Fees for grain inspected and weighed at export are the main source of revenue for the Canadian Grain Commission. These revenues have been lower than expected since the fees were last updated in 2021, as grain export volumes have been lower than expected. At the same time, the Canadian Grain Commission has experienced rising operating costs related to its program delivery.
The Canadian Grain Commission operates as a revolving fund, charging service fees to fund most of its operations. The Canadian Grain Commission funds approximately 90% of its operating budget through service and licence fees, with the balance coming from parliamentary appropriation. The majority of Canadian Grain Commission fee revenues come from official inspection and official weighing of grain exports. The costs of delivering these services includes both direct and supporting work. Most of these costs are fixed and must be recovered even when grain exports are lower than usual.
Through the Canada Grain Regulations, the Canadian Grain Commission adjusts fees automatically for inflation on April 1 each year in line with the Consumer Price Index. These automatic adjustments are meant to keep fees in pace with inflation, not to cover new or significantly increased costs, or compensate for lower-than-expected grain export volumes.
Fee review
In 2024, the Canadian Grain Commission completed a review of its revenues, costs, grain volume forecasting model and service standards. The review found that service fees do not reflect the costs of providing the organization's services and licences. This is due to a combination of lower-than-expected grain volume exports, outdated service fee alignment, and rising costs for labour and digital service development.
The review found that in order to be cost recovered, the Canadian Grain Commission would have to reduce its forecasted grain volumes and adjust its fees. It also showed that the existing cost framework (originally set in 2013) is less than required to sustain the Canadian Grain Commission's current operations, modernize its services, and position the Canadian Grain Commission as a global leader in grain science. Instead of changing its fee formula to increase fees, the Canadian Grain Commission will use its accumulated surplus to cover anticipated shortfalls this year and for the next two fiscal years.
Grain volume forecasting
Following a record high of more than 50 million metric tonnes inspected and weighed in the 2020-21 fiscal year, the CGC projected grain volumes of 48.1 million metric tonnes for calculating its fees starting in 2021. This amount was based on an assumption that major infrastructure investments in the grain sector would increase the overall amount of grain that the Canadian Grain Commission would inspect and weigh. However, these investments have not contributed to increased grain exports as expected. At the same time, crop production was also lower due to drought conditions in Western Canada. Together this resulted in an average grain volume of 36.48 million metric tonnes inspected and weighed for fiscal years 2021-22 to 2023-24, falling well short of the projection used for the fee calculations.
