Lobby wants Ottawa to pay 25 percent of CGC expenses
Representatives of the grain and oilseed sectors say they plan to resist Canadian Grain Commission proposals this month to sharply raise user fees.
They will lobby for the government to pick up a larger share of commission costs because it provides a “public good.”
They will also argue for a reduction in mandatory services that the commission still plans to provide in future. Fewer mandatory services would lead to lower farmer costs.
Rick Istead, general manager of the Alberta Wheat Commission, told the House of Commons agriculture committee Nov. 20 that streamlining and trimming commission functions and costs is welcome, but the proposed transfer of costs to farmers is too high.
Read Also
Farming Smarter receives financial boost from Alberta government for potato research
Farming Smarter near Lethbridge got a boost to its research equipment, thanks to the Alberta government’s increase in funding for research associations.
“Our organization intends to respond to the proposed fee increases, which we feel are excessive,” he told MPs. “I think we need to go back and really challenge the grain commission on what value-added services are really necessary in this changed market for marketing wheat and barley.”
At a grain industry symposium a few blocks from Parliament Hill Nov. 21, Marlene Caskey, a director of the Canadian Canola Growers Association, said her members appreciate the proposed Canada Grain Act reforms. However, she said the government is shifting too much of the funding responsibility to producers.
The Conservatives are proposing that $5.45 million of the commission’s annual expenses be considered the cost of “public goods” to be picked up by federal funds.
“That is nine percent of the grain commission budget,” Caskey said.
“And as CGC costs decrease, it will be less. The public goods share should be 25 percent going forward.”
Under federal budget legislation that comes before the House of Commons for final debate this week, the government is ending some grain commission services that it says are redundant. The cuts will take $20 million out of system costs.
Inward inspection will be ended and a grain trader bonding system will be transformed into an insurance system that will require less commission bureaucracy to administer.
Beginning Aug. 1, 2013, the commission will be expected to pay most of its own way through reduced costs and increased fee-for-service revenue. It means that tens of millions of dollars in costs will be downloaded onto producers. Farmer fees have been frozen for two decades as commission costs grew and the need for annual federal subsidies to pay the bills escalated.
The commission is holding consultations on its fee increase proposals through November, and final regulations on the new fee structure are expected to be completed and published by spring.
Critics of what they call the government deregulation program have denounced the proposed grain commission service cuts and realignment as a reduction in overseeing and certifying the quality and safety of Canadian grain.
At the grain symposium last week, which was organized by Grain Growers of Canada and the Canada Grain Council, grain commission chief commissioner Elwin Hermanson said there will be no reduction in quality control. The services being cut are not essential, but if farmers want them to continue they can hire private providers or pay the commission a fee to do the work.
Hermanson said he expects the government will bring in the second phase of reform in the new year.
