Farmers Forum staff
OTTAWA — Long-sought bankruptcy protections for fruit and vegetable growers cleared their final hurdle in December when the Canadian Senate finally granted approval to Bankruptcy and Insolvency Act reforms originally passed by MPs more than a year ago.
Fruit and vegetable growers will get top priority to collect from bankrupt Canadian food retailers, now that private member’s bill C-280 is set to become law. It grants producers first dibs on collecting their debts when a Canadian food retailer, wholesaler or distributor goes bust.
The January 2023 bankruptcy of Leamington’s Lakeside Produce focused attention on the issue, with 17 Canadian producers accounting for $1.7 million in unsecured claims out of a total $188 million debt. Until now, Canadian growers had no leverage in these situations because they sell highly perishable goods that can’t be returned.
Beyond giving producers new financial leverage to deal with insolvent buyers, the legislative change brings Canada into line with American policy on protection for farmers after such bankruptcies. It should also help to resolve a long-standing trade irritant that has hampered the Canadian fruit and vegetable sector for years.
The bill harnesses a special Crown power known as “deemed trust” to automatically grant growers’ claims first priority. That hammer was lacking from the industry dispute-resolution process in Canada.
A similar trust guarantee has applied in the U.S. for years, but in 2014, Canadian growers selling south of the border were excluded from the protections of the American system — unless they paid double the bond — because Canada didn’t offer reciprocal treatment. As a result, some Canadian greenhouse operations relocated south of the border rather than try to serve the American market from Canada anymore.
The originator of the bill, MP Scot Davidson (CON — York-Simcoe), has previously expressed hope that the legislative change could repatriate some of this production back to Canada. Davidson has also said the change is expected to cut Canadian fresh fruit and vegetable prices by as much as 15 %.
Canadian growers were thrilled to see Senators finally OK the bill in a 54-21 final vote on Dec. 10.
Canadian Produce Marketing Association president Ron Lemaire said it was the result of “decades of advocacy by organizations and industry members across the fresh produce supply chain and in the broader agriculture sector.”
“This common sense bill supports our country’s fresh fruit and vegetable growers, our economy, and will open the door to improved trade with the United States,” MP Davidson reiterated Dec. 11 on X (formerly Twitter) celebrating the passage of his reforms.
