Thank you, Colleen.
Colleen mapped out our mandate, criteria, and reason for being an organization. This mandate is essential and fundamental to the goals, action, and analysis undertaken by the organization.
Mandates and terms of reference are critical components of the functioning of institutions, acts of Parliament, and even the tone and character of private consultant reports, such as the COMPAS report reviewing the Canada Grain Act and the Canadian Grain Commission.
This report recommends altering the mandate of the Canadian Grain Commission, and as such the consequences flowing from this temper all the other recommendations that follow, positive or negative.
Under the current act, section 13 of the Canada Grain Act reads as follows. The terms of reference of the Canadian Grain Commission are under the title, “Objects of the Commission”:
Subject to this Act and any directions to the Commission issued from time to time under this Act by the Governor in Council or the Minister, 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.
“In the interests of the grain producers”—I want to repeat that, “in the interests of the grain producers”—is not a superfluous line. It is fundamental.
This is the result of and recognition of the abuses and domination of farmers that took place at the hands of the grain companies and railways a century ago. Farmers were forced to take or leave a price and a grade deemed by the grain company of the day, regardless of the quality of grain the farmer was trying to sell. They were cheated on weight and even access to delivery.
The possibilities for this behaviour and other untoward behaviour are today even more threatening with the increased concentration of grain companies and the likelihood of further concentration. Today a handful of companies dominate the grain trade around the world. Without a strong regulator with a mandate to act in the interests of these grain producers, the consequences will be grave for farmers. These grain companies recognize the economic gains they can make on the backs of farmers if the mandate changes over time. This will be an incremental but relentless process.
The COMPAS report removes this critical line, “in the interests of grain producers”, from the general mandate of the commission and narrows it down to specific rights. This is where our fundamental critique of the report rests.
Their text would read:
Subject to this Act and any directions to the Commission issued from time to time under this Act by the Governor in Council or the Minister, the Commission shall: 1) establish and maintain the standards of quality for Canadian grain and regulate grain handling in Canada, to ensure a dependable commodity for domestic and export markets.
It's very similar to the original text except that “in the interests of grain producers” is missing.
They then define it in part two:
2) in the interests of producers, provide the right of delivery access by grain producers to primary or terminal elevators, provide the right to third party grade and dockage verification, provide the right of a grain producer to access a producer car for shipment of grain and to have third party weighing and inspection of that unload, provide the right of grain producers that their commercial grain transactions with licensees under this Act be secure.
Section two of this text narrows “in the interests of producers” to some very specific but not unimportant rights for farmers. The flaw is that the role of the CGC under this scenario is narrowed to ensuring quality standards for Canadian grain and to regulating grain handling to ensure a dependable commodity is now no longer focused on grain producers' interests, but it is left loosely open to interpretation. Quality standards beneficial to grain companies may result in grave economic consequences to producers.
Under this language, there's no distinction made among grain companies, farmers, or other players. The economic power and balances are the obvious divergence of the interests. The divergence of the interests are less clear but important nonetheless.
The regulation of grain handling may ensure a dependable commodity for domestic and export markets, as the act requires, but it could very easily accomplish this with onerous conditions placed on grain producers by the grain trade: either over time, by excessive quality demands, resulting in downgrades and price discounts; or by excessive handling requirements and pricing that could still fulfill the mandate of dependability and quality but that could leave producers in even more dire economic straits.
Placing the interests of grain companies and farmers on equal footing is a folly that does not recognize the power imbalances existing between them. In the strongest possible terms, we recommend maintaining the language of the act as it exists now, within the interests of grain producers, as the raison d'être for the Canadian Grain Commission and the standards of quality in grain handling regulations in Canada.
We do not object to the further definition, as written by COMPAS in clause 2 of their text, in the interests of grain producers, but we object strenuously to it being limited to those specific rights.
I think the mandate is critical. What I'd also like to address are some of the recommendations within the report itself. There are positives and negatives in the report.
One of the things that was debated earlier with the COMPAS people was the issue of governance and the issue of the assistant commissioners and what appears to be an ambiguous relationship to the chief commissioner. This was a studied construction and not an attempt to create patronage heaven, as referred to in the report. The assistant commissioners have the ability, when necessary, to act in the interests of producers, sometimes putting them in conflict with the chief commissioner, who is a government appointee.
This was absolutely fundamental as grain handling tariffs increased and producers attempted to alleviate this problem by constructing their own producer carloading facilities where they could, along tracksides. The chief commissioner of the day was adamant that these facilities should be licensed as primary elevators, and then under the act they could not load producer car facilities.
It took one assistant commissioner in particular, acting on behalf of producers, pointing out that the chief commissioner was in contravention of the intent of the act. There was very real pressure from grain companies for this particular individual to be dismissed or to be shut up.
In the end, the Grain Commission decided that because no monetary transactions take place—this is just a service where the producer carloading facility loads the car, gets to the terminal and is unloaded, and the Wheat Board makes payment to the producer and it's administered and weighed by the Grain Commission—they weren't required to have licences as primary elevators. This allowed producers to maintain the fundamental right, which they've had since the turn of the past century, to have an option in moving their grain to port other than through the elevator companies. This is a very real control and cap on the level of tariffs and fees that a producer can be subjected to in the handling of his grain.
While some definition as to the duties of the assistant commissioners perhaps would be appropriate, the office of grain farmer advocacy, as envisioned in this report, is very unclear. If it is an office operating outside the Grain Commission, how would it access records in times of dispute on grades, etc. Would these be separate jurisdictions? Would that be available to them? The fact that they suggest that after three years this office could disappear is extremely worrisome. First, we see it as little more than an ombudsman with ill-defined or no powers. Second, what would happen then to producers, particularly in reference to this changed mandate as suggested by COMPAS?
On the issue of inward inspections, COMPAS recommends this be optional. Inward inspections are the weighing and grading that takes place when railcars or trucks arrive at transfer or terminal elevators. The Grain Commission conducts third-party grading and weighing services. We think this is a value that's important to maintain in the system because it prevents the contamination of large lots with possible off-types of grain, etc. It also serves as an auditing process to make sure that the volumes in and out are equivalent and that there aren't any losses taking place in the transfer system, which would be detrimental to producers.
On contracting out, there were points made here about the costs and the accountability. The other question is, as the COMPAS report suggests that you need competition with contracting out, the reality is that these are very specific services that tend to be consolidated in one private company when this happens. We see this in Industry Canada with weights. And often there are significant relationships formed between these private contractors and/or the grain companies, which we confront right now, which are just a handful.
On cost-recovery and government payments, we agree that the government should be financing the Grain Commission and covering its deficits. We disagree with the COMPAS recommendation that the government finance not only the infrastructure but also the services the Grain Commission provides. We feel that the taxpayer should contribute to that too. Where deficits arise, producers are paying a significant portion of that.
I'd like to address--and Colleen will very quickly--the consultation model proposed by the COMPAS people in their report. They suggest on numerous issues that the consultations between so-called stakeholders should take place based on the Canadian Food Inspection Agency's model of consultation. I am very familiar with one of those models in particular, as I sit on the National Forum on Seed, which they have been touting as a template for consultation for all other government agencies. It presents particular problems as a mechanism for producers to participate in a consultation-model system.
The other model, which Colleen will address, is the idea of doing surveys online.