Categories of unlicensed grain companies

Generally, anyone who deals in or handles grain grown in western Canada must be licensed by the Canadian Grain Commission. There are 4 classes of licences. (Classes of licences and definitions.)

However, not all businesses that deal in grain are licensed. There are three such kinds of grain companies:

  1. Not licensed because they have been granted a licensing exemption by the Canadian Grain Commission
  2. Not licensed because their business is outside the jurisdiction of the Canada Grain Act
  3. Not licensed in violation of the Canada Grain Act

If producers choose to deliver their grain to a company that does not have a Canadian Grain Commission licence, none of the protections of the Canada Grain Act apply. If a producer has a dispute with such a company, the Canadian Grain Commission cannot help the producer resolve it.

Exemptions

The Canada Grain Act mandates the Canadian Grain Commission to license or exempt grain companies from licensing if their businesses meet certain legislated requirements. The objectives are to protect the interests of grain producers and to maintain Canada’s grain export quality assurance system.

In keeping with these objectives, the Canadian Grain Commission grants licensing exemptions if one or both of the following conditions apply:

  1. Grain is not purchased directly from western grain producers
  2. Licensing a company or a class of companies is not required to maintain the quality, safe-keeping, and orderly, efficient handling of Canadian grain.

Companies are exempted in two ways:

  1. By regulations approved by Governor In Council. These regulations are approved by the federal Cabinet and generally remain in effect for several years, or until they are changed by means of a regulatory amendment.
  2. By order of the Canadian Grain Commission. Commission orders normally must be reviewed and renewed annually.

Unlicensed companies should complete a mode of operations questionnaire so that the Canadian Grain Commission can determine whether or not they require a licence or can be exempted.

Often exemptions are conditional. A common condition is that the company must not purchase grain directly from producers. If that condition is not met, the company may be required to become licensed.

The following table identifies the types of companies normally exempted from Canadian Grain Commission licensing and explains why.

Identifies the types of companies normally exempted from Canadian Grain Commission licensing and explains why
Type of company Reason for exemption
Elevators that ship only producer cars They do not buy grain from western producers. See Producer car loading facilities exempted from licensing.
Agents who act solely on behalf of Canadian Grain Commission-licensed companies They do not buy grain from western producers; instead, they buy it solely on behalf of a Canadian Grain Commission licensee. Producers are protected by the security posted by Canadian Grain Commission licensees.
Seed cleaning plants that do not purchase grain from producers They do not buy grain from western producers. Rather, they clean it and return it to producers.
Seed dealers that purchase only seed from producers Quality assurance is governed by the Seeds Act, which is administered by the Canadian Food Inspection Agency.
Elevators operated by nonprofit organizations Licensing is not required to maintain the quality, safe-keeping, and orderly, efficient handling of Canadian grain.
Feed mills Licensing is not required to maintain the quality, safe-keeping, and orderly, efficient handling of Canadian grain
Distilleries Licensing is not required as long as these facilities do not buy grain from producers.
Bulk handling facilities at port locations with no storage Licensing is not required to maintain the quality, safe-keeping, and orderly, efficient handling of Canadian grain.
Container loading facilities located at ports Licensing is not required to maintain the quality, safe-keeping, and orderly, efficient handling of Canadian grain.

Outside the Canada Grain Act

Certain types of grain companies are outside the jurisdiction of the Canada Grain Act, and therefore may not be licensed by the Canadian Grain Commission. Because they are “outside the Act,” there is no need for an exemption, either. They include:

  • Feed lots
  • Hog barns
  • Standard farming operations who exclusively market their own grain products
  • Eastern grain elevators (except those operating on the Great Lakes-St. Lawrence Seaway system)
  • Dealers who exclusively buy and sell grain produced in eastern Canada

In violation of the Canada Grain Act

There may be companies that are in violation of the Canada Grain Act because they operate without a Canadian Grain Commission licence. The Canadian Grain Commission may not be aware of their operations. Alternatively, we may be in the process of licensing them. If you have any questions about the licence status of any grain company, contact the Canadian Grain Commission Licensing Unit.