Grain Commission should scrap user fees in 2018 to reduce surplus
(Calgary, Alberta) April 27, 2017 – Alberta Barley is asking the Canadian Grain Commission to reduce user fees to $0 for the 2018 crop year in order to start balancing the books from the over $107 million being carried in the CGC revolving fund.
To reduce further growth of the surplus, the CGC has now proposed a reduction in weighing and inspection fees for ships from $1.86 to $1.42/MT, effective Aug. 1, 2017. This proposal is now being vetted in the Canada Gazette. While any reduction is a good step, Alberta Barley would have preferred an immediate temporary elimination of fees in order to more quickly return the excess fees accumulated since August 2013 to the marketplace, and therefore to farmers who ultimately bear the cost.
While Alberta Barley recognizes that a $1.42/MT fee will likely be in place effective Aug. 1, 2017, a one year fee elimination in 2018 would address some concerns of its members. With an operating budget of about $60 million, the CGC will have more than enough in the revolving fund to operate for a year’s time.
“Even though it’s impossible to return every penny of the previous overcharges, we believe this solution is the best case scenario given the circumstances,” said Jason Lenz, Alberta Barley chair. “The reduction to $1.42 will allow the CGC to slow the accumulation of surplus user fees, which is a good first step.”
The CGC began public consultation March 1, 2017, on what to do with its surplus, estimated at $107 million as of September 2016. The current fee schedule is set to expire April 1, 2018. There is also a simultaneous consultation on a new fee schedule to go into effect at that time.
The User Fees Act indicates that user fees should only be used to cover the cost of providing the service for which they are being charged. It appears a one-year fee suspension is the fairest way to return a portion of the accumulated surplus to the industry, and therefore producers who were effectively overcharged.
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