Notice of intent – Licensing review

In 2005, the Canadian Grain Commission commenced a Licensing Compliance Initiative with the intent of either licensing or exempting from licensing all elevators and grain dealers as defined by the Canada Grain Act. Since 2005, the Canadian Grain Commission has issued new licences to approximately 75 additional companies, and significantly enhanced its compliance and enforcement efforts. The Canadian Grain Commission issues licences for five separate classes of licence: process elevator, transfer elevator, terminal elevator, primary elevator [1], and grain dealer [2].

A primary focus of the Licensing Compliance Initiative was companies that were neither licensed nor exempted from licensing. Consistent with this direction, the Commission at that time decided to continue allowing a certain group of companies with elevators who dealt predominantly in special crops to retain the option to be licensed as either primary elevators or grain dealers.

Reviewing classification

The grain industry has evolved considerably since that time, particularly the special crops sector. The Canadian Grain Commission feels it is now necessary to review the classification of each licensee, to ensure consistent application of the Canada Grain Act and the Canada Grain Regulations so that producers understand their rights and protections, licensees understand their responsibilities, and that similar companies experience similar regulatory requirements. The Canadian Grain Commission is not proposing to change existing exemptions from licensing specified in the Canada Grain Regulations (e.g. producer car facilities, seed dealers, feed mills, and grain dealers not purchasing grain directly from producers).

Licensing requirements by class of licence

It is important for licensees and producers to understand the requirements for each class of licence. For example, grain dealers need not adhere to Canadian Grain Commission maximum shrinkage allowances that primary elevators must, while primary elevators may use the value of their “stocks in store” on outstanding receipts to reduce their security calculations, but grain dealers may not. Another example is that primary elevators may lease condominium grain storage to producers, while grain dealers may not. Each class of licence requires that security be posted with the Canadian Grain Commission to protect producer payments. Annex 1 includes a table outlining all requirements for each type of licence.

Implementation

The Canadian Grain Commission will be undertaking this review between now and August 1, 2010. Any need for re-classification will be addressed with each respective licensee upon their first annual licence renewal effective August 1, 2010. The entire review and re-classification process will be completed by August 1, 2011. This timeframe will allow a transition period for companies to make any necessary operational adjustments.

For further information contact:

Fred Hodgkinson
Head, Licensing
Canadian Grain Commission
601-303 Main Street
Winnipeg, Manitoba  R3C 3G8

Telephone: (204) 983-3309
Toll Free: 1-800-853-6705
Fax: (204) 983-4654
Email: fred.hodgkinson@grainscanada.gc.ca

[1] “primary elevator” means an elevator the principal use of which is the receiving of grain directly from producers for storage or forwarding, or both (Canada Grain Act definitions)

[2] “grain dealer” means a person who, for reward, on his own behalf or on behalf of another person, deals in or handles western grain (Canada Grain Act definitions)