Bill C-280

Financial Protection for Fresh Fruit and Vegetable Farmers Act

An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (deemed trust – perishable fruits and vegetables)

This enactment amends 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 in the event that the purchaser has not fully paid for the fruits or vegetables and becomes bankrupt or the subject to a receivership or applies to the court to sanction a compromise or an arrangement.

The House proceeded to the consideration of Bill C-280, Financial Protection for Fresh Fruit and Vegetable Farmers Act, as reported (without amendment) from the committee.

Financial Protection for Fresh Fruit and Vegetable Farmers Act

[The Assistant Deputy Speaker, Carol Hughes]

There being no motions at report stage, the House will now proceed, without debate, to the putting of the question on the motion to concur in the bill at report stage.

[Scot Davidson, Conservative, York—Simcoe, ON]

moved that the bill be concurred in.

[The Assistant Deputy Speaker, Carol Hughes]

If a member of a recognized party present in the House wishes that the motion be carried or carried on division or wishes to request a recorded division, I would invite them to rise and indicate it to the Chair.

[An hon. member]

On division.

[The Assistant Deputy Speaker, Carol Hughes]

(Motion agreed to)

[Scot Davidson, Conservative, York—Simcoe, ON]

moved that the bill be read the third time and passed.

Madam Speaker, we want to get to a vote right away tonight. I know all my colleague are excited to get Bill C-280 passed.

It is a pleasure to rise once again to speak to my private member's bill, Bill C-280, the financial protection for fresh fruit and vegetable farmers act. I am encouraged by the support this common-sense Conservative bill has had so far, but we need to keep pushing. It is all the more important as we look to address the high food prices, rising inflation and strained supply chains we see in Canada today. I will take the opportunity this evening to reiterate the urgent need for the financial protection of this bill and the benefits it will bring, and will address some of the questions raised at committee.

We all know we need a doctor maybe once a year and need a firefighter once in a lifetime if we are really unlucky, but we need a farmer three times a day, every day. That is a fact. Despite their importance in supplying local communities with safe and nutritious fruits and vegetables, there is not enough financial protection for Canadian fresh fruit and vegetable suppliers. In circumstances where buyers become insolvent and fail to pay for fresh fruits or vegetables they were supplied, farmers are out of pocket for those losses.

To address this, Bill C-280 proposes to establish a limited deemed trust that would provide much needed financial protection for the entire fresh fruit and vegetable sector in Canada. This bill would give fresh fruit and vegetable suppliers priority access to the proceeds of sale, limited to the inventory, accounts receivable and cash on hand derived from the sale of the produce, during the bankruptcy proceedings of an insolvent buyer. This will help offset the loss of their sold produce.

For too long, the existing provisions within the Bankruptcy and Insolvency Act and adjacent legislation have not provided adequate priority for fresh fruit and vegetable suppliers when insolvencies occur, as these provisions do not take into consideration the unique characteristics of the sector. While the act technically allows suppliers to recover their products following a bankruptcy, it provides no rights when the product has been resold, is no longer identifiable or is no longer in the same state, which is to be expected with most fresh fruits and vegetables.

Fresh fruits and vegetables are subject to rapid perishability. Their shelf life can be sometimes measured in mere hours. By the time insolvency proceedings have concluded, the spoiled product is no longer of any value and cannot be repossessed or resold.

The superpriority provision for farmers in the act does not address the needs of fresh fruit and vegetable suppliers, who regularly receive payments 30 days or more after they have delivered the product. These longer payment terms are typical in the industry. They accommodate the rapid pace of trade and complex storage and transportation arrangements that must be made between many parties to get fruits and vegetables to market over the course of a short growing season. As such, the requirement in the BIA that fruits and vegetables must have been delivered within 15 days of bankruptcy to be covered under the superpriority means that most fresh produce becomes unprotected. This lack of financial protection for Canada's fresh fruit and vegetable sector has had devastating consequences, as farmers and other suppliers find themselves as unsecured creditors with little recourse for their losses.

It is well established that bankruptcies are considerably higher in this sector than in any other agriculture sector across Canada. They occur twice as often as those in livestock and are over 10 times the rates of the poultry and grain sectors, which are heavily regulated in Canada. The average net loss from non-payments, partial payments and delayed payments in the Canadian fruit and vegetable trade amounts to at least 1.53% of a supplier's gross revenue. This is a significant amount for those in the fresh produce sector considering their high overhead and capital costs, small profit margins and reduced risk management capability. While this amount is significant, it does not even capture the full extent of non-payment. Many firms simply close their doors and walk away from their businesses.

These losses are routinely absorbed by farmers, but they are not captured in bankruptcy data. These losses are especially devastating considering that three quarters of Canada’s fresh fruit and vegetable producers are small businesses with sales of less than $85,000 per year, many of which rely on a single buyer for the bulk of their crop. These smaller-scale producers do not have the capability to make credit checks on their buyers, negotiate conditional sales agreements or take other safeguards typical in other industries. Their ability to pursue repayment and other forms of recourse when a buyer does not pay is also extremely limited.

As one can imagine, bankruptcies within the fresh fruit and vegetable industry can jeopardize farms and livelihoods, and the constant fear of non-payment limits our farmers’ ability to invest in their businesses, grow and actually plan for the future. The bankruptcy of Lakeside Produce in Leamington, Ontario, this past winter demonstrated just how wide-ranging the impact that bankruptcy has had on the entire fresh produce industry. When it went bankrupt, Lakeside Produce owed $188 million to suppliers across the fruit and vegetable sector. There were 17 Canadian produce companies among Lakeside’s creditors, which accounted for $1.7 million in unsecured claims.

The lack of financial protection for the fresh produce industry in Canada also impacts our competitiveness and capacity to trade with the United States. Suppliers are no longer able to access the dispute resolution and financial protection processes that exist in the U.S. through the Perishable Agricultural Commodities Act, without incurring significant financial costs. This severely disadvantages Canadian produce businesses given the high volume of produce sold to buyers in the U.S. Having a financial protection tool in place in Canada would pave the way for the United States Department of Agriculture to restore Canadian produce sellers’ preferential access to the U.S. dispute resolution mechanism for fresh fruits and vegetables.

With the adoption of Bill C-280, we could finally ensure that Canada’s bankruptcy laws work for fresh fruit and vegetable suppliers in a form that recognizes the particular needs and challenges of the industry. By doing so, there would be considerable benefits for Canadians.

The financial protection would strengthen a pivotal industry in Canada, increase economic activity and bring economic benefit to the entire fresh fruit and vegetable value chain. With greater certainty and reduced risk, we would see more investment and growth as Canadian farms and greenhouses expand their operations and return operations to Canada that had migrated to the United States when access to PACA was lost. These measures would also result in a reduction in prices for Canadian consumers, which I know is top of mind for all MPs in this House tonight. We would expect to see a decrease in prices for Canadians by as much as 15%, which would save families as much as $900 million on their annual purchases of fresh fruit and vegetables.

While this bill was being studied at committee, there were questions about why the bill would extend the deemed trust protections to all suppliers of perishable fruits and vegetables, which is perhaps considered by some to be too broad. However, it is important to remember that within the fresh fruit and vegetable industry, the large retail trade, farmers’ markets, food service and hospitality trades are far less affected by the lack of financial protection. For the most part, it is the growers and others involved in the first sale, such as packers, brokers and shippers, who are most vulnerable to payment disruption and who would need the financial protection afforded by Bill C-280 the most.

That said, this industry is highly integrated, and bankruptcies involving producers, dealers, shippers, wholesalers, distributors and retailers impact the stability of the market. A bankruptcy at any point along the supply chain can result in farmers going unpaid, so it is essential that all suppliers receive the necessary protection. Crucially, protecting fresh produce suppliers equally is needed to access the equivalent protection offered by the Perishable Agricultural Commodities Act in the United States, which covers all suppliers along the chain.

Another question raised has been the impact of these financial protections on the banking industry. While it is true that by giving priority access to produce suppliers, banks will see their claims receive a lower priority, the benefits of protecting fresh fruit and produce suppliers outweigh the distributional impacts for the banking industry. Moreover, the banking industry would actually benefit from the increased predictability of payments when lending to those in the fresh fruit and vegetable sector. This has been the case in the United States under the PACA deemed trust, which has been reported to be a net positive to the banks, in addition to the produce sector itself.

Canada relies on boots on the ground, hands in the muck and rubber boots on the farm to provide fresh locally grown produce to our citizens. When these farmers suffer losses due to buyer insolvency, it threatens our very food security by reducing the availability of Canadian grown products.

