A broad and powerful coalition of business groups, including farmers and farm supply manufacturers, has formed to fight federal service fees.
The group last week issued a study of the impact of last year’s $1.67 billion in federal charges. It said the fees reduced economic activity and cost “at least 23,000 jobs.”
The coalition called on Ottawa to freeze user fees until the system is revamped, costs justified, efficiencies introduced and accountability injected into the system.
“User fees were supposed to create better services and more efficiencies,” said Garth Whyte of the Canadian Federation of Independent Business. “Instead, the policy has become nothing more than a tax grab.”
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Fees charged by such agriculture-related organizations as the Canadian Food Inspection Agency and the Pest Management Regulatory Agency figured prominently in complaints made by coalition representatives at an Ottawa news conference Jan. 7.
The Canadian Federation of Agriculture, the Canadian Animal Health Institute and the Crop Protection Institute of Canada are members of the coalition.
Agriculture Canada, with charges of $122 million in so-called cost recovery fees in 1996-97, including regulatory fees of $77 million, was identified as one of five major federal departments involved in charging industry for its services.
Sally Rutherford, of the CFA, said the agriculture department has kept a lid on new fees for the past several years.
“I think agriculture is one of the better ones,” she said in an interview after the news conference. “But for farmers, the real issue is the cumulative impact of fees charged not just by agriculture but by others as well.”
Jayson Myers of the Alliance of Manufacturers and Exporters of Canada cited his “personal favorite” of an inappropriate fee.
Transport Canada charges thousands of dollars in ice-breaking fees for Lake Superior even though icebreakers do not work on the lake. Customers using the lake, including grain shippers, have to absorb that cost.
The coalition, claiming to represent businesses that employ 2.2 million Canadians and create $330 billion in economic activity, said it will lobby politicians and the federal finance department this month to include in the February budget an announcement that service fees are frozen until the system is reviewed and improved.
Myers said businesses do not oppose user fees and supported the government when it launched its cost recovery program in 1994 as part of the fight against the deficit.
At the time, government pro-mised one result would be more efficient services. Since then, the cost of fees to business has grown sharply, new fees are introduced without clear justification or analysis of their impact and no one in government can be held responsible for the overall impact, said Myers.
“Treasury Board has allowed cost recovery to become all but an orphan program,” Ottawa consultant Doug Blair wrote in a report for the coalition.
And the result has not always been the promised better service. The average time for a veterinary drug application decision is 713 days – far slower than it was five years ago – and pesticide registrations “are nowhere near the 18-month turnaround promised.”
