Canadian Manufacturing

Feds rolling out new rules to help Canada’s grain sector grow

New rules aimed at aimed at ensuring producers get paid for crops, allows for testing of grain from east of Prairies

December 10, 2014  by John Cotter, The Canadian Press

OTTAWA—The federal government has tabled legislation aimed at ensuring producers get paid for their crops and to allow for the testing of grain from east of the Prairies.

The Modernization of Canada’s Grain Industry Act is the next step in Ottawa’s overhaul of rules governing the grain sector.

It would allow the Canadian Grain Commission (CGC) to establish a compensation fund to protect producers if licenced grain dealers or elevator operators fail to pay for grain deliveries.

The commission would have the power to determine the quality of grain delivered to all licenced elevators, grain dealers and container-loading elevators.


That now only happens at major facilities.

The commission’s mandate is also to change from acting in the interest of producers to acting for the entire grain sector and all Canadians—an effort to clarify that the commission is an unbiased regulator.

Agriculture Minister Gerry Ritz said the proposed changes would help modernize a sector that generated about $23 billion last year in grain and oilseed farm cash receipts.

“Canadian grain farmers drive our economy and this is one of the many ways we are modernizing the sector to make it more competitive,” Ritz said in a release.

The bill also calls for increased fines for grain dealers and elevator operators who fail to comply with regulations.

A commission official said there is no expected timeline for when the legislation will pass.

The government said it will consult with producers and the provinces in the coming months before any changes are finalized or put into effect.

Farm groups are hopeful about the proposed changes, especially the provision for a fund that would ensure producers got paid after they delivered their crops to a buyer.

Doug Chorney, president of Keystone Agriculture Producers (KAP), said that overall the federal government appears to have been listening to producers.

“This is exactly what KAP has been lobbying for,” Chorney said as he prepared to meet with producers in Birtle, a small rural community in west-central Manitoba.

“Of course the fine detail has to be worked out, but in broad strokes this is the exact approach we suggested the government take and we support this approach.”

Norm Hall, president of the Agricultural Producers Association of Saskatchewan (APAS), said his members want more information.

He said farmers want to know how the compensation fund is going to be developed, what it is going to cost and whether the government is going to guarantee a certain dollar figure until the fund is built up.

The legislation says it will be elevator and grain-handling companies that will bankroll the fund, but Hall is pretty certain they will simply turn around and pass on the cost to producers.

“I am sure it will come back to producers as a checkoff to us, because the grain companies won’t eat it on their own,” he said from his wheat, oilseed and pulse farm near Wynard, Sask.

The new legislation would allow the commission to require samples to test for grain safety from elevators in any province east of Manitoba, including unlicenced facilities.

The intent is to create a consistent approach to grain safety across Canada.

In 2012 the federal government began overhauling the commission, which was first established under a different name in 1912 and hadn’t been comprehensively changed since 1971.

The changes two years ago were made to streamline grain inspections, cut the number of staff and move to a fee-for-service system to reduce costs.

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