THE STANDING SENATE COMMITTEE ON BANKING, COMMERCE AND THE ECONOMY
EVIDENCE
OTTAWA, Thursday, October 31, 2024
The Standing Senate Committee on Banking, Commerce and the Economy met with videoconference this day at 11:30 a.m. [ET] to study Bill C-280, An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (deemed trust — perishable fruits and vegetables).
Senator Pamela Wallin (Chair) in the chair.
[English]
The Chair: Senators, this is a meeting of the Standing Senate Committee on Banking, Trade and the Economy. My name is Pamela Wallin, and I serve as the chair of this committee. Let me introduce the committee members here today; Deputy Chair Senator Loffreda, Senator Deacon, Senator Fridhandler, Senator Marshall, Senator Martin, Senator Massicotte, Senator McNair, Senator Ringuette, Senator Varone and Senator Yussuff.
Today we are continuing our examination of Bill C-280. We have an extremely busy and tight schedule today, with two panels and then, as we discussed, we will go through to clause by clause, so we have to keep on track. I’m just going to say to everyone, please, no preambles to your questions. We have all studied and looked at this bill for quite some time, and I would like to have as many people as possible participate today.
For our first panel, we have the pleasure of welcoming, in person, from the Ontario Greenhouse Vegetable Growers, Richard Lee, Executive Director; and Rob Peeters, Vice-President, Operations and Strategy, Nature Fresh Farms. Do you have some opening comments, gentlemen?
Richard Lee, Executive Director, Ontario Greenhouse Vegetable Growers: Committee members, I’m here on behalf of our members to support Bill C-280. I am joined today by Mr. Rob Peeters, Vice-President, Operations and Strategy, Nature Fresh Farms, who has been impacted by a bankruptcy of a produce seller.
The farmers we represent contribute more than $1.4 billion in farm-gate value and $1.5 billion in value-added export activity. The livelihood and financial security of our members is important to ensure the future of North American food security.
Fresh fruit and vegetables growers are one of the few domestic producers that do not have any assurances that they will be paid for their product when it leaves their farm. Unlike other commodities, the perishability of our product leaves little hope in recovering goods in the event a seller claims insolvency or bankruptcy.
Canadian growers were the only country to have access to the USDA’s Perishable Agricultural Commodities Act, PACA, until 2014 when our access was rescinded due to the absence of a similar payment protection program here in Canada. With over 85% of our product being shipped south of the border, our dependency on trade cannot be understated. The passage of Bill C-280 as presented would restore reciprocity to Canadians, providing them protection and competitiveness and avoiding any negative downward impacts on the supply chain.
The current wording of this bill will ensure the reciprocity is restored with the United States. Any amendments or narrowing of the scope to only farmers will not provide the same protection provided under PACA. This bill will be an additional layer of protection to support the farmers that grow food for North America in preparation for the next catastrophic event. These risks will be satisfied with the passage of Bill C-280 in its original form.
In 2023, Lakeside Produce, which was an agent of sale, claimed bankruptcy in excess of $187 million, resulting in losses of approximately $1.5 million to sellers across Canada.
On behalf of our farmers and myself, I would like to thank you for this opportunity to present on Bill C-280.
The Chair: Thank you both very much for being with us today and helping us through this final look. We’ll begin our questioning with Senator Loffreda, the deputy chair.
Senator Loffreda: Thank you to our panellists for being here.
We value and we have compassion for our fruit and vegetable farmers. There is concern, though, also shared and expressed by expert witnesses, that creating this deemed trust and allowing the farmers, in case of insolvency, to pay themselves off before the banks and before everybody else will increase the risk assessment and the cost of lending, which could ultimately lead to more expensive fruits and vegetables. Do you have that concern? Have you heard others express that concern?
Mr. Lee: Senator, thank you for the question.
I think affordability is a crisis that we’re facing as Canadians. When it comes to food security and ensuring that farms are paid for the product that they have grown on farm, it’s important to ensure — that’s a principle of commerce — that you’re paid for the product that you grow or build. To ensure that, this is an added layer of protection.
