The Canadian Grain Commission (CGC) will not cut its fees to further reduce its surplus ahead of Agriculture and Agri-Food Canada’s (AAFC) review of the commission and the Canada Grain Act, which it administers.
Remi Gosselin, manager of the CGC’s corporate information services made the comment last month in response to calls from the Grain Growers of Canada (GGC) to do just that.
AAFC hopes to make recommendations to the federal government on changes to the grain act and CGC by year’s end. That means it’s unlikely any changes will be implemented before 2020, GGC executive director Erin Gowriluk said in an interview March 21.
“There should absolutely be a refund to farmers through a reduction in service CGC fees,” she said. “That’s something they (CGC) can do now in good faith.”
The Western Canadian Wheat Growers Association and Alberta Wheat Commission, which belong to the GGC, agree.
So does the Western Canadian Grain Elevator Association.
Gosselin said the surplus is around $130 million, but the CGC wants to keep at least $40 million in reserve to cover operating costs in case there’s a crop failure reducing grain exports, which the CGC depends on to earn revenue.
The CGC is required by law to raise most of its $65-million annual operating budget from the fees it charges grain companies and farmers. To that end the CGC increased its fees Aug. 1, 2013. But in most years since, western Canadian grain production has been above average, resulting in windfall CGC earnings.
The CGC lowered its fees 23 per cent Aug. 1, 2017 resulting in a $10-million cut in revenue, Gosselin said. CGC fees were cut again April 1, 2018 saving $15 million compared to what would have been collected in 2012.
Starting last year the CGC said it will spend $4 million of the surplus over five years to provide free falling number and DON (deoxynivalenol) results in wheat samples submitted to the CGC’s annual harvest sample program.
In a news release last summer the CGC said it would use the surplus to “strengthen safeguards for producers, improve grain quality assurance programs and enhance grain quality science and innovation.”
The CGC will also consult with farmers on what to do with the surplus, Gosselin said in an interview Aug. 2, 2018.
Agricultural Producers of Saskatchewan (APAS) president Todd Lewis said in an interview March 21 his organization is happy with the way the CGC is handling the surplus.
“It’s much more transparent now,” he said.
The CGC is wise to hold some of the surplus in case it needs funds in the future, Keystone Agricultural Producers president Bill Campbell said in an interview March 22.