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Minister's Message
I am pleased to submit to Parliament and Canadians the Canadian Grain Commission’s Departmental Performance Report for the fiscal year 2009-2010.
Since becoming Minister, my core philosophy has been to think Farmers First in every decision we make on agriculture. I know from my own experience in running a farm that the agriculture sector can only succeed if the individual farmer is making a profit. That is why putting our Farmers First is for me the key to advancing agriculture in this country to the benefit of all Canadians.
I am grateful that the partner organizations of the Agriculture and Agri-Food (AAF) Portfolio share my steadfast commitment to ensuring the industry’s success. These AAF Portfolio organizations - Agriculture and Agri-Food Canada (AAFC), the Canadian Food Inspection Agency (CFIA), Farm Credit Canada, the Canadian Grain Commission, the Canadian Dairy Commission, the Farm Products Council of Canada and the Canada Agricultural Review Tribunal have their own mandates and pursue their own activities.
At the same time, by working together, all of the Portfolio organizations make it possible for me to meet the sector’s needs effectively and efficiently. I know I can rely on the continuing collaborative efforts of my Portfolio team to support me in tackling the agriculture sector’s challenges, while helping the sector to capitalize on its tremendous potential for growth and future profitability.
This report details how the Canadian Grain Commission used its resources from April 1, 2009, to March 31, 2010, to regulate grain handling and establish and maintain grain standards, while protecting the interests of producers and ensuring a dependable commodity for domestic and export markets.
The Honourable Gerry Ritz
Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board
Chief Commissioner’s Message
Welcome to the Canadian Grain Commission’s 2009-2010 Departmental Performance Report. Since 1912, the Canadian Grain Commission has been the federal agency responsible for setting standards of quality and
regulating Canada’s grain handling system. Our vision is to be a leader in delivering excellence and innovation in grain quality and quantity assurance, grain quality research, and producer protection. In order to achieve this vision, the Canadian Grain Commission focuses its work on achieving results to support a competitive, efficient grain sector and uphold Canada’s
international reputation for consistent and reliable grain quality and safety. In addition, Canadian Grain Commission producer protection activities ensure producer rights are supported to facilitate fair treatment within the licensed grain handling system.
During 2009-10, the Canadian Grain Commission continued to work collaboratively with AAF Portfolio partners and other government agencies, producers, and grain industry stakeholders to maintain market competitiveness and add value to Canadian producers and Canada’s grain quality assurance system (GQAS). These close working relationships helped to ensure that the Canadian Grain Commission was informed and able to adapt to emerging challenges associated with delivering upon our strategic outcome of ensuring Canada’s grain is safe, reliable and marketable and Canadian grain producers are protected. This was particularly important in responding to the discovery of trace amounts of genetically modified material in some Canadian flaxseed exports to the European Union and the development of sampling and testing protocols for Canadian flaxseed shipments to facilitate the resumption of the flaxseed trade.
In today’s climate, there continues to be increased market demand for grain safety assurances and increased sophistication of grain safety specifications. As a result, the Canadian Grain Commission continued to focus efforts on meeting today’s grain safety assurance requirements and continued to evaluate, define and evolve the Canadian Grain Commission’s role in testing, monitoring and assuring the safety of Canada’s grain.
Once again, I am pleased to report that the Canadian Grain Commission received a positive audit of its annual financial position. A copy of the audited financial statements is available on the Canadian Grain Commission’s website at: http://www.grainscanada.gc.ca/cgc-ccg/cr-rm/crm-mrm-eng.htm. As Chief Commissioner, I am proud of the Canadian Grain Commission’s ongoing exemplary work to effectively meet the needs of producers, the industry and all Canadians in general. Moving forward, the Canadian Grain Commission remains committed to working with stakeholders to ensure Canada’s GQAS builds on its reputation as the best in the world. I invite you to read this report to learn more about the Canadian Grain Commission’s accomplishments and challenges and how the organization carried out its mandate during the 2009-10 reporting period.
Elwin Hermanson
Chief Commissioner
Canadian Grain Commission
Section I – Departmental Overview
Raison d’être
The Canadian Grain Commission was established in 1912 and is the federal government agency responsible for administering the provisions of the Canada Grain Act. The Canadian Grain Commission’s mandate as set out in the Canada Grain Act is to, “in the interests of the grain producers, establish and maintain standards of quality for Canadian grain and regulate grain handling in Canada, to ensure a dependable commodity for domestic and export markets.” The Canadian Grain Commission vision is to be “A leader in delivering excellence and innovation in grain quality and quantity assurance, research, and producer protection.” The Canadian Grain Commission reports to Parliament through the Honourable Gerry Ritz, Minister of Agriculture and Agri-Food.
