Financial protection for Canada’s fruit and vegetable growers near completion

Long-awaited legislation that will provide financial protection to fresh fruit and vegetable producers is close to fruition.

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Scot Davidson’s private member’s Bill C-280, otherwise known as the Financial Protection for Fresh Fruit and Vegetable Farmers Act, received its third reading Dec. 10 and awaits royal assent.

Why it matters

Establishment of a trust will help secure payment in the event of buyer bankruptcy, stabilize and support the industry and safeguard Canadian food security.

The bill amends the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act, offering financial protection to fresh produce sellers similar to the protections enjoyed by U.S. growers.

“The passage of Bill C-280 has been the result of decades of advocacy by organizations and industry members across the fresh produce supply chain and in the broader agriculture sector,” said Ron Lemaire, Canadian Produce Marketing Association president, in a release.

“The positive impact of Bill C-280 on the highly integrated fresh produce industry cannot be overstated,” added Luc Mougeot, president and CEO of the Fruit and Vegetable Dispute Resolution Corporation.

Royal assent to Bill C280 is the final piece of puzzle for dispute resolution, default contract rules and licensing. It will provide a trust system to back complaints and force payment.

Without the legislation, Canadian fresh produce sellers did not have the preferential treatment previously enjoyed under the United States Perishable Agricultural Commodities Act. They faced double bond payments on shipments to access the dispute resolution mechanism, an untenable option for many Canadian businesses. Royal assent paves the way to restoring that privilege.

“The lack of a financial protection mechanism in Canada has been a pain point in our trading relationship with the United States for many years,” Mougeot said in the release. “We look forward to working with our U.S. counterparts to put in place reciprocal protection and provide stability for produce sellers on both sides of the border.”

In a statement, Massimo Bergamini, executive director of the Fruit and Vegetable Growers of Canada, said establishing a deemed trust for fresh fruit and produce sellers strengthens Canada’s food security and ensures the sector can fulfil its role.