Bill C-39 (Historical)

An Act to amend the Canada Grain Act, chapter 22 of the Statutes of Canada, 1998 and chapter 25 of the Statutes of Canada, 2004

This enactment amends the Canada Grain Act by
(a) clarifying the Canadian Grain Commission’s objects;
(b) combining terminal elevators and transfer elevators into a single class of elevators called “terminal elevators”;
(c) eliminating mandatory inward inspection and weighing as well as some requirements for weigh-overs at elevators;
(d) extending the right to require the Commission to determine the grade and dockage of grain at process elevators and grain dealers’ premises;
(e) eliminating the Grain Appeal Tribunals;
(f) eliminating the Commission’s ability to require security as a condition for obtaining or maintaining a licence;
(g) creating additional regulatory powers for the Commission;
(h) modifying enforcement provisions and creating certain new offences; and
(i) ensuring that some of the requirements and procedures set out are clarified and modernized and that certain language is updated.
The enactment also amends An Act to amend the Canada Grain Act and the Agriculture and Agri-Food Administrative Monetary Penalties Act and to repeal the Grain Futures Act as well as another Act, and includes transitional provisions and coordinating amendments.

[Lloyd St. Amand, Liberal, Brant, ON]

I presume that it was submitted and then eventually published. So it seems to me--and correct me if I'm wrong--that you saw doing an op-ed piece and supporting Bill C-39 in a public way as one of your very first tasks. Is that fair to say? It's certainly one of the first things you did.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

I can tell you that some of my producers who read the op-ed piece were very happy. It was the first time they realized you were with the Grain Commission. They recognized your name and they were very happy to see you there.

That leads to my second question. Do you believe this op-ed piece has reassured some farmers in the industry that the impacts of BillC-39 won't weaken the grain quality assurance system? I know that several of the producers in western Canada I've heard from who've read the op-ed piece were happy to see the information in the op-ed piece. Do you believe this was a success?

[Elwin Hermanson]

I wouldn't describe it, Mr. Easter, as strong concerns, but I would say that there is some uncertainty as to the practical results of the implementation of Bill C-39. That's an area the commission was involved in for some time prior to the tabling of this bill. In fact, that discussion and advice regarding these same issues was given to the previous government. It goes back to the 2002 independent report that was talking about the removal of some mandatory services that are currently provided by the--

[The Chair, Conservative, James Bezan]

I'll leave it up to the discretion of the witness. He has talked about Bill C-39 already, so I guess that door is open.

[Wayne Easter, Liberal, Malpeque, PE]

That's one of our major concerns. I think you can see that from the questioning from the opposition.

The history of this government has been to basically undermine the independent authorities of regulatory bodies, the Canadian Wheat Board being one. They didn't like the CEO challenging them and speaking for the board, as was his responsibility, and they fired him. It was the same with the nuclear regulator--the Canadian nuclear safety commissioner. She was fired for having done her job under the legislation.

My concern is not necessarily on your qualifications, but where you will take your direction from. Will you have the independence to stand up to the minister when concerns arise? You did mention the other two commissioners, the assistant commissioner and the deputy commissioner, and I know both of those folks as well. But I also know, like you, that they've long been advocates against the Canadian Wheat Board. Their views very much parallel the minister's.

I'm concerned about the weakening role of the Canadian Grain Commission. I laid it out on the table in the beginning. I do think it was an error, and I was hoping you would say it was an error, in terms of your strong promotion of Bill C-39.

In any event, you did say to Mr. Lauzon that there were many farmers who expressed support for Bill C-39. In your role as chief commissioner, have you had any concerns expressed on the opposite side--very strong concerns--about Bill C-39 and where it might go?

I don't know whether that's in order or not, Mr. Chairman.

[Elwin Hermanson]

Thank you for the question.