Responsibilities
Under the Canada Grain Act, the Canadian Grain Commission sets standards of quality and regulates the handling of 21 grains1 grown in Canada to ensure Canada’s grain is safe, reliable and marketable and Canadian grain producers are protected. The Canadian Grain Commission is an unbiased, third-party agency in Canada’s grain sector and is the official certifier of Canadian grain. Through its activities, the Canadian Grain Commission supports a competitive, efficient grain sector and upholds Canada’s international reputation for consistent and reliable grain quality. To achieve its mandate, the Canadian Grain Commission
- regulates all aspects of grain handling in Canada through the grain quality and quantity assurance programs,
- carries out scientific research to understand all aspects of grain quality and grain safety and to support the grain grading system, and
- has implemented a number of producer protection programs and safeguards to ensure the fair treatment of Canadian grain producers when they deliver their grain to licensed grain handling companies and grain dealers.
It is widely recognized that Canadian Grain Commission programs and activities are integral in permitting Canadian exporters to market successfully in competitive international grain markets and are essential for producers in order to realize maximum value from their grain. To ensure relevancy and success, the Canadian Grain Commission continued to work collaboratively with producers, industry stakeholders and government partners on the development of new technologies, protocols, and a sound regulatory framework to address emerging challenges in the Canadian grain sector.
The Canadian Grain Commission’s head office is located in Winnipeg, Manitoba. As of March 31, 2010, the Canadian Grain Commission employed 661 full-time equivalents and operated 12 additional offices across Canada. Funding for Canadian Grain Commission programs and activities is through a combination of revolving fund and appropriation sources. Additional information on the Canadian Grain Commission’s mandate, responsibilities, and programs is available on the Canadian Grain Commission website at http://www.grainscanada.gc.ca/.
Strategic Outcome and Program Activity Architecture (PAA)
To effectively pursue its mandate and make a difference to Canadians, the Canadian Grain Commission aims to achieve the following strategic outcome:
- Canada’s grain is safe, reliable and marketable and Canadian grain producers are protected
Canada is known around the world for the quality, consistency, reliability and safety of its grain and grain products. The provision of Canadian Grain Commission programs and activities is integral to maintaining this reputation and to the functioning of Canada’s grain industry and Canada’s grain quality assurance system (GQAS). Canadian Grain Commission programs result in shipments of grain that consistently meet contract specifications for quality, safety and quantity. This is particularly important considering Canada exported approximately $11.0 billion in cereals, grains and oilseeds during 2009. Canada’s GQAS is also essential for producers to realize maximum value from their grain and the Canadian Grain Commission is committed to providing effective producer protection services and safeguards to ensure the fair treatment of Canadian grain producers. In our role as a neutral third party regulator and arbitrator, the Canadian Grain Commission works in partnership with virtually every participant in the grain industry including producers, industry stakeholders, and other government departments and agencies.
Program Activity Architecture
Summary of Performance
| Planned Spending | Total Authorities | Actual Spending |
|---|---|---|
| 46,567 | 90,467 | 80,282 |
| Planned | Actual | Difference |
|---|---|---|
| 421 | 661 | 240 |
Planned Spending to Total Authorities
Planned spending for 2009-10 was approximately $46.6 million, whereas the total authorities were $90.5 million, representing a change of $43.9 million. The difference is primarily because:
- 2009-10 planned spending as reported in the 2009-10 Report on Plans and Priorities (RPP) reflects only the Canadian Grain Commission’s approved authorities as per the Main Estimates. This included:
- $5.2 million of annual appropriation, and
- $41.4 million of projected respendable revenue.
- Total authorities include the additional authorities provided to the Canadian Grain Commission subsequent to publication of the RPP. This included:
- $34.4 million of Supplementary Estimates,
- $8.0 million authorization for utilization of operating surplus, and
- $1.5 million for salary expenditures related to approved collective agreements, severance benefits, and other.
Planned human resource FTEs for 2009-10 as reported in the RPP was 421 based on the approved authorities as per the Main Estimates. Given all authorities secured by the Canadian Grain Commission, the full planned FTEs complement is 718. The difference between the full planned FTE complement and actual FTEs is -57.
Total Authorities to Actual Spending
Total authorities for 2009-10 were approximately $90.5 million, whereas actual spending was $80.3 million, representing a difference of $10.2 million. This difference is primarily because:
- the Canadian Grain Commission manages and monitors expenditures conservatively on a yearly basis due to reliance on ad-hoc funding,
- total authorities reflect $41.4 million of respendable revenue. The Canadian Grain Commission received $45.5 million in revenue due to high grain volumes handled in 2009-10, representing $4.1 million of additional revenues credited to vote. Grain volumes can be highly variable given crop conditions in any given year, and
- the Canadian Grain Commission’s actual expenditures in relation to salaries was approximately $6.1 million less than total authorities due to staff departures and delays in hiring due to potential organizational changes.
