Notes to the Future-Oriented Statement of Operations (unaudited)
1. Authority and purpose
The Canadian Grain Commission Revolving Fund (“CGC”, “the Revolving Fund” or “the Fund”) derives its authority from the Canada Grain Act (CGA). The CGC’s mandate as set out in the CGA 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.
To achieve its mandate effectively, the CGC implemented the Departmental Results Framework (“DRF”) and Program Inventory (“PI”), as required by the Treasury Board Policy on Results, effective April 1, 2018. The CGC’s core responsibility is Grain Regulation: to regulate grain handling in Canada and to establish and maintain science-based standards for Canadian grain. Internal Services supports this core responsibility.
The CGC was established under Appropriation Act No. 6, 1994-1995. The Fund has a continuing non-lapsing authority from Parliament to make payments out of the Consolidated Revenue Fund for working capital, tangible capital acquisitions and temporary financing of accumulated operating deficits and drawdown authority of $2,000,000.
The CGC has informed Treasury Board to access its net authority provided through the Annual Reference Level Update and Business Plan.
Funding for fiscal years 2025-26 and 2026-27 includes a combination of an ongoing appropriation and authority to re-spend revenues collected from fees. Based on the current level of appropriation, in fiscal year 2026-27, the CGC plans to recover approximately 84 percent of its costs through fees. In accordance with the Government’s policy on self-insurance, the CGC does not carry its own insurance. The CGC is not subject to income tax.
2. Methodology and Significant Assumptions
The Future-Oriented Statement of Operations has been prepared based on the government priorities and plans as described in the 2026-27 Departmental Plan.
The information in the forecast results for fiscal year 2025-26 is based on projected expenditures to March 31, 2026, taking into consideration changes to grain volumes handled. The CGC has forecasted the planned results for the 2026-27 fiscal year.
The main assumptions underlying the forecasts are as follows:
- Fiscal year 2026-27 reflects revenues and expenditures based on the CGC’s 2026-27 Departmental Plan. CGC programs and services for 2026-27 remain substantially the same as 2025-26. Additional expenditures to support strategic initiatives are expected for 2025-26 through to 2026-27.
- All CGC fees will adjust annually for inflation, based on the April All-items Consumer Price Index for Canada, on April 1 to be consistent with the Service Fees Act (SFA). Adjusting fees in this manner is consistent with what other Government departments will be required to do under the SFA. Although the consumer price index varies from year to year, the average is within acceptable limits, and the annual increase will limit the need for CGC fee amendments going forward. The annual increase will sustain service standards for grain quality, quantity and safety assurance, producer protection and grain transaction integrity. The CGC’s fees will increase by 1.7% for 2026-27.
- Fiscal year 2025-26 total revenues are forecast to be $62.4 million based on 44.8 million metric tonnes, which is based on actual grain volumes handled from April 2025 through to September 2025 and volume projections for October 2025 through to March 2026.
- Fiscal year 2026-27 total revenues are forecast to be $59.4 million based on 41.6 million metric tonnes, $3.1 million lower than 2025-26 forecasted revenues. Planned revenues for 2025-26 were originally planned to be $58.4 million but were adjusted due to higher grain volumes realized in the first half of fiscal 2025-26 from accelerated grain purchases prompted by uncertainty related to tariffs.
- Fiscal year 2026-27 spending has returned to levels consistent with the service fee framework.
These assumptions were adopted as of September 30, 2025.
3. Variations and Changes to the Forecast Financial Information
Although attempts have been made to forecast final results for the remainder of 2025-26 and for 2026-27, 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 CGC 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 related to grain volumes, specifically the impact of weather conditions on revenue, may affect both the amount of revenue earned and the collectability of accounts receivables
- 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
- The impacts of implementation of new collective agreements
Once the Departmental Plan is tabled in Parliament, the CGC will not be updating the forecasts for any changes in financial resources made in ensuing supplementary estimates. The Departmental Results Report will explain any variances.
4. 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 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:
a. Measurement uncertainty
The preparation of this Future-Oriented Statement of Operations, in accordance with Canadian generally accepted accounting principles, 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 estimated 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.
b. Revenues
The CGC presents revenues on an accrual basis and revenues are recognized when (or as) the performance obligation is satisfied:
- Revenues from regulatory fees are recognized in the accounts at a point in time based on the services provided throughout the year.
- Revenues that have been received but where performance obligation is not yet satisfied, such as for the provision of goods, services or the use of assets in the future, are presented as deferred revenue.
- Licensing fees are recognized as the performance obligation is satisfied over a period of time, typically a 12-month period.
- The CGC accounts for other revenues in the period in which the underlying transaction or event that gave rise to the revenues takes place.
- Parliamentary appropriations are non-exchange transactions that are recognized as revenue in the Fund annually.
c. Expenses
The CGC presents expenses on an accrual basis which, unless otherwise disclosed, are recognized in the period they are incurred:
- Expenses for the CGC’s operations are recorded when goods are received or services are rendered, including services provided without charge for workers’ compensation, which are recorded as expenses at its estimated cost.
- Vacation, overtime and compensatory leave are expensed as the benefits accrue to 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.
d. Employee future benefits
- The accumulation of severance benefits for voluntary departures ceased for applicable employee groups. The obligation for employees who did not withdraw benefits is calculated using information derived from management's estimate of the liability.
- 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 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 CGC to make contributions for any actuarial deficiencies of the Public Service Superannuation account.
- Employees are permitted to accumulate unused sick leave. However, such leave entitlements do not vest and may only be used in the event of illness. Unused sick leave on employee termination is not payable to the employee. No amount has been accrued in these financial statements, and payments of sick leave benefits are included in current operations as incurred.
e. 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 they are put into service, as follows:
| 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 |
5. Parliamentary appropriations
The CGC is financed by the Government of Canada through a combination of an ongoing Parliamentary appropriations, the authority to spend fees collected, accumulated surpluses from prior years and a revolving line of credit of $2,000,000.
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 1 year may be funded through Parliamentary authorities in prior, current, or future years. Accordingly, the CGC 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:
| Forecast results 2025-26 | Planned results 2026-27 | |
|---|---|---|
| Net cost of operations before government funding and transfers | 13,991,670 | 19,961,709 |
| Adjustment for items affecting net cost of operations but not affecting authorities: | ||
| Amortization of tangible capitals assets | (3,624,986) | (3,624,986) |
| Services provided without charge by other government departments | (69,811) | (67,538) |
| Fee revenue earned but not received | ||
| Others (prepaid, severance, interests, etc.) | ||
| Total items affecting net cost of operations but not affecting authorities | (3,694,797) | (3,692,524) |
| Adjustments for items not affecting net cost of operations but affecting authorities: | ||
| Acquisitions of tangible capital assets | 10,063,866 | 8,014,000 |
| Increase due to deferred revenue | ||
| Others (suspense, prepaid, advances, etc.) | ||
| Total items not affecting net cost of operations but affecting authorities | 10,063,866 | 8,014,000 |
| Requested authorities | 20,360,739 | 24,283,185 |
| Forecast results 2025–26 | Planned results 2026-27 | |
|---|---|---|
| Authorities requested | ||
| Vote 1: operating expenditures | 6,340,625 | 6,088,821 |
| Statutory amounts | 14,020,114 | 18,194,364 |
| Total authorities requested | 20,360,739 | 24,283,185 |