- Member of Parliament
- Member of Parliament
- Bloc Québécois
- Shefford
- Quebec
- Voting Attendance: 66%
- Expenses Last Quarter: $81,135.43
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Mr. Speaker, I rise to speak to Bill C-280, which amends the the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act to provide that perishable fruits and vegetables sold by a supplier to a purchaser, as well as the proceeds of sale of those fruits and vegetables, are to be held in trust by the purchaser for the supplier in the event that the purchaser has not fully paid for the produce and becomes bankrupt or subject to a receivership or applies to the court to sanction a compromise or an arrangement. My neighbour and esteemed colleague from Berthier—Maskinongé, who is our agriculture, agri-food and supply management critic, co-sponsored this bill.
Given the demand in Quebec for this measure, which could be helpful for our agricultural community, we could have introduced it. One of our wineries in Shefford reached out to let me know that, as a producer and processor in the wine industry, La Belle alliance agrees with the amendment proposed in Bill C‑280. They said they see the amendment as additional protection for produces of perishable fruits and vegetables that could help protect small- and medium-sized agricultural businesses from suffering undue losses in the event of the insolvency of commercial buyers.
Le Potager Mont-Rouge said that this is a bill that they are really passionate about because it ensures that producer sellers are financially protected. Their profit margins are already razor thin, and they are impacted by many external factors such as price fluctuations, imports and climate change, to name but a few. They have been in a situation like this themselves and have lost thousands of dollars.
This testimony from these two businesses shows how important this bill is. The Bloc Québécois is attentive to their concerns, so we are in favour of this bill and support it. I will therefore begin by explaining its benefits and then talk about the division of powers and the litigation system.
First, passing the bill could demonstrate to the U.S. government that Canada has a trust mechanism in place for cases of buyer bankruptcy. Indeed, the lack of such a mechanism in Canada was one of the main reasons why, in 2014, the U.S. decided to withdraw U.S. buyer bankruptcy and insolvency protection from Canadian suppliers. The Canadian government had actually committed to developing a legal framework similar to the U.S. Perishable Agricultural Commodities Act, or PACA, and thus restoring coverage under their bankruptcy protection law for perishable foods to protect our industry from losses in the event U.S. buyers went bankrupt.
Groups have been calling for this since their PACA coverage ended back in 2014. This protection is necessary because food products like fresh fruit and vegetables are perishable, and a supplier cannot simply take them back and resell them if a buyer goes bankrupt. The protection is intended to allow licensed suppliers that have a contract with a U.S. buyer to take legal action against the buyer in the event of non-payment due to bankruptcy.
The new process will require the value of the shipment to be held in trust in the bankrupt buyer's name so that the producer can recover this amount as a creditor. Before 2014, Canadian fruit and vegetable farmers were protected by a U.S. law if they were doing business in the United States and a company failed to make payment or went bankrupt. This is no longer the case, and the alternate procedure developed between the two countries is very complicated, especially for our smaller businesses.
Quebec's agricultural model is at the family farm scale and on a human scale. Currently, without this protection, Canadian suppliers of fruits and vegetables have to go through a special process to file suit under this legislation in the United States.
According to the Canadian Produce Marketing Association, suppliers have to deposit a bond equivalent to twice the amount required in the suit. Most suppliers do not have that much in liquid assets and the major buyers know that all too well. They are then forced to negotiate downward with the buyer to get at least some compensation instead of losing everything, especially since this type of debt is not a priority in a business' bankruptcy. Suppliers who are not protected do not have much chance of receiving decent compensation through the ordinary process. Under this bill, the trust mechanism ensures that the purchaser is the guarantor of the value of the shipment, without owning it, in the event of a default due to the application of one of the two pieces of legislation. The legislation stipulates that the buyer has 30 days to make the payment under the contract.
Under the Canada-United States Regulatory Cooperation Council initiative, Agriculture and Agri-Food Canada and the U.S. Department of Agriculture are committed to establishing comparable approaches in order to achieve the common goal of protecting fresh fruit and vegetable vendors from Canada and the United States from buyers who are not concerned with their payment obligations.
