Federal Agriculture Minister Marie-Claude Bibeau on Monday appointed Doug Chorney — an agricultural engineer and grain and oilseed grower at East Selkirk, Man. — to a three-year term as chief commissioner of the Canadian Grain Commission (CGC), starting immediately.

Chorney, who was president of Manitoba’s Keystone Agricultural Producers (KAP) from 2011 to 2015, was named a CGC assistant chief commissioner in 2017. He’s been the CGC’s acting chief commissioner since Patti Miller, who was named to the chief spot in 2017 for a six-year term, took early retirement in June this year.

To replace Chorney, Bibeau on Monday named Patty Rosher, currently KAP’s general manager, to a four-year term as the CGC’s assistant chief commissioner, also effective immediately.

Rosher had come to KAP in March last year from the Manitoba department of agriculture, where she had worked since 2013, in roles such as director of policy (2018-19), director of the transformation branch (2017-18) and acting chief operating officer for the Food Development Centre (2016-17).

Rosher’s experience in the ag sector also includes 17 years at the Canadian Wheat Board, including a five-year stint as its manager for marketing and sales before the CWB’s deregulation in 2012. She also currently serves as vice-chair of Genome Prairie, a not-for-profit organization set up to manage and support large-scale genomics research in Saskatchewan and Manitoba.

Rosher had recently spearheaded development of a strategic plan for KAP that proposes adding two new standing committees (research and innovation, and grassroots participation) and potentially cutting the number of districts representing the group across the province.

“I am confident that these two individuals will provide excellent leadership for our grain growers across the country and help the Canadian Grain Commission maintain a competitive and efficient grain sector,” Bibeau said in a release Monday.

The Winnipeg-based CGC serves as the regulator of standards and procedures for Canada’s grain handling sector and as the official certifier of Canadian grain.

The commission establishes, recommends and maintains grades and standards for Canadian grain, is responsible for Canada’s system of grain grading and inspection and serves as one of Canada’s scientific research organizations on grain quality. — Glacier FarmMedia Network

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“(The merger is) a hard one to find a whole bunch of negatives or positives about it. A year from now it might be a different story,” said Todd Lewis, president of the Agricultural Producers Association of Saskatchewan (APAS).

Initially announced in 2016, the merger between the two Canadian-based international companies received final regulatory approval from the United States Federal Trade Commission the last week of December. The new company, Nutrien, was officially formed as of Jan. 1. In order for the merger to go through the companies had to receive clearance from Canada, India and China, as well as the U.S.

There were concerns for producers before the merger, according to Lewis but now with the new company being final thoughts are mixed. APAS was concerned there would be a lessening of competition as there have been numerous mergers in the agriculture industry lately, however they are pleased to see it being two Canadian companies merging.

Dan Mazier, president of the Keystone Agricultural Producers (KAP) echoes Lewis’ sentiment, stating if at the end of the day it makes the companies stronger it is good for Canada as a whole.

“I understand that they don’t plan on shutting down any mines or shutting down any nitrogen manufacturers, it’s actually letting Sask (Saskatchewan) potash into the network of Agrium and vice versa. So probably at the end of the day it’ll be a much more robust company,” he said.

Before the merger the companies had said they expected to see an annual operation synergy of up to US$500 million from the deal. Nutrien is now Canada’s third-largest natural resource company at a value of approximately US$36 billion.

Mazier is concerned the new company could have an effect on independent retailers who sell Nutrien’s products. Nutrien has its own retail division, Crop Production Services, which was previously part of Agrium.

“It’s more where people get their supplies from and if this is actually cutting out retailers or cutting out where people (get the) products (from) … I’m still thinking the Canadian way though … if I’m going to support anything we definitely support the Canadian companies,” he said.

According to Craig Klemmer, the principal agricultural economist with Farm Credit Canada, the merger had to undergo rigorous scrutinization before being approved.

“When we think about specifically the nutrient market and these mergers and acquisitions that we’ve seen and the recent merger there’s a number of safe guards that have been put in place that help to protect consumer prices,” he said.

Things could change but as of right now, both APAS and KAP aren’t concerned there will be an immediate effect.

“(It’s) yet to be seen as far as the pricing. But it’ll be the supply and making sure that they stay viable at the end of the day,” Mazier said.

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When listed grains (wheat, oats, barley, rye, flax, canola, rapeseed) are delivered for payment at a licensed elevator, an elevator operator can issue either a cash purchase ticket or a deferred cash purchase ticket, payable in the year following the year in which the grain is delivered.

