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Minister's Message

The Honourable Gerry Ritz

I am pleased to submit to Parliament and Canadians the Canadian Grain Commission’s (CGC) Report on Plans and Priorities 2011-12. This report details how the CGC intends to use its resources to carry out its responsibilities to protect grain producers’ interests and to ensure a dependable commodity for Canada’s international and domestic markets.

Since coming to office, this Government has dedicated itself to ensuring the success of Canadian agriculture. Our approach from the beginning has been straightforward enough: placing Farmers First in all our decision-making. As Minister, I will continue to use every tool at my disposal to secure the best possible future for our nation’s farmers.

Fortunately for me, the partner organizations of the Agriculture and Agri-Food (AAF) Portfolio are just as unshakeable in their commitment to the industry as I am. These AAF Portfolio organizations - Agriculture and Agri-Food Canada, the Canadian Food Inspection Agency, Farm Credit Canada, the Canadian Grain Commission, the Canadian Dairy Commission, the Farm Products Council of Canada and the Canada Agricultural Review Tribunal – have diverse mandates and duties. What they have in common is that they all support me in managing the sector’s immediate pressures, while helping to fulfill the considerable opportunities for a more competitive and profitable sector in the long run.

Through their diligent work as individual organizations and their coordinated efforts as a Portfolio team, the AAF Portfolio partners are making a difference for Canada’s farmers and their families. I know I can continue to bank on the teamwork of the AAF Portfolio to underpin my ability to address all matters related to agriculture and agri-food. Together, we will bolster this pivotal sector in the interests of all Canadians.

The Honourable Gerry Ritz
Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board



Chief Commissioner’s Message

Elwin Hermanson

Welcome to the Canadian Grain Commission’s (CGC) Report on Plans and Priorities 2011-12. Through its activities, the CGC supports a competitive, efficient grain sector and upholds Canada’s international reputation for consistent and reliable grain quality. In addition, the CGC protects the rights of Canadian grain producers when they deliver grain to licensed grain handling companies.

Since 1912 the CGC has been the federal agency responsible for setting standards of quality and regulating Canada’s grain handling system. April 1, 2012 will mark the 100th year anniversary of the CGC and plans are underway to celebrate this important milestone.

In the coming year, CGC efforts will be guided by two priorities. Both priorities are aimed at allowing the CGC to continue to evolve in response to current and future conditions in the grain industry environment. The first priority is focused on the relevant positioning of CGC program activities to successfully deliver upon the CGC’s strategic outcome while the second priority is aimed at strengthening sound integrated people and business management processes. To make progress towards the plans and priorities detailed in this report, the CGC is committed to working in close collaboration with producers, industry stakeholders, AAF Portfolio partners, and other government departments and agencies.

As Chief Commissioner, I look forward to the CGC’s ongoing exemplary work to effectively meet the needs of producers, the industry and all Canadians in general. I invite you to read this report to learn more about the CGC’s plans and priorities for fiscal year 2011-12.

Elwin Hermanson
Chief Commissioner
Canadian Grain Commission



Section I - Canadian Grain Commission Overview

Raison d'être

The CGC is a federal government agency and administers the provisions of the Canada Grain Act. The CGC’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 CGC vision is to be “A leader in delivering excellence and innovation in grain quality and quantity assurance, research, and producer protection.” The CGC reports to Parliament through the Honourable Gerry Ritz, Minister of Agriculture and Agri-Food.

Responsibilities

Under the Canada Grain Act, the CGC 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 CGC is an unbiased, third-party agency in Canada’s grain sector and is the official certifier of Canadian grain. Through its activities, the CGC supports a competitive, efficient grain sector and upholds Canada’s international reputation for consistent and reliable grain quality. To achieve its mandate, the CGC

  • 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.

The CGC’s head office is located in Winnipeg, Manitoba. The CGC currently operates 12 additional offices across Canada and plans to employ approximately 725 FTEs in the upcoming fiscal year. Funding for CGC programs and activities is through a combination of revolving fund and appropriation sources. Additional information on the CGC’s mandate and responsibilities is available on the CGC website at http://www.grainscanada.gc.ca/.

