Regulations Amending the Canada Grain Regulations: SOR/2018-33

Canada Gazette, Part II: Volume 152, Number 6

Registration

March 7, 2018

CANADA GRAIN ACT

P.C. 2018-194 March 6, 2018

The Canadian Grain Commission, pursuant to subsection 116(1)footnote a of the Canada Grain Act footnote b, makes the annexed Regulations Amending the Canada Grain Regulations.

Winnipeg, January 29, 2018

Patti Miller
Chief Commissioner

Doug Chorney
Assistant Chief Commissioner

Lonny McKague
Commissioner

Her Excellency the Governor General in Council, on the recommendation of the Minister of Agriculture and Agri-Food, pursuant to subsection 116(1)footnote c of the Canada Grain Act footnote d, approves the making of the annexed Regulations Amending the Canada Grain Regulations by the Canadian Grain Commission.

Regulations Amending the Canada Grain Regulations

Amendments

1 The Canada Grain Regulations footnote 1 are amended by adding the following after section 2:

2.1 On April 1, 2019 and every subsequent year on April 1, all fees set out in Schedule 1 will be adjusted by the percentage change over 12 months in the April All-items Consumer Price Index for Canada, as published by Statistics Canada under the Statistics Act, for the previous fiscal year. All adjusted fees are calculated to the nearest cent.

2 Schedule 1 to the Regulations is replaced by the Schedule 1 set out in the schedule to these Regulations.

Coming into Force

3 These Regulations come into force on April 1, 2018, but if they are registered after that day, they come into force on the day on which they are registered.

SCHEDULE

(Section 2)

SCHEDULE 1

(Sections 2 and 2.1 and subsection 21(3))

Fees of the Commission

Item

Column 1

Fee Name

Column 2

Description of Service

Column 3

Unit (per)

Column 4

Fee

Official Inspection

1

Official inspection – ships (payable by the elevator operator)

Official inspection of grain or screenings discharged to ships and issuance of certificate

Tonne

$1.35

2

Official inspection – railway cars, trucks, containers (payable by the elevator operator)

Official inspection of grain or screenings discharged to railway cars, trucks or containers, and issuance of certificate

Inspection

$121.12

Reinspection

3

Reinspection of grain (payable by the person requesting inspection)

Reinspection by the Chief Grain Inspector for Canada or authorized inspector in respect of

  • (a) an inspection of grain upon receipt; or
  • (b) an inspection of a submitted sample

Reinspection

$68.68

Official Weighing

4

Official weighing – ships (payable by the elevator operator)

Monitoring of official weighing of grain or screenings discharged to ships and issuance of certificate

Tonne

$0.07

5

Official weighing – railway cars, trucks, containers (payable by the elevator operator)

Monitoring of official weighing of grain or screenings discharged to railway cars, trucks or containers, and issuance of certificate

Railway car, truck or container

$6.67

Authorized Service Provider – Inspection or Weighing

6

Third-party authorization (payable by the applicant)

Processing of an application for authorization of a third party to provide inspection or weighing of grain upon receipt into a terminal elevator

Application

$137.35

Supplementary Fees for Official Inspection

7

Travel and accommodation for official inspection services outside regular location (payable by the elevator operator)

Canadian Grain Commission staff are available to conduct official inspection in a location where on-site inspection is not available

Actual

Cost calculated in accordance with the rate set out in the Travel Directive of the National Joint Council of the Public Service or, if no rate is set, actual cost

8

Non-scheduled service reservation – cancellation (payable by the elevator operator)

If Canadian Grain Commission staff are reserved for official inspection outside of regularly scheduled location hours, the fee will be charged when service is cancelled

Employee reporting

$239.06

Licensing

9

Full-term licence (payable by the licencee)

Issuance of licence (all classes) for a one-year term or, if the licence is issued following the expiry of one or more short-term licences, for a term that consists of the remainder of the year that began on the issuance of the first short-term licence

Licence / month or partial month

$275.68

10

Short-term licence (payable by the licensee)

Issuance of licence (all classes) for one month or partial month

Licence

$381.64

Producer Railway Cars

11

Producer railway car application (payable by the producer)

Processing of a complete application for a producer railway car

Railway car

$29.00

Inspection of Submitted Samples

12

Inspection of submitted sample (payable by the person submitting the sample)

Inspection of sample of grain or screenings and issuance of certificate

Sample

$45.78

Sampling services

13

Official sample (payable by the person making the request)

At the time of official inspection, obtaining and supplying a portion of the representative grain sample and identifying the portion with a Canadian Grain Commission seal

Sample

$68.68

Documentation

14

Documentation issued (payable by the person making the request)

Provision of the following types of supplemental documentation:

  • inspection certificate
  • letters of analysis
  • statements of assurance

Document

$71.77

NOTES:

Fees for all items

1 Fees are exclusive of the goods and services tax.

Fees for items 1 and 4

2 Fees are calculated to the nearest cent.

Fees for items 2 and 5

3 If more than one certificate is required for a railway car, truck or container, separate inspection and weighing fees will be applied for each certificate issued (per item 14).

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

Canadian Grain Commission (CGC) fees are fixed in Schedule 1, Fees of the Commission, in the Canada Grain Regulations (CGR) until March 31, 2018, the end of fiscal 2017–2018. No fees are set out in Schedule 1 for fiscal 2018–2019 or beyond. The CGR needs to be amended by April 1, 2018, in order to set fees for future fiscal years and keep Schedule 1 current.

Background

The CGC is structured as a revolving fund, receiving the majority of its funding from charging fees for its services. As part of the 2013 comprehensive fee setting process, the CGC committed to review its fees on a five-year cycle to ensure that fees remained aligned with the costs of service provision. The CGC also indicated that it would address issues outside the five-year fee review cycle as warranted.

Fee levels

Official inspection grain volumes from licensed terminal elevators are the basis upon which the CGC establishes its fees. The existing fees for CGC services and licences were established in 2013 and based on a $60 million budget and an annual average official inspection and weighing volume of 23.3 million metric tonnes (MMT). Although CGC operating costs have remained relatively stable since 2013, the CGC provided official services on higher than expected grain volumes, which resulted in a revenue surplus. This was not the intention when the fees were established; fees were fixed with the objective of matching revenue with the cost of providing the service or licence with the best available information at the time.

The CGC has updated its model for forecasting the volume of grain that it expects to officially inspect and weigh upon discharge from terminal elevators and is projecting a level of approximately 34.4 MMT annually. The updated model uses time-series analysis that includes official inspection and weighing grain volumes for the 1983–2016 year period; captures non-obvious trends, seasonality and cycles in the data; and provides a more objective means of characterizing observed fluctuations. The updated model is similar to the forecasting model used by the Federal Grain Inspection Service, the CGC’s counterpart in the United States.

Based on the updated model, to control the accumulation of additional surplus in its revolving fund and better align fees with the costs of service provision, CGC fees for official inspection and weighing services were reduced as of August 1, 2017, eight months earlier than the end of the current fee cycle (March 31, 2018).

Fees for specific services

Provision of samples and documentation issued

Fees for the “provision of samples” and “documentation issued” services were removed from Schedule 1 on August 1, 1995. Rationale cited was that these fees were non-mandatory and that removing them from the CGR would allow the CGC to negotiate these services more freely. Over the past 20 years, the CGC has continued to provide these services and charge fees fixed by contract. However, these services now have significant usage and generate substantial revenue. The 1995 rationale is no longer viable.

Inspection of submitted samples

There are currently three separate fees in Schedule 1 for the inspection of submitted samples: “inspection of submitted sample — unofficial sample,” “inspection of submitted sample — Certified Container Sampling Program,” and “inspection of submitted sample — Accredited Container Sampler Program.” Separate fees were established strictly for tracking purposes and the fee amount for all three services is the same. The CGC no longer requires separate fees for tracking purposes.

