The Canadian Grain Commission is asking Ottawa to allow a sharp increase in cost-recovery fees to take effect April 1, 2012.
If approved by government, it would cost farmers tens of millions of dollars in higher fees.
In a July 8 interview, federal agriculture minister Gerry Ritz said he will wrestle with the question of how many commission costs provide a producer or industry benefit that should be charged to farmers and the industry and how many provide a “social good” that should be picked up by taxpayers.
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federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
He acknowledged the pressure is on in Ottawa to reduce government spending. In the 2011-12 year, the government is promising more than $30 million to the CGC to cover a deficit.
Ritz said the government plans to avoid charging the full amount to the industry.
“What I hear as a politician is there’s some social good, there’s some that is cost-benefit for farmers. What we have to do now is walk that tight rope to decide which is which and come up with a package that addresses both of those issues.”
With cost-recovery fees frozen for the past two decades, the grain commission is under-funded, chief commissioner Elwin Hermanson said in a July 7 interview.
“We are asking for a sustainable funding model that does not require this annual (funding) request to Ottawa,” he said. “Ideally it would include increased cost recovery fees but if not, then a multi-year commitment from Ottawa for funding until the fee issue is resolved.”
After consultations last spring, the commission published the results of feedback that indicated pushback from producers and companies against the idea of sharp fee increases.
The commission says that full cost recovery would increase fee revenue and industry costs 150 percent from $37 million to $91 million.
Many in the industry wanted the Canadian Grain Commission to be reformed before fees are increased and others suggested any fee increase be phased in over three to five years.
Ritz said department officials are looking at changing the Canada Grain Act but he was non-committal.
One potential change would be to end inward inspections and change bonding requirements for grain companies. Another would be to decide if changes in the commission mandate are necessary because of government plans to end the Canadian Wheat Board single desk Aug. 1, 2012. Ritz would not commit to legislative changes to the commission during this parliamentary session.
