Feds move again on “modernizing” Grain Commission

Regulatory makeovers for the Canadian Grain Commission are on the federal government’s radar, again.

Last month the commission announced its latest proposals for "modernizing" itself and the Canada Grain Act it administers. The public has until March 23 to respond.

The commission, established in 1912, is Canada’s grain industry watchdog, ensuring the quality of grain exports, arbitrating grade disputes between farmers and buyers, licensing grain companies and ensuring buyers post security to cover what farmers are owed.

The commission’s list of "key areas under consideration" doesn’t mention the doubling of user fees, which the commission proposed in December 2010.

"Our projections are that new user fees, at whatever level they happen to be — whether they are fully cost-recovered or whether there is some public good included — would come into effect most likely at the beginning of the 2013 crop year," CGC chief commissioner Elwin Hermanson said in an interview March 1. "It’s all subject to adjustment and change."

Agriculture Minister Gerry Ritz said the matter of fees will decided after feedback is reviewed on the other proposed changes.

Most are similar to those previously announced in failed bills C-39 and C-13. However, there are some new ones, including how the commission is governed.

Currently the CGC is overseen by three commissioners, including a chief and an assistant. Traditionally, there’s a commissioner from each Prairie province, with one or two being farmers and one from the grain trade. The commission proposes a single president-CEO replace the commissioners.

The commission’s wants its mandate changed. The current grain act says "… in the interests of the grain producers, establish and maintain standards of quality for Canadian grain and regulate grain handling in Canada, to ensure a dependable commodity for domestic and export."

The commission says its mandate should take the interests of the country as a whole, including grain producers, into account.

Ritz has said the commission should drop its producer security program. Most farm groups reject that and it’s reflected in the commission’s latest proposal. However, instead of continuing the program with companies posting security, the commission wants an insurance program.

"Intra-company"

In previous proposals the commission suggested eliminating mandatory inward inspection and weighing at licensed terminal and transfer elevators and does again.

"A lot of grain is (moved) intra-company," Hermanson said, and it’s hard to justify mandatory inward inspection when a company ships its own grain from one of its facilities to another.

However, inward inspection makes sense when one company is shipping grain to another’s facilities. In such cases companies could request inward inspection, Hermanson said. But the commission wants the inspections done by parties accredited by the commission.

The commission says it will maintain official grain commission outward inspection from licensed terminal and transfer elevators, except for grain destined to the United States.

The commission wants to drop its role as the official weigher of outward bound grain and have CGC-accredited parties do it.
The commission wants more options, such as levying fines, to enforce the Act, Hermanson said. Currently, the commission has to go to court or suspend or pull a company’s license.

Currently licensed grain companies must post security to cover what they owe farmers. The commission monitors the companies, trying to ensure security matches farmer liabilities. Still, sometimes when grain companies fail farmers aren’t fully reimbursed. Insurance is easier to administer and cheaper, according to Hermanson.

The grain commission is supposed to be self-funding over time, but user fees have been frozen since 1991. Currently only about half of its $80 million budget comes from fees. Ottawa covers the rest.

In a discussion paper released in December 2010 the commission said it expects its annual budget will soon hit $90 million and it wants to get all of it — $50 million a year more — from user fees.

To that end, fees would have to more than double to an average of $1.80 a tonne from 70 cents.

Allan Dawson is a reporter for the Manitoba Co-operator at Miami, Man. The full version of this article appeared in the March 8, 2012 Co-operator (page 1).

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