Strategic Outcome and Program Activity Architecture

To effectively pursue its mandate and make a difference to Canadians, the CGC 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. It is widely recognized that the provision of CGC programs and activities is fundamental to maintaining this reputation and to the functioning of Canada’s grain quality assurance program (GQAS). CGC programs result in shipments of grain that consistently meet contract specifications for quality, safety and quantity which is essential for producers to realize maximum value from their grain. In our role as a neutral third party regulator and arbitrator, the CGC works in partnership with virtually every participant in the grain industry including producers, industry stakeholders, AAF Portfolio partners, and other government departments and agencies.

The following diagram illustrates the CGC’s Program Activity Architecture (PAA) which is the basic structure for managing and allocating resources to various programs and activities to achieve intended results. The CGC’s PAA has five program activities which each contribute to making progress to the CGC’s single strategic outcome. The producer protection program consists of three program sub-activities.

Canadian Grain Commission's Program Activity Architecture

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Planning Summary

The following tables provide a summary of the CGC’s planned spending and human resources for the next three fiscal years. Planned spending includes the annual appropriation of $5.45 million and projected spending of approximately $37.06 million of revenue earned through fees. 2011-12 planned spending includes additional amounts as identified in Federal Budget 2010 (see footnote). The 2012-13 and 2013-14 planned spending and planned full time equivalents (FTEs) shown below are reflective of approved authorities to date only and not reflective of total resource needs. The CGC is currently assessing options to ensure appropriate funding is available to maintain program delivery going forward. There are no significant planned program activity changes for the upcoming years.


Financial Resources ($ thousands)
2011-12* 2012-13* 2013-14*
81,216 42,515 42,515


Human Resources (FTEs)
2011-12 2012-13 2013-14
725 373 373

* Main Estimates 2011-12 includes ad hoc funding of $30.20 million and the use of $8.50 million of the CGC’s accumulated surplus for fiscal year 2011-12 as identified in Budget 2010. The CGC plans to seek authority from Treasury Board to access the accumulated surplus in the fall of 2011. The 2012-13 and 2013-14 planned spending and planned FTE’s shown above are reflective of approved authorities to date only and not reflective of total resource needs. The CGC is currently assessing options to ensure appropriate funding is available to maintain program delivery. Planned spending differs from the Annual Reference Level Update for 2011-12, 2012-13 and 2013-14 with respect to non-appropriation funding as these include spending of approximately $37.06 million of revenue earned through fees. The Annual Reference Level Update reflects the authority limit of respendable revenue of $42.88 million.


Strategic Outcome: Canada’s grain is safe, reliable and marketable and Canadian grain producers are protected.
Performance Indicator Targets
Number of instances where buyers are dissatisfied with CGC standards, methods or procedures used to ensure a dependable commodity for domestic and export markets Zero instances
Level of producer satisfaction with CGC producer protection services Zero unresolved or unaddressed complaints

The following table presents planned spending by program activity and identifies the alignment of CGC program activities to the Government of Canada Outcomes.


Program Activity1 Forecast Spending5
($ thousands)
2010–11
Planned Spending4
($ thousands)
Alignment to Government of Canada Outcomes2
2011–12 2012–13 2013–14
Quality Assurance Program 41,155 41,799 21,176 21,176 Innovative and knowledge-based economy3
Quantity Assurance Program 12,558 12,761 8,479 8,479 Innovative and knowledge-based economy3
Grain Quality Research Program 9,869 10,038 3,521 3,521 Innovative and knowledge-based economy3
Producer Protection Program 3,800 3,857 899 899 Fair and secure marketplace3
Internal Services 12,545 12,761 8,440 8,440 N/A
Total Planned Spending 79,9275 81,216 42,515 42,515  

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://www.tbs-sct.gc.ca/ppg-cpr/frame-cadre-eng.aspx.

3 Further information on the CGC’s alignment to the Government of Canada Outcomes is available at: http://www.grainscanada.gc.ca/cgc-ccg/cr-rm/goco-rogoc-eng.htm.

