44th Parl. 1st Sess.
April 19, 2023 02:00PM
- Apr/19/23 5:35:54 p.m.
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Mr. Speaker, we should make sure all Canadians, corporate or individual, pay the taxes they owe, no question. We should make sure that people pay the taxes they owe before we think about increasing taxes on everyone else.
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- Apr/19/23 5:36:14 p.m.
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Mr. Speaker, what a way this is to conclude the debate on such an important measure the government has brought forward. I thought maybe I would reflect on what members should be aware of before we actually vote.
This budget is in fact a reflection of what has been done in consultations, working with Canadians from—
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- Apr/19/23 5:36:41 p.m.
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The hon. member for Calgary Rocky Ridge has a point of order.
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- Apr/19/23 5:36:43 p.m.
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Madam Speaker, I thought we should get a ruling from you. I think this is at least the third time the member has spoken to the budget. Perhaps another member would like a turn. Members can only speak at each stage—
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- Apr/19/23 5:37:03 p.m.
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I can confirm this member is speaking for the first time on the main motion.
The hon. parliamentary secretary has the floor.
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- Apr/19/23 5:37:10 p.m.
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Madam Speaker, the good news for the member is he was able to cut my speech a bit shorter.
The Conservatives do not like it when I stand up to speak because they get a sense of reality, which is that the more Canadians find out what the Conservative Party members are truly up to, the more they are in deep trouble in the next election.
Within this budget is a true reflection of what Canadians expect of the government: to demonstrate it has been listening and there is leadership from Ottawa. This budget delivers.
For important issues such as inflation, we have things such as the grocery rebate. We have the expansion of the dental plan program. We have things such as the doubling of the tax credit for tradespeople so they can acquire their tools. There are so many aspects of this budget that are there to support Canadians. It truly is a reflection of what Canadians want to see in a national budget.
This is an opportunity to emphasize that as a government working with Canadians we have seen the creation of thousands of jobs. In fact, close to two million jobs have been created through this government since we have been in government. This is well past the prepandemic number.
When it comes to dealing with issues such as inflation, we are on the right track and are seeing our inflation numbers going down. Hopefully we will be able to see that downward movement on inflation rates continue. If we compare Canada to any other country, and in particular our peer countries, whether in Europe or just south of us, we will find Canada is doing exceptionally well. We continue to work day in, day out in order to deliver the type of programs expect of us.
No matter how focused the Conservative Party of Canada is on personal attacks or personal assassinations of members on the government benches, we will continue to remain focused on Canadians first and foremost, no matter what region of the country one lives in. This is a government that truly cares. The budgetary and legislative measures we brought forward will continue to have the backs of Canadians as we recognize the value of our middle class and those aspiring to be a part of it. We are going to develop an economy that works for all Canadians, no matter where they live.
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- Apr/19/23 5:39:56 p.m.
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It being 5:40 p.m., it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the ways and means Motion No. 10.
The question is on the motion.
If a member of a recognized party present in the House wishes that the motion be carried or carried on division or wishes to request a recorded division, I would invite them to rise and indicate it to the Chair.
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- Apr/19/23 5:40:30 p.m.
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We request a recorded division.
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- Apr/19/23 5:40:34 p.m.
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- Apr/19/23 6:23:14 p.m.
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I declare the motion carried.
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Mr. Speaker, I am rising to respond to your statement of March 30, 2023, respecting the 15 new items of Private Members' Business added to the order of precedence on March 10, 2023.
In particular, I am rising to raise two arguments respecting the financial prerogative of the Crown and whether two Private Members' Business bills infringe upon the Crown's prerogative in this regard.
Without commenting on the merits of Bill C-318, an act to amend the Employment Insurance Act and the Canada Labour Code regarding adoptive and intended parents, sponsored by the member for Battlefords—Lloydminster, and Bill C-319, an act to amend the Old Age Security Act regarding amount of full pension, sponsored by the member for Calgary Shepard, I submit that both of these bills require royal recommendation.
