On June 8, Scot Davidson, Conservative Member of Parliament for York-Simcoe introduced Bill C-280, the Financial Protection for Fresh Fruit and Vegetable Farmers Act, a Private Member’s Bill in the House of Commons.

Bill C-280 will amend the Bankruptcy and Insolvency Act and Companies’ Creditors Arrangement Act to establish a deemed trust for fresh produce sellers, ensuring that they have priority access to an insolvent buyer’s assets related to the sale of fresh produce.

There are a number of risks faced by farmers growing, harvesting, packing, and marketing fresh fruits and vegetables: overhead and capital costs continue to rise, while revenues are delayed until the product is sold and payment is collected down the supply chain – usually long after growers have distributed their product.

Fresh fruit and vegetables are highly perishable, with a limited shelf-life: when buyers of fresh produce become insolvent, unpaid shipments can not be repossessed and resold by the seller as there typically is no longer any salvageable product left. As a result, Canadian farmers are often at risk of not being paid, leading to farm bankruptcies and worsening Canada’s food security.

The members of the Fresh Produce Alliance [comprised of the Canadian Produce Marketing Association (CPMA), the Fruit and Vegetable Dispute Resolution Corporation (DRC) and Fruit and Vegetable Growers of Canada (FVGC)] enthusiastically welcomed the announcement.

“Having lived the challenge of a client’s bankruptcy and ensuing losses, I believe that Bill C-280 establishes a critical tool to ensure that growers receive payment for their products, even in the event of a buyer bankruptcy,” said Quinton Woods, chair of FVGC’s Trade and Marketing Working Group, and a grower-packer-shipper from Bradford, Ontario in MP Davidson’s riding.

If passed, Bill C-280 would establish a deemed trust mechanism for fresh produce growers and sellers in Canada, ensuring payment in the case of a buyer bankruptcy. The introduction of a financial protection mechanism in Canada would also open the door to the reinstatement of preferential treatment under the U.S. Perishable Agricultural Commodities Act (PACA) for Canadians selling produce into the United States. This preferential treatment had been in place prior to 2014, when it was rescinded by the U.S. due to a lack of reciprocal agreement.

Source:  Scot Davidson MP June 8, 2022 news release, Canadian Produce Marketing Association June 8, 2022 news release