Bill C-48 (Historical)

Modernization of Canada's Grain Industry Act

An Act to amend the Canada Grain Act and to make consequential amendments to other Acts

This enactment amends the Canada Grain Act to
(a) update the objects and functions of the Canadian Grain Commission (“Commission”) including with respect to research and monitoring of grain quality and safety;
(b) create a grain producers compensation fund;
(c) extend the right to require the Commission to determine the grade and dockage of grain at process elevators, container-loading elevators and grain dealers’ premises;
(d) revise the Commission’s authority with respect to the Eastern Division;
(e) allow the Commission to require grain samples from elevators in the Eastern Division for the purposes of research related to grain quality and safety;
(f) provide for an administrative monetary penalties scheme;
(g) modify enforcement provisions; and
(h) reflect current practices in the grain industry.
The enactment also makes consequential amendments to other Acts and provides for transitional provisions.

Agriculture and Agri-Food

[Martin Shields, Conservative, Bow River, AB]

Madam Speaker, it is a privilege to be here at the late show tonight to speak about farmers, ranchers, the carbon tax and clean fuel standards. A carbon tax hike is set to make things a lot harder for Canadian farmers and ranchers. A tax hits farmers from many different directions with very few exemptions.

For inputs and fertilizer, add a carbon tax. For seeds, add a carbon tax. Equipment, machinery and parts cost hundreds of thousands of dollars, and a combine is close to $1 million. Add to that a carbon tax. For grain drying, which costs tens of thousands of dollars, add a carbon tax. For heating buildings, and there are many, add a carbon tax. We have a crop, and now what do we do? We have to truck it and deliver it, with a carbon tax added on. For grain companies and elevators, add a carbon tax. What about the railway? Yes, we have to move things, so add a carbon tax.

Producers pay all the downstream costs with no ability to increase the price they receive. Agriculture sector producers use the most energy efficient and innovative means in the world. Agriculture producers are also carbon sinks.

As Brian Cross noted in The Western Producer, Alberta Federation of Agriculture President Lynn Jacobson said, “the carbon tax increase highlights the need for additional carbon tax exemptions for prairie farms.” He also noted, “The establishment of national carbon credit system that allows farmers to capitalize on carbon sequestering activities would go a long way”.

The government is hiking the carbon tax, or the clean fuel standards tax, without a comprehensive plan to address the damage it is going to cause to our agriculture sector and supply chain.

Speaking of challenges on the Prairies, the cancellation of the Keystone pipeline is devastating to real people, families, businesses and communities. We need jobs and growth, and the pipeline supplied both. The Prime Minister talks about support for the resource sector, but killed northern gateway and added barriers to energy east that killed it. The government legislated Bill C-48 and Bill C-69, which did in pipelines as well.

The Liberals also bought a pipeline from a private company that just wanted to build it and wanted the government to get out of the way so it could do it. Now it is many billions of dollars over budget and years behind completion. Will it get built? Is Enbridge Line 5 through Michigan next on the hit list? It would mean thousands of jobs in Ontario and Quebec.

Post-COVID-19 jobs in the resource sector are an essential part of getting Canadians back to work and recovering Canada's economy. We need this sector working. Where is the plan to do it?

Speaking of plans, was the COVID-19 plan a Canada-focused plan? We all know the first thing the government should have done was protect the most vulnerable and protect front-line workers. How do we do that? It is with rapid testing, tracing and isolation. Instead, the government's plan was lacking significantly, and we slowed down the economy to almost a crawl. Then it was basically closed twice.

Sadly, many vulnerable families have been lost forever. Many businesses are closed and many more will be. Students have lost an academic year, and hundreds of thousands of jobs are lost. Mental health challenges are now exploding.

Now in January, 10 months later, the government has started asking for COVID tests. Where was that 10 months ago? Where was the support for Canadian industries to develop rapid testing and vaccines?

We need to protect lives and livelihoods. That is the key to getting out of this crisis and getting people back to work. The government's handling of this situation has prolonged the economic damage and is risking lives.

[Bill Bewick]

It's no secret that there's a huge problem with the lack of pipeline access, all of the hurdles that have come up since, and more hurdles that the government is considering putting forward through Bill C-48 and Bill C-69. That does mean that all of our oil prices are discounted at a huge rate, because we have a captive audience down in the U.S. that is our sole purchaser. There's that, and then there's the tech resources issue.

Recently, there's so much uncertainty. Everybody understands that Canada has always taken environmental responsibility very seriously, and the sector takes it very seriously. There just needs to be a clear path and clear goalposts that don't get moved. To get those investors back, we need to have confidence that this time the government won't be changing the goalposts.