I think this committee has also heard that there’s very minimal risk of a produce seller going bankrupt or insolvent. If that’s the case, then enabling this legislation will provide growers the much-needed protection to support competitiveness and enhance our trade relationship with the United States. I do not see it as being a cause or concern that enabling this legislation will increase costs or affordability of fresh fruit or vegetables.
Senator C. Deacon: Forty per cent of our produce is exported. If our exports are to be protected, farmers have to put up, I understand, a 200% bond. Would this bill help us to expand our exports to the United States, which in turn would grow our domestic food production capacity?
Mr. Lee: Thank you, senator.
I can speak on behalf of our membership. In the last five years, our export activity has increased over 5%. Our increase in acreage has also matched that to balance out that supply and demand.
With that ability and the reinstatement and the reciprocity between PACA, it would definitely increase investments into Canada. We see a lot of our members going south of the border. There are friendlier policies, and they are able to access that PACA-like trust, so when we look at investment and contributions to our economy, then that would definitely be a tool that would entice growers to reinvest into their current operations to support that export activity.
Senator Marshall: Mr. Lee, you support the bill, but there’s been some discussion about a possible amendment. Have you seen that? Basically, what it does is it takes out the term “supplier” and narrows it down to “. . . primary agricultural producer of perishable fruits or vegetables . . . or who purchases perishable fruits or vegetables . . .” Can you tell us, when you see that amendment, what’s your interpretation of that amendment? And do you support it?
Mr. Lee: The original state of the bill is what we support. Unfortunately, the challenge is that there is no one size fits all on this. The value chain is a very convoluted system. Mr. Peeters can maybe provide some additional comments on that.
In the instance of Ontario Greenhouse Vegetable Growers, a grower can only grow, a packer can only pack, and a marketer can only sell. Oftentimes, that value chain is extended beyond those three transactions. It could go to a reseller, a wholesaler, and then ultimately to the end consumer, so amending this bill to eliminate that full value chain would put the farmers as well as that value chain in jeopardy.
Senator Marshall: Do we have time to hear from Mr. Peeters? He’s had experience.
The Chair: Yes.
Rob Peeters, Vice-President, Operations and Strategy, Nature Fresh Farms, Ontario Greenhouse Vegetable Growers: Thank you, senator.
In adding to Richard’s comments, Nature Fresh Farms is a Leamington, Ontario-based grower, 150 acres of greenhouse under glass. We’re also a marketer. We have partnerships with logistics and third-party growers that were affected by the Lakeside bankruptcy.
What happens is not only is there direct impact to Nature Fresh Farms in terms of our cash flow or financials, but what we saw was third-party growers and logistics companies were hesitant to continue business with Canadian growers because of that risk that falls upon them to compensate for a potential bankruptcy. If you narrow the scope as it’s being communicated, it doesn’t solve that problem. What we saw is that when we and our vendors and partners were hit with the Lakeside bankruptcy, they put us on COD terms. Obviously, that has a significant impact to our cash flow. We need to keep it broad to make sure that we cover all aspects of the value chain.
The Chair: Thank you, gentlemen, very much.
Senator Massicotte: Thank you very much for being with us today.
I have just a simple question. Somebody told me that you can buy insurance to avoid suffering damages from the bankruptcy of a supplier. Is that the case? Is that available, and at what price?
Mr. Peeters: To my knowledge, we have exhausted every avenue to protect ourselves and our growers and our partners. I trust the financial experts within my operation to make the best decisions for the company, and unfortunately, we haven’t been able to find anything that would protect us in a situation like this.
Senator Massicotte: In other words, you don’t agree there’s insurance available even for exports with our government?
Mr. Lee: Senator, if I may, if there is insurance available, it’s costly. It’s a costly insurance to —
Senator Massicotte: Do you have any numbers for us?
Mr. Lee: I don’t have numbers offhand. It’s something that we could submit to the committee afterwards.
Senator Massicotte: If you don’t mind, please do.
