OTTAWA (Staff) – Government food industry cost-recovery fees are generating too little money to maintain existing service levels, a senior Agriculture Canada bureaucrat said recently.
Art Olson, assistant deputy agriculture minister, told a House of Commons committee that government cost-recovery efforts are falling far short of the mark.
In the current government financial year, the goal was to collect $56 million in fees from the food production and inspection branch. Expected revenues will total only $34 million.
Olson said that means the department will have to reduce staff and service to meet the budget.
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The senior departmental official spoke after a Commons committee meeting during which farm industry representatives complained cost recovery in Canada is far higher than in the U.S. and is making the industry less competitive.
Minimal impact
Olson disagreed, arguing the overall impact on the Canadian industry is not worse than it is in the United States.
He said cost recovery in Canada rests on an equitable sharing among sectors, based on risk. In the U.S., some sectors have been spared while others have been hit hard with fees.
“It really comes down to how you allocate resources,” he said. “Do you do it through demand for services or do you do it through a market forces tool?”
David Miller from Treasury Board said there is no expectation that the food industry will pay 100 percent of the cost of services provided. But he said there is a need for the full cost of the service to be identified so the industry knows how much benefit it is receiving.
The industry has complained the government has yet to set a clear and reasonable formula for deciding what is public benefit and what is private benefit when it sets user fees.
Olson said since the government began this round of cost recovery fee setting in 1994, there has been extensive consultation with the industry, “over 400 separate meetings … with stakeholders.”
