Agriculture Committee on Feb. 19th, 2015

[Larry Maguire, Conservative, Brandon—Souris, MB]

Thanks, Mr. Rice.

Mr. Westcott, would you have anything to add to that?

[Jan Westcott]

I don't think we have any environmental standards issues across the country. In fact, I would say the one thing we do well in Canada—and I would compliment the provinces on this—is that we all have a clear understanding of what constitutes our products, what standards they have to be produced to, and quite a sincere effort to protect the integrity of our product.

For example, our signature product is Canadian whisky. Every province in this country works very hard to make sure that when somebody puts a product on the shelf that's called “Canadian whisky”, it is real Canadian whisky, made under the food and drug rules. We've very proud of the fact that we produce Crown Royal, which is a leading international whisky brand in Manitoba, but I would say that every province recognizes the quality and integrity and protects those things around our products.

Coming back to your second part as to why it's so difficult to get different provinces to come together, I was thinking about that, and it occurs to me that what we're missing in Canada is linkage. The international system works well because when you breach your international obligations, your trading partners have an ability to come back and say, “Okay, if you're producing this particular good, we're now going to restrict that good coming in.” We're missing that linkage. We're missing the linkage that Alberta, or Manitoba, or Ontario produces spirits and Nova Scotia produces lobsters. No one in Nova Scotia thinks there's going to be any penalty or any downside in giving their local alcohol producers in Nova Scotia an advantage. That linkage is missing.

I think we need to think that, whatever system we put in place, there has to be this understanding that every province is producing something that goes to other provinces and has value, and when provinces act unilaterally in one particular area, it can affect other things. Right now, that's not happening.

[The Chair, Conservative, Bev Shipley]

Thank you very much, Mr. Maguire.

To our witnesses from Spirits Canada and the Pork Council, thank you very much.

We'll recess while we set up for our next witnesses.

[The Chair, Conservative, Bev Shipley]

I'd like to call our committee back to order, please.

In our second hour, members, we have the privilege of hearing presentations from two sets of witnesses. First of all, from the Canadian Produce Marketing Association, with us today is Ron Lemaire, president. Also, from Winnipeg, Manitoba, on video conference, we have Cam Dahl, from Cereals Canada.

Welcome back, both of you. You've presented to our committee before, and we look forward to your presentations.

Committee members, we will break a few minutes early to deal with a motion that we have to move on for our meeting that is a couple of meetings away. We will move forward.

Because we have you on video conference, Mr. Dahl, I would ask you to start, please.

You have 10 minutes.

[Cam Dahl, President, Cereals Canada]

On behalf of Cereals Canada, I want to thank the standing committee for the invitation to appear before you today. The free flow of goods, both within Canada as well as to our international customers, is critical for the growth and competitiveness of the Canadian cereal sector.

My name is Cam Dahl. I am the president of Cereals Canada. In the interests of time, I will skip the introduction to the organization, but it is part of the brief that was prepared for you. I am open to any questions about the organization itself and am more than happy to answer.

I do appreciate this standing committee review of internal Canadian barriers to trade. In some senses, our international trade negotiations are more advanced than our internal agreements. The North American market remains the most important one for our farmers, grain handlers, and processors, as well as the crop development and seed companies.

I will be focusing my remarks today on two broad categories: national science-based standards, and transportation and logistics.

Canada has a science-based regulatory system that is the envy of much of the world. This includes the regulation of crop protection products through the Pest Management Regulatory Agency, or PMRA, and the regulation of new seed varieties, including plants with novel traits, through the Canadian Food Inspection Agency, or CFIA.

We should not take Canada's science-based regulatory framework for granted, because, in our view, it is under threat. Cereals Canada is concerned about a growing trend of local, environmental, and health regulations that are based on the perception of public opinion and not necessarily grounded on sound science. I would like to demonstrate this through two sets of examples pertaining to crop protection products and to seed.

First, on the crop production products, a number of provinces have enacted legislation and regulations that may limit the use of crop protection products that have been reviewed by the PMRA and approved for use in Canada. These provincial regulations do not conform to the principle of “science-based”. The result is a growing patchwork of overlapping federal and provincial regulations that differ from province to province. This patchwork of regulations puts farmers in some regions of the country at a competitive disadvantage to farmers in other parts of Canada, and just as importantly, puts Canadian farmers as a whole at a competitive disadvantage to farmers in other countries such as the United States.

