The federal opposition New Democrats have cherry-picked a Liberal election promise to fruit and vegetable growers seeking insurance against U.S. and Canadian buyers who dodge their bills.
Tracey Ramsey, the NDP’s international trade critic and MP for the southwestern Ontario riding of Essex, on March 8 tabled a motion in the Commons for Canada to set up a “payment protection program for produce growers like the Perishable Agricultural Commodities Act (PACA)” in the U.S.
Up until October 2014, Canadian produce growers selling into the U.S. had been able to invoke PACA to recover payments through a U.S. federal trust if a U.S. buyer wouldn’t pay, or went bankrupt without paying.
But the U.S. Department of Agriculture’s Agricultural Marketing Service (AMS), as of Oct. 1 that year, made good on previous threats to cut off Canadian growers’ access to PACA, unless the Canadian government came up with an equally effective dispute resolution process for defaults on perishable commodities.
Since then, Canadian producers have had to post a surety bond before they can file a formal complaint against a U.S. buyer for PACA adjudication.
Ramsey’s motion calls for Canada to set up, by Sept. 30 this year, a PACA-like system that “will allow sellers to maintain an ownership trust until payment has been received.”
The motion also calls for the government to take “immediate” steps to negotiate restoring Canada’s “privileged access” to U.S. PACA funds, with the aim of restoring access by Dec. 31 this year.
The previous Conservative government’s “inaction on this file has negatively impacted this important industry, and I urge the Liberal government to resolve the issue by year-end,” she said in an NDP release.
“Resolving this issue would not only give fair protection to produce sellers here in Canada, but return us to a level playing field for our fruit and vegetable exporters selling to the U.S., our largest market,” Ron Lemaire, president of the Canadian Produce Marketing Association (CPMA), said in the same release.
The motion holds the Liberals’ feet to the fire on the governing party’s election promise last fall to set up a PACA-like system in Canada.
“It is unacceptable that, despite months of warnings, the government dragged its heels and still has not resolved this dispute,” Nova Scotia MP Mark Eyking — then the Liberals’ agriculture critic, now chair of the Commons standing committee on international trade — said last fall in an Oct. 7 release.
The Tories’ “inaction put our Canadian producers of fresh fruits and vegetables at risk of non-payment for sales to the U.S., even though a single instance of non-payment could be enough to force one of our many small producers out of business.”
The Liberals at the time pledged to consult with the CPMA and Canadian Horticultural Council to create a comparable mechanism in Canada and work with the U.S. to reinstate PACA access.
“This will ensure payment for Canadian horticulture producers from companies that become insolvent or are slow to pay their bills, at no cost to taxpayers,” the party said at the time.
“Resolving this dispute is crucial for the sector, whose trade in fresh produce with the U.S. is worth over a billion dollars a year.”