Farmers will pay more in fees 
if CGC fare changes proceed


Proposed fee changes at the Canadian Grain Commission will cost the grain industry about an additional $20 million per year by 2018, a cost that will ultimately be borne by farmers, according to industry observers.

The grain commission released a new fee schedule Nov. 1, outlining services and proposed fees.

Grain growers, farm groups and others will have until Nov. 30 to weigh in on the proposed fee changes, which would be introduced gradually over a five-year period beginning next August.

The new fees, if implemented, will be part of a leaner grain commission that will collect more money from the industry and less from government.

The proposed increases are expected to boost the commission’s annual user fee revenues by $11 million in 2013-14, another $6 million in 2014-15 and an additional $1 million a year between 2015 and 2018.

If the fee increases proceed, the money collected through user fees would increase to $48 million in the 2013-14 fiscal year, up from an estimated $37.6 million a year now.

When fully implemented by late 2018, user fee revenues would account for more than $57 million per year in an annual grain commission budget of about $62.65 million.

Based on those figures, user fees would cover roughly 91 percent of the CGC’s total spending in 2017-18, up from less than 50 percent in the current fiscal year.

The government would continue to contribute nearly $5.5 million per year to CGC operations.

Remi Gosselin, spokesperson for the CGC, said steps aimed at increasing user fees and reducing spending will result in a leaner grain commission that offers fewer services and requires less government money to balance its budget.

Beginning next year, the number of fee-for-use services offered by the commission will be reduced to 50 from 125.

CGC spending will also be significantly reduced.

Expenditures of about $80 million per year will fall to about $70 million in 2013-14 and less than $60 million in 2014-15, according to the commission’s consultation notice, which is posted at www.grainscanada.gc.ca/consultations/2012/fees-frais/ufcpn-eng.htm.

Doug Chorney, president of Keystone Agricultural Producers in Manitoba, said his organization supports efforts to modernize the grain commission and eliminate unnecessary services and costs.

But he expressed concern about the amount of grain commission revenue derived through user fees.

Based on average annual grain volumes and CGC inspections performed on outward grain shipments during the past 15 years, the new user fees would generate $54.3 million in 2014-15, up from $37.6 million currently.

“You have to keep in mind … that any cost that goes to the grain companies or the exporters will be borne by producers ultimately,” said Chorney.

“I think some of the things that they’ve done to modernize the (grain commission) are … a good thing.”

“But if the difference between $54.3 million … and $37.6 million is all coming out of farmers’ pockets, then I’m concerned about that. That’s a pretty big number.

“I think producers should be paying attention to this closely and concerned about offloading costs to producers, especially for services that have a public benefit.”

Meanwhile, grain handling companies andthe Western Grain Elevators Association expressed disappointment that Ottawa’s efforts to revamp the CGC did not go further.

Initially, the CGC had estimated that new user fees would generate annual revenue of more than $87 million per year.

Under the proposed fees, annual user fee revenue based on typical grain volumes would generate $54.3 million, said Gosselin.

  • Andy

    “Beginning next year, the number of fee-for-use services offered by the commission will be reduced to 50 from 125.”

    Fees are increasing, services are decreasing. For services the CGC will no longer provide at terminal elevators like Inspection and Weighing, Producers and smaller grain shippers will be at the mercy of the terminal elevator and the company hired by the terminal to grade cars. Unbiased? A Producer would be crazy not to pay for a CGC reinspect or weight investigation (oops no more weight investigations). Saving money? So the Producer now has to pay for the company the terminal has hired and the CGC…

    Producers shouldn’t feel like they are the only group being taken advantage of… On outward Weighing, “Monitoring” is being replaced by “Oversight”. Outward weigh fees will be reduced to 16 cents a ton from 27 cents a ton. The only problem is oversight may as well be from 30,000 feet! Monitoring had CGC weigh staff on site monitoring the route, real time, ensuring weighed grain is shipped grain. Oversight is taking the elevators shipped weight and printing it on the “Certificate Final”. A fee without a service?

  • Ronald

    There will be no more CGC audits.
    The inward weighing and inspection services will be axed.
    Outward grain inspection fees will be increased by over double the current costs.
    Farmers will be paying far more money for lesser levels of service.
    Virtually all of the services offered by the CGC, those which remain…
    Will be heavily inflated.

    Will the new CGC service structure be as efficient as the current standard?
    Not even remotely close.
    Canada’s reputation as one of the world’s leading grain exporters shall be compromised and badly tarnished.

    Why do the federal government and the CGC expect the farmers to pay more for less? This is utter madness.