The most recent example of provincial jurisdictions overriding the science-based regulatory decisions of the PMRA is a move by the Government of Ontario to limit the use of neonicotinoid seed treatments. The reduction targets issued by the Government of Ontario will likely amount to an effective ban on this seed treatment, which is available to farmers in other parts of Canada, as well as the United States.

Regulation like this will put Ontario farmers at a competitive disadvantage, for two reasons. First, the provincial limitation on the use of neonicotinoid seed treatments will increase the cost of production in Ontario, as alternative pest control products are more expensive to apply. Second, the regulations will limit the availability of seed for Ontario producers, because seed prepared in other jurisdictions will not be an option for Ontario farmers if these preparations do not conform to the Ontario regulations.

The Ontario limitation on neonicotinoid seed treatments arose because of concerns regarding the health of pollinators. All of agriculture is concerned about the health of pollinators, but the right approach is one that is national in scope and based on sound science. I note that the PMRA is currently undertaking a review of these products. Localized regulation and legislation should not pre-empt this review.

The Ontario limitation on neonicotinoid seed treatments is just an example of problematic localized regulations. What new issue might spew from the Internet next week or the week after? Canada needs to acknowledge the concerns raised by society at large, but we need to address these concerns in a national, science-based, systemic fashion. Provincial bans on the so-called cosmetic use of crop protection products are just another example of localized regulations that are contributing to the advance of regulations based on popular culture, not science.

Many of these provincial regulations have arisen because of concerns regarding the product 2,4-D. In fact, 2,4-D is one of the most studied and reviewed pesticides today. Health Canada's latest review of 2,4-D was published in 2008. I want to quote a few lines from that report:

Health Canada's assessment included the addition of extra safety factors to ensure that the most sensitive population groups, such as children and pregnant women, were also protected. Health Canada also took into consideration the unique physiology, behaviours and play habits of children, such as lower body weight and hand-to-mouth contact while playing on treated grass.

In other words, the precautionary principle was in use in Health Canada’s review. A pesticide is registered in Canada only if it has been determined that there is reasonable certainty that no harm to human health, future generations, or the environment will result from exposure to or use of the product. This should remain the guiding principle from coast to coast.

I must note that Cereals Canada's concerns with the growth of the non-science-based patchwork regulations across the country extends beyond the immediate impact of these regulations. The impact is also long term. The growth of non-science-based regulations in Canada is increasing Canadian regulatory uncertainty.

Regulatory uncertainty is a cost that directly limits investment. Will a company invest millions of dollars, including the cost of moving through the PMRA’s regulatory review, to deliver a new crop protection product to Canadian farmers if that product can be arbitrarily taken off the shelves by local or provincial governments? I am concerned that the answer will increasingly be no.

The availability of new, more efficient, and effective products in other jurisdictions will put all Canadian farmers at an increasing disadvantage over time. This concern applies to the entire country, not just those farmers within the regions or municipalities with restrictive regulations.

I would like to highlight another example that comes from seed regulations. Limiting local regulations are not constrained to crop protection products. For example, in 2002 the Alberta government, believing that Alberta was free from fusarium head blight, launched restrictive regulations in an attempt to prevent the disease's establishment.

Now, more than 10 years later, the situation is much different. Fusarium is present in Alberta despite the existence of the management plan. It is being found increasingly in wheat, durum, and barley in widespread areas of the province. The current fusarium management plan requires farmers to test seed, and that seed must be found to be “non-detect” for fusarium. Given the presence of fusarium in other provinces and in the United States, it is difficult to source higher generation pedigreed seed that growers in Alberta and elsewhere can use to produce seed for Alberta farmers.

In some cases, the only option for reaching “non-detect” is to heat-treat the seed. This is expensive, could potentially damage the seed, and restricts the amount of seed that can be produced. It also delays the introduction of new varieties in Alberta, putting Alberta farmers at a competitive disadvantage. In addition, seed produced in Alberta that presents with even very low levels of fusarium needs to be moved out of the province and sold as grain instead of seed and, of course, that happens at much lower prices. The result is a smaller supply of seed for Alberta farmers. That supply comes at a higher cost because of the measures that have been taken to try to reach this non-detect level.

These are just two examples.

Cereals Canada would like to propose a solution that would help limit the impact of non-science-based local regulations.

Cereals Canada proposes that a resolution process be brought into the Agreement on Internal Trade. This provision would allow the review of regulations on agricultural products, specifically crop protection products and seed, to ensure these regulations conform to the national standards and fit within Canada’s science-based regulatory framework. Again, I note that these types of provisions are being worked into the trade agreements that we are developing with our customers internationally.

