Bill Introduced to Improve Producer Payment Protection and Update Grain Commission Mandate

The federal government introduced a bill in the House of Commons on Tuesday that contains measures aimed at improving producer payment security when a grain buyer fails to pay for delivered grain. Bill C-48 — the Modernization of Canada’s Grain Industry Act — would also update the mandate of the Canadian Grain Commission and adjust the CGC’s authority in monitoring grain quality.

In the area of payment protection, the proposed legislation would allow the Canadian Grain Commission to create a producer compensation fund, which would be funded by licensed grain buyers. The government says pooling the risk of CGC licensees failing to pay producers is expected to reduce security costs and reporting requirements for licensees. It’s noted the compensation fund model likely wouldn’t cover 100 percent of producer losses, but it could be used together with an insurance program or other forms of security. Officials with Agriculture and Agri-Food Canada say they anticipate this fund would likely be in the range of $5 million to $10 million, but it will depend on consultations with licensees. The CGC is also looking for input on whether feed mills should be included in the payment protection program.

Under Bill C-48, the CGC’s mandate would be “clarified to clearly specify that the organization acts in the interest of the entire grain sector and all Canadians, including grain producers. The clarified mandate is consistent with, and will reflect, the CGC’s role as an unbiased regulator.” Currently, the CGC’s mandate is to “work in the interest of grain producers.” Provisions specific to protecting the interests of producers will remain, say AAFC officials.

“This legislation will continue to modernize the organizations that support the Canadian grain sector and enhance Canada’s excellent reputation around the world as a supplier of consistent, safe and high-quality grains,” said Agriculture Minister Gerry Ritz in a news release.

The bill includes several other measures regarding the CGC, quality assurance and producer payment protection:

• It would extend producer access to binding determination of grade and dockage through the CGC to deliveries made to all licensed facilities. Currently this right only exists for deliveries to licensed primary and terminal elevators.
• C-48 would create a new category of licence called “container loading elevators,” extending producer protections and mandatory statistical reporting to facilities that load containers.
• The CGC would be given authority to require samples of grain from elevators in eastern Canada, including unlicensed facilities.
• Licensees would be allowed to refuse deliveries of unregistered varieties of grain.
• Maximum fines under the Canada Grain Act would be increased to a range from $50 thousand to $200 thousand, as well as expanding the use of Administrative Monetary Penalties (AMPs), including in situations where revoking a license is currently the CGC’s only option for holding a licensee accountable.

Click here for an overview of Bill C-48 from Agriculture and Agri-Food Canada, or here to read the actual text.

Related:

• CGC Nixes Negotiations on Insuranced-Based Producer Payment Model