Evidence of meeting #61 for Agriculture and Agri-Food in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was commission.
A recording is available from Parliament.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
In other words, you have the ability to retain that quality control.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
I have another question about something we haven't talked about a lot. From my own understanding, grading is done visually. Is it the KVD system?
Chief Commissioner, Canadian Grain Commission
No, there used to be kernel visual distinguishability in western Canada. It was about the only part of the world where it was still used, and that was discontinued back in 2008, I believe.
Chief Commissioner, Canadian Grain Commission
We still use a visual system. Kernel visual distinguishability was a requirement that if new varieties were brought forward for registration, particularly wheat varieties, they could only be registered if you could visually distinguish them from varieties in other classes. In other words, you had to be able to distinguish the difference between a hard red winter wheat and a hard red spring wheat, and that made it difficult for the breeders of new varieties to use all the tools. They wanted to bring the best varieties forward. That was discontinued some time ago.
In its place a declaration system was adopted by the industry, so now when a producer delivers wheat to a primary elevator they declare to which class it's going. That's a legal document. They will say that they have hard red spring wheat, or hard red winter wheat, or some other class of wheat. They will sign a written declaration at the beginning of the year and they will orally reinforce that declaration upon each delivery of grain. That has allowed wheat breeders more flexibility in bringing forward new varieties.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
Has there been any problem with the new system, or is it working quite well?
Chief Commissioner, Canadian Grain Commission
It's working quite well. There's always the odd time something happens, but part of the responsibility of the Canadian Grain Commission and the grain research laboratory is to monitor that incorrect varieties are not placed into the wrong class by the grain handling system. Some of that occurred in very small amounts prior to the change. We still see that on some occasions, but there has been no sudden shift to a greater problem. It's one of the strengths of our system that we've been able to maintain.
Conservative
The Chair Conservative Merv Tweed
I have to stop you there. Time flies when you're having fun.
Joining us now from Saskatoon, we have Mr. Gust.
Thank you for being here. We've had opening comments, and I'll ask you to make yours briefly, then we'll go back to questions.
Gerrid Gust Chair, Western Canadian Wheat Growers Association
I'm very sorry for being late. The roads were horrible and traffic was atrocious.
Thank you for the opportunity to provide our views on the supply chain for grains and oilseeds in western Canada. The Western Canadian Wheat Growers Association is a voluntary farm policy organization with a 43-year history of advocating open and competitive markets and a history of promoting innovation and liberalized trade. Our guiding principles are the sustainability and profitability of the entire agricultural sector.
In my presentation today, I will give you a sense of my farm and common practices in western Canadian agriculture. I will then transition to some of the challenges we face and the changes in government policy that we feel are required to achieve the profitable and sustainable ag sector we are all striving for.
On our farm we grow a standard mix of dryland crops, including wheat—spring, winter, and durum—lentils, peas, canola, and rye. We generally market about 40% to 50% off the combine and into the November shipping season. The balance we sell throughout the cropping year, matching sales to market opportunities, selling to meet cashflow requirements and generally doing what we feel is best for our specific operation.
We are very fortunate in the Davidson area to have two high-throughput elevators and a small older wooden elevator, as well as access to high-capacity roads so we can haul full weights and tether all that.
Within 100 kilometres, we have access to seven major export terminals as well as canola crush facilities in Clavet and Yorkton. We have lentil-splitting plants in Regina and Moose Jaw, an ethanol refinery in Belle Plaine, and feedlots, both large and small, throughout the trading area.
I feel that competitive pressures keep everyone honest and it is my job as a farmer to keep abreast of the best market opportunities in my area and around the world. What keeps me awake at night are things beyond my control and more in your sphere of influence.
International trade is the lifeblood of prairie agriculture. Canada's population is too small and our land mass is too large to be dependent on supplying only our domestic market. As well, international trade brings much needed foreign dollars into our economy. For that reason, we the wheat growers have been very supportive of governments of all stripes to push forward on bilateral and multilateral trade deals.
These treaties are necessary for predictable trade and commerce for our raw and processed goods at deals that other countries enjoy. We hope to see the Canada-EU trade deal completed soon so that Canadian farmers have access to this important market, not just for grains, pulses, and oilseeds, but also for meat and meat products. Also, Canadian consumers would get access to all the EU has to offer us. Trade must be a win-win situation.
Canada's entry into the trans-Pacific partnership is also welcome news for Canadian farmers. Again, we hope the negotiations will ensure that Canada remains on equal footing with other exporting nations, such as Australia and the United States, in our ability to access some important Asian markets.
