Inspection, weighing and certification of export vesselsObjectives

Inspection, weighing and certification ensure that bulk grain exports meet the quality and quantity specifications of the buyer and seller.

These activities support the Canadian Grain Commission (CGC)’s mandate, which is to ensure a dependable commodity for domestic and export markets.

How it works

Inspection f CGC inspectors provide inspection services onsite at 36 licenced terminals in Canada. Operations vary greatly across the country depending on terminal activities, ranging from seasonal to continuous 24/7 operations.

f Automatic sampling systems approved by the CGC deliver official samples to the CGC inspection office. CGC grain inspectors monitor the export grain flow for potential contaminants, live insects or quality issues.

f CGC grain inspectors perform an official incremental analysis every 2000 tonnes and provide the results in real time to the terminal operator. The terminal operator may rely on that inspection information to adjust vessel loading to meet contract specifications, including the blending of quality factors. Vessels are generally in the 35,000 to 60,000 tonne range.

f CGC grain inspectors provide analysis in relation to the contract specifications agreed to between the buyer and the seller. This can be based on a statutory grade, a non-statutory list of specifications or a combination of the 2.

f The CGC prepares an official composite sample that is retained as a representation of the cargo.

Weighing f Since 2012, the CGC has adopted an oversight model for official weighing and CGC weighing staff are no longer based in terminal elevators. Terminal operators are required to weigh grain in accordance with a Vessel Loading Standard for Official Weighing published by the CGC.

f Terminal operators weigh grain using scales that are approved by the CGC under the authority of Measurement Canada, which is an agency of Innovation, Science and Economic Development Canada.

f When vessel loading is complete, the terminal operator provides a package of information, which substantiates the weight of the cargo to the CGC. The CGC thoroughly reviews the package and conducts any necessary followup in order to validate the official weight.

f The CGC also audits terminal weighing operations and has access to digital recording devices that record terminal weighing activity.

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Certificate FinalOnce the official grade has been determined or specifications are met and the official weight has been validated, the CGC issues an official inspection certificate, referred to as the Certificate Final, to the exporter.

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How it works

Analytical testing f The CGC maintains analytical laboratory capacity in several ports across Canada. When requested by the exporter, CGC technicians perform analytical tests on a portion of the official cargo sample. Analytical testing is available for many factors, including:

t Falling Number

t chlorophyll content

t wet gluten

f For certain tests of higher complexity, the analysis must be conducted at the CGC’s Grain Research Laboratory in Winnipeg, Manitoba.

f The results of CGC analytical tests are reported on letters of analysis issued to the exporter.

Monitoring and statements of

assurance f A portion of each official composite vessel sample is used by the CGC for export monitoring on a variety of grain quality and grain safety attributes.

f This science-based monitoring produces large multi-year datasets and enables the CGC to generate statements of assurance, respecting the aggregate quality and safety of Canadian grain exports, which are made available to exporters. These records also allow for the CGC to support market access.

Current Canada Grain Act (CGA) authority:

f The Canada Grain Act and Canada Grain Regulations generally require that all grain discharged from terminal elevators be officially inspected, weighed and certified.

t These requirements do not apply to shipments from one terminal to another (Canada Grain Act section 70.3) nor do they apply to domestic shipments or shipments to the United States (Canada Grain Regulations section 49).

f Many sections of the Canada Grain Act and Canada Grain Regulations specifically pertain to our objectives. Some of the key elements from the Canada Grain Act include:

t section 15.1, which enables the CGC to issue any certificate or other document setting out any information that the CGC considers necessary to facilitate the export of any grain

t subsection 32 (1), which requires the provision of an inspection certificate when an official inspection takes place

t section 33, which requires that an inspection certificate issued when grain is discharged from a terminal elevator be transmitted with the shipping documents relating to the grain

t section 56, which requires terminal elevators to install and maintain equipment deemed necessary by the CGC for official inspection and weighing

t subsection 70.3 (1), which requires official inspection and weighing immediately before or during the discharge of grain from a terminal elevator.

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Quick facts

Licensed terminal elevatorsThere are currently 36 licensed terminal elevators in Canada where the CGC provides onsite official inspection for vessels.

f Elevators in Prince Rupert and Vancouver (British Columbia) and the city of Québec (Quebec) are permanently staffed.

f All other locations are serviced by crews dispatched from the eastern regional office in Montréal (Quebec) or service centres in Hamilton and Thunder Bay (Ontario).

f The CGC employs 175 to 200 staff in regional offices, which are primarily dedicated to inspection, weighing and certification.

Prince Rupert

VancouverMontréal

Churchill

Thunder Bay

Baie-Comeau

Hamilton

Goderich

Owen Sound

Sarnia

Windsor

Johnstown

Oshawa Halifax

Port Colborne

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Surrey 28

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668

Port-Cartier

Québec

Trois-Rivières

Sorel

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Official inspection/weighing volumesOfficial inspection/weighing volumes have risen considerably over the past decade:

Calendar year Tonnes (MMT)

2010 28.82011 28.82012 29.42013 30.62014 38.02015 37.42016 37.62017 38.22018 39.52019 38.72020 47.5

CGC inspection and weighing staff enter information into an electronic system used to calculate and communicate interim inspection results in real time to clients and generate statistics.