Further information on Canadian Grain Commission funding is provided in the Expenditure Profile Section.
| Performance Indicators | Targets | 2009-10 Performance |
|---|---|---|
| Number of instances where buyers are dissatisfied with Canadian Grain Commission standards, methods or procedures used to ensure a dependable commodity for domestic and export markets | Zero instances |
Mostly met expectations however the target of zero was not met
|
| Level of producer satisfaction with Canadian Grain Commission producer protection services | Zero unresolved or unaddressed complaints |
Successfully met target
|
| Program Activity1 | 2008-09 Actual Spending |
2009-104, 6 | Alignment to Government of Canada Outcomes2 | |||
|---|---|---|---|---|---|---|
| Main Estimates4 |
Planned Spending4, 5 |
Total Authorities4, 5 |
Actual Spending5 |
|||
| Quality Assurance Program | 44,165 | 23,438 | 23,438 | 48,222 | 41,356 | Innovative and knowledge-based economy3 |
| Quantity Assurance Program | 13,260 | 9,373 | 9,373 | 14,121 | 12,432 | Innovative and knowledge-based economy3 |
| Grain Quality Research Program | 11,484 | 3,365 | 3,365 | 9,463 | 10,057 | Innovative and knowledge-based economy3 |
| Producer Protection Program | 4,755 | 938 | 938 | 5,002 | 3,851 | Fair and secure marketplace3 |
| Internal Services6 | N/A | 9,453 | 9,453 | 13,659 | 12,586 | N/A |
| Total | 73,664 | 46,567 | 46,567 | 90,467 | 80,282 | |
1 Program activity descriptions are available on the Treasury Board Secretariat Main Estimate website at: http://www.tbs-sct.gc.ca/est-pre/20102011/p2-eng.asp.
2 Additional information on the Government of Canada Outcomes is available at: http://publiservice.tbs-sct.gc.ca/ppg-cpr/frame-cadre-eng.aspx. The Canadian Grain Commission’s program activities all align with the key federal spending area of ‘economic affairs’.
3 Further information on Canadian Grain Commission program activity alignment with the Government of Canada Outcome areas is available at: http://www.grainscanada.gc.ca/cgc-ccg/cr-rm/goco-rogoc-eng.htm.
4 The 2009-10 Main Estimates and planned spending values appear low because they do not include appropriations of $34.4 million as well as access to $8.0 million of operating surplus. These amounts were not approved at the time of the Canadian Grain Commission’s ARLU and RPP reports. Total authorities for 2009-10 include these amounts.
5 Planned spending and human resource FTEs for 2009-10 as reported in the RPP reflect only the Canadian Grain Commission’s approved authorities as per the Main Estimates. Total authorities include additional funding approved subsequent to the publication of the RPP. There were no significant program changes during 2009-10.
The difference between total authorities and actual spending include:
- an overall increase in revenue credited to vote for high grain volumes handled, and
- lower actual expenditures for salaries due to staff departures and delays in the hiring process.
6 Commencing in the 2009-10 Estimates cycle, resources for the Internal Services program activity are displayed separately from other program activities. These resources are no longer distributed among the remaining program activities as was the case in previous Main Estimates. This has affected the comparability of spending and FTE information by program activity between fiscal years.