Another concern is rail transportation. As a farmer in southern Saskatchewan, which is over 1,500 kilometres and a mountain range away from Vancouver, and coincidentally less than 1,500 kilometres from Thunder Bay, it is absolutely essential that we have predictable and timely access to ports serving both the east and west coasts.
It is a common problem in Davidson and across western Canada that we have elevators fill up with grain, expecting their regularly scheduled train to arrive, yet it doesn't show. This has a ripple effect across the supply chain. Elevators are plugged, terminals can't fill, boats can't load in time, and our reputation as a reliable supplier to the world is tarnished.
As the primary supplier, all these costs and inefficiencies are pushed back to us. Added to that is the risk that buyers won't see Canada as a reliable shipper, so low expectations are built into a lower bid back to the farm.
To deal with these issues, the wheat growers would like to see Parliament move forward with legislation that requires railways to provide a level-of- service agreement to shippers. These service agreements must include performance-based incentives and penalties if we as shippers don't fulfill as well. Right now grain companies must pay a penalty to the railways if they do not load a train on time. Railways should face equal penalties if they fail to spot or pick up railcars on time.
Another problem we face is crippling railway work stoppages. Rail is vital to the economic prosperity of Canada. In our view, rail services should be deemed an essential service, with strikes and lockouts prohibited.
Another problem we see with the supply chain which we need to have addressed is restrictions that prevent the loading of ships in the rain at the port of Vancouver. If it rains more than five millimetres, the union shuts down its employees, citing safety concerns. This leads to costly and unnecessary delays and contributes to congestion at port. We understand that ships load in the rain in Portland, Oregon, and around the world. There is no need for Canadian farmers to be put at a competitive disadvantage.
We ask that this committee research this proposal, research the concerns around safety, so that somehow a solution can be found.
The main take-aways from my presentation are trade deals and competitive access to the international marketplace. We encourage governments to stay the course on bilateral trade deals that lower trade barriers and open new markets for our produce. Railways and shippers must be held to commercial terms, where penalties are equally applied to both sides. Railways need to be deemed an essential service.
Ports not unloading in the rain cost the Canadian economy millions in lost opportunity and productivity. If solutions have been used successfully around the world, why can't we in Canada adopt best practices?
Again, on behalf of our wheat grower membership, thank you for the opportunity to share our views. I look forward to your questions.
Conservative
Pierre Lemieux Conservative Glengarry—Prescott—Russell, ON
Thank you very much, Chair, and I thank our witnesses for their presentations.
With respect to the Canadian Grain Commission, you've done a good job outlining the essential services you provide in terms of grain quality, safety, research, etc. In fact, I visited your website. It is a good website. I was looking through the different types of research, both crop research and technology research, that you are engaged in. It's very nicely laid out.
You made a comment with respect to being in support of innovative regulations and policies to move the grain sector ahead in terms of service and competitiveness. We've heard from witnesses recently who have said that further changes are required in order to modernize the Canadian Grain Commission.
I'm wondering if you could share with the committee what legislative changes you would see would add value to the Canadian Grain Commission and help it in terms of the important and essential work it does for the grain sector here in Canada.
Chief Commissioner, Canadian Grain Commission
Thank you, Mr. Lemieux. It's an excellent question. It's one that the commission has grappled with for decades.
When I assumed my position and did some research, I found that for quite some time, committees, other professional research groups, and other stakeholders, had a lot of input into what the Canadian Grain Commission should look like and what we should be.
I don't want to get into the policy area because it's the role of parliamentarians to do that, but the minister has suggested that further changes are required to streamline the Canadian Grain Commission and to make it what it should be. In the consultation processes we've been involved with over the last couple of years, we have heard from stakeholders. Even in this last consultation, to which I referred, the response has been that the job is not yet finished. I can report that to you.
An area under consideration, which we hear a lot from our stakeholders and producers about, is that we should move from three commissioners to a president, appointed by the Governor in Council, in order to streamline the top level of the Canadian Grain Commission.
A non-binding decision review mechanism should be established to review CGC decisions. There's a debate on whether it should be something like that or whether there should be a board that makes us larger rather than more streamlined. There are complications around a board which I think a lot of stakeholders are concerned about, and they see the other process being a wiser move.
Authority should be provided to oversee the existing system of declarations in the grain handling system. I referred to that. So far, that's an industry initiative, but there's no government endorsement or authorization of that process. It could be placed within the Canada Grain Act. It seems to be the right fit and the right place because that's the kind of role we play.