Bill C-318 seeks to add a new type of special benefit for adoptive parents and parents of children conceived through surrogacy through the Employment Insurance Act, as well as making corresponding changes to the Canada Labour Code. Since the bill would add a new type of benefit under the Employment Insurance Act, it would need to be accompanied by a royal recommendation. These new benefits are not currently contemplated in the Employment Insurance Act and would authorize a new and distinct charge on the consolidated revenue fund for purposes and in a manner not authorized by any statute. I therefore submit that, absent of royal recommendation, the bill should not be put to a third reading vote.
Bill C‑319 proposes to increase the amount of the full pension for Canadians aged 65 to 74 by 10%. This increase is not provided for under the Old Age Security Act, and the charge against the consolidated revenue fund for this purpose is not authorized by that act or any other. I therefore maintain that, without a royal recommendation attached to the bill, Bill C‑319 should not be put to a vote at third reading.
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We appreciate the hon. member's getting up and informing us about that.
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moved that Bill C-280, an act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (deemed trust – perishable fruits and vegetables), be read the second time and referred to a committee.
He said: Mr. Speaker, we are really excited tonight for fresh fruit and vegetable farmers across Canada. It is an honour to finally have the opportunity to speak to the financial protection for fresh fruit and vegetable farmers act, Bill C-280. This bill proposes to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to support Canada's fresh produce farmers and sellers through the establishment of a deemed trust.
My community of York—Simcoe is home to the Holland Marsh, known as the “soup and salad bowl” of Canada. It produces more carrots, celeries, onions, lettuces and greens than any other single region in this country. We would love to see members at Carrot Fest this summer. Every time I look out over the rich, dark soil in the low-lying fields of the Holland Marsh and survey the endless rows of green vegetables growing there I see opportunity, the opportunity to have Canada become even more competitive as an agricultural leader in global fruit and vegetable exports; the opportunity to ensure fresh, sustainable Canadian produce is more accessible and more affordable than foreign imports for every Canadian family; and the opportunity to support the innovation and grit of our hard-working farmers right across Canada.
Sadly, in the marsh, and across the country, in the fields and greenhouses in places like Leamington, Kentville, Morrell, Brookfield and elsewhere, this opportunity is being limited by the considerable risks associated with the growing, harvesting, packing, marketing and distribution of fresh fruits and vegetables, risks that routinely threaten their farms and livelihoods. Overhead and capital costs are significant. The margins in the sector are thin, normally between 3% and 5%. The return farmers receive from their product is often delayed until it is sold and payment is only collected long after they have passed on their product for sale, far along the supply chain or well after consumers have eaten it.
The worsening recession, inflationary pressures, increased prices, tax hikes and the lingering impacts of the COVID–19 pandemic have only increased the vulnerability of the produce sector. This is underlined in the lack of critical financial protections available to Canadian produce-growers for the losses they suffer as a result of an insolvent buyer. While the existing mechanisms within the Bankruptcy and Insolvency Act may be suitable for the wider agriculture industry and other sectors, they do not provide a workable mechanism for when fresh produce buyers become insolvent. Currently, the act allows suppliers to recover their product after bankruptcy, but has no provisions to protect them in the event their produce has been resold, is no longer identifiable or is no longer in the same state. Given the perishable nature of fresh fruits and vegetables, how quickly they spoil and how many products are highly processed and mingled with other ingredients to make food, it is very uncommon that produce can be repossessed during these bankruptcy proceedings.
There also exists a “super priority” provision for farmers in the act, which is supposed to allow them to get paid ahead of other creditors during bankruptcy proceedings. However, to access this, the product must have been delivered within 15 days of bankruptcy or the appointment of a receiver, which fails to account for the payment schedule of 30 days or more that typically exists within the produce industry.
In practice, these deficiencies in Canada's bankruptcy laws means that Canadian produce farmers are faced with significant, and sometimes insurmountable, losses in the event of a purchaser bankruptcy. They have to line up along with all of the other creditors to seek payment. Otherwise, they must simply walk away from the outstanding debt owed to them. This can lead to further bankruptcies and sunk costs across the entire sector and can jeopardize our domestic food security.
Sadly, the lack of financial protection for the produce industry has real world consequences. In January of this year, 2023, Lakeside Produce Incorporated, a large-scale commercial greenhouse based out of Leamington, Ontario, filed for bankruptcy. This was a family-owned company that grew cucumbers, peppers and specialty tomatoes for 75 years, with extensive operations that included conventional and organic greenhouses, warehouses, packhouses and distribution centres right across North America.
