There was little initial opposition last week to proposals from the Canadian Grain Commission that it reform the way it bills for its services, including the possibility of higher fees for some and more cost recovery to fund non-essential services.
“They have adopted a principle where the fees should cover the costs and that the people who benefit should pay,” said Ron Weik of Saskatchewan Wheat Pool. “That is a difficult principle to oppose.”
United Grain Growers president Ted Allen said it is too early to understand exactly what impact grain commission proposals will have on industry costs.
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He said that should become clear during consultations over the next month. “It is hard to comment without having the hard numbers.”
Canadian Federation of Agriculture executive director Sally Rutherford was part of earlier consultations about the future of the grain commission.
“No one likes higher costs and some people won’t be happy but I think there is broad support for the grain commission and I think these proposals will be generally accepted,” she said Jan. 7.
Grain commission president Barry Senft told a Jan. 5 news conference that existing fees and government funds are not enough to pay the bills. The commission faces chronic deficits if it does not raise more money from clients.
“The (quality assurance) system and the organization which co-ordinates it is not sustainable over the long term without some major changes,” he said. “These changes have to be made sooner rather than later … .”
A key proposal has the grain commission charging a quality assurance fee when grain or special crops are delivered to a prairie elevator. Now, there are no “entry” fees and most commission revenue comes from inspection and weighing fees at export terminals.
Senft said this unfairly forces exporters to fund services that benefit the entire industry. And falling export volumes mean revenues are falling short – $10 million this year and up to $7 million a year in future without changes.
Senft said the trend to export less grain will continue as more grain is processed on the Prairies or shipped to the U.S. following the end of freight subsidies for export grain.
He said the commission expects its proposals to be “revenue neutral” industry-wide but some sectors that do not pay for CGC services now may find costs rising.
The commission is also proposing that “optional” services requested by clients be paid for by them.
This would include continuous service at Vancouver terminals, the harvest survey or market support.
“Public good” services such as grain safety research or end-use value research would continue to be paid with government funds.
Senft said the CGC also suggests that it use the export grade standard for both export and domestic use, dropping the current “domestic” and “export” grade standards.
“I think that makes sense,” said UGG’s Allen.