The Canadian Grain Commission should be allowed to use the Administrative Monetary Penalties Act. The CFIA and the PMRA have access to that act, but we don’t. It makes it very difficult for us to enforce the act. We have to be persuasive, or else we have to be heavy-handed, and there's nothing in between, and we're hearing that.
The subject to inspector's grade and dockage service should be extended. That's one of the producer protection instruments we have. That should be extended beyond not only primary elevators but also to process elevators and grain dealers. Currently, the playing field is not perceived to be level. Farmers have that right when they go to a primary elevator, but if they're hauling their canola to a process elevator or hauling their wheat to a flour mill or some other processing facility, they don't have access to that right. Grain dealers, who are particularly involved in the special crops area, aren't required to submit to that producer protection.
There are a couple of other points. Perhaps a new class of licences for operations such as container loading operations could be created. The last time the act was overhauled, no grain was shipped by container. Now, 10% to 15% of the grain exported from Canada is shipped by container. The act is silent on that, at the current time.
Also, the CGC's role in collecting and disseminating statistical information should be clarified. It's deemed very important. We've consulted with the industry, and they very much want to remain in place our statistics which are published weekly, monthly, and annually. Statistics Canada appreciates that information. Again, with some of the changes and modernization within the industry, we need to have it clearly established how we do that because things have changed a bit.
Finally, the role of the CGC with respect to grain safety should be clarified. We find that customers of Canadian grain, both domestic and foreign, are more focused on grain safety than they've ever been. That is our responsibility as part of grain quality assurance. Perhaps the act could clarify that a little more clearly.
Liberal
Frank Valeriote Liberal Guelph, ON
Thank you, Mr. Gust, Mr. Hermanson, and Mr. Miles.
Mr. Gust, thank you for your presentation.
My question is about value-added processing. I agree with you that we need to open markets. There's no question that's important. I understand there are a lot of tariff barriers and non-tariff barriers that keep us from exporting a lot of our processed goods, with other countries preferring our unprocessed resources and produce.
My concern is that in the last six years, we have had a 10% reduction in people working on farms and a 10% reduction in farm operations. We have a migration of people from rural areas into urban areas. I think we need more processing going on in rural areas, or urban areas, frankly, supplied by farmers.
Can you tell me what opportunities exist to expand processing? What should government be doing to encourage processing and value-added processing so that we can make our rural areas more robust?
Chair, Western Canadian Wheat Growers Association
Thank you for the question.
To expand processing, I think the very best thing we could do is encourage safe food. It's absolutely critical. As Elwin said, we could encourage open market access on an equal playing field with every other competitor around the world and provide a really strong, healthy, economic climate. I don't think incentives are necessary. I think they distort the market and are not something we should do.
Farms are becoming larger and more efficient. Land has been shooting up in value throughout western Canada. In the past 18 months, the price has probably gone up three times what you would have paid back then. We really have to be aware that it's a strong, competitive market. There are young people coming back to the farm because there's now profitability in agriculture. I think that profitability is largely dependent on open markets, competitive business climates, and a real stepping back of the government to provide fair rule playing, making sure everyone plays by the rules, making sure scales are accurate. I don't see a larger role than that.
Liberal
Frank Valeriote Liberal Guelph, ON
Government doesn't have a large role, but do you believe there should be more value-added processing in the industry?
Chair, Western Canadian Wheat Growers Association
Absolutely, we need more processing, even in the livestock sector. That's the original value adding. If somehow we can make that attractive and competitive to world markets, that would be a great start, as well as durum, canola, lentils. Everything helps.
Liberal
Frank Valeriote Liberal Guelph, ON
Thank you, Mr. Gust.
Mr. Hermanson, I understand you were a former member of Parliament.
Chief Commissioner, Canadian Grain Commission
I was. Once upon a time I even sat on this committee.
Liberal
Frank Valeriote Liberal Guelph, ON
That's excellent. You understand the value, then, of public good and public research. We've had a number of people express to us a concern about a decline in the investment in public research, as opposed to downloading it to private industry for profit. I understand there's a balance, but do you share that concern, that there's a reduction in the government's commitment to public research?
Chief Commissioner, Canadian Grain Commission
Thanks, Mr. Valeriote. Certainly, you're correct. It's an issue that we've heard a lot about over the time we've been consulting on the current legislation, our user fees, and even previous consultations. As a public servant, I can't comment on what my opinion or that of the commission would be. Our job is to receive that information and to provide that information to our minister and to the committee, but—
Chief Commissioner, Canadian Grain Commission
—what I can say is we have heard, as you heard from previous witnesses, that the public good is a component that needs to be evaluated. That's something the government has to do. We follow directions. In the current plan—