Elwin Hermanson, chief commissioner of the Canadian Grain Commission, said he looks forward to the day when his agency has stable funding.
That would involve increasing fees the commission charges for services it provides to the grain industry.
“It is no secret that finance (the finance department) would like us to derive more of our revenue from service fees and not from government,” Hermanson said. “I can tell you that just about everyone in the industry and all political parties recognize that some changes are required but there is as yet no agreement on what that should be.”
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In the March federal budget, finance minister Jim Flaherty ann-ounced a two-year, $51.7 million contribution to the commission to fill the gap between costs and inadequate revenue because service fees have been frozen since the early 1990s, but costs have not.
Once the federal budget is approved by Parliament, the commission will be able to pencil into its business plan the programs and employees.
“Not many people are happy with the uncertainty of our funding and I am not,” said Hermanson.
“It has been the government’s intention to see that our situation get rectified but it hasn’t happened yet.”
The Conservative government introduced legislation in the last Parliament to amend the Canada Grain Act and the rules governing the CGC but it met strong opposition and died when Parliament was dissolved for the 2008 election. Critics said it was a blueprint for deregulation, reduced protection and increased costs.
In the March 4 budget, the Conservative government appeared ready to tackle the issue again.
“The government remains committed to modernizing the Canadian (sic) Grain Act and the operations of the Canadian Grain Commission,” it said.
CGC service fees were frozen in the mid-1990s by a Liberal government as a gesture to farmer complaints but as costs have risen, annual federal subsidies have been needed.
“It is just not a good situation to be dependent on ad hoc payments that you can’t really count on until they are announced and then passed,” said Hermanson.
This year, in addition to extending the subsidy for another two years, the Conservative government imposed the same restraints on the grain commission that the rest of the government faces. Operating budgets will be frozen for at least three years to fight the deficit.
For the CGC, the government projects a budget frozen in the $78 million range until 2012-13. Funding for staff positions will be frozen in the 650 range for the three years.
Hermanson said that comes as the commission faces more pressure to assure Canadian grain customers that the products they are buying are safe.
“This has always been part of our mandate but in recent years, product safety concerns have become much more of a priority and we definitely have had to put more resources into that aspect of our job,” he said.
Even if the commission eventually receives permission to increase service charges, it will never have completely stable funding.
Hermanson noted that if the formula returns to a 50-50 government–private balance, expected funding will continue uncertain because fees from industry services depend on the size of the annual grain crop.