First of all, the agriculture sector is a large one, and the Canadian Grain Commission deals with the grains component of that sector. Whatever we do has to be within the mandate of the Canada Grain Act, either the current one or future acts as determined by Parliament. So anything I do, anything the commissioners do, anything the Grain Commission does has to be under the auspices of the Canada Grain Act. I want to make that very clear.

That said, under the Canada Grain Act as it currently exists and as it would exist under Bill C-39, we are a player in the registering of new varieties to meet the challenges of current and future market opportunities. You mentioned biofuels. There are also feed grains, agronomic principles, and disease resistance. The work we do at the Canada Grain Commission equips producers or gives producers the seed, if I can be really blunt, to help them prosper in the agriculture economy that they are in and will face into the future.

I consider that role to be very important. Anything to do with food I think is incredibly important, because food is such a critical ingredient that, as Canadians, we take much too much for granted. The Canadian Grain Commission is one of the factors that ensure quality of food. The CFIA is another, and Health Canada is another. But we have our niche; we have our role to play in ensuring the safety of grains. All this is for the benefit of producers.

There is a change in agriculture. Back when I started farming, which I guess was about the same time as you did, sir, they were still coopering boxcars. Now we're moving to IP, where a lot of our grain is moving through containers, which provides some challenges for the Grain Commission. Under the existing act, we're set up to handle carloads of grain, and not so much containers.

So these are challenges of the future that the Grain Commission has to stay on top of, and we have to function within the Canada Grain Act to serve producers, serve the grain industry, and serve Canadians in such a way that this industry prospers and that the farm sector is a healthy one.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Thank you very much.

Of course, we are here to analyze competence and qualifications, and your resumé seems rather thin. Many of my graduate students have longer, more comprehensive resumés than this. A lot of your administrative experience, if this is what the job entails, seems to be of a biblical or religious nature, as opposed to in a corporate organization such as this.

It's hard to determine whether there will be forward thinking or unbiased thinking, that there's no ideological lock here. So my two questions will be to determine whether as a progressive thinker...and I know the Conservatives don't like the word “progressive” anymore.

First, as standing operating procedure, the use of opinion editorial pieces that set a personal agenda outside of the organization but effectively determine its course is an issue we are concerned about here. It means that you'll be operating outside the board or the mandate.

The second question is on policy and procedures. In terms of your own management style, would you continue to muzzle an employee or threaten them with discipline if they spoke about bills such as Bill C-39?

Those are the two questions, and if there's time left over--

[Elwin Hermanson]

The commission has dialogued with producer groups right across Canada with regard to Bill C-39. We're playing an information role, trying to explain to them what's in the bill. Quite frankly, there are parts of the bill that actually strengthen the role the Canadian Grain Commission would be able to enact. There is the administering of penalties that has increased. There is the “subject to inspection”, which has expanded to processors and to grain dealers, whereas before it was just to primary elevators. So there is some expansion of powers of the Canadian Grain Commission. There is also reduction of mandatory services.

My observation is that while a lot of the industry hasn't cast judgment one way or the other, generally they think the direction is correct. I think this committee in some of its recommendations was moving in the same direction, as I mentioned in my statement. There are disagreements at a party level as to some of the details, but I think generally the reduction in some mandatory services that aren't required any longer is pretty generally accepted by the industry, from producers right through to buyers of Canadian grains and Canadians as a whole.

[Elwin Hermanson]

Yes, I'm happy to respond.

First of all, I will offer to the committee that when Bill C-39 comes before this committee I would be happy to come back, and I will bring experts with me from the commission, as is deemed appropriate, so that we can answer your questions as deeply as you want to drill down.

In just a general way, I would comment that Bill C-39 accommodates some of the recommendations of the committee. Obviously anyone who can read would recognize that not all of the recommendations of the committee are dealt with in Bill C-39. I'm not sure it's unusual for a government to deal with some and not all.

