The Canadian Grain Commission has announced a new plan for using a large portion of the nine-figure surplus it built between 2013 and 2017 from fees for grain inspection and weighing that were ultimately passed down to farmers.
To stop the accumulation, the federal grain industry regulator lowered its fees several times between 2017 and 2021.
As of this year, the surplus has been drawn down from $156 million to $112 million to cover budgetary shortfalls since 2021.
On Oct. 16, the CGC announced it will be maintaining its current fee formula for the next three years, despite revenues from inspection and weighing services not fully covering costs.
Fees are automatically adjusted on April 1 of each year to reflect the annual change in the Consumer Price Index, but the commission says these adjustments have “not kept pace with lower-than-expected grain volumes and increased operating costs.”
By maintaining the status quo, the commission expects it will reduce the surplus to approximately $57 million by March 31, 2027, which includes setting aside $40 million in a contingency fund that was announced in 2018.
“The Canadian Grain Commission is committed to being part of the success and sustainability of Canadian agriculture. Drawing on the accumulated surplus will avoid new fee increases for the next 3 years, while ensuring our programs and services continue to deliver results for the grain sector,” noted chief commissioner David Hunt, as part of the announcement.
The CGC says it’s also committed to consulting with grain sector stakeholders before making any changes to fees in the future.
Going back to 2017, the CGC had proposed several scenarios for how the surplus could be used. In addition to reducing user fees, other ideas included setting up a producer compensation fund to improve producer payment security and investing the surplus in upgrades to CGC facilities or technical services for the grain handling chain.
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