Changes to grain act proceed

Budget goes to Senate | Canadian Grain Commission funding to decline

The government’s mammoth budget bill, with its changes to the Canadian Grain Commission, was approved and sent to the Senate in a raucous House of Commons vote last week.

Final approval could happen as early as this week before Parliament adjourns for a Christmas break that stretches into late January. 

The Senate agriculture committee already has completed and endorsed proposed changes to the Canada Grain Act, and the overall budget bill of more than 400 pages is expected to pass quickly in the Conservative-dominated chamber.

The bill sets up the grain industry for higher user fee charges while ending traditional mandatory services, including inward inspection between prairie elevators and terminals. 

Government funding for the grain commission will decline sharply and most of its funding will come from industry service payments.

The system to guarantee grain handler payments to producers will switch from the current bonding system to a mandatory insurance model.

Chief commissioner Elwin Hermanson told the Commons agriculture committee Dec. 5 that the commission changes are part of an historic grain sector policy overhaul that includes ending the CWB single desk.

“The grain sector is at a pivotal juncture when public policies and regulatory structures need to keep pace with rapid changes in the marketplace,” he told MPs a day after the budget vote, which led to swearing and near fisticuffs on the floor of Parliament.

Western Canadian Wheat Growers Association chair Gerrid Gust said that while recognizing the regulatory victories, the organization now has its sights set on other changes that are needed to help industry efficiency.

He told MPs the government should follow these steps:

  • Outlaw strikes and lockouts in the railway system. “In our view, rail services should be deemed an essential service.”

  • End union rules at the Port of Vancouver that stop workers from loading grain if it rains more than five millimetres in a day. It is considered a safety hazard and delays loading of waiting ships. “We understand that ships load grain in the rain in Portland, Oregon, and around the world,” Gust said. “There is no need for Canadian farmers to be put at a competitive disadvantage.”

  • Introduce tough legislation, expected this week, to force railways to meet service standards for shippers.

Meanwhile, Hermanson warned against arguments from some lobby groups that outward inspection at terminals sending grain to export should also be made voluntary.

Unlike inward inspection, outward inspection helps guarantee customers of the quality and identity of the grain they are buying, he said.

Outward inspection fees charged to the industry must increase as part of cost recovery, he added, but that is not a reason to make them voluntary at industry discretion.

Several prairie grain groups that support deregulation said industry should have a choice about whether they want the service.

Hermanson said mandatory outward inspection was cancelled in the United States in the 1970s, “and they had a wreck.” Mandatory U.S. outward inspection was reinstated.

“We just have to be very cautious that we don’t tamper with what has given us our Canada brand at the current time,” he told MPs.

He said the commission is now sifting through the results of consultations on the proposed new fee structure, which will be implemented Aug. 1. The new rules will be announced soon.

Many interveners said the government proposal to cover only $5 million of the commission budget as a public good should be sharply increased to lower industry costs.

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