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.