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Farmers pay but have no say

Jan 30, 2016 at 07:22 AM CST


Farmers pay for Canadian Grain Commission (CGC) operations so they should have a bigger say in how it operates, says Rick White, chief executive officer of the Canadian Canola Growers Association (CCGA).

“It’s (CGC) a Government of Canada agency and farmers are paying full freight on it now (because of cost recovery),” said White during a formal address at Ag Days Jan. 19.

“It’s one thing to go to full cost recovery, but full cost recovery with absolutely no (farmer) control and no representation around that government agency is not right. And so we are pushing the government hard when it starts to revisit this again.

“We have to do something about that because farmers should not be expected to pay the full shot of a federal government agency. It’s just not right.”

The CGC, which regulates Canada’s grain industry and ensures grain quality, has been recovering 91 per cent of its annual operating costs of $60 million to $70 million through user fees since Aug. 1, 2013. While most of the CGC’s revenue is collected from grain companies, including a $1.80-a-tonne outward inspection fee on grain exports, it’s widely accepted that companies pass the charges back to farmers.

The government contributes around $5.2 million a year to fund the CGC’s Grain Research laboratory, which does work seen as benefiting Canada.

In an interview, White suggested the CGC become a Special Operating Agency.

“There’s tremendous expense running a government agency by the nature of government,” he said.

CGC governance should also change, White said. Instead of the government appointing a chief commissioner, an assistant commissioner and a commissioner, it should appoint a full-time chief executive officer and create a board of directors made up mainly of farmers, he said.

“They (CGC) do a lot of good work,” White said. “It’s not a criticism, it’s just the model is wrong. It’s not accountable to farmers and it’s the farmers who pay the bill.”

The other option is for the government to cover most of the CGC’s operating costs as it once did, he said.

Unsuccessful lobby

Farmers and grain companies argued unsuccessfully that since many CGC services are compulsory and benefit Canada’s economy, the government should pay for them.

Interestingly, the CGC became a Special Operating Agency (SOA) in 1991 under the Mulroney Progressive Conservative government. It said the change would give the CGC more flexibility, including the ability to borrow funds.

Last week a CGC official said he didn’t know when the agency, which reports to the agriculture minister, ceased being an SOA.

In the late 1990s, the Chrétien government proposed scrapping the commissioner model in favour of a president-CEO and board of directors. But it never happened.