Under current tax law, a farmer who opts for a deferred cash purchase ticket is then able to include the amount of the ticket in taxable income in that following year.

The tax treatment of deferred cash purchase tickets “is a departure from the general rule with respect to taxpayers (including other farmers),” the government said after unexpectedly announcing in the March 2017 budget that the measure was under review.

The talk of eliminating the option alarmed many in the grain industry, including KAP members who debated the policy a month later at an advisory council meeting April 20.

“It’s not avoiding taxes (by being able to defer grain sale payments into the next tax year),” said Foxwarren farmer George Graham at the time, who moved the resolution. “It’s just a way to balance out taxes.”

“We all know how tough marketing is and… if you’re going to start timing grain sales because of when you need the income, it’s just going to cause problems,” Starbuck farmer Reg Dyck said while debating the resolution.

Others in the grain industry added their voices to the chorus calling for retaining the system.

Deferred cash purchase tickets help farmers and grain companies, Western Grain Elevator Association executive director Wade Sobkowich, said April 11 on the sidelines of the Canadian Global Crops Symposium in Calgary.

“We’ll be required to pay farmers (who can’t defer payment) sooner than we do today, all things being equal, and therefore the cost of financing will go up (for grain buyers),” Sobkowich said.

“Farmers who defer delivery until the next tax year means we are altering delivery patterns and we may not be taking advantage of peak price periods. Grain companies will have less control as to when they call the grain forward and that can impact their ability to extract revenue from the marketplace. So it can complicate delivery patterns and it can increase the cost of financing to grain companies and all of those costs get shared by the industry.”

Given ups and downs in grain production and grain prices, farmers need tools to even out their income, he added.

The government quietly made the announcement yesterday as part of a larger announcement titled “Additional Tax Support for Canadian Farmers.”

In that document the government also committed to “providing tax relief” for livestock producers who received compensation for having to destroy their herds in the 2016-2017 bovine tuberculosis outbreak in Saskatchewan and Alberta.

Livestock producers in areas where farmers qualified for a livestock tax deferral to rebuild their herds following flood or drought will now also be able to defer a portion of their 2017 proceeds from the sale of breeding stock into 2018.

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Bill C-49 passed its third reading in the House of Commons Nov. 1 and is now off to the Senate for review. The bill is meant to amend the Canada Transportation Act, which includes rail transportation.

The Alberta Wheat Commission (AWC) was vocal in its pleasure to see the bill pass its third reading, stating in a news release, “The legislation marks a milestone for the agriculture industry, paving the way for mechanisms that will result in a more efficient and accountable rail transportation system that meets the need of Canada’s growing grains sector.”

AWC is particularly happy to see reciprocal penalties introduced, as the organization has asked for them in the past.

“It brings back a measure of accountability to both sides of the ship or railroad transaction. Not only is the shipper responsible to load the cars on time, now the railroad is contractually obligated with penalties to pick up those cars and deliver them on time as well,” said Kevin Auch, chair of AWC, in a phone interview.

AWC is concerned about interswitching, which is where traffic is transferred from the lines of one railway company to another. The new bill sets the distance for it to happen at 30 kilometres, a previous bill had increased the distance to 160 km from 30 km.

“(The interswitching provisions) didn’t make it. But hopefully the government will monitor how the legislation’s working in the future and if there’s things that need to be changed they will be responsive to that as well,” Auch said.

The Keystone Agricultural Producers (KAP) in Manitoba are concerned about interswitching as well.

“I’m worried that there’s going to be certain shippers, especially the short-lines, that will fall through the cracks on this,” said Dan Mazier, president of KAP.

While Mazier said KAP is pleased to see the bill making it to this part of the process, the group is concerned and will be reaching out to the Senate.

“We want it passed so we can get some legislation in front of it and start dealing with the regulations. But on the other hand there is some things that are happening in the industry we’re already seeing that aren’t boding very well for the movement of grain,” Mazier said.

The Agricultural Producers Association of Saskatchewan (APAS) are happy to see the bill moving forward.

“There was a period of time here between the combination of the last bill and the measures that were put forward that we’ve had a bit of a gap so we’re glad this has been passed,” said Todd Lewis, president of APAS.

Lewis is hopeful if the bill does get passed it will help. He said currently there are concerns with rail movement for this year’s crop which he thinks would be less likely under Bill C-49.

It was reported CN is delivering cars at 51 per cent, which is causing clogs for grain movement.

“We’re already behind this year so hopefully anything we can do to get better service and continue to get service that’s what we need to see happen,” Lewis said.

