm gate to port terminal. The whole idea of increasing our logistics capacity is being able to figure out where we are at, where we are short, and what needs to be done.
I would add that we have the support of the Grain Growers of Canada in this way forward. As well, the Premier of Saskatchewan spoke today to a trade summit in Saskatoon, where he said:
We fully support the federal government in any measures they can take to address this situation.
As many in the industry have said, these kinds of crops are the new normal. Everyone has to improve, and that includes the railroads. Since day one, our government has been there for Canadian farmers and we are there for them today.
Our government knows that Canada's grain industry drives our economy and jobs with over $20 billion of our exports. The fact is that agriculture is a growing economic powerhouse in Canada and around the world. Agriculture is a big reason that Canada's economy is leading the industrialized world. That is why our government continues to ensure that farmers and food processors have the tools they need to continue to grow our economy and to employ Canadians.
Let me give a few examples. Top of mind, of course, is marketing freedom for western Canada's hard-working wheat and barley producers. This year's record harvest clearly demonstrates that the end of the old single desk two years ago has reinvigorated Canada's world-class grain industry.
Our farmers seeded 2 million more acres of wheat and produced over 20 million more tonnes of grain this year over last year. Since the end of the antiquated single desk, western grain farmers now enjoy the basic right to make their own business decisions on the marketing of their crop.
Over the first 18 months of freedom, we have seen record farm incomes with a strong balance sheet, two million new acres of wheat, and wheat exports up by close to 20%, with sales to the United States up by half.
A Canadian Federation of Independent Business survey found that the vast majority of its agriculture members, over 80%, are positive on the impact of marketing freedom on their operations. It is called choice, it is called freedom, and it is clearly working.
Trade is an another excellent example of how we are strengthening the industry. To help our farmers find new markets for their high-quality crops, our government is moving ahead with the most aggressive trade agenda in the nation's history. I would remind those voices for protectionism who would build a wall around Canada that Canadian farmers depend on trade to market up to 85% of their products.
For 2013, all signs point to another record year. Our beef industry is back on the map, with our beef trade with China increasing sixfold last year alone. None of this would have been possible without a lot of hard work from industry and our government in working together.
Of course, the historic breakthrough on trade was our agreement in principle with the European Union on a comprehensive economic and trade agreement. This accord is without doubt the most comprehensive and ambitious trade agreement since NAFTA.
Upon ratification, Canada will be one of the only developed countries in the world to have preferential access to the world's two largest economies, the European Union and the United States. With Europe and NAFTA, that will mean access to more than 800 million of the world's most affluent customers.
Right now, our agriculture imports hit a tariff wall of almost 14%, so we see the kind of opportunity we are looking at in the world's largest and most affluent market for food. Under this agreement, tariffs will be eliminated on the vast majority of our agricultural exports, including wheat, which currently faces tariffs of up to $122 per tonne. Clearly, this agreement will mean more money in the pockets of our Canadian grain producers.
Likewise, the Canadian beef sector will secure new market access opportunities for exports of 65,000 tonnes, and the industry estimates that new beef market access under this accord to be worth about $600 million a year.
Additionally, increased access for Canadian pork products to the EU has been estimated by industry to grow by $400 million, or $20 a hog. For Canada’s economy as a whole, the agreement is expected to create an additional 80,000 jobs nationwide and boost Canada's GDP by $12 billion.
We are working hard now to finalize the technical issues, which would then allow the agreement in principle to be formally approved. We will also push forward on other trade agreements, like India and the trans-Pacific partnership, a vast market of almost 800 million people. As well, we have revived the South Korean trade talks.
Here at home, we continue to transform and modernize our agricultural industry to help farmers drive our economy and feed the world. Growing Forward 2, our five-year framework for agriculture with the provinces and territories, has a much stronger focus on proactive measures like science and research and less on the reactive measures of the past. Growing Forward 2 is driving innovation through investments of over $70 million in industry-led research clusters on grains and oilseeds alone. We are helping our grain sector to succeed.
We remain committed to developing a policy to manage low-level presence of genetically modified organisms in grain for food and feed. We continue to work with our trading partners and domestic stakeholders to develop an approach that is predictable, flexible, transparent, and proactive.
Also to drive innovation, the government recently introduced the agricultural growth act, to bring our plant breeders legislation in line with the rest of the world. UPOV ’91, as it is known, will strengthen intellectual property rights for plant breeders and help increase investment in research and development for Canada's crop sector.
These discussions have been going on for 22 years, and industry agrees it is time to invigorate investment, innovation, and growth in Canada's agriculture sector, right now. That will help our farmers remain competitive by providing them with access to the best new crop varieties, whether they are developed here in Canada or abroad.
Farmers have a bright future. My message to the House this evening is that we are taking action on the grain transportation challenges our farmers are facing. We are taking action on early recommendations of the crop logistics working group. Our government knows that action is needed now and for the long term. We will continue to take a holistic approach, working with all stakeholders across the industry.
The ministers of agriculture and transport continue to work with producers and the entire value chain to identify and generate new efficiencies. All stakeholders, from farmers to elevators to grain companies to railways, must look at the challenges of transporting this year's record harvest and identify improvements for going forward.
It is a competitive marketplace. Our farmers' renewed strength has also benefited from marketing freedom. Marketing freedom, coupled with a top-quality product, puts our farmers on a level playing field with any country in the world.
To win and maintain our markets, Canada must be competitive not only on price and quality but also on service reliability. The recommendations from the crop logistics working group are a big step in that direction. I am confident that they will help build a stronger supply chain for farmers over the short, medium, and long term. Record volumes present both challenges and opportunities for the industry, and the time is right for the Canadian grain industry to capture these opportunities in marketing their world-class products in a secure and profitable way.
Our government has always put farmers first, and it will continue to do so.
