Industry consultations | Canadian Grain Commission looking to generate $15 to $20 million more per year
It still remains to be seen whether the Canadian Grain Commission will reconsider plans to generate an additional $15 to $20 million per year by 2018 through increased user fees.
Spokesperson Remi Gosselin said in a recent email that the commission has completed another round of industry consultations and will consider stakeholder comments before submitting a formal proposal to Parliament later this year.
The grain commission posted a summary of stakeholder comments on its website at www.grainscanada.gc.ca/index-eng.htm in December.
Among other things, stakeholders suggested:
- CGC funding from the federal government, projected at $5.45 million per year beginning in 2014-15, is too low and should be increased to reflect the true value of CGC services that benefit the Canadian public.
- Government funding should be indexed for inflation and increased by 1.6 percent annually. Earlier proposals circulated by the grain commission indexed user fees to account for inflation but didn’t do the same for government funding.
- User fee increases proposed by the CGC are too high and place too great a burden on industry stakeholders, particularly primary grain producers.
- The commission should continue to look for other ways to streamline its operations and reduce operating costs. Many stakeholders recommended that the commission update its governance structure, modernize the Canada Grains Act and eliminate mandatory outward inspections of Canadian grain being exported abroad.
Eighteen written comments were submitted during the most recent round of the user-fee consultations, which concluded Nov. 30.
“All stakeholder comments will be taken into consideration when we make recommendations and submit a formal proposal to cabinet and Parliament regarding changes to our user fees,” said Gosselin.
“We would like to implement a new fee schedule for Aug. 1, 2013, the start of the new crop year.”
Updates to grain commission user fees have been in the works for several years.
The commission hopes that generating more revenues through user fees will reduce its reliance on federal government funding, which in recent years has exceeded $30 million a year.
New fees proposed by the commission could cost farmers and others in the grain industry an additional $15 to $20 million per year by 2018, over and above what they now pay.
At the same time, changes to grain commission services are expected to shave another $20 million from the commission’s annual operating costs.
The proposed changes to commission services will include:
- Eliminating mandatory inward inspection and weighing of grain by the CGC at terminal and transfer elevators.
- Eliminating the Grain Appeals Tribunal.
- Discontinuing elevator weigh-overs and eliminating registration and cancellation of elevator re-ceipts.
- Eliminating the transfer elevator class within CGC operations.
- Adopting a new insurance-based system to replace the grain commission’s bond-based security program that protects primary grain producers against financial losses in the event of grain company insolvencies.
If approved, the proposed changes would take effect Aug. 1.
Marlene Caskey, a farmer and director with the Canadian Canola Growers Association (CCGA), said efforts to streamline the commission will benefit everyone in the grain industry.
However, she urged Ottawa to account fully for the cost of grain commission services that benefit the entire Canadian population and not just farmers and others in the grain industry.
Caskey said government contributions of $5.45 million annually would amount to nine percent of the commission’s annual operating budget by 2017-18, while user fees would account for the remaining 91 percent.
“The proposed user fees are significantly higher than what farmers are currently paying,” Caskey said late last year.
“The CCGA’s position is that the public good pieces (should account for) closer to 25 percent (of CGC costs) rather than the nine percent currently being offered.”
Doug Robertson, president of the Western Barley Growers Association, said producers will absorb any additional fees imposed on the grain industry.
“There’s no sense in pussy footing around.… Any mandatory costs are going to be ultimately borne by farmers,” he said. “We’d also be in favour of (eliminating) outward inspection … or at least not having the Canadian Grain Commission responsible for that.”