At the time of its bankruptcy, it owed $188 million to suppliers across the produce sector, including other greenhouses, and logistics, packaging and brokerage firms. There are 17 produce companies across Canada among Lakeside's creditors, which account for $1.7 million in unsecured claims. The owner of one of these companies, a farmer also based in Leamington, wrote to me regarding this bill.
He said, “the inadequate protection for suppliers of fresh fruits and vegetables...most recently resulted in my farming operations sustaining a loss of $907,840 due to the bankruptcy of Lakeside Produce. I have devoted my entire life to the [produce] business but I, nor anyone else who is part of the fresh fruit and vegetable industry, can continue to afford these risks.”
In addition to the Canadian creditors, there are 45 companies based outside Canada, primarily in Mexico and the United States, that are owed another $4.9 million. The highly integrated nature of the fresh produce industry means that these losses will impact Canadian growers even further.
The lack of financial protection available to fresh fruit and vegetable farmers in Canada also affects their competitiveness and capacity to trade with the United States. Currently, produce growers cannot access food protections that exist in the United States without incurring significant financial costs.
This was not always the case. Previously, Canada was the only country in the world that had preferential access to the dispute resolution mechanisms within the United States' Perishable Agriculture Commodities Act. It is known in the industry as PACA. However, the United States revoked this access in October 2014 due to a lack of a reciprocal mechanism in Canada. Now, Canadian sellers must post a significant bond worth double the value of their shipment just to initiate a claim through PACA. This severely disadvantages Canadian produce businesses, given the high volume of produce sold to buyers in the United States.
The need is clear. We need to protect Canada's food security. We need to support the Canadian fresh fruit and vegetable industries against the impact of bankruptcies. We need to work toward restoring preferential access for Canadians to the United States' dispute resolution mechanism.
To do this, Bill C-280 proposes to address the deficiencies in existing sections of Canada's bankruptcy and creditor laws by establishing a limited deemed trust to provide financial protection for Canadian produce farmers. These are the changes Canadian produce farmers require. They have been vocal in their support of establishing a deemed trust through Bill C-280.
Bill C-280 is endorsed by hundreds of farms, the Canadian Federation of Agriculture, the Canadian Produce Marketing Association, the Fruit and Vegetable Growers of Canada and many other national, provincial, regional, and industry-specific organizations.
This matters. From farm gate to dinner plate, the fruit and vegetable industry is a major contributor to Canada's GDP and creates thousands of jobs from coast to coast, right across this great country.
The financial protection established by Bill C-280 would reduce losses in the sector and lead to increased economic activity in Canada of $200 million to $235 million per year, increased value added in the Canadian economy of $104 million to $122 million per year, increased employment by more than 1,200 full-time jobs, and increased wages for Canadian workers by $59 million to $69 million per year.
Bill C-280 would also lead to a reduction in costs for Canadian consumers, which is just what we need right now, by as much as 5% to 15%. This would save Canadian families between $300 million and $900 million on their annual fresh fruit and vegetable purchases, improving their overall health. After eating so many carrots in Bradford, these eyes are still 20/20. It is unbelievable.
Unfortunately, the position of the Liberal government has been that the Bankruptcy Act, with its existing mechanisms, works just fine for its produce sellers. However, this is clearly not true. A cucumber, last I checked, is not the same as a sheaf of wheat. It makes no sense to treat these products and these sellers the same. Bankruptcies in the produce sector are substantially higher than other agriculture industries. They happen twice as often as they do for those in livestock, and over 10 times as often as they do in the highly regulated grain and poultry sectors.
After all, the produce industry is as unique as the fruits and vegetables they grow. It is very complex, with numerous producers and sellers involved, and with considerable integration within Canada and with our neighbours to the south, the United States. This unique sector requires a unique solution to the issues they face. Bill C-280 is the solution, a solution that would give Canadian produce farmers the certainty they deserve.
When I look out over the green, growing vegetables in the rich soil of the Holland Marsh, I see opportunity. I hope members of Parliament in the House see the incredible opportunity today, the opportunity to support Canada's fresh fruit and vegetable farmers, to stand up for Canadian consumers and to protect our country's food security. With Bill C-280, we could ensure that fresh produce farmers are paid for the food that they grow. Let us get behind them.