I will start with a bit of background. The legislation was first was created in the 1930s to try to protect vegetable producers from the multiple bankruptcies of their buyers. It then became an important tool in rebalancing the commercial relationship between producers and buyers. It is essentially designed to allow a licensed supplier who has a contract with a U.S. buyer to sue that buyer under the act in the event of a default in payment because of bankruptcy. The process will allow the value of the shipment to be placed in a trust in the name of the bankrupt so that the supplier can recover the amount owed as a creditor. Given the speed with which produce is resold by a merchant or spoils, it is quite rare that a fresh produce repossession situation will meet these criteria. This means that perishable food producers would be given super-priority status so they do not have to wait for the bankruptcy settlement to recover their property. However, in the context of the above conditions, producer associations explained that 15 days is not long enough, given that typical payment terms are about 30 days. However, 30 days is too long to expect to recover a product that can be resold. This provision is not well suited to the structure of the supply chain, which often operates with intermediaries such as wholesalers.
Second, with regard to jurisdictions, the most sensitive issue is the fact that Canada cannot really quickly pass a law like the one in the United States. The Perishable Agricultural Commodities Act, or PACA, is a program to protect farmers in case of bankruptcy, but it also encompasses all of the dispute settlement mechanisms for perishable goods. In Canada, the Bankruptcy and Insolvency Act falls under federal jurisdiction, but the regulations surrounding contracts fall under the jurisdiction of Quebec and the provinces. A legal framework like the PACA therefore cannot be developed unless there are negotiations or a collaboration between the federal government and the provinces, which is what we are hoping will happen. One of the arguments put forward by the federal government is that most trade disputes are resolved before bankruptcy occurs and so most of the American framework deals with issues that fall under provincial jurisdiction. Since it is complicated to operate using multiple dispute settlement regimes, the federal government just gives up rather than trying to find even a partial solution to the problem. We need to work on that.
Third, the official figures are much lower and limit the timeframe for claims to about 15 days. The major difference between the government and the industry figures can be explained by the fact that in order for it to become an official statistic, the producer must file a complaint. Most of the time, producers do not necessarily use official channels because they are too complex, and even more so after the end of privilege. Producers often have special business relationships with their client and try to accommodate them. The argument that there are few claims or that they represent a small percentage of farm receipts is very subjective. Producers used to have protection, but no longer do. We are simply being asked to restore protection given that, because of its proximity and the nature of goods, the United States is by far the most important trade partner for perishable goods. Restoring this protection for our producers who do business with the United States is not far-fetched at all.
Although the government is putting forward some arguments to demonstrate that an insurance similar to PACA is not the best option, especially because of the cost of credit and shared jurisdictions, we will continue to defend this bill. We are under the impression that the Liberal Party seems to want to defend its friends in the banking sector.
In conclusion, this bill is simply a response to the agricultural sector. Two years after Canadian producers' preferential access to PACA was removed, the Standing Committee on Agriculture and Agri-Food studied the issue. A number of key witnesses appeared before the committee. The NDP, the Liberal Party and the Conservative Party have all, at various times, pledged to fix the problem. From our perspective, it is clear that we need to move forward with this bill.
I thank my Conservative colleague for introducing this bill. It can make things better for businesses in Shefford, as I said in my introduction. Obviously, the pandemic was a unique situation, and it also exacerbated various issues in the agricultural sector.
I want to say one last thing. As the member for Shefford, I proudly represent a riding where agriculture is at the heart of its economy. This bill is a common-sense measure that gives farmers a little extra help to get through this difficult period, for their mental health, for their survival. As we know, farm succession is already facing several threats. Perhaps this bill will address some of the concerns of the next generation of farmers and give them the desire to continue, to produce what we eat every day and what sustains us. We need farmers.
Once again, I thank my colleague for this bill. The Bloc Québécois will be voting in favour, to support our agricultural model.