Mr. Lee: Absolutely. But the reality of it is that reciprocity would add that layer of security at a minimal cost. It’s at limited to no cost to the government, and it enables legislation to protect these growers. It’s a safeguard. It’s a safety net. It’s not a question of if there’s a next bankruptcy; it’s a question of when it will occur.
Senator Massicotte: Thank you.
Senator Ringuette: The entire framework that has been pushed on us, literally, is the fact that these products are perishable, whereas PACA in the U.S. also includes frozen produce. Frozen is not perishable in my world. I don’t know if it is in yours. Then, in order to be part of the deemed trust program, you need to be licensed by PACA. In this bill, there is absolutely no licensing process, not for Canadian growers and not for U.S. growers. What would be the solution to take care of that?
Mr. Lee: Thank you, senator.
In order to access any dispute resolution, you have to be licensed by either PACA or the Dispute Resolution Corporation. That would still be an inherent requirement on the produce seller to be a member to access that.
Our 170 members across Ontario are either members of DRC or PACA.
Senator Ringuette: What is DRC?
Mr. Lee: The Dispute Resolution Corporation. I apologize.
Senator Ringuette: And they provide you what? A kind of licence? It’s a third party, but it is not a licence acknowledging your part in a process, in the value chain.
Mr. Lee: Absolutely. The Dispute Resolution Corporation, in the case of our members, does allow us a dispute resolution mechanism here in Canada —
Senator Ringuette: It’s not a license.
Mr. Lee: — similar to PACA.
Senator Martin: I know you have expressed support for this bill as is, and you talked about the importance of restoring reciprocity, so would you comment on the impact of potentially amending the definition of “supplier” on gaining reciprocity?
Mr. Lee: I believe that it will not be the same coverage that PACA currently offers, and therefore, they would not offer that same reciprocity. In order to protect the full value chain, I think it’s important to leave the bill as presented to ensure that we gain that access to the U.S. and trade through PACA.
Senator Martin: That’s what I wanted to know. Thank you.
Senator Varone: Yesterday, The Conference Board of Canada sent 12 senators a schedule of bankruptcies across Canada by industry, and the national average is 1.1%. Agriculture is at 0.37%. Why is it that you feel more entitled than everybody else in Canada to access a deemed trust?
Mr. Lee: Thank you, senator.
I don’t believe we should be entitled to access that deemed trust. It’s that layer of security that we have been seeking. It’s been a long-standing trade irritant between the U.S. and Canada. It actually restores and stabilizes the value chain to ensure that there’s trusted trading among each other.
We talk about affordability and driving costs up. Another bankruptcy will do that. It will increase those costs. It’s about protecting victims, victims that are growing food to support food security.
Senator Varone: Yes. Do you understand that, in the U.S., there is no deemed trust to securitize your receivables? It’s under secured creditors as a trust. Here, you want to access the deemed trust category that is reserved for what I consider more important items.
Mr. Lee: I ask the Senate this: If the minimal risk of 0.37% is a reality, then why wouldn’t this legislation be enacted to provide that protection to support the food you eat? If there’s minimal risk at no cost to the government, why wouldn’t that bill succeed?
The Chair: Thank you for your response.
Senator Yussuff: Thank you for being here.
I recognize we have a problem, but I have a challenge trying to get my head around it. Let me take Lakeside Produce as an example, as you all are very familiar with it. My understanding is that about 17 producer companies were involved in that bankruptcy. There were 300 workers also covered by that bankruptcy. Under the WEPP, the Wage Earner Protection Program, each one of those workers could make a claim for about $2,000, and ultimately, in my calculations, that’s about $600,000 of what the workers would have gotten from their claim.
This bill now essentially changes the equation. They will be knocked out of the super priority because the federal government will be first in line. You knock them out of the system, so now the taxpayer is on the hook for $600,000 that those workers would be entitled to. I find that very problematic because the WEPP was created to ensure workers earn wages and their vacation pay, severance pay, and would be taken care of, in addition to their CPP and EI premiums that were not there.
While I recognize there is one problem we’re trying to fix, we’re also creating another problem, because for the men and women who work in these —
The Chair: Okay, we’ll get a response.
Senator Yussuff: — at the end of the day, they also have similar challenges and responsibility to their families, and this knocks them out of the system.
Mr. Lee: Agreed. In the instance of Lakeside Produce, the number of 600 workers doesn’t really equate. They are a marketing entity.
Senator Yussuff: It was 300, and I did the calculation based on the 17 companies.
Mr. Lee: I would look at it from a grower’s perspective and what we contribute to the economy. There are over 32,000 jobs over 170 growers, so what impacts will it have on those growers if they are not able to pay their bill or recover that produce that was sold but they are unable to receive the funds for?
If you look at it on average, there are 4100 acres across Ontario with an average of about 6.5 workers through the full value chain, so that 300 workers is very minimal in comparison to the potential losses if or when we experience another bankruptcy.
Senator Yussuff: I could make the same argument based on the data we have. It’s 0.01% of the bankruptcies in the fruit and vegetable market, so it’s a very small problem. I do recognize that there is a problem. I just think the way we went about amending the legislation means some other challenges that will come up.
The Chair: We need to get around the table. Do you have a quick comment on that?
Mr. Lee: My quick comment is, again, if it’s such a minimal risk, what is the hesitation of this bill being passed to support agriculture?
Senator Robinson: I had asked the Library of Parliament about the hierarchy in bankruptcy after a conversation with Senator Varone, and it was my understanding that employees and anybody within Bill C-280 who would be in the situation of a bankruptcy would be treated equally, that there would be a prorating of their needs and that any funds from the insolvency would be prorated and go out to them equally in the same priority. I’m just wondering if you can comment on that and if either of you have any knowledge of that.
The Chair: Does anyone have a response? We have heard conflicting things. We have heard Senator Yussuff’s point and then others who say it goes —
Senator Robinson: That did come from the analysts at the Library of Parliament. It was their position that they will be treated equally and that they are in the same status within the creditors.
The Chair: Did you have any questions?
Senator Robinson: No.
Mr. Lee: Madam Chair, I can add some comment to that.
I experienced part of a bankruptcy in my appointment, and as Senator Robinson has indicated, they do proportionately distribute those assets accordingly.
The Chair: That clarifies that.
Senator C. Deacon: If I could, I would just focus in on the trade volume. That has been a consideration, and because there may be more imports to the United States versus Canadian exports to the United States, that is a reason to not proceed. Do you know anything as to the degree to which trade volume and credit risk scale in parallel, or are they different between the countries? The reality is that we have a situation where Canadian exporters are at a very big disadvantage selling into that market, but if that playing field were to level, would that create another disadvantage?
Mr. Lee: I think it would create a disadvantage. It would enable us to meet that supply and demand of the markets in the United States. $1.7 billion export value of fruit and vegetables is sent over to the United States. Ontario Greenhouse Vegetable Growers represents $1.5 billion of that. It’s a significant amount. Again, the lack of the proper policies and support for these farmers here in Ontario is actually pushing that investment to the United States in that full value chain of jobs that are created as well.
Senator Loffreda: We do agree that the insolvency rates and risks are very low here. You have said many times the risk is low, so why not pass the bill. Would you not agree it would create a precedent? Who would be next in creating a deemed trust?
We talked about EDC insurance. There is EDC insurance that insures 90% of your insured losses. With respect to the rate, you won’t be able to get a rate because it’s according to the risk. Every individual case, as you know, would be assessed according to the risk. But given that the risk is very low, the cost of such insurance would be very low.
Rather than creating a precedent and opening up the huge door, “Come in. We’ll create a deemed trust for you; you’re important to our supply chain,” would you not agree it would be simpler in cases where there is a situation to insure the receivable at a minimum cost?
Mr. Lee: As I indicated, we’re happy to provide those numbers to you as it relates to the scope of our growers, but that trade irritant is long-standing.
As far as precedent setting, we are one of the only commodity groups that do not have a mechanism to recover funds outside of an insurance program that you’re paying into. So the precedent has already been set, and we’re the outliers. We’re one of the only commodities across Canada that does not have a mechanism to recover costs associated with growing.
