Future-oriented statement of operations

Authority and purpose

The Canadian Grain Commission Revolving Fund (“the revolving fund” or “the fund”) derives its authority from the Canada Grain Act. The Canadian Grain Commission's mandate, as set out in the Act, is to, “in the interest of 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 commission’s vision is: “to be a world class, science-based quality assurance provider”. The Minister of Agriculture and Agri-Food is responsible for the Canadian Grain Commission.

In order to effectively achieve its mandate, the Canadian Grain Commission implemented the Departmental Results Framework and Program Inventory as required by Policy on Results, effective April 1, 2018. Through this framework, the Canadian Grain Commission regulates grain handling in Canada and establishes and maintains science based standards for Canadian grain. The results of this core responsibility are that domestic and international markets regard Canadian grain as dependable and safe and that farmers are fairly compensated for their grain. The Canadian Grain Commission has three programs: Grain Quality, Grain Research, and Safeguards for Grain Farmers. Internal Services supports the core responsibility.

Appropriation Act No. 6, 1994-1995 established the Canadian Grain Commission Revolving Fund. The fund has a continuing non-lapsing authority from Parliament to make payments out of the Consolidated Revenue Fund for working capital, capital acquisitions and temporary financing of accumulated operating deficits and draw down authority of $2,000,000.

The Canadian Grain Commission has not sought authorization from Treasury Board to access its net authority provided for fiscal year 2018-2019. Through its annual business plan process, the Canadian Grain Commission would seek appropriate authorities should a shortfall materialize.

Starting in fiscal year 2012-13, the Canadian Grain Commission implemented steps to streamline its services to become a financially sustainable organization. Funding for fiscal years 2017-18 and 2018-19 includes a combination of an ongoing appropriation and authority to re-spend revenues collected from fees. The Canadian Grain Commission now recovers approximately 92% of its costs through user fees; therefore, it no longer requires annual ad hoc funding.

In accordance with the Government’s policy on self-insurance, the Canadian Grain Commission does not carry its own insurance. The Canadian Grain Commission is not subject to income tax.

Methodology and significant assumptions

The Future-Oriented Statement of Operations has been prepared based on the government priorities and plans described in the Departmental Plan.

The information in the forecast results for fiscal year 2017-18 are based on actual results as at November 30, 2017 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2018-19 fiscal year.

The main assumptions underlying the forecasts are as follows:

  • Fiscal year 2018-19 reflects revenues and expenditures on the basis of the Canadian Grain Commission’s 2018-19 Departmental Plan. The programs and services to be provided in 2018-19 remain substantially the same as 2017-18.
  • The Canadian Grain Commission proposes its new fees will come into effect on April 1, 2018, the start of fiscal 2018-19 (the base year).
  • The Canadian Grain Commission proposes it would base its fees for 2018-19 on annual average grain volumes of 34.400 million metric tonnes projected over five years
  • The Canadian Grain Commission proposes that annually, on April 1, it would adjust all its fees 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. Adjusting fees in this manner 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.
  • 2017-18 forecasted revenues are based on 35.979 million metric tonnes which is based on actual grain volumes handled from April, 2017 through to November, 2017 and volume projections for December, 2017 to March 2018.
  • The Canadian Grain Commission is currently working to address infrastructure renewal requirements to ensure its continued viability. This includes determining the approach to a major refit of its Grain Research Laboratory space and base building systems; investment in information technology; terminal elevator office upgrades and reconfiguration of leased spaces to ensure that the organization has the required infrastructure to deliver all programs and services and enhance client service.

These assumptions were adopted as of November 30, 2017.

Variations and Changes to the Forecast Financial Information

Although attempts have been made to forecast final results for the remainder of 2017-18 and for 2018-19, actual results achieved for both years are likely to vary from the forecast information presented. This variation could be material due to a number of factors, including environmental conditions.

In preparing this Future-Oriented Statement of Operations, the Canadian Grain Commission has made estimates and assumptions about the future. These estimates and assumptions may differ from actual results. Estimates and assumptions are evaluated and are based on experience and factors, including predictions of future events that are believed to be reasonable under the circumstances.

Factors that could lead to material differences between the Future-Oriented Statement of Operations and the historical statement of operations include the following:

  • economic conditions in relation to grain volumes may affect both the amount of revenue earned and the collectability of accounts receivable
  • further changes to the operating budget through additional initiatives or technical adjustments later in the year
  • the timing and amounts of acquisitions, disposals of property, plant and equipment and timing of leasehold improvements may affect gains/losses and amortization expense; and
  • the impacts of implementation of new collective agreements

Once the Departmental Plan is tabled in Parliament, the Canadian Grain Commission will not update its the forecasts for any changes in financial resources made in ensuing supplementary estimates. Any variances will be explained in the Departmental Results Report.

Summary of Significant Accounting Policies

The Future-Oriented Statement of Operations has been prepared in accordance with accounting standards in the Treasury Board of Canada Secretariat's Directive on Accounting Standards which are based on Public Sector Accounting Standards and Public Sector Guidelines issued by the Public Sector Accounting Board of the Chartered Professional Accountants of Canada and the Government of Canada Accounting Handbook. The presentation and results using the stated accounting policies do not result in any significant differences from the Public Sector Accounting Standards.