When contacted for the story CN did not have a comment about the bill passing its third reading in the House of Commons. A spokesperson stating only that CN is paying attention to the progress.

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The government announced in its recent budget that it is considering eliminating grain ticket deferrals because it is a left over from the days when farmers were forced to market their grain through the Canadian Wheat Board.

“With the deregulation of the grain marketing regime and the commercialization of the Canadian Wheat Board, the delivery of listed grains (to a licensed elevator) is now the responsibility of private business rather than the federal government,” the government said in the budget documents.

“As a result, there is arguably no longer a clear rationale for maintaining the tax deferral accorded to deferred cash purchase tickets received as payment for listed grains.”

However, KAP delegates say they remain an important option given the uncertainties of farming.

“A farmer could have a good crop and good selling conditions one year, and be wiped out the next,” said KAP president Dan Mazier in a release. “Crops could be hit by drought or disease, prices could fall, rail service could be poor, anything could happen – this option allows a farmer to prepare for a lean year, and file taxes accordingly.”

Farmers have historically used the option to manage cash flow and even out their income from one year to the next.

The federal government is taking comments on the the proposed change until May 24. Farmers can send their comments to: Comments can be sent to consultation_tax_2017@canada.ca.

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The deadline to fill out an online survey or download and email it in is March 9, the government said in a release Thursday.

“The current approach to funding our province’s general farm organization is overly complex, inefficient and unlike any other system in the country,” Agriculture Minister Ralph Eichler said in the release.

“Our government is committed to working with KAP and farmers across Manitoba to erase administrative burdens and reduce red tape for the industry. This feedback we collect through this online resource will be essential in helping inform how our government can improve the process to fund membership in a far more efficient manner.”

KAP president Dan Mazier hopes farmers will fill out the survey.

“I encourage producers to look at it,” he said in an interview Thursday. “This is a chance to look at the legislation. Be aware we have an opportunity to help ourselves.”

KAP has complained about its refundable checkoff of 0.75 per cent of the gross selling price on grain, hog and milk sales for years.

“It’s an administrative nightmare,” Mazier said.

The problem is, unlike most other commodity groups, KAP’s checkoff is capped at $210 (including taxes). Once the cap is reached, the checkoff should stop, but sometimes it doesn’t. KAP must refund the excess collected.

Though designated buyers, including elevator companies, are obliged under law to collect the checkoff, some don’t.

And sometimes farmers don’t quite reach the maximum required for KAP membership and the organization is required to refund all of the money. However, KAP will contact the farmer and ask if he or she will contribute the rest directly.

“For every dollar farmers are paying to KAP through this checkoff system, 40 cents has to go back out unfortunately,” KAP general manager James Battershill said in a previous interview.

The survey follows Eichler’s announcement at Manitoba Ag Days in January that the province would explore a different funding option, as part of the government’s promise to cut red tape.

“It’s not because of opt-outs, it is because of overpayments of memberships unfortunately. The purchasers are quite frustrated as well,” Battershill said.

“There is no way for us to improve it significantly. We have worked with them (buyers) over the past two years to try and find solutions to these challenges, but unfortunately it is just a poorly designed system for an organization structured like ours.”

KAP wasn’t involved in setting up the government’s survey, Mazier said. And while KAP has long sought changes, “this is a government initiative, not ours,” he said.

KAP is hoping a new system will result in less revenue “slippage,” but most importantly, be easier to administer and less frustrating for farmers and farm product buyers.

The provincial government hasn’t proposed any alternatives yet. KAP has looked at options, including programs in other provinces tying membership payments to government services.

For example, farmers might have to pay up before being eligible to use purple gas or to get certain farm tax deductions.

Under the province’s Agricultural Producers Funding Act just one Manitoba general farm organization (GFO) at a time is allowed access to legislated stable funding. That is, and has been KAP, since the act took effect in 1988.

The designation, for which GFOs apply to the government-appointed Farm Products Marketing Council, runs for two years at a time.

The National Farmers Union (NFU) says the stable funding should exist for all general farm organizations, including the NFU, by allowing farmers to select where their membership contributions go. Ontario, Prince Edward Island and New Brunswick have such systems.

Eichler said the time it was too soon to comment on the NFU’s request.

— Allan Dawson is a reporter for the Manitoba Co-operator at Miami, Man. Follow him at @allanreporter on Twitter.

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Answers to those questions aren’t coming from OmniTrax, the Denver-based railway that operates the port, as company officials have remained mostly silent since issuing layoff notices July 25.

“It’s unfortunate that this is happening up there for sure, but we want them (residents of Churchill) to know there are a lot of people working hard to try and find a solution for them,” said Elden Boon, president of the Hudson Bay Route Association (HBRA) at Virden, Man.

Churchill, on the shore of Hudson Bay in northern Manitoba, is home to about 800 people. The port was North America’s only deep water Arctic seaport, and was the largest employer in the town, hiring about 10 per cent of the population during seasonal operations, the Union of Canadian Transportation Employees said.

“It’s about these communities in the North having a great economy, and their communities. It’s about people having jobs and a brighter future,” Boon said.

The federal government has listened to the HBRA’s concerns about the port’s closure, he said, but added there is no concrete solution in the works at the moment.

The port had been receiving federal funding through the Churchill Port Utilization Program. That program was set to run until the end of the 2016 shipping season.

The closure comes at an especially inopportune time, as harvest nears and old-crop grain sits loaded and destined for the port, said Dan Mazier, president of Manitoba farm group Keystone Agricultural Producers.

“Those contracts were established, they were signed, sealed, and just not delivered on. We closed the port, so what does this do to our reputation as far as exporting?”

Farmers have been directly impacted by the closure of the port, and long-term it will have an effect on the value chain, he said.

The port had been touted for eliminating time-consuming navigation for the Prairie farmer, reducing handling costs of the St. Lawrence Seaway, and avoiding congestion at other Canadian ports.

The port moves a relatively small amount of grain, but has supported movement during backups. The Port of Churchill had a long-term average of moving about 500,000 tonnes of grain per season.

However, the port only moved about 184,000 tonnes of grain in 2015.

“No matter what kind of jam there was, it was an outlet. If anything it’s going to add more pressure to the Eastern and Western ports,” Mazier said.

Farmers are expected to start harvesting near the end of August and into September. The Western Grain Elevators Association says grain harvest could reach 74 million tonnes this year, which is near 2014’s record-level 76.8 million tonnes.

“We obviously will have a pretty good crop coming off very soon, and here we are closing off our export port now. I don’t think that bodes well for the grain industry,” Boon said.

OmniTrax officials did not respond to a request for comment.

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow her at @jade_markus on Twitter.

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Workers at the Port of Churchill were told Monday there would be no grain shipments going through the port this season, leaving approximately 10 per cent of Churchill residents out of work.

“This is a major blow to us, especially when there appears to be an exceptionally large crop coming,” said KAP President Dan Mazier. “The last time we had a large crop, grain movement through the port was up 50 per cent over the previous year.

“We’ve had so many issues shipping our grain east and west to port, and this was an excellent option. If ever there was a case for government intervention, this is it.”

Mazier says he is very surprised because OmniTrax, the port’s owner, indicated very recently that the coming season was looking good.

“And now the company is saying there isn’t enough grain coming in — something doesn’t add up,” he said.

Mazier is also asking the federal government to come up with a plan that will ensure the port continues to operate.

“We don’t want to lose this facility permanently, and the longer it stays shut, the more possible that scenario becomes,” he said.

The Churchill facility was owned by the federal government until the mid-90s, when it was sold to OmniTrax.

OmniTrax, the Denver-based company running the port, gave no inclination of the closure, Boon said, adding he was in communications with officials no more than a few weeks ago.

“It was business-as-usual; they had some potential customers that were going to utilize the port and were working toward shipments, so we were not expecting this whatsoever,” Boon said.

The port saw drastically lower tonnage last year, 184,000 tonnes of grain compared to the 500,000 to 700,000 tonnes expected, said Boon. When the association brought up concerns for the 2016 shipping season, he said OmniTrax responded positively, telling them this season would be better.

“They assured us they had some new customers come forward and were looking at some good shipments, but apparently that’s not so,” said Boon.

As of August 8, the port will be completely shut down and all employees terminated, right at the start of shipping season through Churchill, Boon said. “(There are) loaded rail cars destined for Churchill and they’re sitting on the side, loaded, with nowhere to go,” Boon said. “They’ve cancelled everything.”

Boon said he has been in contact with provincial and federal government officials, hoping a combined effort can recover some of the shipping season. “I’m not sure what (OmniTrax’s) thought process is…but there are huge implications here, not only for Churchill but the whole supply chain,” Boon said.

The Port of Churchill is Canada’s only Arctic port, raising concerns for the province of Manitoba as well, Boon said.

When reached on Tuesday, OmniTrax spokesperson Ron Margulis would not comment on the layoffs, but said the company would be releasing more information in the near future.

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