Canadian Grain Commission invests surplus funds in the Harvest Sample Program; stirs controversy

Canadian producers will have access to even more information on the quality of their harvest thanks to enhancements to the Canadian Grain Commission’s Harvest Sample Program.

Beginning in the 2018-19 crop year, producers who participate in the Harvest Sample Program will receive falling number and deoxynivalenol (DON) results for their wheat samples at no cost. With this additional information in hand, producers will be better able to market their crop to ensure the best return for their farms.

These enhancements to the Harvest Sample Program will be funded for the next 5 years through the investment of $4 million from the Canadian Grain Commission’s accumulated surplus.

This is the first step in the Canadian Grain Commission’s plan to invest $90 million through a Surplus Investment Framework that will strengthen safeguards for producers, improve grain quality assurance programs and enhance grain quality science and innovation.

The Canadian Grain Commission is committed to working with grain sector stakeholders to ensure enhancements to programs and services deliver clear benefits to producers and add value to the sector into the future.

In the coming months, the Commission will consult with grain sector stakeholders to develop more detailed proposals within the Surplus Investment Framework.

“We are pleased to announce a key investment in the Harvest Sample Program. It’s an important tool that makes data available to promote the sale of Canadian grain, helps producers ensure the best return for their crops, and contributes to research on grain grades and the end-use quality of Canadian grain," explained Patti Miller, Chief Commissioner, Canadian Grain Commission. “The Canadian Grain Commission will invest surplus funds in programs and activities will meet the evolving needs of the grain sector for years to come. We look forward to working with stakeholders to maximize the value of surplus investment initiatives.“

However, the Western Canadian Wheat Growers Association (WCGA) is outraged that the Canadian Grain Commission continues to in their opinion "overcharge farmers for their grain inspection," accumulating a $130 Million surplus in the process.

“This surplus is built on the backs of hard working farmers, money that should be in their pockets, not CGC coffers. The CGC continues to keep their checkoff fee higher than is required to meet their operational budget resulting in this enormous surplus. These funds should be refunded to the farmers that earned it and the check-off fee rate reduced,” said Levi Wood, WCGA President.

The $130M surplus will be split between the Reserve Fund ($40M) and unspecified Strategic Investments ($90M). These funds were allocated by CGC without consultations to grain organizations such as the WCWGA.

On April 25, 2017, the WCWGA received a legal opinion that the CGC is in violation of Section 5.1 of the User Fees Act and Section 53 of the Constitution Act, 1867. The opinion states, “This has been interpreted by the Supreme Court of Canada to prohibit any part of the federal government, other than the House of Commons, from initiating a tax. Therefore, the Commission may not collect Fees that in law amount to a tax.” The legal opinion may be read in its entirety here.

Justice Rothstein clearly and succinctly set forth the rule governing regulatory authorities collecting user fees that constitute a tax:

“Section 23 of the Parks Agency Act specifies that the Minister cannot set a user fee for services or facilities that is higher than the cost to the government of providing them.”

"This is unacceptable. These overcharges by CGC, which amount to tax, are taken from the farmer's bottom line and should not be used to expand the mandate of the grain commission. It is time we look at private sector numbers and find the most trustworthy and most cost-effective way to provide the services of CGC. It would be at a fraction of the cost," said Jim Wickett, WGCA Chair.