Contribution of Priorities to Strategic Outcome
| Operational Priorities | Type1 | Status2 | Links to Strategic Outcome |
|---|---|---|---|
| 1. Ongoing delivery of the Canadian Grain Commission mandate under the Canada Grain Act in a climate of constantly changing international and domestic markets, technological advancements and evolving end-user needs and preferences | Ongoing |
Met all
|
Link The majority of Canadian Grain Commission resources are dedicated to the day-to-day delivery of programs and services necessary to deliver upon the mandate. This priority contributes directly to the achievement of the Canadian Grain Commission’s strategic outcome and all of the Canadian Grain Commission’s program activities. Going Forward
|
| 2. Positioning the GQAS to remain relevant and to support the continued competitiveness of Canadian grains in both domestic and international markets | Ongoing |
Met all
|
Link Progress towards this ongoing priority contributed directly to the achievement of the Canadian Grain Commission’s strategic outcome of ensuring Canada’s grain is safe, reliable and marketable. This priority is closely linked to the Quality Assurance Program and the Grain Quality Research Program. Going Forward/Area for Improvement
|
| 3. Sound regulatory framework | Previously committed to |
Mostly met
|
Link A sound regulatory framework directly aligns the Canadian Grain Commission with its legislative obligations and its strategic outcome. This priority contributes to all program activities. Going Forward
|
| 4. Relationship building and strengthening awareness | New |
Exceeded
|
Link Highlighting Canadian Grain Commission activities and promoting awareness of Canadian Grain Commission services with producers, industry, buyers, Canadians and researchers through effective communications and information tools facilitates increased stakeholder feedback on Canadian Grain Commission programs and activities. Feedback is used to continuously improve Canadian Grain Commission services and build upon Canada’s GQAS. This priority is linked to the strategic outcome and all program activities. Going Forward
|
| Management Priorities | Type1 | Status2 | Links to Strategic Outcome |
|---|---|---|---|
| 1. Sustainable Canadian Grain Commission Funding Mechanism | Ongoing |
Somewhat met
|
Link A sustainable funding mechanism is necessary for the long term stability of the Canadian Grain Commission and impacts upon the Canadian Grain Commission’s ability to maintain its capacity to create value for producers and the Canadian grain industry. This priority is linked to the strategic outcome and all program activities. Going Forward
|
| 2. Effective people management to achieve planned human resource needs and capacity and to meet Public Service Renewal objectives established by the Privy Council | Previously committed to |
Mostly met
|
Link This priority contributes to the Canadian Grain Commission’s strategic outcome by setting out strategies for meeting human resource needs as the organization strives for excellence in delivering services to our clients. Going Forward
|
| 3. Management Accountability Framework (MAF) priorities | Previously committed to |
Mostly met
|
Link The Canadian Grain Commission’s MAF audit results (Round V 2007-08) were used to identify management priorities to improve Canadian Grain Commission management practices and accountability. As such, this priority supports the organization in achieving its strategic outcome and all of its program activities. Going Forward/Areas for Improvement
|
1 Type is defined as follows: previously committed to—committed to in the first or second fiscal year prior to the subject year of the report; ongoing—committed to at least three fiscal years prior to the subject year of the report; and new—newly committed to in the subject year of the report.
2 Status is defined as exceeded (more than 100 percent of the expected level of performance was achieved), met all (100 percent of the expected level of performance was achieved), mostly met (80 to 99 percent of the expected level of performance was achieved), somewhat met (60 to 79 percent of the expected level of performance was achieved), expectations not met (less than 60 percent of the expected level of performance was achieved).
Risk Analysis
The Canadian grain industry, the Canadian Grain Commission, and Canada’s GQAS operate in a climate of constant change. The Canadian Grain Commission and the GQAS must be able to adjust in a measured and careful fashion to these changes in order to maintain Canada’s reputation as a consistent supplier of quality grain. As such, the Canadian Grain Commission is continually monitoring and adapting programs and services to assure consistent and reliable grain quality and grain safety that meets the needs of international and domestic markets and to ensure Canadian grain producers are protected. From its inception in 1912, Canadian Grain Commission programs and practices have been built on sound risk management and risk mitigation principles. Risk assessment and risk management is carried out by all Canadian Grain Commission divisions and units as an integrated part of their policy, planning, priority setting, resourcing, program delivery, and reporting activities. In addition, risk assessment and risk management is embedded in the Integrated People and Business Planning process to ensure the workforce and work environments align with the current and future needs of the Canadian Grain Commission. This is evidenced by the Canadian Grain Commission’s long-standing success in delivering upon its strategic outcome and program activities.
While the majority of risk involved in the Canadian Grain Commission’s work is inherent and constant, some risk varies according to changes in the internal and external environment. The inherent risks in Canadian Grain Commission programs and services are addressed by continuous monitoring and adjustment in order to bring residual risk to tolerable levels, thereby maintaining high performance standards. Feedback from producers and grain handlers, domestic and international processors, and other government organizations often provides early indication of potential risk in the external environment. Effective management of risks often results in opportunities for improvement to Canadian Grain Commission operations and the GQAS.
During 2009-10, the Canadian Grain Commission continued the process of finalizing its Integrated Risk Management (IRM) policy and became actively engaged in the development and articulation of its Corporate Risk Profile. The Canadian Grain Commission established an internal IRM Working Group that initiated the process of identifying and assessing high level risks to the organization. The goal is to create a broad and detailed picture of the key organizational risks facing the Canadian Grain Commission and ensure that sufficient risk mitigation techniques are in place to bring residual risk down to an acceptable level. For consistency purposes, details on key strategic risks will be provided upon completion and approval of the Corporate Risk Profile. This is expected to take place in fiscal year 2010-11. Contact with Treasury Board Secretariat’s IRM Centre of Excellence has provided excellent opportunity for dialogue and clarification around IRM expectations. Continued dialogue with AAF Portfolio partners on IRM will also provide a source of information and best practices in this area.
