Financial Protection for Fresh Fruit and Vegetable Farmers Act
Date: 2023_04_19
Chamber: HOUSE OF COMMONS
Mr. Maxime Blanchette-Joncas: the bill before us would amend two federal laws, the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act to provide that the perishable fruits and vegetables sold by a supplier to a purchaser, as well as the proceeds of sale of those fruits and vegetables, are to be held in trust by the purchaser for the supplier. What this bill would actually do is provide special protection to suppliers of fruits and vegetables if a client were to go bankrupt. At present, the regime that applies in the event of a buyer bankruptcy allows a supplier to take back the goods sold to the buyer. In the case of fruits and vegetables, the problem is very simple. In the time it takes for the administrative measures to be completed, there is a high risk that the fruits and vegetables will no longer be fresh and their value reduced to zero. Suppliers would see the goods they worked so hard to produce be thrown away without having any recourse. We can all agree that the provisions in the Bankruptcy and Insolvency Act are poorly adapted to the reality of our agricultural producers and to the structure of agri-food supply chains. Bill C-280 , which is co-sponsored by my esteemed colleague from Berthier--Maskinonge , seeks to establish a trust mechanism in the event that a purchaser becomes bankrupt. The trust mechanism ensures that the purchaser is the guarantor of the value of the shipment, without owning it, in the event of a default due to the application of one of the two acts. This bill will be extremely helpful to our producers and agri-food suppliers who do business with our neighbours to the south. Prior to 2014, Canadian fruit and vegetable suppliers were protected by a U.S. law when doing business in the United States. When an American company defaulted or went bankrupt, our companies were protected by the U.S. regime. That is no longer the case, and the alternative process developed between the two countries is cumbersome, especially for our smaller businesses. As of 2014, the United States decided to withdraw protections for Quebec and Canadian suppliers in the event that their American buyers become insolvent or file for bankruptcy. The American government made that decision, which penalizes and undermines our Canadian farmers, business owners and suppliers, because of the lack of an equivalent mechanism in the Canadian regulatory framework. Right now, without that protection, Quebec and Canadian produce suppliers must go through a special process to take legal action under that law in the United States. According to the Canadian Produce Marketing Association, suppliers are required to post a bond worth double the value of the shipment to initiate a claim. Most suppliers do not have that kind of cash flow and big buyers are well aware of that. Our suppliers are therefore forced to negotiate the buyer down to try to get a minimum amount of compensation rather than lose everything. According to the testimony heard by the Standing Committee on Agriculture and Agri-Food when examining this issue, the United States and the United States Department of Agriculture have been very clear. They will be looking for a deemed trust before they agree to have a conversation on whether they will give us back the treatment we had previously. A public servant also confirmed that "the trade of fresh produce between Canada and the U.S. has continued to rise over the last four years, by 55% for fresh fruits and 26% for fresh vegetables, showing that the U.S. remains an important market for [Quebec and] Canadian fresh produce." Clearly, reinstating protection for our farmers who do business in the United States is not all that far-fetched. In fact, I would argue that it is necessary and urgent. I also want to remind the Prime Minister that he committed to fixing this problem not two weeks, two months or even two years ago. In 2014, when he had only just been elected to lead his party, he committed to fixing this problem if he took office, as he did in the 2015 federal election. Spoiler alert: His party has been running the federal government for almost 10 years. Why has it taken this long to get something done in support of our agricultural sector? This bill has the support of every party in the House. What is more, the bill is an environmental and social measure. I do not know why it has taken so long. That said, when it comes to Liberal standards, we have seen worse than taking 10 years to deliver on a promise. In closing, I would like to remind my colleagues in the House that I have the honour and privilege of representing the people of the Lower St. Lawrence, a rural and proudly agricultural region. In my region, we have 2,000 farms that produce annual revenues of more than $600 million, a major contribution to the gross domestic product of the region, Quebec and Canada. Dairy farming alone represents nearly half of all agri-food operations in the Lower St. Lawrence region, but our passionate farmers work in countless other sectors, such as maple syrup production in Temiscouata, hog farming, cattle farming, and grain and potato farming. There are also produce growers who grow fruits and vegetables on our fertile land. During my many visits and meetings with produce growers, I noticed that the representatives from the farming industry firmly and unanimously support this bill. That is why my esteemed colleagues in the Bloc Quebecois will support our colleague from Berthier--Maskinonge , the agriculture, agri-food and supply management critic, so that Bill C-280 , the bill he co-sponsored, may come into force as soon as possible. I invite all my esteemed colleagues on both sides of the House to do the same. For the sake of regions such as the Lower St. Lawrence, where farming has been an integral part of our daily lives for centuries, and for the sake of helping the farmers who put food on our tables remain competitive and financially healthy, we must move forward with Bill C-280.