Canada Seeks to Implement PACA Similar to That in U.S.

Canada Seeks to Implement PACA Similar to That in U.S.

(While this story doesn’t apply to produce trucking directly, in reality it really does.  The PACA system in the U.S. fails to provide protection for produce truckers in the event of a dispute involving problems ranging from claims to rejected loads and unfair deductions from the load.  In effect, the trucker has little recourse in a dispute, but to seek remedy through the court system, which can be very expensive, time consuming and not very practical.  Currently, the best solution is deliver to reputable produce receivers.  It also helps to deal with shippers, truck brokers, logistic companies, etc.DSCN4997 that will back you in an unfair claims dispute. for decades has called for PACA to include produce trucking, but the produce industry, which has very close ties with the USDA, which administers the PACA, has strongly opposed it.)

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

“CPMA raised this issue when we met with Liberal Leader Justin Trudeau last September, where he committed to resolving this critical problem for the produce industry,” CPMA President Ron Lemaire said in a press release. “We are thrilled that he is following through on this commitment and that the Liberal Party recognizes the importance of a strong produce industry that can continue to provide fresh, healthy food for Canadians.”

“Growing and selling fresh fruit and vegetables is risky, which makes this commitment to ensuring strong, equitable payment protection tools, both in Canada and when exporting to our largest market, all the more important,” Anne Fowlie, executive vice president of the CHC, added in the press release. “We are grateful of the Liberal Party’s support of those who bring fresh fruits and vegetables to our tables every day.”

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 United States 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 U.S. companies under PACA.

The U.S. revoked Canada’s special access due to the lack of similar trust protection and the lack of progress in fulfilling the Canada-U.S. Regulatory Cooperation Council 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 percent of all produce grown in Canada to U.S. customers.

Since Oct. 1, 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.