Operating context and key risks

Operating context

External Environment

The Canadian grain sector has experienced a period of significant transformation in recent years. These changes include ending the Canadian Wheat Board’s single desk for wheat and barley marketing and the elimination of Canadian Grain Commission provided inward inspection and weighing services. Significant consolidation of grain elevators and investment spending related to grain handling facilities and grain processing facilities has also occurred.

The Canadian grain sector faces uncertainty regarding access to international markets due to heightened market sensitivity related to grain-quality and safety issues. There is increasing emphasis on selling grain by specification, ongoing transition toward analytical assessment of grain grading factors, as well as niche-marketing and increased value-added processing. Additionally, there are concerns in some international grain markets that the intrinsic quality of Canadian grain has declined.

The production capacity of the grain sector has grown beyond expected predictions. Canadian crop yields have increased by approximately 3% per year over the last 30 years due to new technologies and agronomic practices. Canadian grain production between crop years 2007-08 to 2016-17 averaged 79.19 million metric tonnes (MMT), whereas production was 85.39 MMT in crop year 2015-16, and forecast to be 93.05 MMT in crop year 2016-17 and 93.15 MMT in crop year 2017-18. Canadian grain exports from Canadian Grain Commission-licensed grain elevators averaged 34.75 MMT between fiscal years 2007-08 to 2016-17, whereas exports were 42.15, 41.60 and 39.96 MMT in 2014-15, 2015-16 and 2016-17, respectively.

Internal Influences

The Canadian Grain Commission’s funding history has influenced its ability to refresh its capital and infrastructure. On August 1, 2013, amendments to the Canada Grain Act and updated fees came into force after being frozen for over 20 years. Prior to updating fees in 2013, prolonged periods of ad hoc and unstable funding resulted in calculated or deliberate under-investment in the Canadian Grain Commission’s capital, facilities and infrastructure, programs and services, and information management and technology. The continued transformation of the Canadian grain sector is also increasing pressure on the Canadian Grain Commission’s aging infrastructure, equipment, research and technology. For example, there is greater demand for timely specialized analytical testing and quality assurance services which require sufficient space for specialized equipment and technology.

The Canadian Grain Commission has unique human resource challenges and opportunities due to its non-traditional and highly technical workforce where many of its employees are dedicated to scientific research and grain inspection. The average age of Canadian Grain Commission employees is 45 years and approximately 26.1 percent of its workforce will be eligible to retire in 5 years or less. These factors have the potential to significantly affect the continuity of corporate knowledge, capacity, and stakeholder relationships.

Key risks

Risk management is an essential part of strategic planning and decision making at the Canadian Grain Commission and the Canadian Grain Commission has established a process to identify, monitor, mitigate and manage corporate level risk. Strategic planning includes an environmental scan, identification of emerging threats and 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 Canadian Grain Commission in delivering its Departmental Results and programs.

The Canadian Grain Commission operates in an environment where the needs of Canadian farmers and the grain sector continue to evolve rapidly as outlined in the 2018-19 Departmental Plan Operating Context. Feedback from farmers and grain handlers, domestic and international grain buyers and processors, and other domestic and foreign government entities has proven to be a reliable early indicator of risk arising from developments in our external environment. Ensuring that Canadian grain is dependable and safe while balancing rapidly evolving grain sector needs is paramount to the organization going forward. The Canadian Grain Commission is also committed to ensuring that aging infrastructure, equipment, and technology do not compromise program delivery through prioritized funding to address key investment projects. The Canadian Grain Commission is also focused on its capacity to respond to opportunities while delivering upon its core mandate through the business planning process.

A key corporate opportunity is to collaborate with stakeholders to effectively and efficiently deliver Departmental Results and promote the value of the Canadian Grain Commission programs and services.

Mitigating risks and capitalizing on opportunities will allow the Canadian Grain Commission to successfully deliver upon its Departmental Results and demonstrate clear benefits to the grain sector and Canadians.