Significant accounting policies are as follows:

Measurement uncertainty

The preparation of this Future-Oriented Statement of Operations in accordance with accounting principles that are generally accepted in Canada requires management to make estimates and assumptions that affect the reported amounts.

The principal Future-Oriented Statement of Operations components subject to measurement, uncertainty include, the useful life of tangible capital assets, the variability of annual grain volumes from year-to-year resulting in variable revenue from fees, and expenses for employee vacation, severance benefits and employee termination benefits. Actual results could differ from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the future-oriented statement of operations in the year they become known.


Revenues are presented on an accrual basis and are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues as follows:

  • Revenues from regulatory fees are recognized in the accounts based on the services provided in the year.
  • Revenues that have been received where the Canadian Grain Commission has an obligation to other parties for the provision of goods, services or the use of assets in the future are considered as deferred revenue. These revenues are recognized in the period in which the related expenses are incurred. Deferred revenue is primarily for licensing fees which usually cover a 12-month period.
  • Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenues takes place.


Expenses are presented on an accrual basis as follows:

  • Expenses for the Canadian Grain Commission’s operations are recorded when goods are received or services are rendered, including services provided without charge for worker’s compensation, which are recorded as expenses at its estimated cost;
  • Vacation pay and compensatory leave are accrued and expenses are recorded as the benefits are earned by employees under their respective terms of employment;
  • Expenses also include provisions to reflect changes in the value of assets, including provisions for bad debt on accounts receivable, to the extent the future event is likely to occur and a reasonable estimate can be made.
  • Expenses also include amortization of tangible capital assets, which are capitalized at their acquisition cost. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset.

Employee future benefits

  • Employee severance benefits are accrued and expensed as employees earn these as stipulated in their collective agreements. These benefits are currently recorded through a year-end salary accrual based on a calculation of the actual severance liability owed per employee.
  • Canadian Grain Commission employees are covered by the Public Service Superannuation Act and the Supplementary Retirement Benefits Act. The Government of Canada's portion of the pension cost is included in the employee benefit charge assessed against the revolving fund. The actual payment of the pension is made from the Public Service Superannuation and Supplementary Retirement Benefits Accounts.
  • Current legislation does not require the Canadian Grain Commission to make contributions for any actuarial deficiencies of the Public Service Superannuation account.

Tangible capital assets

All tangible capital assets and leasehold improvements with a cost equal to or greater than $10,000 are capitalized at their acquisition cost.

Assets are amortized on a straight-line basis over their estimated useful lives, commencing in the month after acquisition, as follows:

Tangible capital assets
Scientific equipment 5 years
Office equipment and furniture 5 years
Operational equipment 10 years
Motor vehicles 5 years
Computer equipment and software 3 years
Leasehold improvements 5 years

Parliamentary Appropriations

The Government of Canada finances the Canadian Grain Commission through a combination of an ongoing Parliamentary appropriation, authority to re-spend fees collected, accumulated surpluses from prior years and a revolving line of credit of $2,000,000. The Canadian Grain Commission has not drawn on its line of credit since 2003-04.

Ongoing Parliamentary appropriation received for the Grain Quality Research Program and Internal Services in 2017-18, and the Grain Research Program and Internal Services in 2018-19 will be recognized as revenue of the fund. The government funding basis is used to recognize transactions affecting Parliamentary appropriations. The future-oriented statement of operations is based on accrual accounting. Consequently, items presented in the future-oriented statement of operations are not necessarily the same as those provided through appropriations from Parliament.

Items recognized in the future-oriented statement of operations in one year may be funded through Parliamentary authorities in prior, current, or future years. Accordingly, the Canadian Grain Commission has different net cost of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

Reconciliation of net cost of operations to requested authorities (in dollars)
Forecast results
Planned results
Net cost of operations before government funding and transfers (2,275,937) 4,303,572
Adjustment for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capitals assets (2,652,157) (2,514,041)
Services provided without charge by other government departments (97,435) (92,563)
Fee revenue earned but not received 2,636,385
Others (prepaid, severance, interests, etc) (239,717)
Total items affecting net cost of operations but not affecting authorities (352,924) (2,606,604)
Adjustments for items not affecting total expenses but affecting authorities:
Acquisitions of tangible capital assets 10,035,934 3,809,865
Increase due to deferred revenue (1,397,931)
Decrease in retroactive pay liability 2,261,494
Others (suspense, prepaid, advances, etc.) 552,445
Total items not affecting net cost of operations but affecting authorities 11,451,942 3,809,865
Requested authorities 8,823,081 5,506,833
Authorities requested (in dollars)
Forecast results
Planned results
Authorities requested
Vote 1: operating expenditures 5,405,742 4,846,955
Statutory amounts 3,417,339 659,878
Total authorities requested 8,823,081 5,506,833
Date modified: