Agriculture Committee on May 16th, 2016

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

My last question is for Mr. St-Denis.

Are you always the one who assumes the transport-related risks, or do you deal with certain brokers who can transport the products to distribution centres? Is it always the producer who is on the hook both for the cost of the produce and for the transportation when there is a problem?

[The Chair, Liberal, Pat Finnigan]

I would ask you to be brief, Mr. St-Denis.

[Jocelyn St-Denis]

Most of the products we sell are delivered. We are responsible for transport and import. We are the importer of record, and we deliver directly to the client. If there is a bankruptcy or non-payment, we are responsible for our produce and related transportation costs.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Thank you.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. St-Denis. Thank you, Mr. Gourde.

I now yield the floor to Ms. Brosseau, who has three minutes.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Thank you, Mr. Chair.

I want to thank all of the witnesses who are here with us today. I am really pleased that our committee has been able to do this study, even though it was brief.

I believe that all of those who appeared before the committee have testified to the importance of acting on this. Everyone agrees that the PACA, the Perishable Agricultural Commodities Act, and the motion submitted to the previous government, were worthwhile.

If I understand correctly, amendments have been made to that bill.

Mr. Webber, from what I understand there was a piece of legislation that was made by Mr. Cuming, and it has been changed or is in the process of being changed.

Can you talk about the modifications?

[Fred Webber]

In the beginning, the original document, particularly his background at the beginning of the document, spent a lot of time talking about how a trust could be used before the firm became bankrupt. He had even gotten into a little bit about how the provinces could play a role in that. That would be parallel to or running along the same lines as PACA in the United States.

After having these meetings over the last couple of years and learning from the public servants and the government folks, we now do understand that we can have a complete system in Canada by allowing DRC to do what PACA does in the States with solvent firms that are operating.

Recognizing that, Professor Cuming went back, and the change that was made is that everything about the draft legislation now is only about what happens after the buyer becomes insolvent. The change was to remove any ambiguities about whether or not we had a problem here with federal-provincial division of power.

That was the change that was made.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

That was something that was brought up in the 41st Parliament. It was before committee a few times.

Towards the end and especially during the campaign, a lot of parties and a lot of members came out in full support of having a PACA-like system here in Canada.

My colleague, Tracey, talked about having put that promise up on our website. The reason I invited Tracey to committee is that she tabled a motion a few months ago in the House of Commons asking the Government of Canada to bring forward a piece of legislation. I think it would be a very important piece of legislation because it would solve a problem that we've talked about for a long time and that has been studied quite a bit, and it doesn't cost anything.

It's important to do studies, it's important to talk, it's important to consult, but when everybody is singing the same song, talk needs to turn into action. If the legislation was brought through Parliament, sent to the Senate, and got royal assent, how long would it take to get things going correctly in the United States?

Mr. Webber, I know you said that there shouldn't be any concern.

[The Chair, Liberal, Pat Finnigan]

Very quickly. We're out of time. Could we have a very short answer from Mr. Webber, please?

[Fred Webber]

Within the United States, the process of removing reciprocity is an administrative function. The act of PACA sets out who can and can't have it.

Once it had royal assent, I can't speak for the USDA, but I can tell you, having visited with a number of them, that if it provides the same kinds of protections—not guarantees, but protections—it would be returned very quickly.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Webber.

Thank you, Madame Brosseau.

Mr. Warkentin, we'll start another round, since we have considerable time left. You have six minutes.

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

Thank you.

I'm not sure that I need six minutes. I think that my colleagues have summed up the understanding that there's a necessity to move forward.

Mr. Chair, what we probably need from this committee is to have a conversation with Mr. Cuming. It seems we've spent a fair bit of time talking to people who say that we should talk to Mr. Cuming. I would suggest that we either have a written submission from the professor or actually have him before committee. I'll leave that to some future discussion about future business. Before we conclude our study and write a report, I think it would be important to hear from him.

That said, I don't know if there's anything in addition. Obviously we've noted today that even if a PACA-like system was set up in Canada, it wouldn't resolve all of the issues that might face produce growers in the country. There's been some additional confusion in this whole discussion because sometimes produce growers in Canada think this might be the end of all the challenges they face. I think we got some additional clarity today as to what it would help and what it wouldn't help.

I'll turn it over to our witnesses and ask if there is anything else that they feel is necessary for us to hear before we complete today's hearing, if there is any point of clarification that they think has been missed. I think you sense that there is a general sense of support for moving forward to ensure as level a playing field for farmers on this side of the border as exists south of the border. We certainly want to resolve this situation.

Is there anything we haven't covered or haven't touched on that you think needs to be?

[Fred Webber]

Building on your last comment, this is about levelling the playing field between the U.S. and Canada. PACA in the U.S. is not perfect. This industry has been very clear that they're not looking for perfect; they just want the playing field levelled.

The other thing I would throw out is that Professor Cuming would be available. When we did what I'll call version one of Professor Cuming's report, we went before what is now Innovation, Science and Economic Development Canada, and there were representatives of the agriculture department as well. He was on the phone with them. He is someone who is accessible. He is a law professor, so I'm not sure whether the best choice is for you guys to interview him or for someone from the justice department to interview him, because I will tell you that I felt like I was in a law school lecture when he was talking.

