Grain commission changes move one step closer

Services and responsibilities | Inspection of grain cars coming to port will cease, but the CGC will handle disputes

REGINA — Grain quality and farmer protection will remain part of the Canadian Grain Commission mandate, but the way its work is done, who pays and how much will change.

The commission will see significant changes over the next year as a part of the federal government’s budget reductions for 2013.

Commissioner Elwin Hermanson told commission committee members and industry groups during Canada’s Farm Progress Show held in Regina June 20-22, that his organization will be moving to a nearly complete cost recovery model and that a $44 million allocation from the government made for 2012-13 is the last major funding the CGC will receive.

The only likely exception will be part of the role of the Winnipeg grain laboratory, which is deemed to be important for the national good.

While this and other proposed changes are speculative and need to be approved by Parliament, they have a good chance of becoming law by year’s end.

Gordon Miles of the grain commission said an insurance plan would potentially replace the bond program that now assures grain company licensees are in compliance.

“It would save a lot of (CGC) work and those cost savings would be passed on,” he said.

Miles said the agency has been trying to reach sustainable funding for several years. Half of the current $80 million budget is made up of ad hoc funding from the government, with recovery by user fees covering $31 million.

Increases in user fees vary, with some primary grain dealer and grain elevator licences rising from $100 to more than $6,000 to meet the actual costs of inspection and certification.

“There is some push back on these, especially by smaller operations,” said Miles.

“Ninety-four percent of our activities are to support the industry, the rest can be reasonably called public good,” he said.

Genetically modified crop approvals as they relate to international trade are becoming a greater issue, and the commission will continue its role in research and defence of the Canadian industry with “sound science from our lab.”

Mandatory inward inspection of grain cars coming into port for export will cease. Grain companies can hire third party contractors to do the work on a shipment if it is necessary, and the commission would be available to settle disputes that may arise between parties.

Onsite weighing at port for non-producer cars would also stop, with the grain commission retaining oversight and some inspection duties.

Three commissioners now head the organization, which Hermanson said would drop to one.

“I hope that appointee would be very familiar with the industry, but that is up to the government,” he said.

Cuts are only part of the picture. The commission will be asking the government to approve an expansion of the grade and dockage inspection and verification system that protects producers. The service now applies only to export crops. Domestic sales to processing elevators as well as mills, ethanol plants and canola crushers aren’t covered.

Jim Stuart of the commission said that change would allow producers to use the agency to settle disputes or establish sample quality.

“We didn’t envision this an issue in the past. The industry has changed,” he said.

Containers are another area of change, with 15 percent of crop exports from Western Canada being handled in the metal boxes. The commission is asking that containers be added to its mandate, including can-stuffing yard inspections.

Stuart said the commission’s user fees haven’t changed since 1991, and its legislation has been amended only two times: 1941 and 1974.

“It’s time,” he said.

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