Thank you, Mr. Chair.

I want to thank the committee for its invitation to appear this morning.

I'm Terry Youzwa. I am the chair of Pulse Canada. Pulse Canada is a national association representing over 26,000 pulse growers, as well as the processors and exporters of Canadian pulse crops, including peas, lentils, chickpeas, dry beans and faba bean. I'm a farmer from Nipawin, Saskatchewan, where I, along with my son, grow canola, wheat, oats, peas, faba beans and canary seed.

Canada is the world's largest exporter of pulse crops. Every year, we send billions of dollars' worth of pulses to over 120 markets around the world. To do this economically, Canada's pulse industry—and the entirety of Canadian agriculture—relies on a well-functioning supply chain. For crops like mine to make it to ports and onto dinner plates in markets around the world, they first rely on timely, predictable rail service. The lack of competition available results in unreliable and unpredictable service for shippers.

For a farmer in Saskatchewan, there is only one rail carrier that serves the region, effectively creating a monopoly. In fact, 94% of grain elevators are beholden to one single carrier. That is why Pulse Canada advocates for measures that not only make our system more efficient but also increase competition. Key among these measures is extended, regulated interswitching. Pulse Canada has long been an advocate for this policy, dating back a decade. It has been positive to see parties of all stripes recognize the pro-competitive value of extended interswitching and the positive economic benefits that competition delivers.

Farmers like me bear the cost of a supply chain that isn't performing, and you can see it in our yard: higher levels of inventory, increased storage costs, additional interest charges, wider bases and lower prices. That's what an under-performing supply chain means to me.

However, there's more to it than the cost of storing more grain for longer periods of time. For pulse growers, a good deal of the product moves by container. When the supply chain that moves product from Saskatchewan to transloaders in Vancouver is failing, it has an even bigger impact on our bottom line. Poor railcar order fulfillment and unpredictable service through to Vancouver create delays. Delays often result in demurrage charges and container detention fees. If cars and containers aren't getting unloaded and loaded at port on time, we're missing the vessel we booked to ship our pulses to the customer overseas. Missed shipment windows lead to price penalties that are built into the standard contracts.

Because it's all too common for our industry to experience these kinds of problems, companies often have to switch to more expensive transportation modes or widen shipping windows to mitigate risks, which only further reduces profitability and increases costs. These added costs can't be passed on to the customer because we're competing against the Aussies and new producers throughout the Black Sea region. Most of these costs have to be passed down to growers. We see these costs in the form of reduced prices and higher risk premiums.

The bottom line for me as a grower is that we need a system that offers more cars, better rates and better service. To get there, we need competition. The pilot that ran from 2014 to 2017 and the one running currently both show that extended interswitching works. Even when traffic isn't switched over to another carrier, I understand that extended interswitching is encouraging the originating carrier to do what it can to win the business. They offer the cars and match the rates. That's competition. We should expect nothing less every day in our rail freight system.

Competition will put the right cars in the right place at the right time and at the right price. When that's happening, we'll reduce the need to absorb penalties and pay for costly workarounds, such as changing transportation modes and extending shipping windows. Those benefits accrue back to the Canadian supply chain, which creates better outcomes for farmers like me.

It's time to take the 160-kilometre extended interswitching pilot and make it permanent. In fact, in order to include all growers in the Prairies, a range of 500 kilometres should be considered so they can take full advantage of increased competition. There's no reason to study it further. Let's do it and get on with the business of growing our economy.

Thank you, and I look forward to your questions.