[Shane Stokke, Vice-Chair, Grain Growers of Canada]

Thank you, Mr. Chair and honourable members.

My name is Shane Stokke. I'm vice-chair of Grain Growers of Canada. Grain Growers of Canada provides a strong national voice for grain, oilseeds and pulse producers across Canada. As such, we appreciate the invitation to appear before you to discuss the specific elements of Bill C-4 that are pertinent to the grain sector.

I farm at Watrous, Saskatchewan, an hour east of Saskatoon. I grow many different crops, and trade is very important to me to be fluent and real.

Our message regarding CUSMA and Bill C-4 is simple. We want to see it pass quickly. Our farmer members across Canada need certainty to invest and grow. With farmers feeling the effects of global trade wars, diplomatic disputes, increased input costs, higher taxes and challenging weather conditions, the last thing we can afford is uncertainty in trade within our own continent. We need tariff-free access for our export commodities. Canadian farmers rely on stable markets to succeed, and ratifying CUSMA will allow us to capitalize on further opportunities for growth with our closest trading partners.

Mr. Chair, specifically relating to the legislation before us, I'm happy to offer a comment, as per request, to clause 59 and sections under the Canada Grain Act portion of the bill. This section includes a remedy to a long-term trade irritant that both the United States and Canada have had. In essence, these changes allow for a levelling of the playing field. These changes ensure that all wheat varieties registered in Canada can receive a Canadian grade regardless of where they're grown. I should mention that a similar change was proposed by the previous government in Bill C-48 prior to the 2015 election, but it was unable to pass due to the dissolution of Parliament. We supported that change in 2015, and we are very pleased to see these changes being proposed once again. We hope they will be in place soon, with swift ratification of CUSMA through the passage of Bill C-4.

Over the last decade, there have been significant changes to both grain grading and handling systems here in Canada. This remedy is essential to the last remaining cross-border trade irritant U.S. farmers have with respect to grain, and we support this change. Under the current system, registered Canadian varieties grown in the U.S. and sold into the Canadian bulk handling system are automatically given the lowest grade possible. This change will allow grain grown in the U.S. to be graded here in Canada, and graded appropriately. Under the Canada Grain Act, nothing prevents companies such as mills from buying grain on specifications outside the grading system, and that will not change.

Currently a significant amount of grain is not sold in the Canadian bulk system. We would not expect that to increase dramatically because of this change. This change will now make Canada more compliant in providing reciprocal treatment to our trading partners, which we support and expect in return. This also highlights the fact that Canada truly believes in a rules-based system for world trade, and we're happy to show we will walk the talk in that regard. By removing this long-time, last trade irritant, it also assists Canada in growing forward.

While we believe there should be future reforms to the Canada Grain Act, by ensuring we're working on an even playing field with our trading partners we will be more firmly in control of any future changes to the act. This will allow strict Canadian stakeholder engagement for any future changes to the Canada Grain Act to ensure that any changes made are made in the best interests of Canadian grain growers.

In conclusion, CUSMA ensures continued tariff-free trade, establishing processes that help remove technical barriers to trade and maintaining vital precisions to deal with disputes.

I welcome any questions you may have.

[The Honourable Gerry Ritz, Conservative, Gerry Ritz]

Thank you, Mr. Chair.

Today I have with me deputy minister Andrea Lyon; assistant deputy ministers Greg Meredith and Pierre Corriveau; and of course Paul Mayers with the CFIA.

It's been a busy time in Canadian agriculture since we last met. We've had the Canada-Korea Free Trade Agreement come into force on January 1 of this year, the passage of the Agricultural Growth Act, and a very successful trade mission with Canadian industry to Southeast Asia in March.

Just two weeks ago we announced that the CWB had reached a strategic partnership to secure the resources they need to become an independent, strong, and global competitor in the grains sector. This agreement with G3 Global Grain Group is expected to increase Canada's grain export capacity, adding hundreds of jobs and hundreds of millions of dollars of economic growth across the Prairies. The stronger CWB unit will continue to offer farmers an opportunity to build equity in this new company, simply by continuing to deliver their grain.

With this agreement our government has fully delivered on our commitment to marketing freedom by increasing marketing choice for western Canadian grain farmers, as well as keeping the CWB as a strong, viable option for farmers. As I said in Winnipeg, this announcement is a win for Canada's producers and a win for Canada's economy.

Agriculture continues to drive the Canadian economy. Of course, the main estimates are always about looking ahead. When we do so, we see a bright future for this great, dynamic sector.

Demand is growing around the world for the high-quality food that our Canadian farmers and food processors continue to deliver. To allow them to capture that demand, we've sharpened the focus on strategic investments that promote innovation, competitiveness, and market development initiatives, while continuing to proactively manage their risk.