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Mr. Speaker, I have the honour to represent Shefford, a riding that is located in the region known as Quebec's pantry. We are proud of our farmers. Agri-tourism is at the heart of my riding's economy. I love going around to all the public markets and talking to local farmers.
Naturally, the subject of Bill C-282, supply management, is vital to many of them. During the last election campaign, I promised the Union des producteurs agricoles de la Haute‑Yamaska that I would fight tooth and nail for supply management and introduce a bill. I also made the same promise during a press conference with the member for Saint-Hyacinthe—Bagot, the riding next to mine.
It is therefore with great humility and tremendous respect for the the work of the first dynamic trio who recently went to bat for the vital issue of supply management that I rise to speak on this subject. I am talking about my dear colleagues from Berthier—Maskinongé, Montcalm and Saint-Hyacinthe—Bagot.
I will begin my speech by talking about the importance of supply management. Then, I will remind the House of the Bloc's historic role on this issue and close with the words of some farmers from my riding.
First, the bill amends the Department of Foreign Affairs, Trade and Development Act to include the protection of the supply management system as part of the minister's responsibilities. It adds supply management to the list of directives the minister must take into account when conducting business outside Canada, including in international trade.
Once this bill comes into force in its entirety, the minister responsible for international trade will have to stand up for supply-managed farmers in front of our trade partners. The minister will henceforth have the mandate to negotiate agreements without creating breaches in the system, as it did during the signing of the three most important international trade agreements of the past decade.
The bill has become necessary, not least because of the serious breaches that previous governments, both Liberal and Conservative, opened up and negotiated in the last international trade agreements. These breaches in the supply management mechanism prevent the system from working effectively by attacking the integrity of its basic principles, namely pricing control, production control and border control.
In Canada, only the markets for dairy, table eggs, hatching eggs, and poultry, meaning chicken and turkey, are under supply management. This is a system that was put in place in the 1970s. It ensures that we produce just enough to meet domestic demand while avoiding overproduction and waste. It also ensures price stability.
Prices are controlled by setting a price floor and a price ceiling so that each link in the chain gets its fair share. That includes the consumer, who can be sure of getting a very high-quality, ethically farmed local product. Another aspect is border control, which includes very high tariffs and import quotas, preventing foreign products or by-products from invading our market. Because the market is largely closed to imports and there are price controls in place, producers do not end up in a never-ending race to lower production costs.
The current government is taking a number of worrisome actions that compromise the ability of Canada—and especially Quebec, which has a different agricultural reality—to choose the type of agriculture it wants to develop. In fact, the recent free trade agreements, particularly the one with the United States and Mexico, CUSMA, will have catastrophic consequences for certain products and processors under supply management.
Border control is the pillar most weakened by the international agreements. However, given that supply management has never come under fire from the World Trade Organization, or WTO, Canada has every right to protect its markets so long as it complies with the degree of openness established by the WTO.
If international agreements and the WTO give Canada the right to protect its markets, why have there been concessions? It is because Canada cannot cope with pressure from trading partners during negotiations. It is as simple as that. It succumbs to lobby groups and arguments made by other countries that want access to an as-yet untapped market at all costs.
Despite the new aid programs, which were a long time coming, it is abundantly clear that no compensation can possibly make up for the permanent damage caused by concessions in agreements with Europe, the Pacific Rim nations, the United States and Mexico. Accordingly, the Conservatives' argument about how compensation was promised under the Harper Conservatives during the opening rounds of the first two agreements is false.
Second, I want to stress the following point: The Bloc Québécois has always defended supply management in Ottawa. This is the second time that this bill has been tabled and, if not for the unnecessary election that the Prime Minister called in August 2021, Bill C‑216 might have made it to the Senate by now.
By contrast, the House had to adopt four motions unanimously to ask the federal government to fully protect supply management. However, the Liberal and Conservative governments presumably did not feel bound by this commitment when they signed the last three free trade agreements. In fact, because of the concessions that were made, these agreements were catastrophic for agricultural producers and processors under supply management, who are now wondering about their future.
