Thank you very much.
I'd like to echo the comments of the two previous groups in thanking you for the opportunity to be here today. We really appreciate the time with you.
Both Stephen and I are here representing the Fresh Produce Alliance. For those who may not be aware, that particular alliance is a collaborative endeavour of the Canadian Produce Marketing Association, the Canadian Horticultural Council, and the Fruit and Vegetable Dispute Resolution Corporation.
The alliance's goal is to build an improved business environment for the Canadian fresh produce industry and the North American marketplace. Today we're here to talk to you about one of eight projects we have been working on, and it's called the destination inspection system. We want to talk to you about its importance to the Canadian industry and to solicit all-party support for a pending regulatory amendment that will assist in implementing a new business model for this important service.
I have a few words of background. The Government of Canada has provided destination inspection service to the fresh fruit and vegetable industry for approximately 80 years. The results of these quality assessment inspections provide the basis by which the produce industry can settle disputes. The government's role in destination inspection is derived from the licensing and arbitration regulations and the fresh fruit and vegetable regulations, which together create a framework for the marketing of fresh fruits and vegetables in interprovincial and international trade.
There has been a long history of cooperation and shared responsibility between government services and the private sector. However, over the last three decades, there has been a progressive shift by government to reduce its commitment to such quality assessment programs as a result of increased emphasis on food safety, animal health, and plant protection.
This particular service is of extreme importance to the industry. The board of arbitration, established under the Canada Agricultural Products Act, and the dispute resolution corporation, established pursuant to article 707 of NAFTA, function as commercial dispute groups for the fresh fruit and vegetable industry. They rely on destination inspection reports as evidence when hearing disputes and rendering decisions.
Historically, 70% of all commercial disputes for fresh fruits and vegetables are related to product condition. Therefore, access to a credible inspection service is critical to the successful operation of this evidence-based model. From an industry perspective, credibility is defined as a national system that is recognized by industry, governments, and the courts.
The inspection system has to be government-run, and that's an important point because it is one of the key elements upon which the United States Department of Agriculture provides reciprocity for Canadian exporters for their use of the U.S. commercial dispute resolution services under the U.S. Perishable Agricultural Commodities Act, PACA. This arbitration system, supported by an effective national inspection system, is a very useful tool in its own right for risk mitigation in the marketplace and enhancing overall industry prosperity. It plays a crucial role in protecting growers, packers, and shippers from unfair buyer practices, protects buyers from unfair competition, and contributes to minimizing market disruptions stemming from unfair commercial practices.
We are, therefore, here today to seek government support. There is a pending regulatory amendment. Its reference number is 20154, and it encompasses amendments to the licensing and arbitration regulations and the fresh fruit and vegetable regulations, which would ensure the long-term sustainability of this critical quality inspection service.
In conclusion, we simply solicit all-party support for the approval of this very important regulatory package. Thank you, Mr. Chair.