We already know this is happening. Earlier this year, a Statistics Canada report showed that there was a significant decline in fresh fruit and vegetable availability for Canadians in 2022. More than three-quarters of all produce consumed in Canada is imported. As access to fresh produce from foreign markets is increasingly jeopardized by climate change, carbon taxes, trade protections and supply chain issues, our food security becomes more and more threatened right here at home. For much of our nation's history, Canada was far more self-reliant in the fresh fruit and vegetable trade, with production far outpacing consumption, but the failure to reduce risk and provide certainty to the fresh fruit and vegetable sector has seen this decline significantly. This needs to change.

Fundamentally, Bill C-280 recognizes the need to support Canada's produce sector, just as we support other agriculture sectors, by ensuring that Canada's bankruptcy laws recognize the particular challenges and demands of growing and selling fresh fruits and vegetables. Canada's fresh fruit and vegetable farmers should always be paid for the fresh fruits and vegetables they sell. By passing Bill C-280, we can ensure that our food security is protected and that our produce sector is strengthened. By putting this important financial protection tool in place for produce supplies, we will support the economy and lower costs for all Canadians from coast to coast to coast, so let us get it done.

[Adam van Koeverden, Liberal, Parliamentary Secretary to the Minister of Environment and Climate Change and to the Minister of Sport and Physical Activity]

Madam Speaker, I would like to thank my friend and colleague for his tremendous leadership on this bill. It is important in my riding as well. I have lots of fruit and vegetable growers in Milton, and I want to give them a shout-out because I go to the farmers' market every Saturday in Milton. I love fresh produce, and we want to do everything we can to support them.

One of the biggest threats to growing fresh produce in Canada and certainly throughout North America and getting it fresh in our grocery stores or at our farmers' markets is climate change. Therefore, it is important that farmers continue to be a solution for fighting climate change, as the ones in my riding continually talk about. Can the member opposite talk about some of the climate events in his riding that affect some of the growers we can support, so we can help mitigate them?

[Scot Davidson, Conservative, York—Simcoe, ON]

Madam Speaker, we all know here in the House that climate change is real and that it is happening. However, when the bill first came up, another external event was COVID.

I met a farmer in the riding, and at the beginning of COVID, everyone was worried about getting paid. He came to me saying, “Scot, I don't think I'm going to plant my field this year because I'm worried about getting paid.” He said, “Look, Scott, I'm not asking for any handout from the government. I'm just looking to get paid for the produce I sell.”

Thinking about selling to a distributor, whoever that is, and not getting paid, he said, “Scot, it's $2 million to plant my field. I can sit at home and just pay the taxes and not worry about it.”

I said, “Don't do that because that's going to lead to higher food costs for Canadians and all kinds of pressures for Canadians.” That is just a little bit of background on how the bill evolved.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Madam Speaker, I thank the member for York—Simcoe for this bill and for his speech. The Liberal government members just congratulated my colleague for his leadership on this issue. However, the bill before us responds to a request from the sector that dates back to 2014. This Liberal government has been in power for eight years, but, all of a sudden, it is applauding this measure. Why does my colleague think this was not done earlier?

It took a minority government, with a bill from an opposition MP, for this to start moving forward. What happened on the Liberal side?

[Scot Davidson, Conservative, York—Simcoe, ON]

Madam Speaker, I would like to thank my colleague and the Bloc for supporting this bill, along with my Liberal colleagues. It took so long to support this, but I think we are talking about it more and more.

I picked up the Liberal budget that came out last fall and leafed through it and thought that it must be missing pages because there was no vision for the country. I believe that agriculture in Canada should be number one. I know that my colleagues in the Bloc believe that. I think the party opposite on the government side here is finally, with this bill, waking up to how important agriculture is across this great country, and we have to be pushing every day for the people who are out working in the fields. Members can come to Bradford West Gwillimbury any time and look at the hands on these people who are out grinding it out every day.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, I thank the member for York—Simcoe for the bill. It is clearly important that we establish this kind of financial protection for our fruit and vegetable growers.

In the agriculture committee, we learned during a recent study that oil and gas profits had climbed by over 1,000% over the last three years. Would my hon. colleague agree with me that changing the law in this way and offering fresh fruit and vegetable growers this kind of financial protection would help them stand up against the price gouging that oil companies are putting on citizens of Canada?

[Scot Davidson, Conservative, York—Simcoe, ON]

Madam Speaker, I thank my hon. colleague for that, and I thank the NDP for supporting this bill. I would love to see my Liberal colleagues on the other side here unanimously consent it right to the Senate tonight.

This bill is so important to fresh produce farmers. We have been talking about this since 2014. We were all elected here to get things done for our constituents. We have an opportunity tonight, and I turn it over to my Liberal colleagues now.

[Kody Blois, Liberal, Kings—Hants, NS]

Madam Speaker, it is always a pleasure to rise in the House to discuss and debate a bill, especially a private member's bill. That is precisely why we are here this evening. We are debating Bill C‑280, a very important bill for our farmers, especially for fruit and vegetable growers.

I believe that our agriculture and agri-food sector was very important to all Canadians before the pandemic, but it has become even more important since the pandemic. We think it is important to reinforce the supply chain, and bring in new investments and initiatives for our producers. Bill C‑280 is certainly the type of initiative that can ensure their success.

Before I go too much further, I would like to thank and congratulate the hon. member for York—Simcoe for helping to shepherd this bill through the House.

As I had the privilege of reporting this bill back before it came to third reading in debate, I know this is a bill that is supported unanimously in the House. This is an initiative that came back from the agriculture committee with no amendments and was widely supported. I would like to not only, of course, recognize the member for York—Simcoe, but also recognize that there are many members of the House, in fact, all of us, who believe in this initiative.

I would be remiss without talking about the member for Glengarry—Prescott—Russell, the parliamentary secretary to agriculture, who has been on the record for supporting these types of initiatives. The member for Cowichan—Malahat—Langford in British Columbia has also been a strong champion. Any time we had a report where he could reasonably try to find a way to get “deemed trust”, which were the words that we were using, he would make sure they were included in the report. I would say that all sides of the House see the initiative. I send my congratulations to the member for York—Simcoe for bringing it forward.

For those Canadians who are at home, perhaps watching and asking what Bill C-280 is, and wondering what these guys and gals are talking about in Parliament, this is about creating a priority under the Bankruptcy and Insolvency Act to allow farmers who are shipping product to buyers who become insolvent to have a superpriority to be able to claim.

I think back to my days at Dalhousie law school when we start talking about priority under provincial legislation. It is when one lines up and tries to reclaim some of what one is owed from the particular buyer or creditor who is required to be paid.

It is very difficult, when one is talking about a perishable product, for that product to actually be claimed. It is not like it is a sack of potatoes, although even potatoes are perishable, but this is not something like grain, something that can be recovered and come back to the supplier to be resold or recaptured for the economic value.

The member for York—Simcoe talked about the fact that not only could a perishable product be perishable, it could also be transformed into a different type of product. One thinks about fresh strawberries that are then sliced and put into different fruit salads and things of that nature. It is impossible for our farmers who are selling that product to actually be able to, under the existing legislation, recoup the economic value associated with that.

This is a type of legislation that has no cost. This is not going to cost the Government of Canada one single cent. This is about creating legislative change that prioritizes and empowers farmers to be able to support themselves.

I want to give members an example. The member opposite, of course, talks about the salad bowl of Canada. I do not know if we have the same connotation in the Annapolis Valley, but let me tell members, between our apple producers and our horticulture producers, I am very proud of the Annapolis Valley in Kings—Hants as a growing region.

I have had the opportunity to talk to the farmers about what this type of deemed trust legislation would mean. I will give an example. Andy Vermeulen, a farmer from Canning, Nova Scotia, sells a variety of vegetables. He would normally look to Atlantic Canada, or maybe Ontario or Quebec, but he also ships to New England.

The hon. member for York—Simcoe talked about the fact that there is no alignment right now between the dispute resolution that is available to the American producers and the Canadian producers who are selling into that market because we do not have an equivalent type of legislation. That is being proposed here in Bill C-280.

This would allow our farmers to have the same access to those tools, such that if Andy Vermeulen sends his product to Boston, he would have some recourse if the seller went bankrupt or does not pay. It would give further teeth to our farmers to be able to re-collect the money that is owed to them.

With the cost of living and higher costs, including for fuel, fertilizer and materials, it is very important to find a way to help our farmers financially.

This is something that can ensure we have some financial protection. It does not come with a large cost. In fact, there is no cost to the treasury.

I think this is going to be something that is supported by farmers across the country. I will give the example from Nova Scotia. I am sure for my colleagues from Quebec, Ontario, Newfoundland and Labrador, British Columbia, and everywhere in between, this makes sense. That is exactly why we can see that every member of the House is supporting it here today.

The last thing I want to say is that I think there are more opportunities for this type of thinking. Those of us at the agriculture committee often hear that people would like to see not necessarily new program spending, although those programs are great. I will get to that in a moment about some of the things that I am very proud of that this government has introduced.