4 Planned spending differs from the Annual Reference Level Update for 2011-12, 2012-13 and 2013-14 with respect to non-appropriation funding as these include spending of approximately $37.06 million of revenue earned through fees. The Annual Reference Level Update reflects the authority limit of respendable revenue of $42.88 million. Planned spending for 2011-12 also includes ad hoc funding of $30.20 million and use of $8.50 million of the CGC accumulated surplus as identified in Budget 2010.

5 2010-11 actual results may differ from the 2010-11 forecast spending. The forecast is based on a reprofiled budget as at November 30, 2010 and the variation between forecasted and actual spending could be material.

Contribution of Priorities to Strategic Outcome

The CGC has identified two priorities that will be the focus of attention during the reporting period. The first priority is aimed at strengthening the CGC’s program activities while the second priority is aimed at sound integrated people and business management. The CGC has identified several initiatives with specific deliverables to ensure progress is made towards the plans associated with the priorities. To make progress towards the initiatives, the CGC will continue to work in close collaboration with producers, industry stakeholders, AAF Portfolio partners, and other government departments and agencies. Progress towards the priorities will mitigate program risk and ensure long term success in delivering upon the CGC’s sole strategic outcome of ensuring Canada’s grain is safe, reliable and marketable and Canadian grain producers are protected.


Operational Priority Type1 Description
Relevant positioning of CGC program activities to deliver upon the CGC’s strategic outcome New Why is this a priority?
This priority involves positioning the CGC to remain relevant and support the continued competitiveness of Canadian grains in both domestic and international markets. This includes development and integration of new technologies and protocols into daily program and service delivery, sound regulatory framework, ongoing responses to increased market demands for assurances of grain safety and market concerns about low level presence of unapproved genetically engineered events, as well as continuously improving producer protection programs and service delivery models.
Plans for meeting this priority:
  • Continue efforts to evolve service delivery models to remain relevant and meet future service requirements
  • Continue efforts to facilitate market access to ensure Canadian grain remains competitive domestically and internationally
Management Priority Type1 Description
Integrated people and business management New Why is this a priority?
This priority involves sound integrated and accountable planning and management processes to ensure the optimal allocation of human and financial resources to meet business needs.
Plans for meeting this priority:
  • Establish a sustainable CGC funding model that will eliminate the dependence on annual ad hoc funding and create a more stable environment for integrated people and business management
  • Continue efforts to ensure the CGC’s workforce evolves to meet future service requirements

1 Type is defined: 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. While the CGC’s 2011-12 priorities are identified as new, they are closely linked to the priorities identified in the CGC’s 2010-11 RPP.

Risk Analysis

The Canadian grain industry, the CGC, and the GQAS operate in a climate of constant change. The CGC 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. The CGC is continually 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.

Risk management is an essential part of strategic planning and decision making at the CGC. While the majority of risk involved in the CGC’s work is inherent and constant, some risk varies according to changes in the internal and external environment. The inherent risks to CGC programs and services, such as risks associated with assuring accurate quality and quantity assessment and accurate certification of Canadian grain, are addressed by continuous monitoring and adjustment in order to bring residual risk to tolerable levels, thereby maintaining high levels of performance. Feedback from producers and grain handlers, domestic and international grain buyers and processors, and other government organizations has proven to be a reliable early indicator of risk arising from developments in the external environment.

Strategic planning at the CGC includes preparation of an extensive environmental scan to identify emerging threats and/or opportunities for improvement, an internal and external workforce analysis, and a Corporate Risk Profile Summary to identify areas of greatest risk exposure to the CGC in delivering its strategic outcome and program activities. While mitigation strategies are currently in place for the risk areas identified, the CGC’s 2011-12 strategic priorities, plans, and initiatives will contribute to further mitigating these risk areas.

Key risk areas identified for 2011-12 include a risk that the required effort for CGC priorities and initiatives will exceed human resource availability, the risk of insufficient capital investment funding for long-term operational sustainability, and limited ability and/or expertise to respond to a rapidly changing environment in order to keep the GQAS relevant. To address these risks, the number of CGC strategic priorities and initiatives for 2011-12 has been reduced and plans are more focused. Plans for the establishment of a sustainable CGC funding model will contribute to mitigating the risk of insufficient capital investment funding. The CGC’s two 2011-12 priorities, the relevant positioning of CGC program activities to deliver upon the CGC’s strategic outcome as well as sound integrated people and business management, will both contribute towards the CGC being able to continue responding to a rapidly changing environment in order to keep the GQAS relevant.