The estimates you have before you reflect this transformational change. Powered by a $3-billion funding envelope over five years, Growing Forward 2 is really moving the goalsticks, driving our economy and the sustainability of the sector overall.

A great example of this is the agri-risk initiative, or ARI. This is a new tool introduced under Growing Forward 2. Rather than taking action after the fact, the idea is to get out front and centre, and support bankable, predictable insurance tools that producers can use to proactively manage their risk.

A number of initiatives are already in place, including livestock price insurance, implemented in the western provinces of Saskatchewan, Alberta, and British Columbia, who bought on. At last count, cattle producers there have insured close to one million head, valued at $1.7 billion.

Last week our government introduced the budget, which commits a further $30 million over two years to grow Canada's marketing presence around the globe. This new support will help expand the activities of the market access secretariat and those of the CFIA to jointly support this agricultural sector in continuing to maintain as well as expand and diversify into new markets, while capitalizing on opportunities created by the trade agreements we're signing. This will also include new agricultural trade commissioners, and a more proactive role in setting international, science-based standards. The funding will also help expand our successful agri-marketing program to help farmers to further enhance marketing capacity at home and abroad.

To help our new generation of farmers take our industry into the future, the budget also increases the lifetime capital gains exemption from $800,000 to $1 million. On average, a farmer will save some $27,000 when selling a property valued at that $1 million-plus mark. This measure will ease the tax burden as our aging producers considering retirement pass the farm to the next generation.

A strong farm gate is fundamental to helping producers capture the incredible opportunities that are opening up here and abroad. That's why our government continues to push hard on the trade file, to get our foot in those doors before our competitors do. Our collaborative efforts are promoting decisions that are science-based, helping Canadian producers to export more product and grow the economy overall. Last year Canada's agriculture and food exports hit a new record of $56.4 billion.

We continue to deliver on our government's aggressive trade agreement strategy. Since 2006 this government has successfully concluded negotiations on free trade agreements with 38 countries, while having ongoing negotiations with another 32. To date Canada has concluded trade agreements with countries representing close to half of the world's agriculture and agrifood marketplace. Our historic trade agreements with Korea and the European Union will open the doors to vitally important markets on two different continents. On January 1 the Canada-Korea trade agreement came into place. This agreement will level the playing field for exporters in this key market by eliminating tariffs on our canola, beef, pork, and grains.

Upon implementation of the agreement with the EU, Canada will be one of the only developed countries in the world to have preferential access to the world's two largest economies—the EU, and of course the United States. Industry has estimated that this agreement will increase Canadian agriculture and agrifood exports to the EU by some $1.5 billion a year.

We are also working hard to create a new trade opportunity through our ongoing participation in negotiations for the Trans-Pacific Partnership.

Of course, when it comes to enhancing our trade routes, we must practise what we preach here at home as well, and I certainly applaud the work this committee is doing on interprovincial trade barriers and ask that the report, the recommendations you table, be strong.

Transport is a key pillar of our government's strategy to build a modern grain industry that's equipped to compete in the global marketplace. We continue to build a modern grain industry with ongoing reform of the Canadian Grain Commission.

We introduced Bill C-48, the modernization of Canada's grain industry act, building on changes we passed in 2012 to streamline and modernize the operations of the CGC and reduce the regulatory burden for grain producers. Bill C-48 will enhance producer protection, grain quality, and safety assurance, while further streamlining the operations overall of the CGC. While parliamentary games from the NDP are stopping this bill from reaching committee, the government remains committed to advancing this important legislation.

As well as trade and transportation, farmers need research and innovation to compete in the global marketplace. ln today's environment, collaboration is key.That's why we're building on our very successful research cluster model. We almost doubled our investments in these clusters under GF2 as well as adding four new ones. Those investments of $127 million have leveraged $60 million in industry investments. GF2 is also driving innovation through industry-led R and D, agri-science projects, and funds to help get great ideas off the drawing board and into the marketplace. There are also the cost-shared innovation projects with the provinces and territories, and of course our world-class scientists who continue to deliver new ideas and tools to advance the sector.

A key catalyst for innovation is the Agricultural Growth Act, which received royal assent about two months ago. Bill C-18 will drive innovation by strengthening intellectual property rights for plant breeders so Canadian producers can and will have the best possible varieties available. At the same time, farmers retain the right to save, clean, and store seed for their own operation. Bill C-18 will level the playing field for our producers and will encourage foreign breeders to release their varieties into Canada much sooner. We've already seen the results with Bayer CropScience announcing a $10 million investment in Canadian cereal crop breeding. Bill C-18 aIso brings innovation to our delivery of the advance payments program, giving farmers a more flexible tool to manage their cashflows while cutting red tape and improving efficiencies.

