When Agriculture and Agri-Food Canada (AAFC) told the Grains Roundtable in Montreal March 8 it was leading a review of the Canada Grain Act and Canadian Grain Commission (CGC) it didn’t seem unusual.
The CGC has been under review on and off since 2006 when the last comprehensive review was wrapped up.
In 2013 the CGC increased its fees after the federal government compelled it to be self-sufficient. Other changes included making inward inspection at grain terminals optional.
AAFC says the last comprehensive update of the grain act was in 1971.
The former Harper government intended on making changes to the act and CGC with Bill C-48, the Modernization of Canada’s Grain Industry Act, but it failed to become law before the 2015 election.
AAFC’s review isn’t merely the resurrection of Bill C-48. While there is some overlap, AAFC’s presentation to the roundtable showed there are big differences.
For example, AAFC will dig into the CGC’s role in outward grain inspection and the CGC’s governance. C-48 left CGC outward inspection mandatory.
Why it matters: The grain act and CGC were established to protect farmers and the quality of Canadian grain. Changes to either could erode that. But grain companies say the industry has changed and the act needs to reflect that.
C-48 also retained the CGC’s governance structure of three commissioners, despite earlier proposals to replace them with a president/chief executive officer and board of directors.
“I’m a firm believer in ‘if it ain’t broke don’t fix it,’” then agriculture minister Gerry Ritz said when asked about the apparent shift in policy in an interview Jan. 9, 2015.
“We’ve got a good working relationship across the spectrum with the three commissioners. Each one brings different expertise to the fore. To limit that to a president and some other people under him doesn’t have the same effect.”
Governments have traditionally appointed commissioners who represent the grain industry, farmers and the three Prairie provinces.
The current chief commissioner, Patti Miller, headed the Canola Council of Canada when appointed in 2017. Before that she worked for AAFC and Cargill Canada.
Doug Chorney, the current assistant chief, and Lonny McKague, commissioner, are both Prairie farmers.
AAFC slides don’t provide any clues about how the CGC should be governed.
Switching to a president/CEO, board of director’s model goes back at least two governments. The argument is it’s the traditional way to run a corporation.
Critics of the current model say three commissioners is like having different bosses who don’t always agree.
The argument for keeping commissioners is their insights can better inform the CGC in its role as industry watchdog and regulator. Some conflict among commissioners reflects the tensions within the sector. It might not be pretty sometimes, but the idea is they bring balance to issues.
Moreover, the commissioners, because of their experience and backgrounds, have a direct relationship with their respective constituencies facilitating communication to and from the CGC.
AAFC’s slides are silent on whether the direct reference to the commission acting in the interest of farmers be removed from the grain act. Previous Conservative and Liberal governments have proposed such a change.
The act currently says “… the commission shall, in the interests of the grain producers, establish and maintain standards of quality for Canadian grain and regulate grain handling in Canada, to ensure a dependable commodity for domestic and export markets.”
It reflects why the CGC was formed in 1912 following years of farmers’ complaints about unfair treatment at the hands of grain buyers and railways.
Previous governments have said the wording might not be legal and previous commissioners have said in practice the CGC treats all industry participants fairly.
But some farmers say since the CGC was formed to protect farmers, the current wording ensures it remains core to CGC operations.
AAFC’s slides list four potential areas to focus on during the review:
- Grain Quality Assurance – A system-wide stock-taking;
- Outward Inspection Services – delivery model assessment;
- Producer Protection;
- Other (Grain Quality Research and Governance).
Ensuring grain quality and outward inspection are core to what the CGC does now. AAFC says it wants to explore components critical to ensuring quality.
Producer protection has been an issue with the CGC for years. Currently CGC licensed grain companies must post security to cover money owed to farmers for grain they’ve delivered. Even though the CGC monitors companies in an effort to ensure security matches liability, sometimes it doesn’t. In such cases farmers aren’t paid all they are owed when a company goes out of business.
An ideal replacement program would protect farmers better and cost less. Insurance schemes and compensation funds paid for by grain companies have been suggested as alternatives.
Bill C-48 contained a number of other changes to the grain act and CGC, which weren’t part of AAFC’s slides, but that doesn’t mean they won’t be discussed during the review or be in legislation resulting from the review.
Here are a few:
- Creating a new class of licence for container loading elevators.
- Extending farmer access to CGC binding determination of grade and dockage on grain deliveries to all CGC licensed facilities, including processors and grain dealers.
- Making provisions for variety declarations at elevators.
- Increasing fines for breaching the grain act, including for misrepresenting the variety of grain delivered.
- Creating a non-binding Decision Review Panel.
- Making it easier to collect grain samples from across the country to monitor grain safety.