Supply management is a model that is envied around the world, especially in jurisdictions that have abolished it. In Quebec, agriculture is practised on smaller farms where there is a much greater concern for quality and respect for the environment. While Quebec's quality-centred agriculture sector is flourishing, with an ever-increasing variety of local products and organic farming, Ottawa is taking the opposite approach by encouraging more industrial agriculture.
Until the Quebec government is present at international negotiations and until it gets to act as the sole architect of agricultural policies, there is a serious risk that Ottawa will align the federal government with the needs of western Canada. The Bloc Québécois simply wants the Prime Minister and the Liberal Party to keep the promise they have made more than once to stop making concessions at the expense of supply-managed producers. That is all.
It was Stephen Harper's Conservatives who got the ball rolling in 2008. Supply management first started crumbling with the Canada-Europe free trade agreement negotiations, because the Canadian government started putting supply management on the table, something it had never dared to do in the past. Since then, there has been one breach after another.
Supply management has always been a key issue to the Bloc Québécois. During the entire time that the Bloc Québécois had a strong presence in the House, which I remember well, as I was an assistant then, the government signed free trade agreements with 16 countries and fully protected the supply management system.
During the federal election that followed the creation of the WTO, in other words the June 1997 election, defending the supply management system was already one of our election priorities. That was quite a few years ago. The Bloc Québécois was the first party to move a motion in the House calling for the pillars of the supply management system to be fully maintained. The House will recall that the motion was adopted unanimously by all parties. What is more, for practically every major negotiation, the National Assembly of Quebec has unanimously adopted a motion calling on the federal government to protect supply management. We are the defenders of supply management, the voice of supply-managed farmers.
Third, I want to share the words of farmers back home. Nancy Fournier, a farmer from Saint‑Alphonse‑de‑Granby who is a member of the board of directors of the Haute-Yamaska branch of the UPA and part of the next generation of Quebec farmers, told us that she is proud of our efforts and our support for agriculture.
Denis Beaudry, a farmer from Saint‑Alphonse‑de‑Granby, said the following: “The bill is very relevant because we are fed up with supply management being used as a bargaining chip in treaty negotiations. From a more local perspective, the riding of Shefford is home to many supply-managed businesses, so when supply management is mishandled, the agricultural community suffers. I look forward to seeing whether the other parties will support the bill. The government said that it would no longer compromise on supply management. We will see.”
Valéry Martin, a communications advisor at UPA de l'Estrie, said the following: “Supply management provides stability and helps maintain the country's food self-sufficiency. Supply-managed farms are everywhere, keeping our communities strong. There are not many sectors that can provide this kind of predictability, food security and superior quality products without direct subsidies.”
I want to say one last thing. Without supply management, there would not be many people left in Abitibi, Saguenay, Lac‑Saint‑Jean or the Gaspé, because it helps ensure that there are family farms all across our beautiful Quebec nation. If there is one economic sector that is key to how our land is used in Quebec, it is the agricultural industry. The statistics speak for themselves. With $9.1 billion in sales generated by just over 42,000 farmers on 29,000 farms, Quebec agriculture is essential, important, vital.
Agriculture is going through a very difficult period, however. We are at a crossroads, where we will have to choose between following the trend of more open markets and protecting domestic markets in order to promote human-scale agriculture. We will need strong agricultural policies that will help local farmers make a living providing top-quality agricultural products to consumers.
Consumers are also placing increasing demands on farmers. Farmers are being asked to produce better-quality food that is more diverse at a lower price. They are also being asked to protect the environment and use Quebec's land to benefit all of society. As incredible as it may seem, despite the meagre support they receive, farmers are doing a brilliant job of rising to this challenge, despite the pandemic, the labour shortage, the disastrous consequences of the free trade agreements, the war in Ukraine and the inflation crisis.
We must respond to the requests of this sector that feeds us, that sustains us. Tomorrow, let us put partisanship aside and vote in favour of Bill C-282. We must take action.
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