Key program activity risks were identified in the Canadian Grain Commission’s 2009-10 RPP. Risk mitigation strategies used to achieve results and successfully deliver upon the organization’s strategic outcome and program activities are described in Section II by program activity.Expenditure Profile
The Canadian Grain Commission is funded by a combination of an ongoing appropriation, special appropriation, and authority to re-spend fees collected. A revolving fund (RF) was set up for the Canadian Grain Commission in 1995 with the expectation that the Canadian Grain Commission would be largely self-funded through fees for services. However, the RF has not worked as expected. Canadian Grain Commission user fees have not increased since 1991, operating costs have continually increased, and annual grain volumes can fluctuate considerably from year to year. As a result, overall cost recovery has fallen from approximately 90 percent in the early 1990s to between 50 and 60 percent today.
The Canadian Grain Commission’s falling cost recovery level has caused the Canadian Grain Commission to rely on ad-hoc government appropriations since 1999 to fund operations on an annual basis. The Canadian Grain Commission receives annual appropriation to fund a portion of the costs related to the Grain Research Laboratory (GRL) and the functions that were associated with the Assistant Commissioner positions. The last Assistant Commissioner term ended in June 2008. Assistant Commissioner functions have been assumed by Canadian Grain Commission Commissioners, the Canadian Grain Commission Licensing Unit, and the Canadian Grain Commission Communications Unit. The remainder of the organization’s funding comes from yearly ad-hoc government appropriations and fee revenues collected primarily from inspection and weighing services.
The Canadian Grain Commission is currently assessing options to ensure appropriate funding is available to meet operational and staffing requirements. Federal Budget 2010 provided the Canadian Grain Commission with $26.0 million for fiscal year 2010-11 and $30.2 million for fiscal year 2011-12 that when combined with fee revenue allows the Canadian Grain Commission to deliver mandated services and operations over the next two fiscal years. The Canadian Grain Commission will continue to monitor and control discretionary spending and continue the ongoing process of cost containment and reallocation of internal resources to meet new and emerging priorities. The Canadian Grain Commission has initiated a project to develop a long-term model that will ensure the financial sustainability of the organization.
For the 2005-06 to 2009-10 periods, total authorities is reflective of all funding sources available to the Canadian Grain Commission including appropriations realized through the full Estimates process and fees generated through the provision of services. The graph below shows Canadian Grain Commission planned spending, total authorities, and actual spending over the past several years. Trend analysis is challenging because Canadian Grain Commission revenues and expenditures are dependent on annual grain volumes and crop quality. These factors can fluctuate considerably from year to year and can result in significant variances between Canadian Grain Commission revenue and expenditure projections that are prepared 18 months in advance of a crop being harvested. Planned spending and total authorities have generally increased over time with inflation. There have been no significant program changes in recent years.
Planned spending for 2009-10 reflects only the Canadian Grain Commission’s approved authorities as per the ARLU and Main Estimates. 2009-10 total authorities include additional ad-hoc funding totaling $42.4 million that was not approved at the time of the Canadian Grain Commission’s ARLU and RPP report. The differences between total authorities and actual spending over the past several years are due to:
- an overall increase in revenue credited to vote for high grain volumes handled, and
- lower actual expenditures for salaries as a result of staff departures and delays in the hiring process. Delays in hiring were due to potential organizational changes. Consequently, the Canadian Grain Commission took an extremely conservative approach to staffing during these fiscal years.
Canada’s Economic Action Plan (CEAP)
($ millions)
Note: Planned spending for 2009-10 reflects only the Canadian Grain Commission's approved authorities as per the ARLU and Main Estimates. 2009-10 total authorities include additional ad-hoc funding totaling $42.4 million that was not approved at the time of the Canadian Grain Commission's ARLU and RPP report.
Voted and Statutory items show the amount of funding received by the Canadian Grain Commission through approved votes. 2009-10 Main Estimates do not reflect that the Canadian Grain Commission received $34.4 million via Supplementary Estimates. In 2008-09, the Canadian Grain Commission received approval to access $14.2 million in operating surplus as well as $26.5 million via Supplementary Estimates. In 2009-10 the Canadian Grain Commission received approval to access only $8.0 million in operating surplus as well as $34.4 million via Supplementary Estimates. The operating surplus components are not reflected in the table.