Supplementary fees for official inspection

There are currently three separate fees in Schedule 1 for cancellation of overtime (by users of the service) related to CGC provision of official inspection services outside of regular location hours: “time and one-half overtime — cancellation,” “double-time overtime — cancellation,” and “standby.” Separate fees are no longer required.

Objectives

The objectives of these regulatory amendments are to

Description

The regulatory amendments to Schedule 1

These fees are effective April 1, 2018, the start of the 2018–2019 fiscal year. The following table outlines all of the fees of the Commission prescribed in Schedule 1 to the CGR:

The following table outlines all of the fees of the Commission prescribed in Schedule 1 to the CGR

Fee Name

Description of Service

Unit (per)

Feenote *

Official inspection

1. Official inspection — ships
(payable by the elevator operator)

Official inspection of grain or screenings discharged to ships and issuance of certificate

Tonne

$1.35

2. Official inspection — railway cars, trucks, containers (payable by the elevator operator)

Official inspection of grain or screenings discharged to railway cars, trucks or containers, and issuance of certificate

Inspection

$121.12

Reinspection

3. Reinspection of grain (payable by the person requesting the inspection)

Reinspection by the Chief Grain Inspector for Canada or authorized inspector in respect of

  • (a) an inspection of grain upon receipt; or
  • (b) an inspection of a submitted sample

Reinspection

$68.68

Official weighing

4. Official weighing — ships (payable by the elevator operator)

Monitoring of official weighing of grain or screenings discharged to ships and issuance of certificate

Tonne

$0.07

5. Official weighing — railway cars, trucks, containers (payable by the elevator operator)

Monitoring of official weighing of grain or screenings discharged to railway cars, trucks or containers, and issuance of certificate

Railway car or truck or container

$6.67

Authorized service provider — inspection or weighing

6. Third-party authorization (payable by the applicant)

Processing of an application for authorization of a third party to provide inspection or weighing of grain upon receipt into a terminal elevator

Application

$137.35

Supplementary fees for official inspection

7. Travel and accommodation for official inspection services outside regular location (payable by the elevator operator)

Canadian Grain Commission staff are available to conduct official inspection in a location where on-site inspection is not available

Actual

Cost calculated in accordance with the rate set out in the Travel Directive of the National Joint Council of the Public Service or, if no rate is set, actual cost.

8. Non-scheduled service reservation — cancellation (payable by the elevator operator)

Where Canadian Grain Commission staff are reserved for official inspection outside of regularly scheduled location hours, the fee will be charged when service is cancelled

Employee reporting

$239.06

Licensing

9. Full-term licence (payable by the licensee)

Issuance of licence (all classes) for a one-year term or, if the licence is issued following the expiry of one or more short-term licences, for a term that consists of the remainder of the year that began on the issuance of the first short-term licence

Licence/month or
partial month

$275.68

10. Short-term licence (payable by the licensee)

Issuance of licence (all classes) for one month or partial month

Licence

$381.64

Producer railway cars

11. Producer railway car application (payable by the producer)

Processing of a complete application for a producer railway car

Railway car

$29.00

Inspection of submitted samples

12. Inspection of submitted sample (payable by the person submitting the sample)

Inspection of sample of grain or screenings and issuance of certificate

Sample

$45.78

Sampling services

13. Official sample (payable by the person making the request)

At the time of official inspection, obtaining and supplying a portion of the representative grain sample, and identifying the portion with a Canadian Grain Commission seal

Sample

$68.68

Documentation

14. Documentation issued (payable by the person making the request)

Provision of the following types of supplemental documentation:

  • inspection certificate
  • letters of analysis
  • statements of assurance

Document

$71.77

“One-for-One” Rule

The regulatory amendments reduce the number of fees in Schedule 1 to the CGR from 18 to 14 and improve ease of use. For example, the CGC previously had three separate fees for inspection of submitted samples, but these fees are now combined under one fee code since the costs of providing these services are equivalent.

