Thank you for the opportunity to appear before the standing committee to express the views of the Canadian Special Crops Association.
The CSCA has 110 members, ranging in size from large multinational companies to single-plant processors of the four pulse crops, as well as sunflower, buckwheat, canary seed, and mustard. The CSCA brings the voice of the trade and the processing industry to Pulse Canada.
I am here representing the views of the CSCA, but we, at CSCA, are a very strong and important part of the Pulse Canada organization. All of you as elected members will be receiving a letter from Pulse Canada outlining our strategic plan and inviting you to view it so that you can get an idea of the partnerships that we see in the pulse industry, in the special crops industry, where government, the trade, and farmers can work together to make this a stronger industry.
My task here today is to share the views of the CSCA on how we build a stronger industry, and more specifically the framework we can use to look at how changes proposed by this act will impact the operations of the Canadian Grain Commission and thus impact Canadian processors and Canadian farmers.
Trade members have always stressed the importance of being competitive. The pulse and special crop trade wants to focus on optimizing costs and diversifying our revenue streams. Achieving these outcomes will ensure high returns for growers, competition in the Canadian marketplace, and will give farmers in Canada a reason to continue to grow pulses and special crops.
The CSCA has a diverse membership base. The majority of CSCA members are small and medium-sized enterprises operating across Canada. All members are responsible for creating jobs in processing and handling in rural areas, adding value to commodities, and they are responsible for ensuring that Canadians can meet the needs of our customers who are residing in more than 150 countries.
Canadian farmers and processors can be competitive when we focus on keeping costs low and strive to ensure that we compete on a level playing field at home and abroad. When we have fair and level competition, we grow, create jobs, diversify the market base, and help create a stronger, more stable agricultural sector.
Let’s use this framework as the criteria against which we can compare the proposed changes to the operation of the Canadian Grain Commission. The move away from the requirement for bonding of grain companies as a condition of being licensed by the Canadian Grain Commission is seen as a positive step. The trade has been assured that this move will lower costs and free up capital to be put to use growing the businesses. However, we aren’t so certain it also ensures there will be a level playing field between Canadian companies. There are no answers as to whether there will be differences in the insurance costs among companies, and, if there are differences, how significant these differences might be. Without these facts, questions remain as to whether we have optimized the change in policy. While costs are expected to be lower, we need to understand whether the changes will also shift the competitiveness among companies.
This is particularly important, in our view, when it is a government regulation that may be unlevelling the playing field.
Members of the CSCA recognize that farmers want payment security. Outside of trade in agricultural products that occurs in facilities licensed by the Canadian Grain Commission, government-mandated security programs do not exist within the rest of agriculture.
We all recognize that there are approaches to payments today that didn’t exist 10 years ago, when cheques had to be issued, sometimes mailed, and might even take a few weeks to clear through financial houses. Today, with options that include immediate electronic transfer of funds, there are a wide range of settlement options against which the value and costs of insurance-based security programs need to be considered. The question that should be considered is whether it is necessary or in fact desirable to implement the provision of the act that would continue to require licensees to have a security provision prescribed to them by the CGC. A provision that would create an unlevel playing field between companies or disadvantage small and medium-sized enterprises would not be seen as a positive move for government to impose on the trade.
The move to full cost recovery of the Grain Commission is also an important issue. All fees come off the bottom line of farmers. The CSCA recognizes that fee changes are needed, especially when the fees have been frozen for so long. But CSCA members also suggest that the costs of the Canadian Grain Commission must be driven down further through a more comprehensive streamlining of operations than the current amendments in this bill propose.
This bill does not address all of the recommendations that have been made in the past, and until things like modernization of the governance structure and elimination of other costs from the Grain Commission structure are done, a mandate to recover all costs will result in CGC operational costs that must be funded or recovered through higher fees charged to grain companies, which are then passed on to farmers. Therefore, the CSCA encourages this committee to look at what additional changes need to be made to the CGC to ensure that it is as cost effective as possible. The CSCA would also encourage all the political parties around this table to agree on the approach that will eliminate these costs, and in the process help the trade and farmers through cost reductions before the cost recovery is implemented on August 1.
The CGC currently plays some important roles that Elwin spoke about in his remarks, including cargo monitoring for pesticide residues, heavy metals, and mycotoxins. If the CGC's role will change with a reduction in funding from government of, I understand, over $40 million, the CSCA is asking for a clear indication of what changes to fees or services will be made. He did talk about the consultation that is under way in the month of November.
The timelines are very tight for these changes to be made, and clarity is needed on what the existing charges are and what the charges will be under a cost-recovery system. The CSCA is asking that the committee ensure that the answers on the changes to both mandatory fees and optional services are made clear, noting both the existing and proposed new fees in a side-by-side comparison.
The complexity of trade is increasing as food security, food safety, and quality assurance continue to be important while the ability to test becomes more sophisticated. The role of the Canadian Grain Commission in playing a role in Canada's quality reputation needs to be recognized. The value that all Canadians receive from high standards of quality assurance also needs to be recognized.
In closing, I want to thank the committee for the opportunity to present the views of the Canadian Special Crops Association.