Debates of Oct. 3rd, 2023

Affordable Housing and Groceries Act

[Warren Steinley, Conservative, Regina—Lewvan, SK]

Madam Speaker, I am sure the member would like me to table a document showing who he actually met with in Germany, so there is proof that the meetings I talked about are true.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Does the hon. member have unanimous consent to table the motion?

[Some hon. members]

Nay.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Madam Speaker, I would be more than willing to let them table it, if they table all the receipts and who actually paid for—

[The Assistant Deputy Speaker, NDP, Carol Hughes]

That is becoming a point of debate.

Does the hon. member have unanimous consent to table the motion?

[Some hon. members]

Nay.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Questions and comments, the hon. member for Shefford.

[Andréanne Larouche, Bloc, Shefford, QC]

Madam Speaker, throughout this debate, I will try to bring us back to the matter at hand today, Bill C‑56.

Yesterday, at a meeting with entrepreneurs, I was asked what happened to the $900 million for housing. What does my colleague think of that?

It might be important to release that money as soon as possible. In Quebec, that money is eagerly awaited. It is time to try to stop this procedural wrangling.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Madam Speaker, absolutely, the money has to flow. We have so many housing proposals out there and they are getting turned down one after another by the Liberal government or the money is just sitting there. We are not seeing the money flow. We are hearing the words flow but we need to see the money flow.

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, NDP, 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, NDP, 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, NDP, 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, NDP, Carol Hughes]

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

The sound is starting to come up. 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.