Operating context
External Environment
In 2020-21, in response to the COVID-19 pandemic, the Canadian Grain Commission focused resources primarily on critical services including inspection and licensing, supporting producers through the Harvest Sample Program, adapting the workplace to support remote work, and implementing new approaches to provide mandated services while ensuring the safety of employees. As provinces announced plans to reopen and gradually lift public health restrictions, the Canadian Grain Commission re-established services that had been paused and was able to resume most research activities by the end of the 2020-21 fiscal year. In 2021-22, the Canadian Grain Commission continued to undertake the necessary steps to transition a portion of the workforce towards a flexible work environment that meets current operational needs and delivers on its strategic priorities and program commitments. The Canadian Grain Commission continued to support employees to complete their work effectively in remote or in physical work locations such as in the laboratory or at licensed terminal elevators through strategies designed to ensure the health and safety of all employees.
In 2021-22 the Canadian Grain Commission also continued to draw on the innovative practices adopted during the pandemic and integrated these into the Canadian Grain Commission’s post-pandemic operating environment and vision for the future of work. The department’s Future of Work project team initiated a strategy to support the Canadian Grain Commission’s transition towards a modern workplace that puts employee experiences and quality of service at the core. This addressed short-term reintegration needs as well as supported the longer-term strategies including modifying workspaces, establishing a framework for re-occupancy, virtual work strategy, and long-term facility decisions. The overall goal of the Future of Work initiative is to achieve the Canadian Grain Commission’s mandate effectively through an engaged, dynamic, empowered and healthy workforce using advanced and innovative digital services and technology that optimal infrastructure supports. The Canadian Grain Commission continues to address pandemic related health and safety challenges while further developing strategies and tools to support staff returning to the physical office in the hybrid workforce model, and staff who have been onsite nationally during the pandemic due to the nature of their work.
The Canadian grain sector has experienced a period of significant transformation within the past 10 years including the ending of the Canadian Wheat Board’s single desk for wheat and barley marketing in 2012 and the transfer of inward inspection and weighing services from the Canadian Grain Commission to the private sector in 2013. Grain companies with grain elevators on the prairies have consolidated significantly, and investment spending related to grain handling facilities and grain processing facilities has occurred. As a result, the Canadian Grain Commission continues to experience an increase in licensing demands for all four classes of licences)Footnote 1.
Although grain production can vary from year-to-year due to environmental conditions, the trend for Canadian grain production has been increasing due to new technologies and agronomic practices. In turn, this has increased export volumes and requirements for Canadian Grain Commission service delivery and documentation. The 10-year average for Canadian grain production from 2011-12 to 2020-21 was 88.71 million metric tonnes (MMT), whereas production was 99.24 MMT tonnes in crop year 2020-21, but forecast to fall to 69.62 MMT in crop year 2021-22 as a result of Prairie droughtFootnote 2. The recent 5-year average (2016-17 to 2020-21) of 94.99 MMT was 15 percent higher than the previous 5-year average (2011-12 to 2015-16) of 82.44 MMT. This growth has increased the demands on Canadian Grain Commission inspection and weighing services resulting in, for example, significant overtime and travel within inspection services. The Canadian Grain Commission faces further pressures to ensure efficient and effective analytical services and testing, and a reliable grain quality assurance system. Factors that have contributed to the increase in grain production include:
- advanced seeding technologies,
- increased understanding of seeding and fertilizer rates,
- advancements with respect to crop protection products,
- technologies for optimal application related to fertilizers and crop protection products to maximize yield potential,
- research and development advances in crop varieties including disease resistance and improved quality and yield,
- improved producer management techniques (e.g., tile drainage, irrigation systems, and crop rotation practices based on existing environmental factors to increase yield potential), and
- changing tillage practices.
While total area of grain production in Canada has remained consistent over time, a change in comparative acreage of crops has also occurred. Increased crop production and changes in the relative acreage of different crops have resulted in changes related to the ultimate end-use of Canadian grains. An increase in Canadian processing facilities has facilitated the growth of domestic processing of Canadian grain. For example, Canadian grain exports from Canadian Grain Commission-licensed grain elevators averaged 37.13 MMT between crop years 2011-12 to 2020-21, whereas exports were 47.95 MMT in crop year 2020-21, 41.01 MMT in 2019-20 and 40.83 MMT in crop year 2018-19. Despite record production in the 2020-21 crop year, total carryout stocks for all principal field crops dropped to their lowest level in eight years, due to these record exports.
