Evidence of meeting #13 for Agriculture and Agri-Food in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was paca.
A recording is available from Parliament.
4:35 p.m.
President and Chief Executive Officer, Fruit and Vegetable Dispute Resolution Corporation
Currently? The farmer does.
4:35 p.m.
Liberal
Lloyd Longfield Liberal Guelph, ON
Yes, I know, but under this new system you said it won't cost anybody anything, but the money has to come from somewhere.
4:35 p.m.
President and Chief Executive Officer, Fruit and Vegetable Dispute Resolution Corporation
The money will come from the gentleman who filed for bankruptcy. I will go back to my previous example, because I think it helps. The gentleman who took my product either has my product, he has the cash from selling my product, or he has my account receivable. I want whichever of those is left.
4:35 p.m.
Liberal
Lloyd Longfield Liberal Guelph, ON
If he has gone out of business...my history wasn't great on people who went out of business and getting paid.
May 16th, 2016 / 4:35 p.m.
President and Chief Executive Officer, Fruit and Vegetable Dispute Resolution Corporation
Okay, but where did my account receivable go? It's gone somewhere else.
4:35 p.m.
Liberal
Lloyd Longfield Liberal Guelph, ON
It's off the creditor list, and that's what we've been talking about—just moving them off the creditor list.
4:35 p.m.
President and Chief Executive Officer, Fruit and Vegetable Dispute Resolution Corporation
Yes, he's dissipated the trust, and therefore that money comes back to the farmer.
4:35 p.m.
Liberal
Lloyd Longfield Liberal Guelph, ON
That's a viable solution. I'm not going to argue, because we don't have any time, but that sounds like—
4:35 p.m.
President and Chief Executive Officer, Fruit and Vegetable Dispute Resolution Corporation
Well, it's been working in the U.S. since 1984.
4:35 p.m.
Liberal
Lloyd Longfield Liberal Guelph, ON
So why haven't we done it? I don't get it. Why hasn't Canada just done it?
4:35 p.m.
President and Chief Executive Officer, Fruit and Vegetable Dispute Resolution Corporation
I'll have to add myself to the line of people asking that question.
4:35 p.m.
Liberal
Lloyd Longfield Liberal Guelph, ON
There were previous Conservative governments, previous Liberal governments. We have 50 years of governments that haven't done this.
4:35 p.m.
President and Chief Executive Officer, Fruit and Vegetable Dispute Resolution Corporation
If I might be so bold, I truly think it was confusion. It has only been in the last year that most people understood that we know the difference between solvency and insolvency, that we're not asking to copy what's in the U.S., that we understand the Canadian solution will be different.
4:35 p.m.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
Thank you, Mr. Chair. I also want to thank Mr. Webber, Mr. Verkaik, and Mr. St-Denis for being with us today.
I didn't quite understand why the NDP member from Essex would come out and say what she did and undermine the competence of the players in the industry, the players in governments, and our public service.
Quite honestly, I think you said it right. I've been with various organizations, including the Canadian Horticultural Council, the Greenhouse Vegetable Growers, the fruit and vegetable growers, all of them. From those meetings and from personal conversations, I can tell you it was all about how we get there. How can we make this happen and yet meet the requirements under the law, the dispute resolutions, and the financial requirements of the growers?
Communications can be a big struggle in our businesses and even at home. There are large complexities out there. We talked about other options. I'm involved in different agricultural and commodity groups, and we've looked at checkoffs, insurance, and other things. We had to boil them down to see how they worked, especially for the horticultural group.
I appreciate that Professor Cuming has brought forward a draft that may be workable for both the industry and the government. I have colleagues on the government side, and if there's something there, I'm not going to take shots at you. As Lloyd said, we've had 50 years of PACA with the United States. We had preferential treatment—we get that—but we're going to work with you to make sure that this comes to fruition.
Mr. Verkaik, you may have reflected on this when you had a claim under PACA. Mr. Webber, you said it could take three to 12 months to get paid, depending on the complexity of the claim. What happened with your financial institution? Were they willing to extend your credit beyond 30 days? You have your input costs coming in, and you have your transportation. You have all that to deal with. Could going through a resolution process and putting in a request for payment through PACA take away the concern for finances that comes from not being paid?
4:40 p.m.
Chair, Ontario Fruit and Vegetable Growers' Association
I would say it all depends on the individual farmer's position with the bank. If you're a new farmer and have bought a $3-million farm and you're sitting on a heavy mortgage, you can have a great business idea that would make you lots of money outside of a claim, and the bank might not lend you anything even though you're pretty confident that it's going to work.
When it comes to a resolution, that's a grey area for getting credit or for extending credit that you already have. It really depends on the individual farm. Some of the farmers who have the knowledge to farm might not have the ability to extend beyond that.
4:40 p.m.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
I understand all that. When you talk about the small farmers, the average is $85,000, which is not a lot of money nowadays in terms of farming. So how do they get...?
They've had someone not pay them. Under preferential treatment, they could make their application through PACA, right?
4:40 p.m.
Chair, Ontario Fruit and Vegetable Growers' Association
Yes. I think it's $100.
4:40 p.m.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
It could take three months to a year to resolve, but they have bills to pay within that 30 days. Who would carry them? If they didn't have PACA, they would have to make up the money, or they would have to get—
4:40 p.m.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
Okay. So how does that work in terms of their being able to survive that long without getting funds?
4:40 p.m.
Chair, Ontario Fruit and Vegetable Growers' Association
It depends. The claim could be 10% of their receivables or it could be 40% of their receivables. Really, how they'll be able to survive depends on the size of the claim. Some don't.
4:40 p.m.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
I have a quick question for Fred and then I'll be done.
You mentioned that you're confident that the U.S. will accept the terminology that is somewhat like theirs—I forget your word—but there have been times, dealing with our friends to the south, when near likeness didn't cut it. You're giving some assurance that you've had a number of conversations that the near likeness—because it won't be word for word, I can almost guarantee that—will be satisfactory not only to the U.S.A. but also to your organization.
4:40 p.m.
Liberal
The Chair Liberal Pat Finnigan
Mr. Shipley, we're already past the time. I'll need a quick answer, please.