Thank you, Mr. Chair.
Good morning. Bonjour. We want to again thank the committee for giving us the opportunity to meet with you today.
Allow me to make a couple of introductions. First of all, I'm Elwin Hermanson, the chief commissioner of the Canadian Grain Commission, and I've been in that position since 2008. I'm from Beechy, Saskatchewan, where I have a farm. I'm joined by Gord Miles, who is the chief operating officer for the commission. He coordinates and oversees the delivery of the programs, services, and activities of our corporate services, industry services, and grain research laboratory divisions.
It's only been a few weeks since we last appeared before this committee. I recall I was in a bit of a rush that day because I had to catch a train. I have lots of time this morning, so that's good.
We mentioned at that time that the grain sector is at a pivotal juncture, when public policies and regulatory structures need to keep pace with the rapid changes in the marketplace. I think that message needs to be reinforced again today to policy-makers and legislators such as yourselves. The government has taken significant steps on this front, first with the removal of the Canadian Wheat Board's single desk, and now with the proposed amendments to the Canada Grain Act.
In this spirit, I'm pleased to inform you that on November 30, the Canadian Grain Commission ended a consultation on proposed changes to our user fees. We are now reviewing the feedback received during consultation, and we propose to implement a new fee schedule on August 1, 2013, which will reflect a more streamlined and cost-effective Canadian Grain Commission.
I'd like to put the commission into context within Canada's grain sector. I'll talk a bit about our mandate, our organization, and our role in the areas of grain quality assurance, grain research, and market access.
The Canadian Grain Commission reports to Parliament through the Minister of Agriculture and Agri-Food Canada, the Honourable Gerry Ritz. Our organization is led by three commissioners. As well as myself, there is an assistant chief commissioner and a third commissioner. We are national in scope, with employees across Canada. The amendments proposed in the jobs and growth act will further streamline our operations.
Under the amended Canada Grain Act, the Canadian Grain Commission will continue to be mandated to establish and maintain standards of quality for Canadian grain for both international and domestic markets. We will continue to regulate grain handling in Canada and work to ensure that Canada's grain is a dependable commodity. Our mandate will continue to cover 21 grains. At present, we are funded through a combination of appropriations and user-fee revenues, though going forward we expect our operations to be funded primarily through user fees.
Grain is graded visually by highly trained inspectors. We set grain grades and standards. These have a scientific foundation, based in research conducted in our grain research laboratory . We regularly review standards to ensure their continued relevance. The eastern and western standards committees are a key part of this review. Members include producers, grain handlers, processors, exporters, and representatives from government agencies. The committees consider grading issues and make recommendations to us. Grades are important because they establish grain quality and facilitate fair transactions for producers. They also reflect the end-use characteristics required by our customers and ensure the consistency of product from cargo to cargo and from year to year.
We also play a role in grain safety and grain safety assurance. We screen, monitor, and certify grain shipments to assure that export cargoes meet international safety tolerances. Our laboratory is able to test for pesticide residues, trace elements, mycotoxins, fungi, and moulds.
We also assure that weights are accurate at terminal elevators. The correct weight of grain that is loaded to a vessel is recorded on the certificate final issued at export. Speaking of the certificate final, it indicates the official Canadian Grain Commission grade and weight, and it assures that a cargo meets contract specifications. In 2010-11, we inspected over 30 million tonnes of Canadian grain for export. So far this year, we have inspected 351 vessels of Canadian grain that have gone overseas from various ports in Canada.
Our grain research laboratory, which is located at our national office in Winnipeg, supports quality and grain safety assurance. Our researchers study how grain quality is measured, and they develop new ways to measure grain quality. They also evaluate grain-grading factors. They study new uses for Canadian grain. I can give you as an example the use of durum in Asian noodle products. They develop new technologies and methods for assessing end-use quality, and they also develop new methods for monitoring the safety of Canadian grain.
We take part in the Canadian Food Inspection Agency's variety registration process in which new cultivars are evaluated for disease resistance, agronomics, and quality. As part of quality evaluation, our researchers and inspection experts evaluate the end-use functionality of new cultivars. As well, we designate new wheat varieties into a class. Our work helps to ensure that all registered varieties within a class perform consistently for end-users.
When international market issues arise, we provide technical support through our grain research laboratory and our industry services. We are the official government authority with expertise in sampling, grading, grain safety, and laboratory testing processes. Again, I can give you a recent example of our market access support regarding the Triffid incident with Canadian flax. We work with the European Union, Japan, and Brazil to develop protocols for flax shipments to ensure continued access to these important markets.
A big and important part of our mandate is to protect the interests of Canadian grain producers, and we do this through several activities. Through our “subject to inspector's grade and dockage” service, we give producers a way to solve disagreements about the grade they receive at licensed primary elevators.
We also provide producers with access to producer cars to ship their grain. We work with the railways to negotiate for cars, and this gives producers control over the movement of their grain. In 2010-11, we processed applications for just over 14,000 producer cars. This crop year, and we're about halfway through it, we have processed 6,796 applications to date.
We provide payment protection. Briefly, when producers have delivered grain to a licensed primary elevator and they have not yet been paid, they can make a payment claim. We pay eligible claims out of security posted by the licensed elevator. We cannot always guarantee 100% payment for all eligible claims as liabilities may, on occasion, exceed security. However, the amendments proposed in Bill C-45 would improve producer payment protection by creating the opportunity to move to a new insurance-based system under which protection coverage may be improved.
We also provide services like the submitted sample service and the harvest sample program, which give producers important information about their grain, such as grade, dockage, moisture, and protein.
Finally, we serve a variety of clients by providing information to the grain industry. We publish quality data and statistical information, and we maintain current information on our website. I would encourage all members of the committee that if you have a moment or two—and I know you're very busy—to review our website. We think it's an excellent site that contains a lot of very useful information not only for producers and other stakeholders in the industry, but I'm sure for this committee as well.
Also, our experts are available at trade shows, and we provide a lot of tours at our national office for domestic stakeholders and international visitors.
In closing, I'd like to thank you, Mr. Chairman, for the opportunity to present to you and the standing committee members. The grains sector, as I mentioned, has entered a time of fundamental change. The Canadian Grain Commission is committed to effectively delivering grain quality and safety assurance, quantity assurance, research, and producer protection both now and in the future. We are committed to continued development of new and innovative regulations and policies to serve the interests of producers and the entire grain sector.
It is a pleasure to share that information with you briefly. We're certainly open to any questions from any of the members.