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

The difficulty with House of Commons committees is that although we can all acknowledge that there's a problem, the question is if there's a solution at hand. If there's one person in the country who seems to be articulating the solution that everyone keeps pointing to, I think it's important that we do hear from him. Hopefully he can get the folks around this table who aren't lawyers to understand what he is proposing. I'll be the first to admit that I might get lost in the details, but I think it's important that it be on the record so that we can then encourage our ministers to be involved in that conversation and take it up from there.

We obviously won't be the ones responsible for drafting the legislation that we hope might resolve this situation, but we do know that we will be the ones who will hopefully push the minister to propose some legislation that we hope to review some day when the minister refers it to this committee.

If there's nothing further, I'll move on.

Thank you.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Warkentin.

Go ahead, Mr. Peschisolido.

[Joe Peschisolido, Liberal, Steveston—Richmond East, BC]

Thanks, Mr. Chair.

Mr. St-Denis, this afternoon we have talked about the PACA, which belongs to the legal domain, but our farmers also have practical problems on a daily basis.

Are there changes we could make in order to help them? Mr. Gourde spoke about transport. Are there other aspects we could change in Quebec, in the context of our relationship with the United States, to get around the problem related to PACA?

[Jocelyn St-Denis]

I will go back to what I said previously.

The difficulties are not just about our trading relationship with the United States. The deemed trust we have been discussing for some time is a matter which affects our business relationship with other Canadians, in this country. I think it is important to note that. It is not only because we are losing our privileged access right to the American remedies that we are here discussing this, but because there are other needs related to trade within Canada.

As a commercial activity, agriculture is challenging. I mentioned a few of those challenges at the beginning of my presentation, such as sustainable production, the environment, and healthy and safe food. I think that all of these aspects are dealt with well for the moment, on both sides of the border. We have some common concerns.

I would like to talk about herbicides and pesticides, which are not subject to PACA, but are a good illustration of the relationship between two countries whose borders are often defined by a river or by a simple line drawn on the ground. Products that are authorized in the U.S. are used close to the border, but are prohibited in Canada. This weakens Canadians' capacity to compete with American producers.

A produce merchant or an input supplier has a larger market in the United States. The approval process is much more important and he obtains a better return on his investment than if he supplies a smaller market like Canada. This is a very important topic right now as regards organic products.

[Joe Peschisolido, Liberal, Steveston—Richmond East, BC]

Mr. Webber, Mr. Verkaik, I'd like to ask you the same question. Are there any practical changes we can make on how we do agriculture so that we come to a point where you don't have to deal with people who don't pay you or you don't have to deal with Americans who are either not willing to pay or are unable to pay?

[Jason Verkaik]

Well, I would echo what my colleague said. It's not just about selling to the United States. You have to remember the trade between our two countries is $10 billion. You have to remember that our country does not produce food 365 days a year, and we need that trade for all of our society to eat.

In order to have good, balanced trade and to be able to bring in the products we need to sustain ourselves in a food-secure way, we need to have that trade. Therefore, we need to be selling to them so that they can sell to us. That whole development of how our countries work together is really our food security. We need a United States–Canada–Mexico kind of perimeter for our food security. That trade is imperative, as well as interprovincial trade, as well as trade within a province. It really speaks to all of that.

I'd say the system itself and how we do that is probably a very good system. From this aspect, we're looking for another tool in the tool box to be able to make that work and facilitate it better.

[Joe Peschisolido, Liberal, Steveston—Richmond East, BC]

We probably won't be able to get a food security system in place quickly among Canada, the U.S., and Mexico, but we may be able to do it within our own regions. We can define a region to be as small or as broad as we like.

In response to a question by Mr. Shipley on ticking off what has to get done—I think it was the distinction between a deemed trust or a double trust—you talked about the various layers of moving the food.

I have the same question. Are there any practical things that can be done, or is it structural? Is it that it is what it is, and we need to have us involved to make sure that if there is a dispute, we'd deal with the dispute?

[Fred Webber]

If I may be so bold, you would have to re-engineer an entire system. With all due respect, you have a situation here where a raspberry can be picked on Monday morning and be on your table by Friday. It is that dynamic that makes it impossible to have futures contracts. It is that dynamic that makes it impossible to check every single person you sell to.

Jason just had a situation on his farm. He has seeding out, and the ground froze last night. Is he going to have to replant it and put himself a week behind? Will it take Mother Nature a week to catch up? There is no real way to know. Mother Nature dictates how big it's going to be. Mother Nature dictates when it comes out, and in some ways he doesn't know whether he's going to have three loads out this morning or five, until it's very close.

That is really what drives this industry and makes it so different.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Webber, and thank you, Mr. Peschisolido.

Ms. Brosseau, you have six minutes at your disposal.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

I have a more technical question, Mr. Chair.

When the committee discussed doing a study on the PACA, it was supposed to last two days. After that, we were to do a study on bees, then one on the Growing Forward program, and we were to hold consultations in connection with that.

I would like you or the clerk of the committee to confirm whether or not we are going to prepare a report containing recommendations. I want to ensure that all of the testimony we hear at the committee will be submitted to the House in the form of recommendations. I think it is very relevant for the committee to table a report with recommendations in the House.

[The Chair, Liberal, Pat Finnigan]

It is up to the members of the committee to decide whether they want to submit a report to the House.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Is a motion necessary?