As well, to speed up the innovation pipeline, we are modernizing the variety registration system to help seed companies get farmers the tools they need to compete faster and more efficiently.

I'm confident these reforms will take down barriers to innovation while continuing to support our high-quality Canadian brand in the world markets.

Mr. Chair, all of this is great news for Canada's agriculture and food sector and for Canada's economy. The future is bright for this dynamic industry. The department's economic outlook points to a strong future for the agricultural sector with Canadian farmers' incomes and balance sheets at record levels. Agriculture has become more global in focus, more outward-looking, and much more confident. The credit for that goes to a new generation of farmers, processors, and other business people who have stepped up to the challenges of feeding a hungry world.

Our job as government, Mr. Chair, and mine as minister, has been to clear the road for that to happen. We've come a long way, but there's always work to be done. We're now starting to look at what the next-generation agricultural framework will look like. Powered by an aggressive trade and innovation agenda, we will continue to drive transformational change throughout this core economic sector to reap a bumper harvest for Canada's economy.

Thank you, Mr. Chair. I look forward to any questions or comments the panel may have.

[The Chair, Conservative, Bev Shipley]

Bill C-48.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Mr. Speaker, I have been meeting with grain farmers across Canada. Their growth and continued success depends on being a competitive supplier on the international markets.

The government claims it wants to give more farmers security and increased access to processing facilities, and guaranteed payment when they sell their product, but the bill the Conservatives tabled last December has not turned a wheel since and farmers are not being consulted.

Why is the Minister of Agriculture stalling on Bill C-48?

Rail service

[Earl Dreeshen, Conservative, Red Deer, AB]

Mr. Speaker, it is a pleasure to stand here today to speak to the motion.

Since the motion addresses agriculture, I would like to recognize my much older brother Alan on his Groundhog Day birthday as well as his outstanding career as a rancher, grain farmer and businessman. He was my first farming partner from a time long ago when we were both teenagers.

Last year, Canada's 60,000 grain producers exported some 40 million tonnes of world-class grain products worth over $20 billion. That is important for agriculture because it represents about half of all agriculture and food exports, but it is also important for Canadians who live in cities. A strong agriculture and food sector drives one in eight jobs in our country and almost 7% of our gross domestic product.

Canadian grain farmers depend on exports to sell 70% of their wheat, 75% of their pulse crops and 85% of their canola. That is why the rail service is so critical to Canada's hard-working grain farmers.

Regarding today's motion, our government has taken steps to address each of the five points, namely: recognizing that improved rail service is essential to farmers' livelihoods; recognizing that the ongoing review of the Canada Transportation Act will provide an opportunity for improvements; the need for all stakeholders to sit down together; the need to correct the imbalance of power along the chain; and ensuring government and industry work together. We have addressed these points and we continue to do so. Let me elaborate.

We recognize our rail service is essential to the livelihood of Canadian farmers. Likewise, we have moved to address the imbalance of power along the logistics chain.

Canadian farmers pay over $1 billion to move regulated grain by rail. On the prairies, grain travels an average of 1,400 kilometres to reach a port position. Our farmers and our economy depend on efficient, effective and reliable rail service to move those crops off the farm to our valued customers in Canada and around the world. That is why a year ago our government took action when our farmers were facing the prospect of moving a record crop.

First, we introduced an order-in-council mandating the railways to move a minimum volume of one million tonnes of grain a week, backed by penalties. Two weeks later we introduced Bill C-30.

The Fair Rail for Grain Farmers Act has put into law clear and achievable solutions to ensure grain and other commodities get to market in a predictable and timely way. The act amended the Canada Transportation Act to include the authority to set volume requirements in order to mandate that certain grain volumes be moved. The legislation also gives us the ongoing flexibility to monitor and adjust volume requirements as needed. The act also created the regulatory authority to enable the Canadian Transportation Agency to extend inter-switching distances for all commodities on the prairies.

Bill C-30 amended the Canada Grain Act to strengthen contracts between producers and shippers. The amendment will provide the Canadian Grain Commission with the authority to regulate grain contracts between farmers and grain elevators.

Bill C-30 also enacted regulatory power to add greater specificity to service level agreements as requested by all shippers.

In addition, we required additional, timelier and more detailed data from the railways to increase the transparency of railway, port and terminal performance across the supply chain.

In August, the regulations came into force and we renewed the minimum volumes to ensure continued movement through the fall.

In December, we did the same, while committing to increased monitoring throughout the winter months.

These measures are concrete and comprehensive and they have been delivered. The grain is moving faster than last year and faster than the five-year average.

Speaking to the second point of the motion regarding the review of the Canada Transportation Act, this process was up and running in the summer. We accelerated the review by a full year to focus on long-term structural issues affecting all rail transport, including grains.

A discussion paper was released in September for industry comment. Since then, the CTA review panel has been busy throughout the fall and winter, meeting with a number of stakeholders to get a clear picture of the challenges facing the western Canadian grain handling and transportation system.

We will continue to bring the whole value chain together to manage future challenges and create a rail supply chain that has greater capacity, predictability and accountability for the industry and, most important, for our global customers.

As far as urging industry to work together to improve the system is concerned, we have delivered on that as well. We have established a number of opportunities to bring together all the players to develop solutions for the longer term. We have also formed the Crop Logistics Working Group, bringing the entire industry together to focus on the performance of the supply chain for all crops in this new and exciting marketing freedom environment.

We moved forward on recommendations from the working group around performance measurement and government support, with a $3 million industry-government investment in a study on supply chain improvements. We also launched the commodity supply chain table, with stakeholders from the agricultural, forestry, chemical, and petroleum industries, as well as railways, ports, grain elevators, and shipowners. The group is exploring solutions to the challenges facing Canada's rail-based supply chain. Together, these initiatives will ensure that Canada's grain industry can to shape a strong logistics system for the future, one that responds to the needs of the Canadian grain sector.

However, we are not stopping there. This government has an overall plan to create a modern and competitive grain industry that will open up new opportunities for farmers in the 21st century. The cornerstone of our reform is marketing freedom. This landmark legislation restored to farmers a basic business freedom they had been denied for 69 years, the freedom to sell the crop they paid to grow to the buyer of their choice, the same freedom that helped create the canola and pulse industries, which made them juggernauts of Canada's farm economy over the past two decades. The overwhelming majority of western grain farmers have embraced the opportunities opened up by marketing freedom, which allows them to make decisions at the speed of business.

In the post-monopoly era, Canadian wheat is finding new customers in Asia, Africa, and South America, where sales of Canadian wheat in 2013 and 2014 surpassed the previous five-year averages. Meanwhile, instead of one buyer for farmers' wheat, there are now dozens of grain companies competing for their crops, as we saw with the deregulation in Australia. Since marketing freedom came into force, the number of grain dealers licensed by the Canadian Grain Commission has risen significantly.

In December, we took another key step for Canada's grain industry when we introduced BillC-48, the modernization of Canada's grain industry act. This proposed legislation builds on major reforms we made to the Canada Grain Act in 2012. It would modernize the regulatory framework for the grain industry to reflect current practices. It would enhance producer protection and grain quality and safety assurance. Enforcement of the act's provisions would be improved and less burdensome. Efficiencies would be realized in producer protection. This proposed legislation would benefit producers, the grain industry, and all Canadians in a big way.

Trade is also critical to the competitiveness of Canada's grain industry. Internationally, we have continued our aggressive trade agenda by pursuing free trade agreements and ensuring a science-based approach to trade issues, like low-level presence of genetically modified crops. We have concluded major agreements with 38 countries, including the European Union and South Korea, opening up key markets for our producers and processors.

Once the trade agreement with the EU is fully implemented, our grain farmers will have virtually tariff-free access to half a billion consumers from Italy to Scandinavia. To give traction to these trade agreements, the Minister of Agriculture and Agri-Food continues to travel with industry for face-to-face meetings with our customers in key markets. These missions help to promote the qualities of Canadian grains to every corner of the world, while bringing back valuable feedback from our customers to ensure that our grains continue to command a premium in the world.

The other key element in our grain modernization plan is innovation. We are keeping our wheat producers on the leading edge of innovation through investments in the wheat genome and disease-resistant varieties. That includes the national wheat improvement cluster. We have matched funds, bringing in investment up to $25 million. We have dealt with the Western Grain Research Foundation, again bringing all of these things together to help our farmers.

In conclusion, the future is bright for Canada's grain industry. The Food and Agriculture Organization estimates that over the next 35 years, farmers will need to increase their annual production of cereals by a billion tonnes. To meet the world-class demand, they need a world-class transportation system. This government remains committed to ensuring that Canada does, indeed, have a world-class transportation system.

Modernization of Canada's Grain Industry Act

[Kevin Sorenson, Conservative, Crowfoot, AB]

moved for leave to introduce Bill C-48, An Act to amend the Canada Grain Act and to make consequential amendments to other Acts.

(Motions deemed adopted, bill read the first time and printed)