The amendments also consolidate two of the fees for cancellation of overtime related to provision of official inspection services outside of regular location hours into one fee. The “standby” fee related to cancellation of overtime is eliminated. This reduces the administrative burden of tracking and billing for overtime costs for business and government.

Small business lens

The small business lens does not apply to these amendments, as there are no costs on small business.

Consultation

The CGC has conducted extensive fee consultations. The CGC completed a 60-day stakeholder consultation on its full suite of fees on May 1, 2017, which followed the guidelines of the User Fees Act and other government requirements. Bilateral information sessions were also held between the CGC and stakeholders upon request. In addition, a client satisfaction survey was conducted during February and March 2017. The key audiences for the survey were Canadian grain producers and industry representatives.

The following section provides results from the 2017 consultations.

Fee consultation

On March 1, 2017, the CGC released its User Fees Consultation and Pre-proposal Notification document, which outlined proposed fees, service standards and performance measures. The document proposed fee reductions on most CGC fees as of April 1, 2018, based on a thorough review of existing fees and cost structures, past revenues generated by services, the relatively stable costs of providing those services, and the updated grain volume forecasting model.

The consultation document was emailed directly to industry and producer stakeholders, including all CGC licensees, producer organizations, industry associations and relevant government organizations. At the same time, a news release was issued. The consultation document was posted on the CGC website, and a link to it was posted on Service Canada’s Consulting with Canadians website.

The consultation document was accessed over 1 200 times during the consultation period. A total of 92 formal written submissions were received from a combination of individual producers, producer organizations, CGC licensees and industry associations. The most common stakeholder comments received are as follows:

Client satisfaction survey

As part of the CGC’s fee consultation process, Ipsos, on behalf of the CGC, conducted a qualitative survey of grain industry representatives and a quantitative survey of western Canadian grain producers.

The qualitative survey consisted of self-directed interviews through a workbook format, followed up with conversations and in-depth interviews. Participants included company executives, elevator operators, quality assurance managers, key contacts in industry associations, and other industry representatives. The quantitative survey consisted of telephone interviews with Canadian grain producers in Manitoba, Saskatchewan, Alberta, and the Peace River Region of British Columbia.

Survey results provided information on the perceptions and impressions of Canadian grain producers and grain industry representatives regarding CGC services, satisfaction levels with CGC services, and opinions on fee adjustments. Highlights of survey responses are as follows:

The final report and detailed findings of the CGC’s 2017 Client Satisfaction Survey are available at the Library and Archives Canada website.footnote 2

Canada Gazette, Part I, consultation process

The amendments were published in the Canada Gazette, Part I, on December 16, 2017, followed by a 30-day consultation period. The CGC received one formal written submission, from the Canadian Canola Growers Association, during the Canada Gazette, Part I, consultation process.

Submission: The submission supported the proposed fee amendments, the updated grain volume forecasting model, and the CGC’s process for reviewing fees going forward. However, the submission went further and said that the CGC’s cost recovery model increases the burden on producers and the industry due to low government appropriation levels, and that the CGC should be allocated substantially more than $5.37 million annually. The submission said that in addition to the CGC’s Grain Research Laboratory, CGC public good functions include policy development related to grain safety, traceability, monitoring programs and a quality assurance framework to ensure a consistent, dependable grain supply for domestic food production. Concerns were also raised that CGC services are not competitive with the private industry and that an element of competition should be introduced.

Response: The CGC’s current amount of annual appropriation was approved by Parliament over 20 years ago. The private and public split of fee revenue to appropriation is expected to remain constant on average. It is important to note that annual appropriation is adjusted each year for changes to employee contract settlements and employee benefit contribution rates as defined in the CGC’s Annual Reference Level Update (ARLU) and summarized in the Main Estimates.

Pursuant to the Canada Grain Act, the CGC provides official inspection and weighing services at export position. The CGC’s fees are based on the actual costs of providing its services. Government does not make a profit from its services.