Expenditure Profile

Additional ad-hoc appropriation has been required to meet CGC operational requirements on a yearly basis since 1999. The following chart illustrates average CGC spending by funding source over the past four years (fiscal year 2007-08 through 2010-11). In recent years, approximately 44 percent of CGC expenditures have been funded by annual ad-hoc appropriation (this includes the use of the CGC’s accumulated surplus of $2.5 million in 2008-09 and $10.2 million in 2010-11), approximately 7 percent of CGC expenditures have been funded through core appropriations which have historically been used to cover a portion of the costs related to the Grain Quality Research Program and functions associated with Assistant Commissioner positions, while approximately 49 percent of expenditures has been funded through CGC fee revenues collected primarily from inspection and weighing services.

Average Spending by Funding Source (2007-08 to 2010-11)

Graph explained above

The graph below illustrates the CGC’s funding level trend from 2007-08 to 2013-14. The two trends shown on the graph are core funding and total spending.

Total Spending against Core Funding Level from 2007-08 to 2013-14

Graph explained below

Total spending from 2007-08 to 2011-12 is reflective of all funding sources available to the CGC including appropriations realized through the full Estimates process and fees generated through the provision of services. Planned 2011-12 total spending includes additional ad hoc funding of $30.20 million as well as $8.50 million of the CGC’s accumulated surplus as identified in Federal Budget 2010. The CGC has already been granted approval to access the $30.20 million in additional ad-hoc funding and plans to seek authority from Treasury Board to access $8.50 million of the accumulated surplus in the fall of 2011.

For 2012-13 and 2013-14, the graph shows the CGC’s approved authorities to date only (core funding). The graph does not include 2012-13 and 2013-14 total spending due to the expiration of ad hoc funding. The CGC is currently assessing options to ensure appropriate funding is available to meet operational and staffing requirements. This includes a review of CGC user fees (further information is available at: http://www.tbs-sct.gc.ca/rpp/2011-2012/info/info-eng.asp). Going forward there are no significant planned changes to the CGC’s program activities.

Core funding for 2011-12 and future years of $42.52 million partially consists of $5.45 million in annual appropriation which is used to fund a portion of the costs related to the Grain Quality Research Program and the functions that were associated with the Assistant Commissioner positions. Assistant Commissioner functions have been assumed by the CGC Commissioners, the Licensing Unit, and Communications. The remainder of the organization’s quality assurance, quantity assurance and producer protection programs are intended to be cost recovered via fee revenues collected primarily from inspection and weighing services. These revenues are dependent on annual grain volumes which can fluctuate up to 20 percent from year-to-year, resulting in variable revenue from fees. The CGC forecasts spending of revenue earned through fees of $37.06 million generated from handling expected grain volumes of 50.0 million tonnes of grain. However, the CGC has fixed costs related to its statutory mandate which cannot be eliminated or reduced as revenues decline. In order to meet the evolving grain industry needs and increasing operating costs, the CGC maintains an ongoing process of cost containment and reallocates internal resources to meet new and emerging priorities.

The figure below illustrates the allocation of 2011-12 planned spending by program activity. The largest portion of the CGC’s planned spending is allocated to the quality assurance program. While the CGC has a specific program activity dedicated to producer protection activities, it is important to note that all CGC program activities contribute to the CGC’s overall mandate of producer protection. For example, the quality assurance and quantity assurance programs are essential for producers to realize maximum value from their grain. With consistent mandated expectations, the percentage allocated to each program activity does not change significantly from year-to-year.

2011-12 Planned Spending by Program Activity

2011-12 Planned Spending by Program Activity Graph

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For information on CGC votes and/or statutory expenditures, please see the 2011–12 Main Estimates publication. An electronic version of the Main Estimates is available at: http://www.tbs-sct.gc.ca/est-pre/20112012/me-bpd/toc-tdm-eng.asp.