2014–15 - Report on Plans and Priorities

Section I: Organizational Expenditure Overview

Organizational Profile

Minister: The Honourable Gerry Ritz, P.C.

Chief Commissioner: Elwin Hermanson

Ministerial portfolio: Agriculture and Agri-Food

Year established: 1912

Main legislative authorities: Canada Grain Act

Other: The CGC’s head office is located in Winnipeg, Manitoba. The CGC currently operates two regional offices and ten service centres across Canada. Funding for CGC programs and activities is through a combination of revolving fund and appropriation sources.

Organizational Context

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’s vision is: “To be a world class, science-based quality assurance provider”. The CGC’s mission is: “To ensure the integrity and marketability of Canadian grain for the domestic and international grain trade, from producer to global consumer.” 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 20 grainsFootnote i grown in Canada to ensure Canada’s grain is safe, reliable and marketable, and Canadian grain producers are protected. The CGC is a third party agency in Canada’s grain sector and is the official certifier of Canadian grain shipments. 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, theCGC:

  • regulates 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 producers are properly compensated for the quality and quantity of grain delivered to licensed grain elevators and grain dealers. This includes the licensing and security program, the producer car allocation program, and the producer support program.

Additional information on the CGC’s mandate and responsibilities is available on the CGC website.

Footnotes

Footnote i

Grain refers to any seed designated by regulation as a grain for the purposes of the Canada Grain Act. This includes barley, beans, buckwheat, canola, chick peas, corn, fababeans, flaxseed, lentils, mixed grain, mustard seed, oats, peas, rapeseed, rye, safflower seed, soybeans, sunflower seed, triticale and wheat. Solin was removed from the list effective August 1, 2013.

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Strategic Outcome and Program Alignment Architecture (PAA)

  1. Strategic Outcome: Canada’s grain is safe, reliable and marketable and Canadian grain producers are properly compensated for grain deliveries to licensed grain companies
    • 1.1 Program: Quality Assurance Program
    • 1.2 Program: Quantity Assurance Program
    • 1.3 Program: Grain Quality Research Program
    • 1.4 Program: Producer Protection Program
      • 1.4.1 Sub-Program: Licensing and Security Program
      • 1.4.2 Sub-Program: Producer Car Allocation Program
      • 1.4.3 Sub-Program: Producer Support Programs
    • Internal Services

Organizational Priorities

Priority TypeFootnote 1 Strategic Outcome and Programs
Relevant, efficient and innovative programs and services New This priority contributes to the CGC's strategic outcome and all CGC programs
Description
Why is this a priority?
Ensuring the CGC remains relevant supports the continued competitiveness of Canadian grain in both domestic and international markets. A targeted set of amendments were made to the Canada Grain Act as part of the Jobs and Growth Act, 2012 to streamline the operations of the CGC and reduce costs for CGC services by approximately $20 million per year. While these amendments were an important first step towards aligning the Canada Grain Act with the needs of today's grain sector, the CGC needs to continue investigating opportunities to adjust programs, services and costs to remain relevant, efficient and innovative.
What are the plans for meeting this priority?
The CGC plans to continue efforts to evolve service delivery models and programs to remain relevant and support the continued competitiveness of Canadian grains in both domestic and international markets. Plans include the investigation, development and integration of new technologies, processes, and protocols into daily programs and service delivery. For example, the CGC will continue to investigate opportunities to enhance producer protection programs and services, adjust processes and protocols to improve and enhance quality assurance activities and improve grain safety, adjust quantity assurance processes and protocols, improve and enhance enforcement activities, and make adjustments to complement recent legislative amendments that streamlined the operations of the CGC. The CGC will also continue efforts to respond to increased market demands for assurances of grain safety and market concerns about low-level presence (LLP) of unapproved genetically engineered events. This priority could include further amendments to the Canada Grain Act and Canada Grain Regulations to ensure a sound regulatory framework.
Footnotes
Footnote 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 reporting year of the RPP or DPR.

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Priority TypeFootnote 2 Strategic Outcome and Programs
Sustainable and equitable funding model New This priority contributes to the CGC's strategic outcome and all CGC programs
Description
Why is this a priority?
Recent changes to the Canada Grain Act, the CGC and the CGC's user fees have made the organization's revenue streams. The CGC's current funding model is vulnerable to fluctuations in export grain volumes as the majority of costs associated with Canada's GQAS are funded through exported grains.
What are the plans for meeting this priority?
The CGC has begun to investigate new ways to sustainably fund the organization and its valuable activities such as grain quality, grain safety, and grain research to ensure that the organization can continue to be an asset to the grain sector. An alternative funding structure could reduce financial risks to the organization and ensure that the CGC's valuable activities can continue to be provided in a financially sustainable manner. Therefore, while updated user fees took effect on August 1, 2013, work will continue, in collaboration with stakeholders, towards developing a sustainable and equitable funding model for the CGC.
Footnotes
Footnote 2

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 reporting year of the RPP or DPR.

