The grain commission has an extra $130M. But a refund to farmers would be illegal

The Canadian Grain Commission has a $130 million surplus, gained from 2012 to 2017, and plans to invest it in the industry. But farmers across the country say they've been overcharged and won't see a penny of the surplus.

That's because, in part, a refund would be illegal. 

The commission — which is responsible for establishing and maintaining the country's grain quality — collects fees from distributors, which in turn charge handling fees to farmers.

The distributors' costs have been reduced twice in the last year, but are still "slightly above the actual cost of the service provided," according to Jeff Nielsen, president of the Grain Growers of Canada, which represents grain farmers' interests in national policy development.

The commission says it consulted with both groups about how to deal with the surplus.

"We looked carefully at the option of refunding money to the sector and to grain producers more specifically," said spokesperson Rémi Gosselin. 

"The challenge is that the Canada Grain Act, which governs the commission, does not allow us to refund the fees we collect from grain companies to producers because the lion's share of what the commission receives in fee revenue comes from the companies, not producers."

There's also no guarantee the refund would make it into the hands of farmers.

For many farmers, that's an indication that legislation reform is needed.

"It just shows we need to reopen the Canada Grain Act, fix these minor problems, and ensure we have a complete modernization… that meets the needs of producers," said Nielsen. 

"The best way to eliminate that surplus is to drastically reduce user fees until the point that surplus is depleted," he said. 

Industry investment

The surplus will be split several ways, including the creation of a $40 million contingency fund to guard against future declines in delivery volumes.

The rest, roughly $90 million, will be split between industry investments like strengthening safeguards, investing in grain quality assurance and innovation in the sector. 

In a news release, the Western Canadian Wheat Growers Association expressed "outrage" at the overcharge and resulting surplus. 

The association's chair, Jim Wickett, proposes the industry look at private sector numbers and find more cost-effective ways to provide the services of the commission.

The Saskatchewan Wheat Development Commission, for its part, said it applauds the commission's plan, especially the enhanced harvest sample program, which allows wheat producers to have a sample of their grain analyzed by the commission.