Financial Protection for Fresh Fruit and Vegetable Farmers Act
Date: 2023_04_19
Chamber: HOUSE OF COMMONS
Mr. John Barlow: before I begin my remarks on this bill, which was brought forward by my colleague from York--Simcoe , I want to say that I appreciate having the support of all the opposition parties on this very important private member's bill. However, in response to my NDP colleague, I am also extremely proud to have been part of a government that eliminated the Wheat Board and gave Canadian farmers marketing freedom and never-before-seen success. That is something farmers are extremely proud of. Again, I want to thank my colleague from York--Simcoe . Certainly, I think all of us in the House appreciate his passion for his riding, or what he would call the "soup and salad bowl" of the country. I had the opportunity to tour the Holland Marsh with my colleague last fall, and I had the chance to get down, get my hands dirty and harvest celery and carrots. This is something that does not really happen very often in southern Alberta in the foothills. That was an opportunity to see first-hand the dedication and commitment of those farm families to grow and produce the finest-quality fresh fruit and produce anywhere in the world. It just shows why this legislation, this private member's bill, is so important. It aims to create a limited statutory deemed trust to provide critical financial protection and assurance to our producers of these perishable fruits and vegetables in the event that a purchaser becomes bankrupt or goes into receivership. I want to mention that the Liberals could bring forward this legislation any time. Interestingly, their 2015 election platform committed to follow through on exactly what my colleague has brought forward today. It is another promise made and another promise broken; it has been almost nine years, and they have yet to follow through on that election commitment. Again it falls upon the Conservatives to do what the Liberals have failed to do and stand up for Canadian farmers. This legislation would ensure that produce sellers have priority access to an insolvent buyer's cash, inventory and accounts related to the sale of fresh produce. The current rules severely limit the ability for produce growers and sellers to collect payment when their buyers declare bankruptcy. This is unique, as my colleague from York--Simcoe said, because if a distributor or a vendor went bankrupt, many times those products could be returned to the producer. Electronics, a bicycle or whatever the commodity or product was, it could be returned. Obviously, with fresh fruit and vegetables, it is a very different situation. Either the product is consumed, or it rots in the warehouse, leaving the producer nothing. They cannot resell it because it has expired and rotted. They cannot collect the product back from the bankrupt retailer. First, I want to give a bit of background on where we stand. The United States Perishable Agriculture Commodities Act, which many of us have heard referred to as PACA, provides protection to producers of perishable products in the case of a buyer's bankruptcy or insolvency. More specifically, it protects fresh fruit and vegetable growers. The PACA provisions require buyers to maintain a statutory trust on fruit and vegetables received and not yet paid for. The reason for this is as follows: In the case of a business failure or bankruptcy, the debtor's true assets are not available for general distribution to other creditors until valid claims of trust from producers have been satisfied. This is to protect those fresh fruit and vegetable growers. PACA provided Canadian producers with the same rights as their American suppliers. While Canadian firms had been the only non-U.S. entities benefiting from these same protections when operating in the United States, the lack of a comparable system here in Canada was a trade irritant to the United States. Not surprisingly, in late 2014, the United States revoked Canada's preferential access to PACA's payment dispute resolution mechanism. This was due to Canada's lack of a similar protection here in Canada, and it was stated that the preferential access would not be reinstated until a similar piece of legislation was passed in Parliament. Again, it brings us back to the Liberal Party's 2015 election promise to do such a thing, which it has not done. As a result of that, fruit and vegetable growers here in Canada have been waiting more than eight years for the Liberals to act on the campaign promise. However, once again, the Liberals have not followed through on that commitment. With their track record when it comes to Canadian agriculture, this is not surprising. From what we have heard here tonight, certainly this legislation is long overdue, but it seems that when those things come up the Liberals go out of their way to create trade irritants with the United States rather than solving these issues. We have certainly heard that with PACA tonight, front-of-package labelling, animal vaccines and removing critical pest management products from Canadian farmers that are impacting our American colleagues. We also heard, just in committee today, from the Food Processors of Canada, that higher interest rates, higher input costs and the carbon tax are putting our producers and our processors in a very precarious financial position, putting even more urgency on this type of legislation, which would provide protection and cost certainty for our processors. Throughout the years, as a long-term sitting member of the Standing Committee on Agriculture and Agri-Food, I know that this type of legislation has been supported unanimously by all the members of the committee. It has been a recommendation in numerous studies that we have done at the agriculture and agri-food committee, and yet the government has yet to act on that. Clearly, this is not a priority for the Minister of Agriculture , for the Minister of Innovation , for the Minister of International Trade or certainly for the Prime Minister . Time and again, the Liberals have targeted farmers with higher carbon taxes, burdensome red tape, removal of valuable pest management tools, and fertilizer tariffs. Liberal mismanagement on important trade files has put these critical international markets at risk. We also heard from the Fruit and Vegetable Growers of Canada that 44% of fresh fruit and vegetable producers are selling their products at a loss, so there is no question that these bankruptcies and insolvencies can and will happen. In fact, we know they have already happened. Therefore, it is no surprise, when a survey goes out to Canadian farmers asking them if they feel that the current Liberal government is doing a good job supporting agriculture, that only 2% of the farmers surveyed say that they think the Liberals are doing a good job. It is from decisions or inaction on these types of critical pieces of legislation that this frustration and anxiety arise. When we talk about why this legislation is needed, it only takes one bankruptcy to have a devastating impact throughout the industry, and certainly a ripple effect throughout all of our small rural communities that rely on these family farms. Certainly if we talk to my colleague from York--Simcoe and many of the members of Parliament around his riding, we will hear that the economics of the small communities in those rural areas rely on these industries. I am sure the government will try to argue that there has been no demonstrated reason why this legislation is needed, but that is simply not true. We already had the Lakeside Produce company in Leamington, Ontario, file for bankruptcy earlier this year. There were 17 Canadian produce companies listed among Lakeside's creditors, totalling more than $1.6 million in unsecured claims. We can imagine the impact that has on the small family farms that are out those dollars and those products. Another 45 produce companies outside Canada, mainly in Mexico and the United States, are owed another $4.85 million. Not only could Canadian companies be in these circumstances, but this is a highly integrated industry and the ripple effects are significant. In addition to Lakeside Produce, in October 2021 a New Brunswick produce retailer declared bankruptcy, with more than $3 million owing to its creditors, including farmers and wholesale produce retailers. It is absolutely critical that we give our fresh fruit and produce farm families this assurance, this economic safety net and certainly this protection so they can go about their business knowing that a bankruptcy will not put their own farm at risk. Also, as Canadians, we need this protection to ensure that our food security is protected. I would encourage all members of this House to support this private member's bill and support Canadian farmers.