I would like to turn to the second topic, transportation and logistics. Of course, as all committee members know, we could spend a lot of time on the issue of transportation and logistics. The committee is aware of the impact on Canada’s global reputation arising from transportation failures during the winter of 2013-14. However, the impact of these failures is not limited to international markets. Livestock feed going into B.C. is limited. Canadian and U.S. millers ran out of Canadian product. In fact, oat processors were importing product from Scandinavia because they could not find transportation to move Canadian oats.

The actions taken by the Government of Canada have been well received by international customers; however, it is clear that their confidence in Canada as a reliable supplier of high quality has been shaken. While the situation has improved from last winter, North American customers, including Canadian flour millers and feed processors, continue to voice concerns about transportation shortfalls.

Available transportation is critical to the free flow of goods within Canada. Additional regulatory and perhaps legislative changes are required if Canada is to build an environment where all parties are commercially accountable for performance, commercial accountability is well defined and known by all parties, all parties have access to timely and effective dispute resolution mechanisms, and the grain handling and transportation system meets the growing demand of the Canadian economy.

Grain handling and transportation is a complex file, and this is not a complete list of issues that need to be resolved, nor is this a complete explanation of the details on these key points. Cereals Canada is happy to discuss these issues further if you have any additional questions and comments.

This wraps up the remarks.

Again, I thank you for your time, and I welcome all questions and comments that you may have.

[The Chair, Conservative, Bev Shipley]

Thank you very much, Mr. Dahl, for your presentation and your material.

We'll now move to the Canadian Produce Marketing Association.

Mr. Lemaire, you have 10 minutes, please.

[Ron Lemaire, President, Canadian Produce Marketing Association]

Thank you, Mr. Chair.

Honourable members of the Standing Committee on Agriculture and Agri-Food, on behalf of the Canadian Produce Marketing Association, I would like to thank you for the opportunity to speak today on the topic of promoting domestic trade of agricultural and agrifood products by reducing interprovincial trade barriers.

The Canadian Produce Marketing Association, as you know, is a 90-year-old, not-for-profit trade association representing 800 companies within a supply chain that contributes $11.4 billion in real GDP. In 2013 it supported roughly 148,000 jobs in Canada. This economic activity supported the creation of $7.5 billion in primary household income and $2.9 billion in corporate profits, which in turn contributed directly to federal and provincial government revenues. ln total, the Conference Board of Canada calculated that the federal government balance was improved by $2.4 billion, and aggregate provincial balances by $1.1 billion, in 2013 due to the economic activity associated with Canada's produce sector.

The produce industry is a unique entity. This important economic engine is made up of rural, provincial, national, and multinational companies all working together to increase the consumption of fruit and vegetables in Canada. The foundation of Canada's fresh produce supply chain is made up of approximately 8,500 small, medium-, and large-sized farms that produce vegetables, fruit, and potatoes. As the committee is well aware, a portion of Canada's produce production is sold domestically, while a significant portion is destined for export. ln 2013 farm cash receipts equalled approximately $4.2 billion, with $2 billion being exported. There are many reasons for this high percentage of exports, including a higher value of return, easy market access, and a Canadian dollar fluctuation.

Promoting increased trade and sales within our own market is very important to the long-term viability of our industry and economy. The Conference Board calculated that if we lift the consumption of every Canadian aged two and over by one portion per day, this would add $3.1 billion to spending on fruits and vegetables. Additionally, this would permanently lift the GDP by $1.6 billion and create nearly 30,000 jobs. This along with export markets that can change quickly or close quickly are key reasons we need to promote domestic trade and reduce trade barriers.

As you know, section 121 of the Constitution states:

All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.

The ability of the provinces to create customized policies and adopt different economic strategies is considered a strength of our federalist model. However, this has aIso created barriers that reduce opportunities for trade between the provinces. Indeed, sometimes different policies work against each other to negate the intended effects. Removing historical barriers is vital to encouraging increased domestic trade. Areas I'd like to focus on today include consistency of alignment of regulations, container size, and payment protection.

As we move forward to modernize regulations at a federal level, we need to recognize the importance of alignment of the provinces. Many provinces, and even municipalities, are creating food policies to support a growing demand for local food. In many cases, these policies contradict their purpose and actually hinder the sale and movement of domestically grown fruit and vegetables. Definitions of what constitutes local, either stated or implied, differ between programs and regions. The more restrictive these are, the more the domestic movement of food is impacted.