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Madam Speaker, when I think of vegetables and fruits, I think of Peak of the Market in the province of Manitoba.
Manitoba produces the best vegetables, I would argue, in the world. Some might question that, but it is the yellow potatoes, white potatoes, red potatoes and so much more, along with the carrots, cabbage and turnips. There are so many things. Peak of the Market seems to know what it is doing. It brings everything together and puts that stamp of it being made in Manitoba or being from the Prairies.
I appreciate what the member says. I love the farmers. These people who are producing, helping us and feeding the world, are doing an incredible job. Has the member had any discussions with organizations, such as Peak of the Market, to get their sense of what he is proposing today?
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Madam Speaker, I know the member loves the fresh fruit and produce business.
As I mentioned in my speech, we have support right across Canada from all producers. This is one thing, and I know the member for Winnipeg North prides himself on this as well, where we were getting out and talking to constituents. I would love to have him come out to Bradford and see that rich, dark soil, and come out to cut celery with me one day.
This is much needed. I encourage members to get out to talk to the farmers and to listen to what they are saying.
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Madam Speaker, I thank my colleague for his speech in which he talked about the future of farming.
This week, the Bloc Québécois has made a point of calling for more help for the agricultural industry, particularly for young farmers. It is important to recognize that, right now, farmers are not doing well from a mental health perspective. One in 10 agricultural businesses are at risk of closing in the next year because of all the problems.
How will the member's bill meet the needs of all sorts of farmers, particularly vegetable growers? How will the bill help them to get through this period of inflation, which is so difficult for them and for young farmers in particular?
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Madam Speaker, that relates to a quick story. When COVID first started, I had a farmer reach out to me in Bradford. He said to me, “Scot, I don't think I'm going to plant in my field this year.”
I asked him, “Ken, why aren't you?”
He said, “I'm so worried about getting paid. The stress is for my family. I cannot plant my field, sit at home and pay the $20,000 in taxes because, if I plant my fields, it's going to cost me in excess of a million dollars. If I don't get paid, I'm going to lose this family farm that has been in the family for four generations.” These are the kinds of stresses they have. Then he said, “I'm not even looking to the government for any money. I'm just looking for insurance that I am going to get paid.”
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Madam Speaker, first of all, I want to indicate that we in the NDP support this proposal. In fact, it has been part of our last three federal election platforms to recognize that this support is critical for farmers and farming families to put our farmers on a level playing field with those to the south of us.
Obviously I want to acknowledge as well the impacts of climate change, which are rendering agriculture to be much more unpredictable in our country. Whether it is in western Canada or eastern Canada, it reinforces the need to support farmers during this time.
I am wondering if the member could speak to how important it is to move on this legislation as soon as possible.
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Madam Speaker, it is so important.
We should be number one in the world in Canada with agriculture. I have always said that a General Motors plant can be moved but a farm cannot be. We have the most arable land in the whole world. That has to come into the vision for Canada. That is one thing I talked about missing in the budget. Where is the vision?
We should be number one in the world with agriculture. We should be teaching people throughout the world how to grow food and have fresh water. We need to keep pushing for agriculture.
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Madam Speaker, I am pleased to rise to discuss the important matters raised by Bill C-280, which would amend the Bankruptcy and Insolvency Act, or BIA, and the Companies' Creditors Arrangement Act, to provide the claims of the sellers with a deemed trust.
This means that their claims would be paid first, in full, ahead of the claims of all other creditors if the buyer was subject to a bankruptcy or receivership and that the claims of the sellers would have to be paid in full as part of the buyers' restructuring plan of arrangement.
By way of background, it is important to note that the deemed trust proposal is a long-standing industry request. I would note that it has been studied extensively by Agriculture and Agri-Food Canada and Innovation, Science and Economic Development Canada for more than 15 years.
This means that there is ample evidence to help us assess this proposed exception to the usual order of claims in insolvency proceedings.
To begin with, I was pleased to see that the fresh fruit and vegetable sector, also known as the edible horticulture sector, is a thriving and growing sector that makes a significant contribution to the Canadian economy and food security. According to Statistics Canada, farm cash receipts from the edible horticulture sector have increased by 23% over the past five years, and the value of exports of fresh and processed fruits and vegetables have increased by 61%.