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Priority TypeFootnote 3 Strategic Outcom and Programs
Skilled, adaptable, engaged workforce New This priority contributes to the CGC's strategic outcome and all CGC programs
Description
Why is this a priority?
Recent changes to the Canada Grain Act, the CGC and the CGC’s user fees have changed the organization’s revenue streams. The CGC’s current funding model is vulnerable to fluctuations in export grain volumes as the majority of costs associated with Canada’s GQAS are funded through exported grains.
What are the plans for meeting this priority?
The CGC is focusing on several people management activities to ensure the workforce has the necessary skills to deliver high quality programs now, and is prepared to respond to changing future needs of both internal and external stakeholders. For example, performance management, learning, and leadership development are essential to the future needs of the organization. In light of significant changes experienced at all levels of the organization, plans are to foster a work environment where employees feel involved, equipped and supported as they adapt to recent changes and become increasingly resilient in the midst of ongoing change.
Footnotes
Footnote 3

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 reporting year of the RPP or DPR.

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Risk Analysis

Key Risks
Risk Risk Response Strategy Link to Program Alignment Architecture
Adapting the organization to remain relevant to CGC stakeholders This risk is linked to the organizational priority relevant, efficient and innovative programs, services and costs. This is an ongoing risk due to the rapidly evolving needs of Canadian producers and the grain industry. To mitigate this risk the CGC will continue to investigate and integrate new technologies, processes and protocols into programs and services. Risk trends will continue to be monitored closely and mitigation strategies revised as required. Linked to the CGC's sole strategic outcome and all CGC programs
Risk Risk Response Strategy Link to Program Alignment Architecture
Stakeholder pressure to establish an equitable and sustainable funding model This risk is linked to the organizational priority “sustainable and equitable funding model”. While updated CGC user fees recently took effect that eliminate dependence on annual ad hoc appropriation funding, there continues to be external pressure and corresponding risks related to the CGC's funding structure. The CGC will continue to work with external stakeholders, Central Agencies, and AAFC to investigate funding model options. Risks will continue to be monitored closely and mitigation strategies revised as required. Linked to the CGC's sole strategic outcome and all CGC programs
Risk Risk Response Strategy Link to Program Alignment Architecture
Capacity within the CGC to deliver programs and adapt to change An ongoing risk to the CGC is ensuring sufficient human resource capacity to carry out day-to-day operational work while at the same time adapting to changes in the internal and external environments. While this risk is linked to all organizational priorities, the priority “skilled, adaptable, engaged workforce” is aimed at mitigating this risk. Capacity trends will be monitored closely and mitigation strategie revised as required. For example, projects and activities are being monitored and will be stopped, delayed or decreased if necessary. Linked to the CGC's sole strategic outcome and all CGC programs

The Canadian grain industry, the CGC, and the GQAS operate in a climate of constant change. 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. 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 our external environment. The CGC has an established process in place to identify, monitor, mitigate and manage corporate level risks. Strategic planning includes preparation of an extensive environmental scan, broad and inclusive identification of emerging threats and/or opportunities for improvement, an internal and external workforce analysis, and the development of a corporate risk profile summary to identify areas of greatest risk exposure to the CGC in delivering its strategic outcome and programs. Corporate level risks and mitigation strategies are reviewed during the strategic planning process and key risks for the upcoming fiscal year are identified based on current internal and external factors. CGC senior management meets on a quarterly basis to review the key corporate risks and to identify additional mitigation strategies and/or contingency plans if necessary.

Planned Expenditures

Budgetary Financial Resources (Planned Spending—dollars)
2014–15
Main Estimates
2014–15
Planned Spending
2015–16
Planned Spending
2016–17
Planned Spending
70,444,198 70,444,198 60,536,970 61,538,268
Human Resources (Full-time equivalents—FTEs)
2014–15 2015–16 2016–17
404 404 404
Budgetary Planning Summary for Strategic Outcome and Programs (dollars)
Strategic Outcome, Programs and Internal Services 2011–12 Expenditures 2012–13 Expenditures 2013–14 Forecast Spending 2014–15 Main Estimates 2014–15 Planned Spending 2015–16 Planned Spending 2016–17 Planned Spending
Strategic Outcome: Canada's grain is safe, reliable and marketable and Canadian grain producers are properly compensated for grain deliveries to licensed grain companies
Quality Assurance Program 40,834,642 40,035,541 37,075,066 38,428,772 38,428,772 32,876,490 33,474,531
Quantity Assurance Program 13,177,471 12,520,212 10,936,331 4,665,784 4,665,784 3,193,300 3,251,388
Grain Quality Research Program 10,214,676 11,055,383 11,338,132 7,978,107 7,978,107 6,582,955 6,607,258
Producer Protection Program 3,946,652 3,711,368 3,511,689 1,520,937 1,520,937 1,265,212 1,288,226
Strategic Outcome Subtotal 68,173,441 67,322,504 62,861,218 52,593,600 52,593,600 43,917,957 44,621,403
Internal Services Subtotal 13,720,678 15,049,754 17,075,303 17,850,598 17,850,598 16,619,013 16,916,865
Total 81,894,119 82,372,258 79,936,521 70,444,198 70,444,198 60,536,970 61,538,268

Operational spending follows a consistent trend for fiscal years 2011-12 and 2012-13. Fiscal years 2013-14 and 2014–15 are transition years as a result of amendments to the Canada Grain Act and implementation of updated user fees that took effect concurrently on August 1, 2013. Fiscal years 2015-16, and 2016-17 represent CGC spending post-legislative change and revised user fees.