Perhaps the area that has the greatest potential to impact industry's domestic interprovincial competitiveness is the pending regulatory change at the federal level. While industry applauds the federal government for efforts to modernize food safety and labelling regulations, if provinces do not adopt or align the same regulations, there will be multiple regulatory requirements that any interprovincial shipper would need to meet. If we take the example of food safety audits, it is already daunting and extremely costly for industry to respond to various country and customer requirements. If the provinces don't align, the problem could grow exponentially.

As an aside, there should be no difference between the provinces, or between the provinces and the federal level, on what constitutes food safety. We request that the federal government continue to encourage the provinces and territories to commit to aligning their food safety regulations with the new food safety for Canadians regulations, when implemented.

Hand in hand with this is the need for the provinces and territories to commit to adopting common standards that support both domestic and international trade. As an example, I'd like to talk about the Canadian organic products regulations of 2009 for intraprovincial trade.

For interprovincial trade, companies must follow the federal organic regulations. This could create challenges if the regulations within the provinces are different, and could reduce the ability to trade organic product on a national scale. Another area of concern similar to the organic regulation is activity happening at a provincial area around stewardship programs. These programs are operating at provincial levels across the country, developed in a fragmented manner and not framed on a national scope addressing recycling programs throughout Canada. While important, they are adding tremendous cost to the industry based on the differences of application in each province. Although it is recognized that intraprovincial regulations are the purview of the provinces, industry requests that the federal government work diligently, including through the existing federal-provincial-territorial working groups, to strongly encourage alignment.

Other regulations, such as those related to plant health, should be reviewed in the context of risk impact and science to ensure that the regulations are still relevant, since industry needs to pay for inspections for some products moving between provinces. For example, apples from eastern Canada require an inspection of every load shipped to B.C. for a pest that may no longer be a threat. In addition, there is no ability for a portion of that produce shipment to be unloaded in another province on their route, such as Alberta or Manitoba. ln a market that works with highly perishable products with very tight margins, shippers try to find cost savings by sending product to multiple locations when travelling across the country. An example such as this adds costs to the supply chain and can impact consumer pricing and availability.

Standard container regulations, currently under review, are another area where movement between provinces is impacted based on the regulations around what constitutes a standard container. Many in industry believe these are antiquated and they in some instances negatively impact interprovincial movement of produce, specifically apples, potatoes, and blueberries. More consultation is necessary to determine a practical and modernized approach to a regulation that was created many years ago.

Inconsistency of regulatory application across Canada is another significant issue, one that can cause frustration for an entire supply chain. Industry continues to encourage federal regulators to ensure their front-line inspectors apply regulations consistently, regardless of the province in which an inspection is performed, so that the federal government itself does not inadvertently create barriers to trade through differing interpretation and enforcement of federal regulation in different regions.

ln closing, I would be remiss in not using the opportunity to remind the committee members of a key issue for the industry in Canada. This relates to protecting produce sellers when selling in Canada. As many of you are aware, the produce seller is not effectively protected under the current Bankruptcy and Insolvency Act. To effectively protect the industry, there is a responsibility and jurisdiction for both provincial and federal governments. The provinces need the federal government to take the lead before they are able to align with any new model to ensure produce sellers are protected when a company becomes insolvent or bankrupt. With the loss of preferential access to the United States' Perishable Agricultural Commodities Act and the corresponding rise of payment uncertainty for produce shipped to the U.S., some Canadian companies may be looking to increase their sales in the Canadian market. Ensuring payment protection and barrier-free access across the country will allow them to confidently find new customers for their products.

I understand that the committee has today received a summary document from Minister Ritz outlining an assessment of the feasibility for insurance and bonding for our sector. I would caution the committee to consider this document very carefully, as it excludes such important caveats as cost, sustainability, and added administrative burden or red tape to both industry and government. Interestingly, the list of risk management tools examined does not include the creation of a limited statutory deemed trust to protect produce sellers during bankruptcy. This no-cost approach is the industry's preferred solution and one we have been advocating for over the last 30 years.

Thank you again for the time, and I will entertain any questions.

[The Chair, Conservative, Bev Shipley]

Thank you very much, Mr. Lemaire. We'll likely try to stick to the interprovincial concerns, but I appreciate your raising that. It is an issue you've brought up many times.

I'll now move to Madam Raynault, for five minutes, please.

[Francine Raynault, NDP, Joliette, QC]

Thank you, Mr. Chair.

My question is for Mr. Lemaire.

