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CGC Seeks A Doubling Of Fees

The Canadian Grain Commission wants to more than double its service fees in anticipation that Ottawa will soon cut back support for the agency.

Under the proposal, fees, which have been frozen since 1991, could average $1.80 a tonne, up from about 70 cents, said CGC spokesman Remi Gosselin.

“We are getting 50 per cent of our costs covered through fees and that’s insufficient,” he said. “The rest is coming through the fiscal framework – a special appropriation from Ottawa. In these times of fiscal restraint we just can’t continue to rely on the fiscal framework as we have over the past 20 years.”

The grain industry will get its say before there are any changes, Gosselin added.

The grain industry has until month’s end to comment, not just on fees, but on whether to cut certain services, including some mandatory measures aimed at ensuring the quality of Canadian grain and protecting grain farmers from unscrupulous grain buyers.

In March, after getting industry feedback, the agency will announce proposed changes and the grain sector will have 30 days to respond. The agency expects to submit a formal proposal to the federal government in early 2012. The industry can comment before the final changes are adopted when they are published in theCanada Gazette,Part I.

If approved by cabinet, the new fees will come into effect April 1, 2012.

Farm leaders say farmers shouldn’t be stuck with the entire bill.

“I can completely understand why the grain commission wants to go to cost recovery, but as the person who will be funding it, I struggle (to understand) why I should be paying for all of it when there is a large public benefit to what the grain commission does,” said Keystone Agricultural Producers’ president Rob Brunel.

“The last thing we’d want is the grain commission to reduce its commitment to producers and grain companies because they serve a real important function in making sure the standards are set so customers know what they are buying. Yet should we as producers be funding all of that? That’s the question.”

For the executive director of the Grain Growers of Canada, the answer to that question is “no.”

“I think there is value for the greater public good so taxpayers should at least be sharing the cost with us,” said Richard Phillips.

If farmers have to pay more for CGC services, then they will want to know if it’s worth it, he said.

The National Farmers Union also wants cost sharing to continue.

“We will do what we have to do to maintain the Canadian Grain Commission,” said Glenn Tait, the National Farmers Union’s Region 6 co-ordinator. “We will do our part, we expect the government to do so as well.”

It makes more sense to modernize the Canada Grain Act first, then review the service fees, said Wade Sobkowich, the executive director of the Western Grain Elevators Association.

“At a minimum, the industry needs competitive alternatives as an option to keep their costs down,” Sobkowich said in an email.

Sobkowich also said services provided “for the good of Canada” should be funded by Ottawa.

The CGC’s role in ensuring quality is critical to the marketing of Prairie grain, said Canadian Wheat Board spokeswoman Maureen Fitzhenry.

“It’s of top importance that the integrity of the quality control system doesn’t suffer,” she said.

Canada’s economy benefits from those services so the costs shouldn’t be downloaded all on farmers, she added.

The question of who benefits and who should pay has been on and off the agenda for more than a decade.

In 1999, the CGC proposed fee increases to cover 90 per cent of its costs, saying they were needed to offset a dramatic drop in revenue when grain exports fell following the end of the Crow benefit. Citing the benefits of the grain sector to the economy, the then Liberal government rejected the bid to boost fees 26 per cent. That view was echoed in a 2006 report prepared for Ottawa by Compas Inc. which recommended government should cover all the agency’s basic infrastructure costs.

The government proposed a major overhaul of the grains act and CGC in 2007 and again in 2009. Neither bill became law, but both proposed dropping the requirement that grain companies be licensed and post security to ensure farmers are paid if the companies go broke. At the time, Agriculture Minister Gerry Ritz said that would reduce costs and “remove a barrier to new entrants into the grain-merchandising industry.”

KAP wants to keep the existing producer security program, but if it ends, wants it replaced by a mandatory farmer-financed fund, kick-started by federal money.

The bills also proposed ending mandatory CGC inward inspection at terminal, including for producer cars. Inward inspection is used by producer car shippers and the wheat board for final settlement on grain at port. [email protected]

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“Wearegetting50percentofourcostscoveredthroughfeesandthat’sinsufficient.”

– REMI GOSSELIN

About the author

Reporter

Allan Dawson

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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