From fiscal year 2012-13 to fiscal year 2015-16, the CGC will have transformed itself into a streamlined and financially sustainable organization. This is due to certain activities being eliminated and other activities being adjusted and/or implemented to allow the CGC to continue to achieve its mandate and manage risk. Changes that contribute to a reduction in operational spending of $21.84 million between 2012-13 and 2015-16 include the elimination of mandatory CGC inward inspection and CGC inward weighing, elimination of the Grain Appeal Tribunal, elimination of CGC registration and cancellation and CGC-mandated weighovers, elimination of the Dispute Resolution Service for railcar weights, transitioning to a CGC oversight role in outward weighing, adjusting and streamlining the CGC’s Grain Research Laboratory by amalgamating several units, discontinuing image analysis and spectroscopy work, and modernizing and streamlining the producer protection program. Additional information on these changes is available in the CGC’s 2012-13 Departmental Performance Report.

Spending on internal services follows a consistent trend for fiscal years 2011-12 and 2012-13. Fiscal year 2013-14 and 2014–15 are transition years as a result of amendments to the Canada Grain Act and implementation of updated user fees. Significant internal services support is required during the transition period.

Alignment to Government of Canada Outcomes

2014–15 Planned Spending by Whole-of-Government-Framework Spending Area (dollars)
Strategic Outcome Program Spending Area Government of Canada Outcome 2014–15 Planned Spending
1 Canada’s grain is safe, reliable and marketable and Canadian grain producers are properly compensated for grain deliveries to licensed grain companies 1.1 Quality Assurance Program Economic Affairs An innovative and knowledge-based economy 38,428,772
  1.2 Quantity Assurance Program Economic Affairs An innovative and knowledge-based economy 4,665,784
  1.3 Grain Quality Research Program Economic Affairs An innovative and knowledge-based economy 7,978,107
  1.4 Producer Protection Program Economic Affairs A fair and secure marketplace 1,520,937
Total Planned Spending by Spending Area (dollars)
Spending Area Total Planned Spending
Economic Affairs 52,593,600
Social Affairs Nil
International Affairs Nil
Government Affairs Nil

Alignment to Government of Canada Outcomes

CGC Spending Trend Graph
Graph of spending trend described in the Budgetary Planning Summary table above

In the fall of 2012, two initiatives were announced. Firstly, amendments to the Canada Grain Act to streamline operations of the CGC and eliminate unnecessary costs to the grain industry were contained in Bill C-45 (Jobs and Growth Act, 2012). Bill C-45 received royal assent on December 14, 2012 and Canada Grain Act amendments came into force on August 1, 2013. Secondly, on November 1, 2012, the CGC launched consultations on updated CGC user fees that reflect an updated Canada Grain Act and streamlined CGC operations. The new fees took effect August 1, 2013. These two initiatives have eliminated the CGC’s dependence on annual ad hoc federal appropriations which has represented approximately 44 percent of CGC expenditures in recent years.

Fiscal year 2014–15 is a transition year as a result of amendments to the Canada Grain Act and implementation of updated user fees that took effect concurrently on August 1, 2013. Planned operational spending for fiscal year 2015-16 and 2016-17 is based on operations under an amended Canada Grain Act and updated user fees.

Estimates by Vote

For information on the Canadian Grain Commission’s organizational appropriations, please see the 2014–15 Main Estimates publication.

Contribution to the Federal Sustainable Development Strategy (FSDS)

The CGC also ensures that its decision-making process includes a consideration of the FSDS goals and targets through the strategic environmental assessment (SEA). An SEA for policy, plan or program proposals includes an analysis of the impacts of the proposal on the environment, including on the FSDS goals and targets. The results of SEAs are made public when an initiative is announced or approved, demonstrating that environmental factors were integrated into the decision-making process.

Authorities available and used for the period ended June 30, 2014 (in millions of dollars)
  Authority available Authority used year to date
Fiscal Year 2014-15 2013-14 2014-15 2013-14
Statutory (Revolving fund revenue) 54.060 47.853 13.860 9.828
Statutory (Access to accumulated surplus and employee benefits plan) 8.847 6.738 0.330 0.505
Vote 30 (Appropriation including Ad hoc) 7.537 33.856 1.532 8.690
Total 70.444 88.447 15.722 19.023