Sometimes it is these little legislative tweaks, or a regulatory change here or there, that really empower farmers and our agricultural community to continue to do the amazing work they have been doing. The member for York—Simcoe talked about the hardened hands of the men and women who do really important work, and the fact that we need farmers three times a day. I think those are extremely powerful words, which I would second.

We should all be thinking about little measures that we can do, especially in the environment right now. The Minister of Finance has signalled this. The President of the Treasury Board has talked about program review and government being very smart and wise about how it spends money. I am fully on board with that, but let me also say that there is a lot that can be done on the non-cost side that could make a huge difference. We, all parliamentarians, should be looking at what we can do to build upon Bill C-280 to do even more in the days ahead. It is something that I look forward to exploring with my colleagues at the agriculture committee.

One such idea is the opportunity for an expedited pathway for regulatory approvals around seeds, feeds and crop protection products. I have talked about this at great length, but I will continue to go on the record. I will have, hopefully, even something more to say in a couple of days with this piece of legislation.

There is tremendous opportunity when we look at the applicants who come to either Health Canada, PMRA or the CFIA with existing approvals from what I would call trusted jurisdictions: the United States, Europe, Australia and New Zealand. We know that, if a process was undertaken in one of these jurisdictions, it was science-based and credible. The likelihood of it being approved in Canada is extremely high.

We have to create a model so that, if an applicant arrives at Health Canada in this country and wants to give those tools to our farmers, we can tighten the timelines between when that application is made and when the product can be registered on the basis of using some of the strengths of science in jurisdictions elsewhere. It is a really straightforward policy, and I think it would make a lot of sense. Again, it is another initiative that does not cost money.

I am proud of what this government has done on the agricultural side. I could go into it at great length, but I am proud of what we are all doing as parliamentarians here tonight to advance the interests of Canadian farmers. This bill, of course, has had Liberal support. We look forward to seeing this off to the Senate and hopefully get it into farmers' hands and available as soon as possible.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Madam Speaker, I feel like starting my speech in a different way. I just heard that the Liberal government is supporting this bill. Everyone is pleased to be pleased, and everything is perfect.

However, we asked if it would be possible to seek unanimous consent to send the bill directly to the Senate. That way, it could move forward and produce growers could finally get some protection when they are not paid for their produce. It seems that some members withheld their consent.

There may be agreement, but some among us plan to take their time. I have a bit of a problem with that, because the request is clear and dates back to 2015. Furthermore, the Liberal government made very definite and public commitments in this file. I mentioned 2015, but the requests started in 2014. During the 2015 elections, the Liberal Prime Minister agreed to fix the problem. Now it is 2023. How is that for efficiency? We will not get far at that rate. For now, people are pleased to be pleased. They support the bill, and good for them, but I would like to see us move forward.

Now I will close that parenthesis and explain what this bill is about. This bill seeks to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act to put vendors of perishable products such as fruits and vegetables at the top of the list. When a perishable product is delivered to a purchaser, the value of the produce is deemed to be held in trust. Why is that necessary? It is necessary because producers of perishable products are in a vulnerable situation. We need to think of every scenario.

Not so long ago, we conducted a study at the Standing Committee on Agriculture and Agri‑Food on inflation at the grocery store. Grocery store CEOs came and swore to us that their profit margins were thin, just 2% or 3%, and that they were still the same. When we asked them to show us a breakdown of their profits, they refused, claiming that they are competitors. They promised to submit these figures to the Competition Bureau during its investigation. When we saw the Competition Bureau report, we discovered that they had not provided the figures.

When produce growers appeared before the committee, they told us they were seeing lettuce worth 99¢ being sold at a discounted price of $2.49, which means it normally costs more than that. I am talking about prices from March, and the situation is even worse today. The grower gets only 99¢, so I think the profit margins are over 2%. The profit margins are above 2% because it is a fresh product.

Negotiations are unbalanced. A purchaser can refuse the stock and say they will go and see another grower who has been negotiating for three or four days. If the grower's warehouse is full of fresh produce and they wait too long, their products will no longer be fresh and appealing. Consumers will not want them, and the grower will not be able to sell them. In that case, they will be forced to give in. This is just one example.

Government officials now agree, and that is good, but they told us for a long time that there were almost no bankruptcy filings and that the bill was therefore unnecessary. The truth is that there were no filings because there were no legal protections. Whenever it became clear that a customer was having trouble paying for merchandise or was on the verge of bankruptcy, arrangements could be made, similar to a kind of liquidation. Sometimes half the price, or even a quarter, would be accepted.

If an out-of-court settlement is not reached and the client goes bankrupt and the business owner does not have any protection, then the business owner would lose 100% of the production value. Business owners therefore end up agreeing in a panic to be paid 25% of the production value. These losses are not included in the statistics. Business owners seem as though they are happy to be paid, but they are receiving only one-quarter of the production value. That is why this is important.

I have a hard time not getting upset about this, because I cannot understand why we have not yet passed such a measure. It would be easy to do, and we have been calling for this kind of measure since 2014. It is now 2023 and there is still no legislation. What is more, it is free. It will not cost the government a cent. What it will cost is to perhaps put fruit and vegetable producers first and bank creditors second. I think maybe that is why some members are hesitating.

There are a lot of discussions going on in the House, Madam Speaker. In fact, for the past little while, I have been speaking indirectly to the very people concerned in this matter. I would like them to listen to my speech.

[The Assistant Deputy Speaker, Carol Hughes]

Order. It is starting to get a bit noisy in the House.

If members are not interested in listening to what is being discussed and wish to have conversations, I would ask them to step out.

The hon. member for Berthier—Maskinongé.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Madam Speaker, I always love it when the people I am talking to appear to be listening, at least.

What I was saying is that it is essential. I challenge anyone here to accept the same working conditions as those people. Rain in the summer brings us down because we cannot go for motorcycle rides or head to the beach. What do they do when it rains? They do building maintenance. They go place orders. They do their paperwork because they do not have time for that when it is nice out. They have to be in the field 14 hours a day because they have no workers. Why do they have no workers? Because the government is so slow at processing foreign worker applications and because governments failed to see the current labour shortage coming.

I would like to say a thing or two about the labour shortage. I was a high school teacher. I was not an internationally renowned scientist. I was a high school geography teacher and, in the early 1990s, I taught my students that we would have a labour shortage now. Nobody did anything to avert that, and now people are stuck in this situation. They have no workers. Locals do not want to get their hands dirty, so people have to find other workers.

These folks are facing a labour shortage. They have to mechanize a lot of the production, and that means thousands if not millions in investments that generate debt. These people are heavily in debt. They called for help in spring and early summer, when torrential rains just about wiped out their harvest. Why did they call for help? They called for help because the crop insurance programs we have, the ones currently in place, the ones that the good old ministers refer us to whenever we ask them a question, do not work. Growers are not being adequately insured because the programs were designed 30 years ago in a more stable climate.

Yes, global warming exists. At the very least, I can tell the House that there is so much climate disruption that the last three years have been a disaster for produce growers. First, there was a drought. Then there were aphids. Why aphids? Because the hot season lasts much longer. The aphids moved further north. As they ran out of soybeans to eat, they moved on to fruits and vegetables. That happened last year. This year, there has been non-stop rain. We broke all-time records, particularly in the Eastern Townships, but just about everywhere in Quebec. It is all over the board. During the same period, there was a drought in Abitibi—Témiscamingue and northern Quebec as we tried to navigate our way through the smoke from the forest fires.

All these things are real. As a society, we are going to have to sit down with these people and discuss how to share the risk factor. We cannot just keep asking growers to put $2 million, $3 million or $4 million into their fields in the spring and get nothing back but us thanking them for feeding us and telling them that if they run into issues, they will need to figure it out on their own. We cannot do that.

I am digressing a bit from the subject of the bill to illustrate the fragility of this sector. I am a bit tired of hearing politicians talk about food sovereignty and how important it is to buy local. For 10 years now, we have been talking about this kind of simple, free measure that will not cost the government a thing, and yet it still has not been done.

I wish there could have been unanimous consent to send the bill to the Senate this evening. I am angry and upset because people who are celebrating and congratulating the member for York—Simcoe on his outstanding leadership, who say they are so happy to be voting this way for farmers, did not give unanimous consent. That means we will have to spend who knows how much more time on this in the House before sending it to the Senate. We also have to hope that place will deal with this efficiently so it can come back here and be made law.

