Operating context

External Environment

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 the demand for Canadian Grain Commission service delivery and documentation. The 10-year average for Canadian grain production from crop years 2012-13 to 2021-22 was 88.62 million metric tonnes (MMT), whereas production was 70.80 MMT tonnes in crop year 2021-22 due to Prairie drought. Canadian grain production is forecast to increase to 96.06 MMT in crop year 2022-23. The recent five-year average (2017-18 to 2021-22) of 90.38 MMT was four percent higher than the previous five-year average (2012-13 to 2016-17) of 86.85 MMT. Continued overall 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 in Canadian grain exports and domestic processing of Canadian grain. Canadian grain exports from Canadian Grain Commission-licensed grain elevators averaged 40.22 MMT between crop years 2012-13 to 2021-22, whereas exports were 29.12 MMT in crop year 2021-22, 50.58 MMT in 2020-21 and 44.14 MMT in crop year 2019-20. 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.

In the 2022-23 crop year, total field crop production is forecast to be 96.05 MMT^{Footnote 1}, which represents a 33 percent increase from 72.37 MMT in 2021-22. Lower production in 2021-22 was driven by 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. 2021-22 emphasized the issues that the Canadian grain sector faces because of climate change. It is projected that extreme weather events and other environmental impacts including water availability and quality, soil health, and biodiversity will become more severe and costly for the sector in the decades ahead. These events highlight the importance of taking action to adopt innovative and sustainable practices and technologies on Canadian farms to improve their climate resiliency.

Internal Environment

Public health restrictions were gradually lifted in 2022-23 and the Canadian Grain Commission re-established services that had been paused due to COVID-19 pandemic. The organization integrated the innovative practices adopted during the pandemic into its current operating environment and vision for the future of work. The reintegration/future of work project team closely monitored resource utilization and offered Reintegration refresher training sessions. Furthermore, the Canadian Grain Commission continued to modernize the workplace to enable a flexible and connected work environment that meets current operational needs as well as GCworplace^{Footnote 2} standards. These plans aligned with the Treasury Board of Canada Secretariat’s directive to ensure a consistent approach to hybrid work across government.

Budget 2019 confirmed the Government’s commitment to a review of the Canada Grain Act 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 Canada Grain Act 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 Canada Grain Act 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. Agriculture and Agri-Food Canada released a “What We Heard” report that summarizes the feedback received from stakeholders in August 2021.

Overall, respondents indicated that the Canadian Grain Commission 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. In 2022-23, the Canadian Grain Commission continued to support Agriculture and Agri-Food Canada as they analyzed the consultation feedback and developed options for legislative modernization. While this is ongoing, the Canadian Grain Commission also continued to address Canada Grain Act Review outcomes at the regulatory and operational level, within the current legislative 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 led to an accumulated revolving fund surplus. In 2018, the Canadian Grain Commission developed a plan to invest this surplus through an nvestment Framework and reduced fees 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 again 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. In 2022-23 the Canadian Grain Commission began to consider updates to the Investment Framework to ensure that accumulated surplus funds are used effectively and deliver tangible benefits to the Canadian grain value chain. Moving forward, the Canadian Grain Commission will continue to consult with stakeholders as the organization develops initiatives.

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. Given that approximately 22 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 33.6% percent of the organization. The Canadian Grain Commission administers the Grain Inspector Development Program— a four-year specialized program to train and develop qualified grain inspectors. The program is undergoing program evaluation via our internal Audit and Evaluation team. Most grain inspectors are required to work shifts or irregular hours and overtime on a frequent basis. Grain inspectors primarily work in grain companies’ terminal elevator sites and, in some regions, are required to travel frequently or work in smaller centres located in more remote areas. Given these factors, it is often challenging to provide necessary training and to recruit bilingual candidates to meet federally legislated official language requirements. These realities continue to impact the Canadian Grain Commission’s ability to deliver on core services and mandate.