Rationale

Schedule 1 — Fees of the Commission

Schedule 1 of the CGR expires March 31, 2018. As no fees are set for fiscal 2018–2019 or beyond, the amendments to Schedule 1 with fees effective April 1, 2018, will keep the schedule current.

As part of its stakeholder consultation, the CGC proposed to replace the current fixed-fee structure with a formula-based fee structure set out in Schedule 1 to help streamline the process for adjusting future fees. When this structure was proposed, the CGC would still have been required to follow the requirements of the User Fees Act to increase fees but not the regulatory process to update the CGR. As a result, a formula-based fee structure would have allowed for fee adjustments on a timelier basis if CGC operating costs became unaligned with grain export volumes.

However, on June 22, 2017, the User Fees Act was repealed and replaced by the Service Fees Act. Under the Service Fees Act there is no longer any requirement to consult and report to Parliament on fee changes if fees are fixed by regulation; only the requirements of the regulatory process are applicable. Under the Service Fees Act, if the CGC implements a formula-based structure for its fees, neither of the regulatory process and the legislated fee consultation process would apply to future amendment of CGC fees.

Given the change in legislation, the CGC is no longer pursuing the proposal to move to a formula-based fee structure in Schedule 1. Retaining a fixed-fee structure is the simplest, most efficient and justifiable approach. Fee amounts are the same whether formulas are established or fees are fixed in the CGR and will not impact producers or the grain industry.

Adjusting fees annually on April 1 by the percentage change over 12 months in the April All-items Consumer Price Index for Canada is consistent with what other Government departments will be required to do under the Service Fees Act. Although the consumer price index varies from year to year, the average is within acceptable limits. The annual increase will sustain service standards for grain quality, quantity and safety assurance, producer protection and grain transaction integrity.

Fee levels

Maintaining fee levels for official inspection and weighing services at the same level as those that came into effect August 1, 2017, and reducing almost all other CGC fees, results in fees that better reflect the operational costs of providing services and licences, and controls the accumulation of surplus in the CGC’s revolving fund. The fee amendments account for the increase in grain volumes requiring CGC services going forward.

Overall, based on the updated grain volume forecasting model, it is expected that the fee amendments will ensure a viable funding platform for the CGC to continue its operations into the future. Based on actual usage data for all services in question and 2016–2017 dollar values, the net result of all fee amendments is a cost reduction to stakeholders of approximately $404,468 annually.

Fees for specific services

Provision of samples and documentation issued

Re-establishing fees for “provision of samples” and “documentation issued” services in Schedule 1 recognizes that these fees should be prescribed, improves regulatory application consistency and transparency, and ensures accountability for the associated revenues. These services have significant usage and generate substantial revenue: in fiscal 2016–2017 approximately 8 290 samples were provided and the “documentation issued” service generated approximately $1.3 million in revenue.

Inspection of submitted samples

Consolidating the three existing fees for inspection of submitted samples into one fee, “inspection of submitted samples,” consolidates Schedule 1 and simplifies its use. Historically, separate fees were established strictly for tracking purposes but had the same fee level. Current usage of the “inspection of submitted sample — Certified Container Sampling Program” and “inspection of submitted sample — Accredited Container Sampler Program” services is minimal or zero and separate fees are no longer required for tracking purposes.

Supplementary fees for official inspection

Combining the two fees for “time and one-half overtime — cancellation” and “double-time overtime — cancellation” related to CGC provision of official inspection services outside of regular location hours into one fee consolidates Schedule 1 and simplifies its use. Over the past three years there has been an upward trend in usage of “double-time overtime” versus “time and one-half overtime.” The new simple fee “non-scheduled service reservation — cancellation” prorates the two existing fees using a 25/75 split to align it with the historical trend analysis of service usage.

The existing “standby” fee is no longer required. As of August 1, 2017, overtime is recovered as part of the CGC’s official inspection fees. Since “standby” is another type of overtime, this service is now recovered through official inspection fees.

Implementation, enforcement and service standards

Implementation

These regulatory amendments are targeted to come into force on April 1, 2018.