I could tell you where there is common ground and which recommendations are not dealt with in Bill C-39, but I'm not sure there's benefit in going over what we all are aware of. All I can tell you is that I've read the bill, I've read the committee's report, and I recognize where there is concurrence and where there are issues that aren't dealt with. Perhaps they will be in the future.

That's a political decision; that's not the decision of the chief commissioner. We're in place to advise the minister and to deal with what's on the table.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

I just want to point out that the witness himself mentioned Bill C-39 in his speech. So I do not see why we could not raise it.

[The Chair, Conservative, James Bezan]

Just before Mr. Hermanson begins, this is outside of the scope of today. Today we're talking about Mr. Hermanson's qualifications. I'm sure we're going to have Mr. Hermanson back when we have Bill C-39 at committee, and at that point we'll address it.

Again, coming back to the rules, he is not here to advise us on policy; he's here to implement the Canada Grain Act as we, as a committee, make our recommendations back to the House when we report it back.

Do you have a point of order?

[Elwin Hermanson]

It's been a long time, because we were discussing some of these issues when I sat on this committee and we had the chief commissioner of the Grain Commission come before us. Of course, I had to try to get feedback for my constituents to find out what their position was on the Grain Commission and other issues.

I can tell you, quite frankly, that there is support for the Canadian Grain Commission among all stakeholders in the industry, particularly among producers, and support for the work of the Grain Commission continues and is strong today. The fact that the Grain Commission is not in the news every other day is a good thing. It is doing good work, and the farmers appreciate that.

That being said, the other thing farmers are particularly concerned about is input costs. I would imagine this committee is very aware of the fact that input costs are one of the greatest impediments to a positive bottom line, even with higher commodity prices. Within the Grain Commission and among farmers, there has been discussion for quite some time about how those input costs could be reduced as they relate to the Canadian Grain Commission. That is the area that Bill C-39 tries to address, and it's obviously something I'm hearing from producers.

[Elwin Hermanson]

There are couple things that I don't mind putting on the record, and I hope I'm not breaking any rules of the committee.

First, years ago Minister Ritz and I were colleagues. But this had no bearing—from either my perspective or his—on my decision to let my name stand for the chief commissioner's position.

Second, with regard to the Canadian Wheat Board, the board is a client of the Canadian Grain Commission. It is my intention as chief commissioner to have a positive relationship with the Canadian Wheat Board, as we would hope to have with all our clients. Beyond that, I don't believe it is the role of the chief commissioner to speak on Wheat Board issues. I haven't and I won't.

You talked about the op-ed piece. When I assumed the position of chief commissioner on January 21 of this year, senior management from the commission, including the other two commissioners, approached me about writing an introductory letter. We worked on the op-ed piece with three purposes in mind.

The primary purpose was to identify me with the Canadian Grain Commission. That is why I was signatory to the letter. I wanted the industry, from producers to customers abroad, to know that the new chief commissioner for the Canadian Grain Commission was Elwin Hermanson.

The second reason we wrote the op-ed piece was to reassure farmers, the industry, and customers of the Canadian Grain Commission that Bill C-39 would not weaken Canada's grain quality assurance system. That's the raison d'être for the Canadian Grain Commission. That's the reason for the Canada Grain Act—to ensure that Canada's grain quality assurance system is second to none in the world, which I believe it is. It's my commitment to maintain that quality. We discussed the impact of Bill C-39.

Finally, I wanted to state that farmers will continue to be protected under the Canada Grain Act. I wanted to make it known that the Canada Grain Act would remain in existence under Bill C-39, and that it would continue to provide farmers with the protection they had experienced in the past.

Those were the three purposes for writing the op-ed article. I concurred with that decision then and I concur with it now. Those objectives were correct. I think it's unfortunate that it's become a political football, because it was never intended to be that.

[Elwin Hermanson, Chief Commissioner, Canadian Grain Commission]

Good morning, and thank you, Mr. Chairman.

