Changes are coming to the Canada Grain Act to comply with NAFTA 2.0 — and that’s sparking concern in some quarters.
Stewart Wells, former National Farmers Union president and current second vice-president of the group, says the proposed legislation (Bill C-4) inserts unnecessary clauses, and is being rushed through just weeks before planned public consultations on other changes to the grain act. He says that amounts to an end run around the public process and sidelines farmers from participating and expressing their concerns.
“As it stands, Bill C-4 is a Trojan Horse designed to make it easier for grain companies to pay farmers less for their grain,” Wells said in a media release.
But in reality, Canada’s grain quality assurance system will be stronger, not weaker, says Remi Gosselin, the Canadian Grain Commission’s (CGC) head of communications.
Gosselin said the NFU fails to understand there are two issues at play simultaneously during the process. He says the bill will incorporate changes to make the act compliant with the Canada-U.S.-Mexico Agreement (CUSMA) and also implement further changes to strengthen the act to ensure quality assurance objectives continue to be met. He says to properly understand the implications, the entire package must be considered as a whole.
“What we are saying is the consequential changes are a chain reaction required to shore up the quality assurance as a result of the CUSMA changes,” Gosselin said. “It’s like a domino effect and we must make sure the quality assurance system is maintained and that’s why we need to make these additional changes.”
The NFU is taking the battle to Parliament Hill, having sent letters expressing its concerns to Liberal cabinet ministers earlier this month.
“We are asking, and strongly recommending, that the changes not required to satisfy CUSMA be deleted from, or amended in the text of Bill C-4,” the NFU letter says. “The elements that should be deleted from Bill C-4 are positions that should be discussed and debated during the upcoming Canada Grain Act review process already scheduled for March 2020.”
The government is pre-empting its own review, the letter says.
Gosselin said the changes will help allow for appropriate oversight that will “… address different regulatory environments in Canada and the U.S.”
For example, the variety declaration system implemented by grain companies that belong to the Western Grain Elevators Association will be used throughout the grain-handling system when the amendments become law, he said.
Farmers will also have to declare what pesticides were used in producing the grains they deliver.
Details are pending.
“We can’t pre-empt the work of parliamentarians, but certainly our intent, and what’s written into the legislation, is the implementation of those declarations,” Gosselin said. “At present it’s only required by the WGEA, now it’s going to be required throughout the system.”
It was expected CUSMA would see the grain act changed so wheat grown in the U.S. and registered to be grown in Canada, would be eligible to receive an official CGC grade when delivered to Canada. That would address a long-standing American complaint that Canada discriminated against its wheat.
However, the grain act will be changed so all American grains listed in the grain act are eligible for a CGC grade if the variety is registered in Canada. The NFU questions that.
The explanation lies in how the grain act is currently worded, Gosselin said.
“The challenge was the provisions currently don’t distinguish between different types of grain so our legal drafters recommended, and were comfortable with, the approach of using the more general term grain. So fundamentally the issue is how the act is constructed. There’s no distinction between grains so we had to draft it that way.”
Gosselin stressed the grain act amendments will require those delivering American grain to Canada to declare the variety they are delivering. If the variety isn’t registered in Canada it’s ineligible for an official CGC grade. The same applies to Canadian farmers. In the case of wheat, unregistered varieties must receive the lowest grade in the class.
Since wheat and other grains are sold and bought in an open market, ultimately the price is up to what the buyer and seller negotiate, and in the absence of an official grade, the price can be determined based on end-use specifications. That’s how buyers and sellers have traditionally dealt with unregistered varieties delivered to Canadian elevators.
“Unregistered U.S. varieties will not benefit from the same treatment and imported grain (from countries other than the U.S.) certainly will not,” Gosselin said. “All it is, is an update of the definition of what imported grain is.”
The NFU disagrees, citing an amendment setting out when a grain inspector is to assign a grade and dockage to imported grain. According to the NFU this enables the CGC to create regulations that would allow grain from countries other than Canada and the U.S. to be offered Canadian grades.
“This is not in the interests of Canadian farmers, thus contrary to the CGC mandate,” the NFU letter says.
The change repeals the definition of “foreign” grain and replaces it with a definition for “imported” grain, which will be any grain grown outside of Canada and the U.S., Gosselin said.
“It makes a distinction between Canada and U.S. grain and now what’s called imported grain rather than foreign grain,” he said. “It also imposes rules on U.S.-grown grain so that they are subject to the same regulations in Canada as Canadian-grown grain.
“This amendment must be read in conjunction with the CUSMA-related changes… ” Gosselin said. “The amendments to Section 32(1) remove the requirement that country of origin or imported grain be stated on inspection certificates for U.S.-origin grain, but maintains the requirement for imported grain — any grain other than Canadian or U.S.”
The NFU claims an amendment to the definition of “contamination” is unnecessary because the CGC already has the authority to define and deal with contaminated grain.
Gosselin said the amendment ensures consistency with current provisions of the Food and Drug Act and the Safe Food for Canadians Act.
“The definition of ‘contaminated’ has not changed since 1994 and the very specific definition in the grain act limits CGC jurisdiction in a way that limits our ability to keep pace with industry change,” he said. “In fact this broadens the definition of contaminated.”
The NFU says an amendment allowing the CGC to issue any certificate or other document it considers necessary to facilitate the export of any grain is redundant.
It also says it makes optional the CGC’s ‘Certificate Final’ guaranteeing the grade and weight of export wheat.
“That particular clause intends to clarify in the Canada Grain Act that the Canadian Grain Commission can issue documents such as statements of assurance and letters of analysis, which are currently in use, but this will give us the legislative framework to do so,” Gosselin said. “It’s going to help allow the organization to fulfil our mandate of ensuring a dependable commodity in domestic and export markets.”
The NFU is worried about amendments allowing grain buyers to reject the delivery of unregistered varieties of grain and grains treated with unregistered pesticides.
Both will strengthen Canada’s quality assurance system, Gosselin said.
“Our view is the amendment is going to assist the commercial grain-handling system with the management of visually indistinguishable, unregistered varieties,” he said. “It also allows us to prohibit if it has a pest control product applied to it that’s not registered under the Pest Control Act.”
The NFU says the CGC already has the authority to include additional quality characteristics in grades so amendments in this area are unnecessary. But Gosselin said the change will allow it to broaden the range of grain quality characteristics.
“Examples of that would be falling number and DON (deoxynivalenol),” he said. “The amendment only applies for general authority to expand this service so any changes that would introduce other quality characteristics eligible for binding determination would require regulatory amendments and consultations with stakeholders.”
The NFU also opposes an amendment allowing the CGC to incorporate certain documents on its own.
But Gosselin said it will give the CGC more flexibility.
“So an example of that could be primary elevator receipts, or grain receipts that are part of the regulations, we could make updates more quickly, or we could also incorporate by reference our standards sampling handbook, which is used by industry,” he said.