CGC posts $100 million surplus

The surplus is a result of high export volumes — commission says a user fee reduction may be considered

The Canadian Grain Commission has built up a surplus of nearly $100 million since 2013-14 through excess user fees collected from Canadian grain farmers.

That surplus has prompted the Western Canadian Wheat Growers Association to call for surplus fees to be immediately returned to farmers.

In a Jan. 3 news release, the association called the excess funds a “massive and unnecessary surplus” and invited all western Canadian grain farmers to demand a refund and an immediate reduction in user fees.

The association has also launched an online petition at userfees.wheatgrowers.ca.

“With approximately $100 million of farmers’ hard-earned money having piled up into this enormous surplus, it’s time to immediately give growers a break and reduce these user fees,” said WCWGA president Levi Wood, who farms near Pense, Sask.

“User fees are supposed to help pay for (CGC) operations, but a nine figure surplus in user fees is shocking.”

The association said farmers pay user fees worth roughly $1.80 on every tonne of grain that’s delivered to an elevator.

Those fees are supposed to be used for inspection and weighing certification of grain being sold for export.

According to the wheat growers association, an average farmer who delivers 5,500 tonnes of grain to an elevator typically pays about $10,000 a year in CGC user fees.

The excess funds are partly the result of Canadian grain export volumes significantly exceeding industry expectations over the past four years.

“It’s a fair point that export volumes have been higher in the past few years than first estimated, so the volume of fees has also been much higher, but that’s no reason to now hoard farmers’ money,” said WCWGA director Matt Sawyer, who farms near Acme, Alta.

“However, it is a great reason to now reduce these user fees — which are clearly out of line for their intended purpose of those operations — and it’s time to refund the surplus, giving the money from growers back to the growers.”

Grain commission spokesperson Remi Gosselin confirmed that revenues collected through user fees have exceeded expenditures since the 2013-14 crop year.

He confirmed that a surplus of roughly $100 million has been accumulated over the past three and a half years. The commission will begin a review of its current fee schedule in early 2017 and will be consulting with stakeholders for ideas on how the accumulated surplus should be managed.

Gosselin said CGC user fees are set every five years.

The current schedule of fees was implemented in 2013-14 and is due to expire at the end of the 2017-18 crop year. A new fee schedule will be implemented at that time to cover 2018-23.

“We made commitments to our stakeholders that we would review our fees every five years, and we are doing that in relatively short order,” Gosselin said. “In addition to that, the CGC is examining potential options to use the accumulated surplus and that will include an assessment of stakeholders’ views on the various possibilities.”

Gosselin said upcoming consultations will include discussions on potential user fee reductions and methods of allocating the current CGC surplus.

He said the surplus is the result of high grain volumes and lower-than-expected expenses on programs financed through user fees.

The wheat growers association said it hopes grain growers will use its online petition to request an immediate reduction in user fees and a refund of the surplus.

“It’s been a tough year with the nasty weather we’ve had and lower commodity prices, so a fee reduction and refund will go a long way to help growers,” said Graeme Manness, an association director who farms near Domain, Man.

“And it is growers’ money, that’s why we’re asking our farming colleagues to join with us in calling for the reduction and refund of our hard-earned dollars back to us at the farmgate.”

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