It brings back some memories, and I would say good memories, being back in committee. Not too many times have I sat as a witness, although I have sat as a witness before committee in the past. I have sat in the chairs of the honourable members and I found it a very rewarding experience. I feel honoured that I would be asked to appear before your committee this morning.

I have a statement that I believe is less than 10 minutes. To make sure that it is, I'll undertake it right away.

Honourable members, I am pleased to appear before the Standing Committee on Agriculture and Agri-Food today. I understand that the principal reason you have invited me to appear before you today is to discuss my appointment as chief commissioner to the Canadian Grain Commission. I would first like to make a brief statement and then I would be pleased to answer any questions.

To begin, I would like to underline what an honour it is for me to work on behalf of Canadian farmers and Canadians at large as the chief commissioner of the CGC. As Canada's grain industry regulator, the CGC is responsible for Canada's grain quality and quantity assurance systems, grain research, and producer protection. As chief commissioner to the CGC, I am personally committed to these important objectives and to upholding Canada's world-class brand reputation.

As you know, my appointment comes at a time of change and modernization for the CGC, as reflected in Bill C-39, An Act to amend the Canada Grain Act, which was recently introduced in the House of Commons. The CGC needs a strong management and sound guidance to lead it during this period of transformation.

Throughout my career, honourable members, I have displayed strong skills both as a leader and as a manager. I have an extensive background in agribusiness and public service in Canada, with 32 years of farming and elected experience at both the federal and provincial levels. As a farmer, I managed my family farm in Beechy, Saskatchewan, which is a diversified operation producing grains, pulse crops, and oilseeds, and it includes a commercial cow-calf operation. At the federal level, I served as a member of Parliament for the Saskatchewan riding of Kindersley--Lloydminster from 1993 to 1997. During that time I served on the same committee as you represent today, the Standing Committee on Agriculture and Agri-Food. I also demonstrated my leadership skills participating on the steering subcommittee and working as the leader of the official opposition from 1999 to 2004 in the Saskatchewan legislature.

Throughout my career, one of my priorities was the development and the communication of agricultural policy. I'm proud to say that my political success was founded upon my knowledge of the agriculture sector. In fact, my years spent in public service have depended on strong support from farm communities and farm families. I accepted the position of chief commissioner to the CGC because of my profound desire to serve Canadian farmers and Canadians generally.

As I mentioned earlier, my appointment as chief commissioner comes at a time of change and modernization for the organization. I must say it's an exciting time to be grain farming. I recognize that it's also an equally difficult time in the livestock sector. The Canadian Cattlemen's Association is in town. I've run into some of them, and we certainly feel for the economic pressures they're feeling now. But commodity prices are at an all-time high for cereal grains, and oilseed producers are finally beginning to reap the benefits of what they sow.

While Canadian farmers continue to serve traditional export markets, new opportunities are becoming available. Canadian grain is increasingly marketed to niche markets and domestic value-added enterprises such as livestock and biofuels processing. To sustain this growth, both farmers and the grain industry are seeking more opportunities and a more cost-effective grain handling system.

Many grain sector stakeholders, including farmers, have been requesting updates to the Canada Grain Act for many years. In this context the Minister of Agriculture and Agri-Food introduced Bill C-39, An Act to amend the Canada Grain Act, to the House of Commons last December. Bill C-39 represents the Government of Canada's vision of a modern CGC, one that is positioned to meet the changing needs of today's grain sector. The government is focused on reducing mandatory regulations and unnecessary costs while maintaining the advantages of Canada's grain quality assurance system.

Honourable members, I understand that while your respective parties have agreed on the need for modernization of the act, they may not all completely agree on the details of that change. The final outcome of a bill must be decided by members of Parliament, and it is the role of the chief commissioner to administer the Canada Grain Act as passed by Parliament. While it is the duty of the CGC to support the government's agenda and policy direction, I will not, nor will the CGC, prejudge the outcome of Parliament's deliberations.