My riding, Joliette, Quebec, is home to many potato and blueberry farmers. Since we're talking about fresh produce, I was wondering whether farmers suffer a lot of transportation-related losses, in terms of shipping their products to other provinces. Does it cause them significant losses? Is there anything you can tell us about that?

[Ron Lemaire]

It's a very difficult question to answer relative to losses.

As you know, the perishability of fresh produce can cause quite a few different issues, especially in transportation if the cold chain is not managed. Ensuring that the grower and the shipper are managing that cold chain when providing that product to the buyer interprovincially and that the transportation system is in place are vital. Transportation is an issue and my colleague in the west noted that relative to cereals.

For the produce industry, access to transportation interprovincially and also internationally is an ongoing costly component of our business.

There are innovations in place to ensure the cold chain management of the product is improved so that the product does reach its destination and has an extended shelf life once its there based on how it's handled through the shipping process. We have worked to find innovations with packaging and with shipping to be able to provide longer shelf life once the product is received. We're very hopeful that we'll continue to find more innovations to reduce any potential shrink and add increased sales to the grower.

Packaging is the key. It's a matter of, for example, whether they have to pack in clam shells for blueberries to ship across interprovincial boundaries. There may be other manners and ways to ship that are more cost effective and those are areas we need to investigate further.

[Francine Raynault, NDP, Joliette, QC]

Obviously, that's important because people want fresh products. If the blueberries are all bruised up, people won't buy them anyways. So it's a loss not only to the farmer, but also to the retailer. On top of that, it hurts the farmer's reputation, no matter which province there from. Farmers have to make sure their produce is fresh. As we all know and as potato farmers in my riding have told me, the situation is quite serious. People don't want to buy potatoes that are all banged up.

[Ron Lemaire]

Exactly.

[Francine Raynault, NDP, Joliette, QC]

What often happens when an order comes in and the grocer opens up a bag and finds one, two or three potatoes that are bruised is they refuse the entire shipment in the truck. That's a loss for the farmer. It's not a good situation.

[Ron Lemaire]

There are some potato shippers that are asking if they can change the size and volume of packed potatoes that are shipped so they can ship larger volumes across interprovincial boundaries and repack in another province to ensure that they can remove any product that may have been damaged and that the consumer is getting the best product possible.

We have heard that from some of our potato growers. It is something we need to look at under the standard container framework to ensure we are modernizing our approach to how we move and transfer product from province to province, while still protecting our domestic growing framework.

[The Chair, Conservative, Bev Shipley]

I am going to cut it there. We're going to be a little short, so I'm going to keep it so we can stay within our timeline, if that's okay.

I'll now move to Mr. Dreeshen. You're almost there, though.

[Earl Dreeshen, Conservative, Red Deer, AB]

Thank you very much, Mr. Chair.

It's great to have this opportunity to speak with both of you.

I think one of the things that you had mentioned, Mr. Lemaire, was popular culture, some of the trendy issues, things such as the 100-mile diet, and so on. It sounds very good; however, the practicalities of it and the realities of what we have in our country are somewhat obscure.

I think, as well, Cam, you had mentioned the same type of thing, where we have a perception of public opinion—and of course that's fed by different groups and popular culture—and then there's the fact that it's not grounded in science. One of the issues, again, as a canola producer in western Canada, is the discussion on GMOs and all of these types of things. When we look at the great strides that it has provided for the industry, those that pay attention would recognize the types of things that it could do for the rest of the world, as far as hunger is concerned, and as far as reducing the need for extra energy in order to produce, and for water, and so on. However, there is a popular culture that says they don't want to see any of that happening.

Now, again, there is some research that says, okay, we have to be careful in certain areas, and of course, I think that's perhaps where the discussion in Ontario is coming from when we look at the neonicotinoid seed treatments. They have moved in a certain direction. We use the same types of seed treatments in Alberta, perhaps applied in a different manner. We have seen our bee populations increase. There's no canola producer that isn't happy to have a bunch of bees brought into their community so that they can help in the pollination.

I think we have to make sure that the science is there and that people understand how that comes into play, or else we end up with these knee-jerk reaction situations occurring. Those that don't understand seem to be louder at the microphone than some of the others.

But I'd just like to have you talk, perhaps, Cam, if you could, a little bit more on how difficult it is for competitiveness when we're trying to bring in other information from other countries, science-based programs, in order to help our own industries, and how the difficulties that exist there also permeate throughout the interprovincial barriers that we see.

