AWC and Alberta Barley disappointed in CGC decisions on surplus allocation


Source: Alberta Wheat Commission, Erin Tateson

The Alberta Wheat Commission (AWC) and Alberta Barley are disappointed that the Canadian Grain Commission (CGC) has decided to disperse $90 million of its $130 million surplus into numerous special projects and expand its operations rather than reducing service fees for Canadian grain farmers.

While the CGC has indicated it will hold further consultations on how the funds will be allocated, AWC and Alberta Barley are concerned that plans to spend the $90 million surplus have already received approval from the federal government without a detailed plan.

“The surplus is farmers’ money stemming from overcharging for the CGC’s services and should not be spent without a business case and cost-benefit analysis that demonstrates value to Canadian farmers,” said AWC Chair Kevin Bender. “In today’s announcement the CGC has ignored the advice from numerous groups to use the surplus to reduce costs to farmers.”

Today’s announcement from the CGC states that investments will be devoted to safeguards for producers, grain quality assurance and science and innovation. AWC and Alberta Barley believe that the majority of these programs – if they can be justified – should be funded by the federal government, not Canadian grain farmers.

“In our view, the focus of the CGC should be on an efficient, low-cost grading system that elevates Canadian farmers competitively in the global marketplace,” said Alberta Barley Chair Jason Lenz. “We question how these expenditures will achieve that and we look forward to making our views known to the CGC and the federal government.”

The CGC began industry stakeholder consultations in early spring of 2017 to determine responsible allocation of the surplus funds. Upon the consultation period closing in May 2017, the CGC received 92 formal written submissions, with the majority of proposals agreeing the surplus funds should directly benefit farmers. During these consultations AWC and Alberta Barley strongly advocated the CGC reduce service fees to farmers for a fixed period of time. The commissions also suggested updates to the CGC’s forecasting methodologies to more accurately reflect grain volumes to alleviate future overcharges and ultimately prevent future surpluses.

The commissions also believe the CGC should move away from its dual role as both a regulator and service provider.  AWC and Alberta Barley believe that all inspection services should be open to competition from private inspection companies and not restricted to the CGC to ensure the best value and lowest costs to farmers.