This is also a diversified sector, consisting of both small and large, domestic and foreign players. The sector is divided into different types of businesses along the supply chain, including producers and farmers, on the one hand, and resellers, wholesalers, brokers, and traders, as well as supermarkets, on the other. The size of these businesses varies considerably. For example, there are approximately 700 fresh fruit and vegetable wholesalers of varying sizes in Canada, ranging from small companies with sales of $30,000 to larger companies with sales of over $5 million per year. The distribution sector is dominated by a few large companies, including Canada's major food retailers.
According to the 2021 census of agriculture, there are approximately 14,000 farms that produce fruits and vegetables. Most fresh fruit and vegetable farms are small, and the data from Agriculture and Agri-Food Canada shows that about 40%, or about 5,600 farms, have an annual income of less than $25,000. In contrast, about 12%, or about 1,600 farms, generate over a million dollars in revenues and contribute to about 80% of the sector's total revenues.
The fresh produce supply chains also extend throughout North America and include larger American agribusiness, including farmers and sellers who export into Canada. All these players would be covered by the bill's deemed trust, in contrast to current protection in insolvency legislation, which focuses on domestic producers such as the farmers, fishers and aquaculturists.
When studying the bill, we will likely want to look at the following aspects: which parts of the sector are in need of this type of protection and whether it should be extended to all players equally. For instance, since Canada's main retail chains are also wholesalers, it would potentially mean that, if a Loblaws or Sobeys franchisee was to become insolvent, the chain could benefit from the deemed trust proposed by Bill C-280.
It would also seem possible that big American or Canadian agribusinesses, which may have the largest unpaid fresh produce invoices, could become the primary beneficiaries of the proposed deemed trust by collecting from an insolvent buyer first, thus depriving non-fresh produce creditors of recovery at a greater rate.
At a time where inflation in grocery prices is top of mind for the House, and for all Canadians, we may want to consider whether this type of actor should benefit from extraordinary protection under the insolvency legislation.
Another question that will likely be worthy of further examination relates to the type of soft products that have been scoped in this bill. This bill excludes and subordinates other farmers that produce milk, egg and meat, and the fisheries, all of which are highly perishable and subject to their own market challenges. On the other hand, the definitions included in Bill C-280 could potentially include frozen produce, which may not be much more perishable than other products that can be recovered from an insolvent entity within 30 days of delivery under our current laws.
The unfortunate reality is that insolvencies always create difficult situations for all stakeholders. That is why it is important to examine these issues carefully. We should keep in mind the other proposals that have been made in the past to prioritize certain claims, including with regard to employee health and disability benefits, because we would be effectively determining who gets paid first.
Granting privilege may also lead other groups to ask for similar treatment. It goes without saying that the more creditors who benefit from a priority in insolvency, the less that priority is worth, and the whole concept of treating similar creditors equally could unravel.
I think it is really important that we keep measures in place that target the most important problems the sector is facing. Statistics from the Office of the Superintendent of Bankruptcy indicate that losses due to the insolvency of the fresh produce industry have been relatively low. The data shows that losses by the fresh produce industry due to insolvency are likely less than 1% of sales for most years and the estimates vary from 0.8% to 0.21% of sales over the past few years.
This is in contrast to the much more significant losses that the industry suffers because of partial payments, delayed payments or other disputes with solvent players against which the deemed trust would not protect the industry. For example, ongoing improvement of trade practices in the sector will contribute to reducing losses in the sector due to food loss and damage, because an estimated 13% of fruits and vegetables grown in Canada are not harvested or are thrown out for reasons unrelated to payment protection. That is according to the 2019 report by Environment and Climate Change Canada.
To conclude, the Canadian government strongly supports Canadian fresh fruit and vegetable growers. This can be seen in the superpriority protecting them under current insolvency legislation, as well as the action taken to date through other legislation, policies and programs that will continue to benefit the industry. The bill at hand proposes special unlimited treatment under insolvency legislation awarded to the sector's entire supply chain, including large foreign corporations. It will be important to really dig in and look at this initiative in detail to make sure that we understand how this intersects with other policies and questions in this very critical sector. I look forward to continuing this conversation on these important matters.
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