As part of implementation, a communication strategy will involve notification to stakeholders regarding fee amendments and updates to the CGC website prior to the Regulations coming into force. Also, to be as transparent as possible with stakeholders, the CGC will publish the corresponding fee formulas and associated variables and inputs used to calculate the Schedule 1 fees on its website.

CGC information technology and financial systems will be updated to support the regulatory amendments.

Schedule 1 fees will be reviewed if services change or if, for example, actual CGC operating costs became considerably unaligned with grain export volumes.

Enforcement

Where a fee is not paid by the person obliged to do so (as stipulated in the Regulations) then that fee payable will be a debt owing to the Crown, which will be collected as per standard practice.

Service standards

The CGC consulted with stakeholders and established service standards for each fee that reflect the level of service that can be expected. The service standards are commitments with recourse for underperformance, as per the Service Fees Act.

Service standards

Fee name

Service standard

Official inspection —
ships

  • When grain being loaded is other than grade ordered or specification ordered, the Canadian Grain Commission informs the elevator staff of non-conformance within one hour of the increment being loaded.
  • One original Certificate Final is issued to the client within two business daysfootnote 3 of
    • (a) approval of the official weight from Weighing Services; or
    • (b) determination of the grade from Inspection Services.

Official inspection — railway cars, trucks, containers

  • When grain being loaded is other than grade ordered, the Canadian Grain Commission informs the elevator staff of non-conformance within one hour of the sample being processed.
  • One original certificate is issued to the client within two business days of
    • (a) approval of the official weight from Weighing Services; or
    • (b) determination of the grade from Inspection Services.

Reinspection of grain

Reinspection by the Chief Grain Inspector for Canada is complete and results available within 10 business days of the reinspection request.

Official weighing —
ships

One original Certificate Final is issued to the client within two business days of

  • (a) approval of the official weight from Weighing Services; or
  • (b) determination of the grade from Inspection Services.

Official weighing — railway cars, trucks, containers

One original certificate is issued to the client within two business days of

  • (a) approval of the official weight from Weighing Services; or
  • (b) determination of the grade from Inspection Services.

Third-party authorization

  • After receiving a complete application form, a decision is made with respect to the authorization of a service provider.
  • Notification to the applicant is provided within 10 business days.

Travel and accommodation for official inspection services outside regular location

Employees are available to conduct official inspection in a location where on-site inspection is not available.

Non-scheduled
service reservation —
cancellation

Employees are reserved for inspection outside of regular location hours.

Full-term licence

  • Licensees are sent licence renewal packages three months prior to the annual licence renewal date.
  • The licensee is sent their licence(s) on or before the licence effective date.
  • The Canadian Grain Commission’s website is updated within three business days of the effective date of a change in the status of a licensee, and published reports are updated weekly or as needed.

Short-term licence

The licensee is sent their licence(s) on or before the licence effective date.

Producer railway car application

Acknowledgement of the receipt and processing of a complete producer car application is sent by the end of the next business day.

Inspection of submitted sample

  • A submitted sample certificate is issued within five business days of receiving the sample.
  • Grades are accurate (based on the submitted sample reinspection process).

Official sample

  • If request is received prior to the conveyance loading, samples are provided within two business days upon completion of the loading of the conveyance and receipt of the official sample at a Canadian Grain Commission regional office.
  • If request is received subsequent to the conveyance loading, samples are provided, if available, within four business days of the request.

Documentation issued

Applicable documents are issued to the client within two business days after

  • a) approval of the official weight from Weighing Services;
  • b) determination of the grade and grading factors/results from Inspection Services;
  • c) receipt of final documentation request from the shipper/exporter; or
  • d) completion of all required analytical testing results.

Contact

Melanie Gustafson
Policy Economist
Canadian Grain Commission
303 Main Street
Winnipeg, Manitoba
R3C 3G8
Telephone:
204-292-5721
Email:
melanie.gustafson@grainscanada.gc.ca