Restored PACA access for produce growers, sellers

The Canadian Produce Marketing Association (CPMA) and the Canadian Horticultural Council (CHC) applaud the commitment from the Liberal Party of Canada and Liberal Agriculture Critic Mark Eyking yesterday to establishing a comparable Canadian mechanism to the Perishable Agricultural Commodities Act (PACA) in the United States and to restoring Canada’s preferential access to PACA programs.

The lack of payment protection in Canada is the number one issue for fresh fruit and vegetable growers and sellers across Canada. The industry has long advocated for a PACA-like trust in Canada. The highly perishable nature of fresh produce makes the industry uniquely vulnerable during bankruptcies, risking financial ruin for those affected.

Produce sellers in the US have PACA, which provides a deemed trust mechanism that ensures that growers and sellers are paid should a buyer go bankrupt or simply refuse to pay for the product they receive. Canada had been the only country whose exporters were granted the same protections as US companies under PACA. The U.S. revoked Canada’s special access due to our lack of similar trust protection and the lack of progress in fulfilling the Canada-U.S. Regulatory Cooperation Council (RCC) commitment to establishing a comparable approach in Canada.

Long vulnerable in Canada, the situation became more urgent after the decision last fall made exporting to the U.S. a much riskier enterprise for Canadian companies, who currently send 40% of all produce grown in Canada to U.S. customers. Since October 1st, Canadian companies trying to recover unpaid bills have had to post a bond of double the value of their claim to move forward with a formal claim under PACA. Many cannot afford to do so and must simply walk away from what they are owed, a decision several have already had to make.

CHC and CPMA have been asking all parties to commit to resolving this issue in their platforms this election. A limited statutory deemed trust, like the PACA model, is a no-cost solution and the most effective means to resolve the issue. Other options would result in high cost to both sellers and government, while still providing ineffective protection.

For more information:
Trevor Eggleton
Canadian Horticultural Council
Tel: +1 613 226 4880 (ext. 218)
Email: teggleton@hortcouncil.ca
or
Vanessa Sherry
Canadian Produce Marketing Association
Tel: +1 613 226 4187 (ext. 225)
Email: vsherry@cpma.ca