[Cam Dahl]

Thank you for your comments. I think you have accurately given a synopsis of the issue. Something that I am growing more and more concerned about is the breakdown of national science-based standards. The examples I used in the brief are only just two examples. There are others. For example, my members in British Columbia have raised concerns about localized bans on products of modern biotechnology. We need to be careful in Canada that we don't close the door to investment in new products and in new seed varieties, because of our regulatory risk. That regulatory risk will be substantially increased if we have a patchwork of differing regulations across the country, and in each different region, and sometimes in municipalities.

I think your study on interprovincial trade barriers is an ideal time to address this concern, because I really do believe that the Agreement on Internal Trade is an ideal vehicle to bring forward mechanisms that would help resolve some of these differing regulations across the country. This is precisely the kind of vehicle that we are incorporating into our international trade agreements. I think you have an ideal opportunity now to make those recommendations, to bring that resolution process into Canada, and to ensure that patchwork of regulations doesn't occur in Canada.

[The Chair, Conservative, Bev Shipley]

Thank you very much. Thank you, Mr. Dreeshen.

I'll now move to Mr. Eyking, please, for five minutes.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you, Mr. Chair, and I thank our guests for coming today.

I'm going to start with you, Cam. You represent many different growers of cereals and you mentioned the concern about, especially, the interprovincial transportation of grains, and how some of our users within each province are not receiving the amount of grain that they should receive. Also, many of your commodities came to us and said to us that the big yields and volumes they're having now could be very common in the future, and then when you have coal, oil, and potash being shipped....

I have a motion in the House dealing with a long-range strategy for rail transportation. Right now we have a short-term solution on the floor. What would you like to see in that long-term strategy on a rail solution that would make sure that the grain is going to be moving in good time and that the people, our local receivers, are going to get the grain they need within their provinces?

[Cam Dahl]

Thank you for the question. It is a critical issue.

Again, it gets back to that question on investment. My colleague from the produce sector noted the value of local value-added processing and consumption, and the same applies for products that my members produce. If we could increase that Canadian consumption and Canadian trade, it would be very valuable.

I think the one critical point comes down to a balanced accountability. This is something we have referenced to the review of the Canada Transportation Act, which is ongoing and is something that we hold out hope for. We need to ensure that there is financial accountability by all parties, so that if a grain company is not loading cars and not meeting its requirements, there is financial accountability for that. The same—that there be financial accountability—applies on the rail side if the railways are not meeting demand. This is the part that is missing today.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you very much. You need a long-range strategy.

For the produce industry, you alluded to problems with protecting our exporters in the United States. It has an effect back here in Canada. I think your industry is looking at whether we should have a North American or definitely a Canada-U.S. system in place, and it's kind of stuck in Industry Canada now that we protect our exporters and shippers.

What would you like to see come out of this so that all produce people in North America and interprovincially are protected in some way where there is a big void right now? How much is not having something in place costing your industry right now?

[Ron Lemaire]

This does come back to interprovincial and federal jurisdiction, because we need to find a solution for Canadians. Beyond the U.S.-Canada relationship, this is a concern for Canadians selling to Canadians and selling between provinces. This is why the provinces have a key role in part of this solution and the federal government does on the bankruptcy and solvency component.

After many years of working with the federal government to look at options, from bonding to insurance to pooling, we've found that all of those options are high-cost options and don't necessarily work relative to effectively supporting an industry. As an example, in insurance, 20% of the buyers are not insurable. At any one time, a buyer is operating at five times the value of their liquid assets, so an insurance company would be looking at covering those assets with only what they owe.

Within an insurance framework, the system doesn't function. What is being proposed is that maybe the government would put $25 million into it. As an industry, we are saying that there's no need to put government funds into a system that we know would just add administrative burden and challenges.

The key here is working with the provinces and working at a federal level to create a statutory deemed trust that would enable the produce industry to access what is rightfully theirs in the event of a bankruptcy. That would be focused on a very narrow scope in looking at the accounts receivable in the sale of the produce and/or any assets derived from the sale of produce during the bankruptcy. It's very narrow and very focused, and it would allow produce sellers who can't access their fresh produce—because it's gone. It's perishable and it's gone through the system in a bankruptcy. But the provinces play a key role here also.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Can I ask you one quick question? My time is probably up.

Why isn't the federal government acting on this?

[The Chair, Conservative, Bev Shipley]

You're out of time.

Now I'll move to Mr. Keddy, please, for five minutes.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

I'll try to continue on the same subject here. Within the domestic marketplace in Canada, it's my understanding that there has been some discussion with Minister Ritz and some discussion of matching dollars if the industry were to put a checkoff in place. Have you looked at that? Are you willing to consider something like that?