Bills like this can be hard to implement. There are jurisdictional challenges that mean negotiations with other levels of government. That is important. We have to move quickly. Our fresh fruit and vegetable farmers are looking to us. They feed us now, but for how much longer? I think they are going to get sick of it and go find something else to do. Maybe grow field crops. Maybe sell their land. That is what we are up against. Let us pass this bill pronto.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, I am extremely proud to be standing in the House on behalf of the fruit and vegetable farmers in my region of Cowichan—Malahat—Langford. My region and the Cowichan region have a long and storied history in agriculture. I would like to remind all members that the Cowichan Valley is in fact Canada's only Mediterranean climatic zone. The Halkomelem language is the language of the Quw'utsun; the Cowichan name is the anglicized version of that, and it roughly translates into the “warm lands”.

We are an agricultural powerhouse in the Cowichan region. I have been proud to call that area my home for over 30 years, and I am proud to be standing in this House in support of Bill C-280. This is a measure that has long been talked about in this very chamber, and we now have an opportunity to actually change the law. As many colleagues have pointed out, this is going to be of no cost but of huge benefit to the people it directly concerns.

I want to thank the people who have spoken before me: the sponsor, the member for York—Simcoe; the member for Kings—Hants; and the member for Berthier—Maskinongé. I have the pleasure of serving with two of those colleagues on the Standing Committee on Agriculture and Agri-Food. I have been the proud agricultural critic for the NDP since January 2018, so I know this subject very well. This is my third Parliament on the agriculture committee, and this subject has come up time and time again.

I do not want to delve too much into the details. We know that this issue matters because of the nature of the product we are talking about. Fruits and vegetables only have a tiny bit of shelf life before they have no more value. This is a unique product, and that is why we need to have this kind of a deemed trust.

It is not as though farmers, who are taking all the risk, can recoup losses by taking the product back; it is perishable in nature. We know that farmers deal with high costs. They have high input costs. It is expensive to buy machinery and erect greenhouses. In fact, almost all farmers' money is tied up in infrastructure, whether that is machinery or land. They are, in other words, land rich but cash poor.

This is a business model that is based on the tightest of margins, and anything the Parliament can do to ease up and make the payment process more guaranteed is something we should look at seriously. I am happy to say Bill C-280 would do that.

I would argue that, instead of this being just a Conservative bill, this bill is expressly non-partisan. I know the NDP has been fighting for this, as part of our electoral promise to Canadians, since 2015. Moreover, it is non-partisan by virtue of the fact that the second reading of this bill was unanimous. It sailed through committee. We had three meetings; we heard from a variety of witnesses. However, we decided as a committee to report this bill back to the House without amendments. It has the committee's stamp of approval, and I hope members in this chamber take note of that and seek to give it rapid passage.

This bill has been the subject of many committee studies. I have almost lost count of how many times, at different committees and different parliaments, we have seen a recommendation for this type of measure to be enacted by the House of Commons.

The time is now. I would like to see this bill pass through third reading, get to the Senate and start getting the traction it needs. The Fruit and Vegetable Growers of Canada, the Canadian Produce Marketing Association and the thousands of people they represent are watching us. They are waiting for action.

I will conclude my remarks by proudly saying that I will be supporting this bill, along with the NDP caucus. We look forward to its speedy passage to the other place; hopefully, it will eventually find its way to the Governor General's desk and receive the royal assent it deserves.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Madam Speaker, I would like to thank my colleague from York—Simcoe for putting Bill C-280, the financial protection for fresh fruit and vegetable farmers act, forward. It is a very important bill, and it has been a long time coming. I was elected nearly four years ago and we have been talking about this through the last two Parliaments, and I know it was talked about long before then. It is great to see all parties come together to support something that will help our Canadian produce growers, packers and shippers immensely.

During a Zoom call with The Fruit and Vegetable Growers of Canada, I heard that 52% of perishable product sales to U.S. customers from Canadian suppliers await payment from the United States. California producers and suppliers have a similar problem with their Canadian customers. On October 1, 2014, the United States Department of Agriculture revoked preferred treatment for Canadian shippers under the Perishable Agricultural Commodities Act. This was taken in retaliation for an action on the part of Canada with regard to establishing some type of trust protection from bankruptcy for all fresh produce shipped into the U.S. Under that status, Canadian companies did not have to post surety bonds when trying to collect payments from delinquent buyers. No other nation had such status.

Without the special status, a Canadian shipper must now post a bond for twice the amount they are seeking to collect. Taking action to recover $100,000 would require the purchase of a $200,000 bond. Current rules severely limit the ability of produce growers and sellers to collect payment in the event that their buyer declares bankruptcy.

While products like electronics can be reclaimed by the seller, highly perishable produce is lost because of the obvious. It spoils and rots very quickly, costing Canadian and U.S. firms that operate in Canada an average of $19 million per year, but there is a policy solution to this. In 1984, the United States Congress established “deemed trust” provisions through the Perishable Agricultural Commodities Act, also known as PACA, and that protected shippers in the event their buyer became insolvent. The PACA trust helps suppliers of perishable products ensure prompt payment by buyers.

The trust gives suppliers interest in a debtor's assets. Creating a reciprocal legal framework in Canada by federal statute for a PACA-like “deemed trust” would not draw on federal or provincial public treasuries but would offer Canadian producers and suppliers the means to collect on accounts payable from U.S. customers and give U.S. producers and suppliers the means to collect on accounts payable from Canadian customers.

My colleagues have gone into a lot of the details of this bill and I would like to take a bit of a different approach. I would like to give some personal perspective and a little history of my experience in the fresh produce sector to provide some personal context on how this legislation would benefit growers and shippers.

I grew up on a produce farm. I am a third-generation farmer and my grandparents on both sides of my family were essentially pioneers in the produce industry in the area that I grew up in, which is my hometown of Grand Bend, Ontario. My dad's parents, my oma and opa, immigrated from Holland and were one of the first five families to start farming in what is called the Klondyke marsh. My mom's parents immigrated to Canada from Poland via Germany and moved to Grand Bend after living in the Chatham area where they first started growing vegetables.

They cleared their land and began farming in the Grand Bend bog, which used to be a shallow lake that was drained to become rich farmland. They grew potatoes, onions, carrots, lettuce and onion sets over the years. Eventually, my dad's parents retired and the family farm that my grandparents started, which now involved two families, took over growing some of the vegetables that my oma and opa used to grow. Farmers are innovators, and I would like to give one example from personal experience.

When I was growing up, it would be time to harvest our potatoes and my dad would go out to the field and hand-dig potatoes to see what stage of growth they were at. There are many things that farmers can automate, but this is not one that can be automated. This is still done by farmers putting their hands in the dirt and digging those little nuggets out of the ground by hand. When my dad would do test digs, he would bring all these little potato nuggets home, and we would never waste them. We would cook them up and eat them for supper. I can tell everyone that those were the most absolutely delicious potatoes.

To provide some context, back in the 1980s when I grew up, the CFIA regulations stipulated that undersized potatoes could not be packaged, and so all of those small undersized potatoes that we harvested would either be discarded for cattle feed or put in a compost pile. There was an enormous amount of perfectly good eating potatoes that became food waste because of packaging regulations. There came a point where my mom thought, “Well, jeez, we're always throwing these undersized potatoes out and they're the most delicious thing ever. Why are we doing this when they taste so good?” These little mini nuggets were so delicious that we wanted to share them with everybody else. Our farm made an application to the CFIA asking that we be able to bag these mini potatoes and sell them. So, the mini gourmet potato bag was born, and our family farm became the first farm in Canada to bring mini potatoes to market.

Now, members are probably wondering why the short history lesson on my family farm. Well, I wanted to provide context from the unique perspective that I hold as the only parliamentarian who is still involved in the fresh produce industry and produce farming.

Before my parents retired from farming, their farm was growing over 1,000 acres of potatoes in southwestern Ontario for grocery retailers. To meet grocery store expectations, we also relied on local smaller farms as well as smaller farms from across Canada in different provinces to supply us with Canadian product in our season. If we could not supply the grocery stores with the product they wanted when they wanted it, then they would not even consider us as a farm to be a supplier. However, the grocery stores had to supply year-round, and so we had to grow potatoes around North America in order to keep the supply going to supply grocery stores. We had farms contracted to custom grow for us in California, Florida, Idaho, North Carolina and Michigan. Our packing facility in Grand Bend used to process anywhere from 5,000 to 6,000 acres through it per year.

Members can imagine the coordination that it would take to keep everything going when we have farms across North America supplying us. There would be a constant flow of trucks coming back and forth from all over the United States into Canada and from Canada into the States. The potatoes would be coming for us to process and package in our plant so that we could then give Canadians fresh potatoes on the grocery store shelves. We had to do this year round. With bringing upwards of 4,000 acres of fresh potatoes across the border to Canada from the United States every year, members can imagine the dollar value that would be for that product.

However, not only did we pack potatoes from the U.S., we also exported our excess crop during harvest season to the United States. The growing season in the United States is different from Canada's growing season in many parts. Being neighbours, we rely on each other to ensure a fresh food supply year-round. Canadians grow an abundance of fresh, perishable food, far greater than what we consume, and we are blessed to live in a country to be able to do so, but with that comes a huge amount of risk.

In this industry, it is standard practice to be paid 30 to 45 days from the time a product is received. As members can imagine, the shelf life of fresh produce is far less than the payment terms that sellers are working with. The intricacies of our supply chain for fresh food are far greater than anyone could ever imagine. When farmers are exporting millions of dollars in perishable food from the United States without a reciprocal agreement to ensure that they have a mechanism to be paid in the event of a dispute or a bankruptcy, it becomes a risky business. One bad deal or one dispute could literally bankrupt a family farm, especially since most companies could not afford to put up a bond worth double what they are disputing. Produce farmers work on such tight margins that one sale of a quarter of a million dollars or a half million dollars could be three to five tractor-trailer loads of goods to one customer in the States, which they might not get paid for. This could bankrupt a smaller farmer. While this might sound extreme, I have seen this happen to a young farmer first-hand.

In Canada, when there is a dispute between growers and sellers in this country, we have a mechanism to resolve those disputes, but without the deemed trust, we have no mechanism to resolve disputes between growers and sellers in the United States and Canada that is affordable for growers to access.

I am very passionate about this industry, because it has literally been my family's bread and butter my entire life. I have friends across the industry who would welcome this important change, because it would help protect the livelihoods of families, their farms and their businesses. Creating this deemed trust and having that reciprocal agreement with the U.S. would protect farms from having to bear those losses in the event of a dispute.

This will save family farms. I will always fight for Canadian farmers, their livelihoods and their legacies. At a time when food security and food sovereignty are top of mind, this is needed to protect this industry in Canada, and that is why I support this bill on behalf of my constituents and consumers.

[Jennifer O'Connell, Liberal, Parliamentary Secretary to the Minister of Public Safety]

Madam Speaker, I am very pleased to speak today about Bill C-280, a private member's bill introduced by the member for York—Simcoe. Allow me to extend my congratulations to the bill's sponsor on this important work as it aims to protect our fresh produce farmers and sellers who provide Canadians with access to fresh produce for their families.

Bill C-280, an act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (deemed trust – perishable fruits and vegetables), addresses the need for payment protection in the fresh produce industry through insolvency law amendments in cases of buyer bankruptcy, receivership and large commercial restructuring.

The bill would create a special legal mechanism known as a “deemed trust” to pay the unpaid bills of fresh fruit and vegetable sellers ahead of all creditors if a buyer becomes insolvent. The deemed trust would provide important protection in insolvency proceedings to the sellers of fresh fruits and vegetables against unique payment risks faced by the fresh produce industry, such as the perishable nature of fresh produce.

Members of the Standing Committee on Agriculture and Agri-Food studied the bill with the assistance of testimony from representatives of the fresh produce industry and the bill was reported back to the House with unanimous support. With our support of Bill C-280, we hope to increase the likelihood that the United States will restore Canada's preferential access to the formal—

[The Assistant Deputy Speaker, Carol Hughes]

We have a point of order.

The hon. member for Shefford.

[Andréanne Larouche, Bloc, Shefford, QC]

Madam Speaker, I apologize, but I am rising to ensure the safety of the interpreters. They have just indicated that there is a telephone too close to the microphone. I am thinking of them. We know that this can sometimes cause acoustic shocks, so it is important to be careful.

[The Assistant Deputy Speaker, Carol Hughes]

I do not know if the hon. member's phone is perhaps on her desk.

I will ask the hon. member to move her phone. It may be vibrating at some point, I do not know. There may be some static there.

The hon. member has 30 to 40 seconds before I interrupt her.

The hon. parliamentary secretary.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Madam Speaker, we hope to increase the likelihood that the United States will restore Canada's preferential access to the formal dispute resolution process under the United States' Perishable Agricultural Commodities Act, PACA, which regulates the fresh produce sector and provides financial protection for sellers.

I know I am about to be cut off, but PACA is a U.S. legislative and regulatory regime that regulates the fresh produce industry. I will continue at a later time.

[The Assistant Deputy Speaker, Carol Hughes]

The time provided for the consideration of Private Members' Business has now expired and the order is dropped to the bottom of the order of precedence on the Order Paper.

The House resumed from October 3 consideration of the motion that Bill C‑280, An Act to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act (deemed trust – perishable fruits and vegetables), be read the third time and passed.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I am not sure what I did to deserve such applause and support from my Conservative colleagues, but I appreciate it. Sometimes it is possible to be transpartisan when one has good ideas. I tip my hat to my dear friends.

It is a great pleasure for me to rise in the House today to speak to Bill C‑280, which is extremely important for our farmers, particularly our fruit and vegetable growers. Bill C‑280 seeks to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act to put vendors of perishable products, such as fruits and vegetables, at the top of the list by holding the production value in trust. Perishable goods are a special case when a company goes bankrupt because the supplier cannot simply take back its goods and resell them. This measure is necessary and our farmers deserve it. The Bloc Québécois strongly supports Bill C‑280.

As a representative of Quebec's agri-food capital, I am obviously very concerned about the agricultural industry and its artisans. I often say that they hold the only occupation that we need three times a day. That is why I want to thank the hon. member for York—Simcoe, who is sponsoring this bill in the House, and my esteemed colleague and friend, the hon. member for Berthier—Maskinongé, who is co-sponsoring it.

I know how important it is for our two colleagues and all my Bloc Québécois colleagues to pass this bill quickly. The protective measure it will bring in is desperately needed across Quebec. We look forward to seeing it implemented. I share their eagerness to finally see our fruit and vegetable suppliers protected, so they can avoid seeing their crops go to the compost pile without being able to do anything about it. Not everyone in the House is quite as keen, despite the unanimous support this bill has received. We asked for unanimous consent to send Bill C-280 directly to the Senate, but unfortunately, some members would not give their consent.

This is a long-standing demand. The Liberals promised back in September 2014 to address this issue with the Canadian Produce Marketing Association if they were elected in 2015. They reiterated their commitment in 2016. The NDP and the Conservatives also made similar promises in their election platforms. It was also in their platforms in 2021, so I have to wonder why this has taken so long and why Bill C-280 could not be fast-tracked to the Senate.

We are now in 2023. The first promise was made in 2014 and we are in 2023. Better sooner than later, but better late than never. I am pleased to see that we are near our goal, especially given that the implementation of our protection will also help remove an irritant in our relationship with our American neighbours.

The sector's request of such a bill has been so strong since 2014 because on October 1 of that year, the U.S. Department of Agriculture revoked preferential access from its legislation for perishable agricultural products from producers here at home. Up until that point, Canadian and Quebec farmers were protected by this legislation in cases where American purchasers declared bankruptcy. Since Canada, for its part, did not have a trust mechanism for cases of buyer bankruptcy that could have protected American farmers, the U.S. decided to remove that security from Canadian suppliers. In short, they did that in response to a gap in our legislation.

Although an alternative process has been developed between the two countries, it is extraordinarily cumbersome, especially for smaller companies, which have to undertake the tedious process of filing a lawsuit. If they decide to take on this bureaucratic ordeal, they must post a bond worth double the amount claimed in the lawsuit, according to the Canadian Produce Marketing Association. Then they are in a pickle, if I may say so. I am not just using that expression because we are talking about produce. In short, they are in a pickle and the major buyers know it. As a result, companies are forced to negotiate downward with the buyer, because they would still rather receive a fraction of the value of the fruits of their labour than nothing at all.

The U.S. is demanding that Canada provide protection similar to that offered by the U.S. Perishable Agricultural Commodities Act before it will again give Canadian producers access to its program. Passing the bill we have before us today will provide protection not only for our producers doing business domestically, but also, with a little good faith on the part of the U.S. administration, for those doing business with American buyers.

I just want to point out here that the U.S. Perishable Agricultural Commodities Act was adopted in the 1930s, so it is high time we adopted a similar mechanism.

I hope you will agree with me, Mr. Speaker, especially since you are my MP during House sitting weeks. I live in your riding while we are working here in Parliament. I hope you will hear my plea.

Over the course of many Parliaments, many committees have recommended implementing just such a measure. The Standing Committee on Agriculture and Agri-Food, which studied the bill, sent it back to the House without amendment. The committee approved it, with support from all the parties. Action on this is long overdue.

Before concluding, I want to make an aside and draw the House's attention to another issue related to food products and the difficulties that certain players in the supply chain may experience when a buyer goes bankrupt.

In my riding, there is a storage company that found itself in a difficult situation a few months ago. This company provides refrigeration and freezer services and serves as an intermediary in the transportation of perishable goods. After one of its clients went bankrupt, a bakery, the company ended up stuck with about 800 pallets of pies that did not belong to it. Since the bakery in question was under the authority of a trustee in bankruptcy at the time, the storage company could not dispose of the pies in any way. The situation went on for several weeks, causing major financial losses for the storage company since it could not get any income from the merchandise in question and it could not take on other contracts because the cargo was taking up half of its warehouse. The bakery finally hired a company to transport the stored merchandise, but that company was never paid for services rendered. The transportation company then turned to the intermediary, the storage company, for compensation for its losses, which put the storage company's financial viability at great risk.

At that point, I wrote a letter to the Minister of Transport and his parliamentary secretary. That was before the cabinet shuffle. The letter was cosigned by the Bloc Québécois transport critic, the member for Pierre-Boucher—Les Patriotes—Verchères. We felt that the intermediary was also a victim of the situation, and we asked the minister to consider including a provision in the Bills of Lading Act that would protect intermediaries responsible for goods in specific cases involving bankruptcy of the original business. Such situations become even trickier when perishable goods are involved, and I would like to take this opportunity to get everyone thinking about this issue.

In closing, to get back to the subject of my speech, let us pass this bill without delay, as its co-sponsor entreated us.

[The Speaker, Greg Fergus]

Before we resume debate, I want to let the member for Saint-Hyacinthe—Bagot know that I am proud to be his MP.

The hon. member for Port Moody—Coquitlam.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

Mr. Speaker, New Democrats support this bill and want to see it advance.

This bill has already been the subject of many committee studies. My colleague from Cowichan—Malahat—Langford said recently that he has almost lost count of how many times, at different committees in different Parliaments, the bill has been considered. He went on to say that we have seen a recommendation for this type of measure to be enacted by the House of Commons.

The time is now. My NDP colleagues and I would like to see this bill pass through third reading to get to the Senate and start getting the traction it needs.

The Fruit and Vegetable Growers of Canada, the Canadian Produce Marketing Association, and the thousands of people they represent want that too. They are waiting for action. I reiterate the news from the member for Cowichan—Malahat—Langford, as well as the NDP caucus, that we look forward to the bill's speedy passage to the other place. We hope that it finds its way to the Governor General's desk to receive the royal assent quickly, because climate change is not waiting for government process.

Climate change is affecting growing seasons, shipping times and supply chains. It is contributing to Canada's ongoing infrastructure deficit. During the drastic flooding in B.C. due to an atmospheric river, B.C. got a first-hand view of how fragile Canadian supply chains are, because they rely on open roads, railways and ports. Let us add the black swan event of the global pandemic to supply chain challenges. Such black swan events are coming more often.

Since the start of the pandemic, it has been more difficult to transport goods, especially fresh fruits and vegetables, which have short lifespans and need just-in-time logistics. With small profit margins, alongside big impacts on food security, any wasting of food directly affects the bottom line of farmers and producers, and it limits how we get food on tables.

Many farmers in Canada are feeling the stresses of trying to make ends meet in this volatile business. They feel the pressure of feeding not only Canadians but also the world. Right now, the government does not have their backs when something out of their control affects their bottom line.

In Canada, we depend on farmers and producers to feed our communities. Food sovereignty is a life-or-death business, and we cannot leave farmers and producers without a safety net if we are serious about protecting food sovereignty in this country.

The fresh fruit and vegetable industry has been calling for support to prevent farms from going bankrupt because of the lack of protection. In the supply chain specifically, it would be very beneficial. Supply chains are becoming more and more unreliable because of climate change.

Food loss because of supply chain limitations cannot happen fully on the backs of those who grow and produce our food. We need farmers and producers to thrive so that people can eat healthy, affordable food. Food spoilage is not only incredibly expensive, but it is also harmful to the environment. It contributes to climate change. Farmers and producers need protection from that. The Liberal government needs to get serious about helping farmers reduce wasted food and recover from any losses that are out of their control.

Food waste alone increases carbon dioxide and biomethane emissions, contributing to a warming planet. With more droughts, fires and floods, farmers and producers become more susceptible to these events. It is more challenging to get food from farm to table. Producers, suppliers and retailers must all be supported and encouraged to help get food to tables. However, let us get back to the bill.

Farmers and producers of fresh fruit and vegetables are taking incredible risks and hits to their viability, with an increased risk of filing for bankruptcy. For example, Canadian producers and growers selling to markets in the United States once had equal access to payment protection under the Perishable Agricultural Commodities Act. Since 2014, however, they have not been allowed to file a formal claim under PACA until after they post a bond of double the value of their original shipment. This is an expensive, risky ask when product shipments can be delayed and affected by many different points of the supply chain.

In addition, let us talk about the risks of natural water resources in Canada becoming scarcer. The amount of water and the number of water restrictions are putting a strain on farmers and producers, adding costs and risks to their businesses. They need government support as they deal with these mounting risks.

New Democrats have supported and will continue to support farmers and producers. In 2015, the New Democrats' federal election platform promised to “introduce a payment protection program for produce growers”, and we mean it, among other measures to keep farms in their stewards' hands and to allow those businesses to make the money they deserve. Protection for our farmers is critical.

Canadian farmers are essential workers. During the pandemic, they continued to work to keep our stores supplied. As large grocery store chains continued to make record profits, they downloaded costs and risks to their suppliers. Farmers and producers suffered, with no legislated support. That lack of a safety net needs to be corrected.

I will close by saying this bill is imperative to reduce the risk for farmers and producers and to assist them in remaining viable. As climate change continues to negatively impact food security and food sovereignty, we need our farmers.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Mr. Speaker, before I get started in speaking to this great bill, I really want to pass on that today is a very special day for our family. Today is my 38th anniversary. Hello to Leigh, wherever she is watching me.

I rise to speak to Bill C-280, the financial protection for fresh fruit and vegetable farmers act. I want to thank my colleague from York—Simcoe for introducing this piece of legislation in Parliament. I know that the member for York—Simcoe represents Holland Marsh, which is known as the soup and salad bowl of Canada. The reality is that Bill C-280 would not only be support for fruit and vegetable growers and producers in this region but also all across Canada. That is why I am so excited to support this bill today.

As a former farmer myself, I know that farming is not just a business, but it is a way of life for many Canadian families from coast to coast. This way of life is not an easy one. There are significant risks and uncertainties that farm families take on every year to grow food that feeds the world. Producers face many uncertainties every year, including unpredictable commodity prices, Mother Nature and the ability to obtain revenue for their product. Producers are forced to work within a very limited growing cycle and one bad year could put the family farm business at risk.

One of the most significant things that can impact a producer is when a purchaser of their product declares bankruptcy. When a buyer declares bankruptcy, the impacts to the producer can be devastating. Many of the farmers I represent are grain, pulse and cattle farmers. While this bill would not directly impact them, they understand the importance of protecting producers from the insolvency of businesses that purchase their product.

When I was a young farmer, a few years ago, I was in a situation where our local grain buyer became insolvent. The situation was made worse for our farm and others in the area because the insolvent party was not only buying our product but was also selling us inputs for the next year's crop. Preventable moments like this put undue stress on family farm businesses. Because of the seasonal nature of farming, farmers plan months and years in advance to keep their businesses operating.

Therefore, when a buyer who is the main purchaser in an area suddenly goes insolvent, this puts undue stress on the entire area. By the way, we are talking about an area the size of P.E.I. That is how big the purchaser of our product was and it did take down the whole region. I am sure members can imagine the uncertainty for this entire area and the undue stress it would have put on farm families. Pricing everything else accordingly while simultaneously tracking inputs so that a farmer can maintain a cost coverage to keep profitable is enough of a challenge. Adding bankruptcy, an entirely separate issue, to the equation can create a whole range of complications, crippling farmers without warning.

The way the value chain is designed, it requires the farmer to have a buyer and contracts in place before they even step into the field. That means they need to enter negotiations on how much they will sell their pound of product for, without any guarantee that they will grow a crop. That means the Canadian farmer is forced to be all in. They can do everything right. They can get the product to the buyer's doors and then not get paid for the product. It is a devastating blow for anyone when they do not get paid for the hard work they do every day. While the current mechanisms within the Bankruptcy and Insolvency Act may be suitable for the wider agriculture industry and other sectors, the current approach does not work when fresh produce buyers become insolvent.

Fruits and vegetables are perishable. The shelf life of these products is not long. This is why the risk of the buyer becoming insolvent is so much more devastating to fruit and vegetable producers. Their products can rarely be recovered because they will have already spoiled. Without the ability to recover the product or access current mechanisms in the Bankruptcy and Insolvency Act, fruit and vegetable producers can face a significant loss that could very easily put them out of business. Imagine the effect this would have on a producer's insurance, their farm and their family. There are only so many hits one can take before the ship starts to sink.

The uncertainty of producers not being paid for their products is very real, but it is also avoidable if we pass this bill into law. Members do not need to just take my word for why this legislation is needed. They can listen to the Canadian fruit and vegetable producers who have rallied behind Bill C-280 in support.

Jan VanderHout, the president of the Fruit and Vegetable Growers of Canada, stated that this will have a very positive impact on our national food supply, lowering cost to consumers.

The chair of the Canadian Produce Marketing Association stated that, for too long, Canadian produce growers and sellers have shouldered the financial risk when selling their products. The challenges of the pandemic and the massive increases in costs they have experienced over the past few years have put many in an even more vulnerable position. He hopes that all members of Parliament will vote in favour of this important piece of legislation to support the long-term viability of their sector and send a message to their growers and sellers that we have their backs.

While I said there are reasonable protections for producers, there is a lack of protection for them within the banking industry itself. I believe that too often business people, with no understanding of how the agriculture industry operates, undertake uncalculated risks that could undermine the survival of the farms they do business with. That is why I am so grateful to my colleague for bringing this bill forward in the House of Commons and why I am so proudly supporting it.

As a lifelong farmer, I know that many farmers have faced challenges where they wished there was a mechanism in place to protect from the devastation of an insolvent buyer. It would allow producers to have more protection from the buyers who hold their very livelihoods in their hands. Bill C-280 would build that certainty into the financial landscape. This increased certainty would allow for reduced produce costs that could be passed on to the grocery cart of Canadians. With food inflation limiting how many fresh fruits and vegetables Canadians can afford, reduced costs are needed now more than ever.

This bill is a practical solution to a very serious problem. Farmers should not have to fear being shortchanged when their buyer goes insolvent. It is a common sense approach for the common people who feed our country and the world. The bottom line is that our agriculture producers need to get paid for what they grow. Anytime that system breaks down, the stabilization of the entire food supply is at risk. If we do not pass this bill, we are continuing to set up our fruit and vegetable producers for failure.

Now, more than ever, it is critically important that we send this very clear signal to our agriculture producers across the country. The NDP-Liberal government has neglected farmers for far too long. By passing Bill C-280, it has a chance to stand with Canadian producers for once.

In closing, I want to mention that one of Canada's newest vegetable producers, Vermillion Growers, earlier this year opened a state-of-the-art tomato greenhouse in Dauphin, Manitoba. The folks at Vermillion Growers are working tirelessly to become a leader in growing fresh, local produce that will feed Canadians across the country.

I am very fortunate to represent this new business in Parliament, and I know that Bill C-280 will support local growers just like them. I hope all members in the House will support Canadian fruit and vegetable producers by passing Bill C-280.

[Chris Bittle, Liberal, Parliamentary Secretary to the Minister of Housing]

Mr. Speaker, I am pleased to rise today to talk about Bill C-280, which was first introduced by the member representing the soup and salad bowl of Canada. I know you said not to come up with new riding names, but I think the hon. member appreciates it in this particular case. I would like to thank the member for getting the process started and for the important steps that have already been taken on the way to getting the bill through the parliamentary process.

The aim of the bill is to help our fruit and vegetable growers by reducing the financial risks they face. Growers and farmers work hard, take risks and provide Canadians with healthy produce. Furthermore, growers do not get paid in many cases until their produce goes through numerous steps of a long supply chain to get to the consumer. This is risky from a financial perspective, as the bankruptcy or insolvency of any of the players along the supply chain may result in the grower not getting paid.

The government has taken important steps to make things better for growers and farmers. One example is the passing of the safe food for Canadians regulations in 2018. However, the risk is not completely gone and we can still do more. We heard a lot from witnesses during the bill's study at the agriculture committee that our growers and farmers still face the problem of non-payment if a link in the supply chain becomes bankrupt or insolvent, which is a real risk already, given the tight profit margins. In short, this is why we are supporting Bill C-280.

We in the House agree that this bill is a good idea, but as we heard during the study of it at committee, it is not perfect and there are issues that the government and this House should continue to monitor to ensure that we maximize the bill's potential to assist growers. I note two issues in particular: first, the impact of the bill on access to affordable credit for growers and sellers and the fresh produce supply chain, and second, the potential for the bill to restore Canada's preferential access to the formal dispute resolution process under the United States' Perishable Agricultural Commodities Act, the PACA, which regulates the fresh produce sector and provides financial protection for sellers.

In committee, members heard from a witness who was concerned that the changes made by the bill might make banks less willing to give loans, or they might charge more when lending to fresh produce sellers. This is because the bill would change the creditor priority in insolvency, and such changes could cause lenders to react with high credit costs or lower availability to compensate for higher risks of non-payment.

This witness had extensive experience in the fresh produce industry in both Canada and the United States, and his concerns stemmed from the impact that the PACA had south of the border. He explained to the committee that in his experience, U.S. lenders reduced crucial operating credit lines for produce sellers or required additional security, because the PACA deemed trust is paid ahead of all other loans and lines of credit in a bankruptcy or other payment default. It is important to note that the Canadian Bankers Association also raised this when the Department of Industry consulted on this issue several years ago. However, this was a minority view at committee, and most fresh produce industry representatives downplayed these credit risks. The committee gave appropriate weight to their assessment, given their knowledge and experience.

I am noting the concern here to invite the government to monitor the situation in the months following the entry into force of the legislation so that corrective measures can be taken in a timely manner if Canadian lenders decide to take the same approach as U.S. lenders. Industry witnesses before the committee emphasized the importance of trade credit to the fresh produce supply chain and, as such, I believe we will want to make sure the bill achieves its intended objectives.

A second issue to consider is getting back Canada's preferential access under the PACA. Before 2014, Canadians, like Americans, could use the PACA for free. Unfortunately, in 2014, the U.S. rescinded Canada's preferential access.

At this stage, we do not know for sure if passing Bill C-280 will result in PACA access being restored, and as far as I know, parliamentarians were not provided with any direct confirmation from the United States. While the committee heard from industry representatives that they believed restoration was likely in that case, this is another area where attention should be paid at the implementation stage. I trust that the government will do all it can to ensure that Bill C-280 leads to the restoration of preferential PACA access should the bill become law and will monitor the situation closely and on an ongoing basis.

Finally, I would like to reiterate the point made by my colleague, the member for Kings—Hants. Seemingly small legislative adjustments such as Bill C-280 can have significant positive impacts on our agricultural community. We should look for other opportunities to help our farmers and growers through regulatory and legislative tweaks, which could have positive impacts without adding more to the budget. The member from Kings—Hants mentioned streamlining regulatory approvals for agricultural products as one example. I look forward to hearing more about this and other ideas from the members of our agricultural community, including the parliamentary secretary, who is very enthusiastic about all things agricultural.

In summary, Bill C-280 is a good step toward supporting our hard-working fresh fruit and vegetable growers and making sure Canadians continue to have healthy food on the table. Let us also keep watching to make sure the bill reaches its potential.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Mr. Speaker, I am pleased to be here this evening to speak to Bill C-280, which was introduced by the member for York—Simcoe. He sits next to me here in the House, and he is certainly not afraid to make his voice heard when it comes time to defend our produce growers. The Bloc Québécois is pleased to join him in his efforts.

Many members of the Bloc Québécois would have liked to sponsor this bill. I am thinking, for example, of the member for Berthier—Maskinongé or the member for Salaberry—Suroît. I, too, could have introduced this bill, because there are a lot of produce growers in my riding of Mirabel. The bill could have also been introduced by the member for Joliette or the member for Repentigny. In short, we all care a lot about this issue.

I therefore want to thank my colleague. There are some nice moments in Parliament when we can say that we are working together to do important things. Perhaps this should have been done sooner. This also reminds us of the importance of private members' bills, because they are inspired by what we see on the ground, by the people and businesses in our ridings. It reminds us of the fundamental work that members must do on the ground. I truly commend my colleague and, obviously, he is invited to come visit the maple capital of the world, Mirabel, any time he likes.

Produce growers, meaning fruit and vegetable producers, are still facing major challenges that continue to grow. We have talked about production costs, the cost of fertilizers and raw materials, and the declining demand for certain niche products as people struggle to afford things that can sometimes be perceived as luxuries at the grocery store.

We have talked about the Conservatives running deficit after deficit when they were in government. Things went from bad to worse under the Liberals. They are the kings of deficits. We have talked about bargaining power. Sometimes, small producers have to negotiate with resellers.

Bad weather is also a factor. I met some produce growers this summer as part of the Canada summer jobs program. I visited some businesses. I met Léanne and Vincent from the Entre Ciel et Terre farm in Sainte‑Anne‑des‑Plaines, Stéphanie from the Complètement légume farm in Saint‑Augustin, and Cinthya from Tierra Viva Gardens in Saint‑Augustin.

As we walked around the plots, they told us that they had lost 100%, 50% or 75% of this or that crop because of the rains. These people do not make a lot of money. They are true artisans. This serves as a reminder, and we cannot stress this enough, of the need for compensation programs here in Ottawa. However, that file is not moving forward quickly.

We can talk about the difficulties associated with climate change, bad weather, labour shortages, Immigration, Refugees and Citizenship Canada and the issue of temporary foreign workers, which creates challenges for our businesses. Then, there is foreign competition, obviously.

It is important to protect these companies when they sell their produce to resellers. How does the current system work? The member for York—Simcoe helped me gain a better understanding of how it works when someone is a fruit and vegetable grower.

Say that an American grows apples and sells them to a grocery store, to a reseller. If the grocery store goes bankrupt, this American has protection. He is registered as a supplier and, if the grocery store goes bankrupt, the government recognizes the fact that, since the supplier has not been paid, these fruits and vegetables belong to him and he is immediately reimbursed. That is the American system. Until 2014, Canadian and Quebec producers benefited from this system because they could sell their produce in the United States. If they sold to a grocery store in the U.S. and the grocery store or chain went bankrupt, they could get reimbursed the same way. This meant that we were relying on the Americans to protect our own producers.

In 2014, the Americans looked at what Canada was doing and found that Canada was in bad shape, that it had a terrible approach. They realized that their producers would not be protected if they sold their produce in Canada. If a Canadian grocery store or reseller went bankrupt, the producers would not get paid unless they went through an extremely costly process, which no small producer would go through if they could avoid it. Logically speaking, our own farmers were not protected either. The Americans told us to wake up, smarten up and protect our farmers and theirs so that there could be some sort of reciprocity.

In 2014, when the Americans tried to clue us in and told us that they were sick of protecting our farmers for us, they thought this would make the Canadian government sit up. They thought they were alerting Canada to take action. What has happened since? Cue the crickets, because nothing happened. The federal government did nothing. Now our farmers are no longer protected either in the United States or here at home. That is tough.

In 2016, we had a new Prime Minister who said, “Canada is back”. That was two years later. He went to the Fruit and Vegetable Growers of Canada and promised to get Canadian farmers back into this U.S. program, which would require Canada to adopt certain measures. Then the same old thing happened that always happens with the federal government when things are urgent: it waited and waited and waited.

Today, a courageous MP decided he would table these changes in the government's place. All of us members who have farmers in our riding are proud of that. We are proud to support him. We think this bill should have been fast-tracked directly to the Senate. We think there should not have been any nonsense. We think that there has been enough nonsense since 2014, and this process should have gone faster.

Right now, if our farmers want help, there are mechanisms. For example, in the United States, they have to file suit. There is a mechanism requiring them to pay a deposit worth twice the amount of the claim. They do not have the means to do that. The idea is to deter them so they never get paid for their fruits and vegetables and the products they sold to a reseller. It is disrespectful to the farmers who feed us and feed our cities. I want to stress that part for those who do not represent agricultural ridings. We are all connected to those farmers in some way.

Not only is it disrespectful, but it is also completely out of touch with the reality of being a farmer. Farmers have plenty to do without having to go to court, hire lawyers and waste their time on administrative procedures. Farmers are on the ground, dealing with all the problems I listed. They are in the fields, the orchards and the greenhouses. They take care of their businesses and their workers. They deal with temporary foreign worker applications while Immigration, Refugees and Citizenship Canada takes its sweet time and the federal government does nothing to make the system better. That is what they do.

This bill will make their lives easier. It is going to restore justice. It is going to reduce the risks they bear in one of the riskiest sectors on the market. As we can see, it is getting harder and harder to attract new farmers, because it is not easy work. I want to thank the bill's sponsor for making all this easier for our farmers.

The bill will make the buyer of these products liable for the value of the shipment. The shipment will not belong to the buyer until the invoice has been paid. There will be a kind of priority list so that, if the person who has ordered agricultural products but has not paid their invoice goes bankrupt, the producer will be assured of getting paid without much trouble.

Right now, the system says that farmers have the right to get paid. Fifteen days after the bankruptcy, they have the right to recover the goods that were sold 30 days before. Do members see how little sense that makes for the agricultural industry? If any member of the House is opposed to this bill, I would challenge them to eat a 45-day-old salad or some withered old strawberries or blueberries. They can do it in the lobby and I will film it.

Under the current system, what we are telling farmers is to take back their rotten produce. That is how we are treating them. The current system is rotten. It needs to be changed. We need to move forward on this. This bill needs to move forward. The Senate needs to pay close attention to this so that this bill is passed quickly.

[The Speaker, Greg Fergus]

The hon. member for York—Simcoe for his right of reply.

[Scot Davidson, Conservative, York—Simcoe, ON]

Mr. Speaker, Canada's fresh fruit and vegetable growers should be paid for the fruit and vegetables they grow, full stop. Bill C-280 will ensure that fresh fruit and vegetable suppliers are not unduly disadvantaged by the bankruptcy of a produce buyer.

The deemed trust established by this bill will also support the highly integrated produce trade between Canada and the United States. Farmers and other suppliers in Canada have been pushing for these measures for almost 20 years. The absence of a deemed trust has cost produce suppliers their farms and livelihoods and has jeopardized our domestic food security. With Bill C-280, we can finally change that.

This is a common-sense Conservative bill that has been supported by all parties in this House. I want to thank all members for that, especially the Conservative shadow minister for agriculture and agri-food, the member for Foothills; the chair of the Standing Committee on Agriculture and Agri-Food, the member for Kings—Hants; the member for Berthier-Maskinongé; and the member for Cowichan—Malahat—Langford for their support. It goes to show the cross-country support this bill has.

Bill C-280 will provide financial protection measures for those growing fruits and vegetables from coast to coast to coast. This includes asparagus in Quebec, sweet potatoes in Nova Scotia, and carrots in the soup and salad bowl of Canada, home to the Holland Marsh in my riding of York—Simcoe. Of course, this week we saw the leader of the official opposition clearly loved the Ambrosia apples in the great province of British Columbia. How about those apples?

I am also grateful to Ron Lemaire and Shannon Sommerauer from the Canadian Produce Marketing Association, Quinton Woods from the Fruit and Vegetable Growers of Canada, Fred Webber from the Fruit and Vegetable Dispute Resolution Corporation, Jody Mott from the Holland Marsh Growers' Association, and of course, my number one staff in Ottawa, Patrick Speck, who worked tirelessly on this bill with me, as well as my staff in the riding: Jennifer, Michael and Carol.

My thanks to Suzanne, my wife. I told her that it would all be worth it, all the long days and nights here in Ottawa, which I know all members can appreciate.

It is time we get this over the line. I urge members to support Bill C-280 when this is voted upon next week. I trust that legislators in that other place with the red carpet, who can be a little slow sometimes, will deal with it promptly, given the multi-party support for these measures. Like we say in York—Simcoe, “Be ready, Senators”.

Right now, Canadians are dealing with the high cost of food. With Bill C-56 and other measures, the government has been talking about stabilizing food prices. Bill C-280 is going to lower prices of fresh fruits and vegetables that Canadians need now, so we all need to get behind this.

Too often Canadians, especially rural Canadians, think we cannot work together in this place. They think we cannot get anything done and they believe that whatever is accomplished does not have any relevance to or impact on their lives. In rural communities, people band together every day. They are the foundation of what it means to be Canadian. They want to see this place work for them, they want to see the way it works for one another. I firmly believe that Bill C-280 sends a message to every produce farmer and supplier that we understand the issues they face and that we are committed to addressing them.

The hard work of passing this bill is nothing compared to the boots in the muck in the Holland Marsh, which all farmers face right across Canada, but I can tell colleagues this. We are going to get behind them with this bill. We are going to get it done. Let us get Bill C-280 passed for the farmers right across Canada.

[The Speaker, Greg Fergus]

The question is on the motion.

If a member participating in person wishes that the motion be carried or carried on division, or if a member of a recognized party participating in person wishes to request a recorded division, I would invite them to rise and indicate it to the Chair.

[Scot Davidson, Conservative, York—Simcoe, ON]

Mr. Speaker, we request a recorded division.

[The Speaker, Greg Fergus]

Pursuant to Standing Order 98, the division stands deferred until Wednesday, October 25, at the expiry of the time provided for Oral Questions.

The House resumed from October 19 consideration of the motion that Bill C‑280, An Act to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act (deemed trust — perishable fruits and vegetables), be read the third time and passed.

[The Speaker, Greg Fergus]

The House will now proceed to the taking of the deferred recorded division on the motion at third reading stage of Bill C‑280, under Private Members' Business.

(The House divided on the motion, which was agreed to on the following division:)

Vote #430

[The Speaker, Greg Fergus]

I declare the motion carried.

(Bill read the third time and passed)