The Canadian Grain Commission formally launched consultations today on a proposed reduction to its user fees. The CGC is also seeking input on potential uses of its $107 million surplus.
The proposal and discussion period come less than three weeks after new commissioners took the reins of the federal department that regulates the grain industry. Patti Miller, Doug Chorney and Lonny McKague began their appointments as chief commissioner, assistant chief commissioner and commissioner, respectively, on February 13.
The CGC is proposing an average fee of $1.50 per tonne, beginning when the the current five-year schedule ends on March 31, 2018.
“This represents a $0.44 decrease in cost per tonne when directly compared to published 2017-2018 fee levels. Overall, our proposed fee updates would reduce costs by 23 percent for the 2018-2019 fiscal year,” says the commission. (Read the details of the proposal here.)
A new formula-based fee structure would also “better align revenues with the costs of providing Canadian Grain Commission services,” says the CGC.
As of September 30, 2016, the CGC has accumulated a surplus of $107.2 million, which it attributes to higher than expected grain volumes and lower than expected spending. It’s expected this surplus will continue to grow until the current user fee cycle expires on March 31, 2018.
Approximately $36 million of this surplus must be retained to cover fluctuations in grain volumes, as well as employee contract and severance obligations, according to the commission.
The CGC is proposing several scenarios for how the remaining surplus could be used, including providing initial funds for setting up a producer compensation fund to improve producer payment security, drawing down the surplus by reducing user fees for a fixed period of time, and/or investing the surplus in upgrades to CGC facilities or testing services in the grain handling chain. (More info on the surplus discussion here.)
Consultations for the reduced user fees and the discussion period for the user fee surplus will both close on May 1, 2017. The CGC will then make a formal proposal on updated user fees through the Canada Gazette process. Comments on what to do with the surplus will be presented to the federal agriculture minister before he can seek the required Treasury Board approval.
Contact info for submitting input to the CGC:
Email: [email protected]
Mail: Accumulated Surplus Comments or User Fees Comments
Canadian Grain Commission
600-303 Main Street
Winnipeg, MB R3C 3G8