I want to clearly state the commission's principal responsibility is to administer the Canada Grain Act.

The chief commissioner must lead the organization to ensure ongoing protection for producers and Canada's reputation for high-quality grains and must be supportive of the government's agenda. This leads me to discuss recent criticism of an op-ed article I produced for two different western Canadian publications.

First, I would like to clarify that the op-ed article was intended as a personal introduction to farmers and the grain industry in my new role as the chief commissioner of the CGC. Second, my objective was to reassure producers, grain industry stakeholders, and customers of Canadian grain that Bill C-39 will not weaken the grain quality assurance system. Third, farmers need to be reassured that producers will continue to be protected under the Canada Grain Act.

Honourable members, before I respond to your questions, I also wish to address one final issue, the CGC memo to employees. The CGC memo has been referred to as a government gag order in both the media and in the House of Commons. There is no government gag order, and the allegations of political involvement are unfounded.

No one in the office of the Minister of Agriculture and Agri-Food or in the Prime Minister's Office requested that CGC management issue this memo. It is an internal document that was produced by the CGC senior management on its own in response to employee questions about political activities regarding Bill C-39.

The CGC directive to employees regarding their political activities is based on the Values and Ethics Code for the Public Service. It states that public servants are free to express their views about the amendments to their members of Parliament as long as they don't publicly criticize the government. The Values and Ethics Code for the Public Service also clearly states that public servants must loyally implement ministerial decisions lawfully taken. I would also like to clarify that this code has been in effect since 2003.

In closing, honourable members, it is clear that the CGC is facing an exciting period of modernization and change. I also wish to reiterate that it is the CGC's duty to support the government's agenda and policy direction. I am confident that the integrity of the grain quality assurance system and the reliability of Canadian grain exports will be maintained; in fact, I'm committed to that outcome.

Finally, it's with a deep sense of pride in this 96-year-old institution that I assume the position of chief commissioner to the CGC. I look forward to serving farmers and all Canadians in my new position.

Thank you very much.

Canada Grain Act

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, Mr. Speaker, I appreciated the well-researched remarks by the member for British Columbia Southern Interior.

I agree with him when he stated that the government moves rapidly in areas such as trying to destroy the Canadian Wheat Board, which it is attempting to do, in terms of trying to weaken the Canadian Grain Commission, and now the minister's ridiculous announcement to do away with KVD by August 1, which industry, the Canadian Wheat Board, nearly everybody in the system, except the right-wing friends of the parliamentary secretary over there, claim should not be done until 2010 or it will completely disrupt the industry. It will in fact put Canada at risk in terms of supplying the quality grain it has a reputation of supplying around the world.

When it comes to responding to the beef and hog crisis, the government is absolutely missing in action. Why can it not move rapidly in that area?

Let me turn to the specific bill we are talking about, Bill C-39, on the Canadian Grain Commission.

We see that the Conservative government is undermining the authority of farmers. The original Canadian Grain Act has in the mandate that it is in the interests of producers. The new bill takes that out. That crowd on the other side is not really interested in doing anything in the interests of producers and it shows. The Conservatives are undermining them with the Canadian Wheat Board. They are undermining them with the Canadian Grain Commission. They are missing in action on hogs and beef. The Conservatives are turning over the authority of the Canadian Grain Commission to the interests of industry rather than producers. I would like to ask the hon. member his point of view on that.

There are other problems with the bill. The Conservatives are taking away the appeals tribunal. There were 2,000 appeals last year. There is nothing about reporting to Parliament in this bill. That right is being taken away and Parliament will not know what is going on with the Canadian Grain Commission and the Canadian Grain Act. They are taking away the necessity of grain companies having to post a bond to protect producer interests.

I would like to get the member's comments on that critique of the bill and certainly the critique of a government that is missing in action when it comes to developing real solutions for farmers in this country.

The Conservatives like to say that they put farmers first, but everything they are doing is putting farmers absolutely last.