Certification and documentation The CGC issued 20,150 documents in 2019/20 crop year of which 2466 were Certificate Finals.

The certificate of quality is generally a requirement for funds to transfer from the buyer to the seller.

What is the difference between composite loading and incremental loading?Under incremental loading, every increment (typically 2000 tonnes) of an export parcel must meet the established grade or specifications of the contract. Under composite loading, only the average of the increments must be met. The option for composite loading was introduced by the CGC in 2013 and today virtually all loading is composite. As these loading procedures are not specified in either the Canada Grain Act or Canada Grain Regulations, adjustments can be made at the discretion of the CGC.

Frequently asked questions

Are exporters required to export on the basis of statutory grades?No. The Canada Grain Act and CGC allow exporters to sell based on statutory grades, specifications or some combination of the 2. Approximately 85% of shipments are certified on the basis of statutory grades.

Is the CGC involved directly in negotiations between Canadian exporters and foreign buyers?No. Canadian exporters negotiate sales to foreign buyers and establish the terms of quality and quantity. They also negotiate what combination of CGC and private sector services and certifications will be provided. The CGC provides certification to Canadian exporters, not overseas buyers.

What are the inspection and weighing fees and how are they calculated?

f Mandatory CGC inspection and weighing fees are a combined $1.48 per tonne for the 2020-21 fiscal year.

f CGC fee revenues fund all grain inspection, weighing and certification costs, as well as the infrastructure and internal services costs that support these activities. Fee revenues also support a portion of the costs of the CGC’s Grain Research Laboratory.

Who pays the fee for CGC inspection and weighing services?Terminal elevator operators.

How are private inspection companies involved?

f Large international private sector quality assurance providers are active at ports. These companies provide various services including grain inspection, analytical testing and certification.

f Terminal operators or grain exporters obtain these services based on their business requirements. These companies are also often involved at other points in the supply chain, including at primary elevators or at destination in overseas markets.

f In many respects, activities of grain exporters, terminal operators, the CGC and private sector quality assurance providers are integrated. For example, the CGC routinely provides portions of samples to third parties, exporters often present a combination of CGC and private documentation to buyers and there are informal mechanisms aimed at aligning results.

Does the CGC provide oversight of third party inspection companies?No. As these companies do not provide official services, the CGC does not oversee their export inspection, weighing or certification. Their activities are additional to legislated requirements.

85 %STATUTORYGRADESSTATUTORYGRADES

Incremental Composite

Incremental Composite

Alternatives previously considered

Strengths of the current approach

f The CGC adjusted from onsite weighing activity to weighing oversight in 2012.

f In 2013, the CGC conducted limited and targeted consultations on an oversight framework that involved:

t accreditation of third-party companies

t the designation of the inspectors working for those companies

t methods of determining their competencies

t an audit and monitoring program

At the same time, the CGC consulted on an alternative funding source that would have become a broadly applied deduction on all farmer deliveries into the licensed handling system. These alternatives were not pursued because the alternative funding approach was considered to be a non-viable option to fund an oversight model.

f The CGC has also reviewed oversight options and mechanisms in use in other sectors and jurisdictions.

f There are rigorous training and development programs for CGC inspectors, specialists and other staff.

f The CGC is seen as an impartial and unbiased service provider. Services and assurances provided by the government are preferred in certain destination markets, particularly on issues of market access or safety.

f When one central organization undertakes the comprehensive collection of samples and data, this allows the provision of additional services (e.g. monitoring to enable statements of assurance). The data generated by the CGC is available to stakeholders, which benefits the entire sector. No one private player would individually undertake all of these additional services.

Potential opportunities for improvement

f Improved or formalized coordination between the CGC and private service providers could help address real or perceived duplication of services

f Improved alignment of mandated services with commercial demand

f Amended service fees that do not need to cover costs beyond the direct costs of service provision

ApproachesBased on other regulatory approaches used across government, there are 3 broad approaches that could be considered in looking at alternatives to the current inspection and certification requirements:

f The CGC continues its role as the official service provider for Canadian grain exports with a focus on the modernization of CGC service approaches. This could include investments to address client concerns, such as operational capacity constraints, timeliness of analytical services and the digitization of certification.

f The CGC withdraws from direct service provision and reorients itself to oversee and approve private sector quality and quantity assurance providers. This would presume a continued requirement within the Canada Grain Act for official inspection and weighing of grain exports and enabling authority for the CGC to play an effective oversight role.

f The CGC fully withdraws from service delivery, without any residual role in oversight. The CGC could reorient itself to become a more focused regulatory body with the requisite authority access the data, grain samples and information required to support regulatory standards and international market access.

For more information, visit grainscanada.gc.ca.