I'd like to continue to talk a little bit about liability, misrepresentation, and the Certificate Final.
The recommendation that the CGC be liable for 33% of the harm incurred by revision to their Certificate Final is both positive and a concern. The recommendation would ensure that the government, through the CGC, would be liable for the integrity of the Certificate Final, which is a concept we can and do support.
However, limiting the CGC's liability to only 33% of the losses sustained when it initiates a course of action that causes economic harm to a stakeholder is unacceptable. If the CGC causes loss to a third party, either intentionally or negligently, it should bear the entire resulting cost. The principle of accountability would suggest that those who are responsible for damages should be held financially accountable for the impact of their decisions.
Furthermore, the recommendation itself assumes that the Certificate Final can be changed in the first place, which misses the point that Certificates Final are final. This runs contrary to general commercial principles.
We would recommend that the regulations governing the Canadian Grain Commission be amended to better ensure the integrity of the Certificate Final, to help assure that adjustments are not allowed after the certificates are issued.
The concept of CGC liability brought forward in the COMPAS report should also apply to situations in which the CGC makes changes to their interpretation of grain standards in the middle of the crop year. We have had three instances in the last two years in which the CGC has clarified their interpretation of grading standards. This has resulted in financial damages to the industry. We cannot purchase grain on one standard and then be expected to ship it on another, higher standard.
I will touch on the topic of licensing and security. While it is positive that the report carries forward the idea of accountability for the CGC when they fail to protect farmers, the point is missed that recent bankruptcies are simply the most current demonstrations that this expensive system does not work as advertised. COMPAS understands that the current system does not provide farmers with the protection they believe they have and it acknowledges the cases involved. However, COMPAS does not recommend reform.
Similarly, with respect to licensing, COMPAS has heard the concerns from new processors, such as trackside loading facilities, regarding the cost of becoming licensed. The recommendation, however, was not to reform the licensing system overall but to exempt some facilities.
COMPAS does recommend that the CGC initiate a consultation process as to whether any facility should be exempted or placed in a separate class. We would welcome such a review.
In touching briefly on dispute resolution, I will try to hurry along. The recommendations brought forward by COMPAS are positive and would provide structured and predictable protection for all members of the value chain, from farmers to shippers of various sizes. A structured dispute resolution process in which the CGC is compelled to participate would help ensure impartial application of regulation and rapid resolution of issues.
On the research side--again, in the interests of time I won't go through a deep review of our opinion--we do feel that research is critical and government funding of research is critical, so we think COMPAS has made some positive recommendations in the report.