However, in the 2021-22 crop year, total field crop production is forecast to be 69.62 MMT, which represent a 30 percent decrease from 99.75 MMT in 2020-21. Lower production was driven by ongoing drought conditions in Western Canada, which worsened considerably throughout July 2021, with most of the Canadian prairie-growing region experiencing record low levels of precipitation and record-breaking temperatures. By the end of July 2021, 74 percent of the Canadian agricultural area was classified as abnormally dry or in drought. These conditions put pressure on grain producers and buyers alike, as the amount of grain harvested by producers fell short of contracted grain volumes. This year emphasized the issues that the Canadian grain sector faces because of climate change. Extreme weather events and other environmental impacts including water availability and quality, soil health, and biodiversity are projected to become more severe and costly for the sector in the decades ahead, highlighting the importance of taking action to adopt innovative and sustainable practices and technologies on Canadian farms to improve their climate resiliency.
Internal Environment
Budget 2019 confirmed the Government’s commitment to a review of the Canada Grain Act (CGA) and the operations of the Canadian Grain Commission in response to stakeholder input received through the Regulatory Review and the Economic Strategy Roundtable. Additionally, the 2021 budget committed to continue the work on regulatory modernization, including the CGA Review, which provides an opportunity to modernize the Canadian Grain Commission regulatory framework to better address the evolving needs of farmers and the Canadian grain sector. After being paused for much of 2020-21 due to the COVID-19 pandemic, the CGA Review was relaunched in January 2021, including stakeholder consultations. The deadline for written submissions was April 30, 2021, and feedback was also gathered through a virtual Town Hall and three Minister-led virtual roundtable discussions. A “What We Heard” report that summarizes the feedback received from stakeholders was released by Agriculture and Agri-Food Canada in August 2021. Overall, respondents indicated that the CGC should continue to have a strong role in establishing and maintaining a world-class grain quality assurance system, through regulation and oversight of the grain sector. However, opinions on the specific roles that the Canadian Grain Commission should adopt going forward, particularly in relation to delivery of official inspection services were mixed. Moving forward, the Canadian Grain Commission and Agriculture and Agri-Food Canada will continue to work together to explore and analyze the consultation feedback to determine potential modernization within the existing or a modified regulatory framework.
Prior to updating fees in 2013, prolonged periods of ad-hoc and unstable funding resulted in the under-investment in the Canadian Grain Commission’s facilities and infrastructure, programs and services, and information management technology. Since 2013, relatively stable operating costs and growing grain export volumes let to an accumulated revolving fund surplus. The Canadian Grain Commission invested this surplus in an Investment Framework in 2018 to guard against the possibility of future declines in revenues and for strategic investments. Effective August 1, 2021 the four fees for official inspection and weighing that generate most of the surplus were reduced by 29 percent and realigned with an adjusted grain volume forecast of 48.10 MMT. The ongoing Canadian grain sector transformation continues to increase pressure on the Canadian Grain Commission’s aging infrastructure, equipment, technology, and research capabilities. Fee information is located on the Canadian Grain Commission website.
The Canadian Grain Commission, by virtue of its mandate, is a science-based regulatory department. From a human resources management perspective, this means a relatively high percentage of positions in the organization are in non-traditional public service occupations that deliver the required services and results. Given that approximately 20 percent of the Canadian Grain Commission workforce provides scientific research and related services, it is an ongoing challenge to recruit and retain the required scientific expertise where available pools of talent are small, worldwide. Another non-traditional occupation within the Canadian Grain Commission is grain inspectors, which makes up 34 percent of the organization. The Canadian Grain Commission administers a four-year specialized program to train and develop qualified grain inspectors. Most grain inspectors are required to work shifts or irregular hours and overtime on a frequent basis. Grain inspectors primarily work in third-party grain terminal sites and, in some regions, are required to travel frequently. Additionally, some of the duties of a grain inspector are physically demanding. Some grain inspectors work in smaller centres located in more remote areas. In these smaller sites, it is challenging to provide necessary training and to recruit bilingual candidates to meet federally legislated official language requirements. These realities continually challenge the Canadian Grain Commission’s ability to deliver on core services and mandate.