The Canadian Grain Commission has an Integrated Risk Management Working Group that includes representatives from all Canadian Grain Commission programs and divisions. The group meets regularly to identify and assess the Canadian Grain Commission's risks and risk response strategies. Information and recommendations from the Integrated Risk Management Working Group are forwarded to Canadian Grain Commission senior management for review and action as necessary (e.g. implementation of additional mitigation strategies and/or contingency plans).

Key risks
Risks Risk response strategy Link to the department’s Core Responsibilities Link to mandate letter commitments and any government wide or departmental priorities
Ensuring Canadian grain is dependable and safe while balancing rapidly evolving grain sector needs.
  • The grain sector is increasingly requesting flexibility to use specific non-standardized grain quality and safety parameters, which can be at odds with the current grain quality assurance system. The Canadian Grain Commission must ensure that Canadian grain is dependable and safe while balancing requests for quality system flexibility.
The following mitigation strategies have been identified or are underway:
  • Implement the 2018-19 Departmental Plan key priorities and initiatives aimed at ensuring Canadian grain is dependable and safe while continuing to meet the evolving needs of the grain sector. This includes updating the grain grading system, modernizing wheat classes, and assessing and refining regulatory coverage.
  • Investigate and integrate new technologies, policies, processes and protocols into programs and services.
  • Residual risk will be monitored closely and strategies and initiatives revised as required.
Grain Regulation Linked to Canadian Grain Commission departmental priority:
  • Strengthening the quality and dependability reputation of Canadian grain.
Aging infrastructure, equipment, and technology.
  • Innovation in science and technology and constrained investment have increased pressure on the Canadian Grain Commission’s aging infrastructure, equipment, and technology. The Canadian Grain Commission is expected to maintain modern scientific infrastructure and equipment that reflect advancements in grain science and international requirements in order to deliver upon its mandate and underpin the grain quality assurance system.
The following mitigation strategies have been identified or are underway:
  • Implement the 2018-19 Departmental Plan key priorities and initiatives to re-invest in Canadian Grain Commission facilities, infrastructure, and technology to support innovative programs and services and science-based results.
  • Prioritize funding through the Canadian Grain Commission’s Investment Plan to address aging infrastructure, equipment, and technology through high priority capital repairs; and implementing an inspection schedule.
  • Work with Agriculture and Agri-Food Canada and central agencies to replace and refresh aging infrastructure. This includes re-investing in the Grain Research Laboratory, terminal elevator upgrades and leased spaces to support innovative programs and services for the grain sector.
  • Residual risk will be monitored closely and strategies and initiatives revised as required.
Grain Regulation Linked to Canadian Grain Commission’s mandate.
Capacity to respond to opportunities while delivering upon the core mandate.
  • The grain sector continues to evolve rapidly and influence the regulatory and economic environment within which the Canadian Grain Commission operates.
  • The Canadian Grain Commission must continuously innovate to operate efficiently and deliver effective high quality services to the grain sector.
The following mitigation strategies have been identified or are underway:
  • Effectively manage and implement the key priorities outlined in the 2018-19 Departmental Plan to ensure the Canadian Grain Commission continues to provide value by meeting the evolving the needs of farmers and the domestic and international grain sectors while ensuring the dependability and quality reputation of Canadian grain. This includes analyzing the Canadian Grain Commission’s regulatory framework, strengthening technological innovation of information management systems, and assessing scientific analytical methods and technologies.
  • Ensure efficient operations and service delivery through the business planning process. This includes; the Investment Plan; implementing an Integrated Risk Management Framework, renewing the Corporate Risk Profile, and implementing the Departmental Results Framework to replace the Program Alignment Architecture.
  • Residual risk will be monitored closely and strategies and initiatives revised as required.
Grain Regulation Linked to Canadian Grain Commission departmental priority: Innovating Canadian Grain Commission programs, services and the regulatory framework.
Date modified: