Thank you, Mr. Chair.
Good afternoon, members of the committee.
It's my pleasure to present to you our views on this subject today. The Ontario greenhouse vegetable sector is a significant part of the rural economy, accounting for over 12,000 jobs annually. The Ontario Greenhouse Vegetable Growers are headquartered in Leamington, Ontario, and is the grower organization for all tomato, pepper, and cucumber greenhouse farmers in Ontario. Our mandate is to provide market access for producers and ensure opportunity for economic success. We account for 65% of the $1.3 billion in farm cash receipts attributed to the Canadian greenhouse vegetable sector. Ontario possesses the largest concentration of hydroponic greenhouses in North America with over 200 farmers and over 2,700 acres in production.
Greenhouse vegetables are also produced on a significant scale in British Columbia, Alberta, Quebec, and the Maritimes. Our sector is one of the fastest-growing sectors in Canadian agriculture. In terms of farm gate sales our compound annualized growth rate over the past 15 years is 6.8%. Our growing area has expanded 5.5% year over year for at least the past decade and current projections do not see this expansion slowing.
Few people outside the fresh produce industry recognize Ontario's market dominant position across North America. This dominance extends from eastern Canada down through the southern U.S.A., principally east of the Mississippi, but Ontario greenhouse vegetable products can be found in all the lower 48 states. In 2015 our greenhouse vegetable farmers grew the equivalent of 500 million long English cucumbers, 920 million tomatoes—Mr. Shipley definitely found some in Florida—and 550 million bell peppers. These numbers are quite staggering.
Our American exports have been growing at a remarkable rate. In 2009 we exported 163 million kilograms of greenhouse vegetables totalling $400 million. In 2015 we exported 247 million kilograms totalling $652 million, a 63% increase in value. A big part of this increase took place in the U.S. with the protection of the PACA rules in that marketplace. By the way, that additional $250 million in exports resulted in significant economic activity, primarily in one of the more economically depressed regions in Canada, which is the Windsor-Essex marketplace. We are a big exporter and we are a big part of domestic supply of Canadian-produced vegetables.
Regarding the need for financial protection, in Canada domestic sales remain completely vulnerable to non-payment by produce buyers. Our belief is that the fundamental principle of commerce is that the seller receive payment from the buyer for the product or service that has been sold. I think it's appropriate to be in this room. I see the two pictures on the wall, one representing agriculture and the other representing commerce. These are some pretty principal things I'm talking about, those principles about being paid for what you do.
The nature of produce marketing limited legislative support, and the perishable nature of vegetables has left farmers with no mechanism for recovery in the event of bankruptcy or refusal to pay. Previously the situation in the United States was much more favourable to produce sellers than in Canada where Canadian sellers received preferential access to the Perishable Agricultural Commodities Act, otherwise known as PACA. However as of October 1, 2014, Canada's failure to provide a reciprocal program resulted in the American government withdrawing that preferential access and, principally, that preferential access to our members.
Fresh retail vegetables are extremely perishable and their quality can change from perfect to unsellable in a very short period of time. PACA had also offered preferential access at minimal cost to dispute resolution provisions in the event of slow or no-pay transactions, a process that threatened the operating licence of a delinquent buyer and often led to quick resolutions of dispute. Fresh vegetable farmers and sellers are integral elements of the rural Canadian economy, and the impact of financial interruption is felt far beyond the industry itself.
American legislators have long recognized the unique nature of produce sales and provided legislative and financial protection to buyers, sellers, and ultimately the local rural economy. I would say that was probably done in the same framework or the same environment of which we've talked about, in terms of bankers and their perception of this thing as we see it today in Canada as well. I don't think the banks liked it when the PACA went in. At the end of the day they did go along with it. They've been the beneficiary of that added economic activity in the United States.
The greatest benefit will be a reduction in risk and improvement in market efficiency in our own Canadian marketplace. A secondary benefit, but also of vital importance to greenhouse farmers, is the reinstatement of PACA reciprocity in the U.S. market. This will allow for our growth patterns to continue in the greenhouse vegetable sector to assure that you're going to get paid for what you grow.
When buyers know that sellers have full recourse against them and regulatory authorities are monitoring them, buyers act ethically and in good faith. Enacting such protections would encourage orderly markets and minimize significant and damaging disruptions due to the bankruptcies and refusals to pay.
The retail industry is now highly consolidated, and it's operating under the tightest margins in history. It's not just a matter of if, but when those competitive pressures result in a significant Canadian retail or wholesale bankruptcy.
Ontario greenhouse vegetable farmers are totally reliant on access to American markets and strongly urge the Canadian government to fix this trade irritant once and for all.
On behalf of our members, we are asking for enabling legislation to allow our farmers to be paid for the produce they grow, both in our American export markets and right here at home.
Thank you, Mr. Chairman, for the opportunity to present our views.