Senator Massicotte: My question was a follow-up to the other three. It’s allocation of proceeds. That’s the bankruptcy law, but what you’re asking is to be an exception to that. Why would we agree to being the exception? How about the butcher? How about the other small enterprises? Why would you purposely change the rules to give you an advantage compared to everybody else?
Mr. Lee: Again, senator, it’s this long-standing irritant. We rely so heavily on that export activity, 85% of our product, and without that reciprocity, again, the next bankruptcy will disrupt the value chain and the investments as well as the future of farming here in Canada.
Senator Massicotte: But to answer my question, I’m a businessman, and I deal with that issue all the time. When you run a business, there’s a risk where your supplier or your partner will have inadequate funds and be illiquid and you get an insolvency. As you mentioned, you have experts reviewing that on your behalf. Why would you have a different set of rules than every other small enterprise?
Mr. Lee: We have our own risks as well. It’s a perishable commodity. We’re not able to recover any of those costs. In the case of a butcher, you’re talking about something that can be stored for a longer period of time. We have a shelf life of approximately seven to ten days, and that includes shipping.
Senator Massicotte: Thank you.
The Chair: Thank you, gentlemen, for coming on such short notice to answer these final quick points.
For our next panel, we have the pleasure of welcoming, by video conference, Timothy Dean Henkel, Attorney, Henkel Law. I would like to thank Mr. Henkel for joining us from Spain through weather crises there and finding all the appropriate equipment to participate. Mr. Henkel, welcome, and please go ahead with your opening comments.
Timothy Dean Henkel, Attorney, Henkel Law, P.A., as an individual: Thank you very much. I have been an attorney practising commercial law for 36 years with my law office in Miami, Florida. My complete professional background appears on my firm’s website, miamibusinesslitigators.com.
Starting in 1994 and for the last 30 years, I have represented companies and individuals in the U.S. fresh produce industry as both corporate and litigation counsel. In addition to my private law firm practice, I am also North American general counsel for two U.S. produce companies, Fyffes North America Inc. and Sol Group Marketing Company, both of which export products to Canada in addition to selling in the U.S. This statement and my testimony today are solely my own views, and I’m not a representative of either company.
I have substantial familiarity with the U.S. PACA trust, having represented numerous produce clients in PACA trust matters. On my website is a reference to various PACA lawsuits I have handled. I have lectured in legal education courses on PACA law, including a general overview of PACA law and a separate seminar on the PACA trust impact on lenders and banks.
The PACA trust is essentially a trust in equity. Once produce, which is an asset of the trust, is delivered by a seller to a buyer, the unpaid buyer becomes a beneficiary of the trust and holds equitable title not just to the fruits and vegetables sold but also to all derivatives, including accounts receivable and cash proceeds. The produce and derivatives remain in trust until the seller has been paid in full. That is the command of the PACA statute. All produce sellers are paid in full and promptly. The buyer acts as a trustee for the benefit of all unpaid produce sellers until payment is made in full.
The PACA trust works well in protecting fresh produce sellers without unduly burdening the U.S. factoring and banking industry, which makes loans to produce industry companies and farmers. The early concerns in the U.S. of the banking industry and their counsel when the law was first enacted, that lenders would be forced to curtail credit to the industry, simply did not materialize. Lenders educated themselves about the PACA law, they learned to accommodate it, and lending continued to the agricultural industry unabated for the last 40 years.
Because the PACA trust creates priority for produce sellers to be paid first, the likelihood of being paid in full is greatly increased. Banks and factoring companies have the ability to require agricultural industry borrowers to provide all requisite information and documentation so that the banks can determine risk, price credit appropriately, and in the case of irresponsible players or players who are too weak, simply not extend the credit. That is, in fact, one of the principal reasons why PACA was passed — to make sure that only financially responsible parties are participating in the industry.
Thank you for the opportunity to participate in this very important proceeding. I welcome any questions you may have.
The Chair: Thank you very much. Again, our apologies for the situation and our short notice to you.
We are going to begin some questions. Again, I’m going to remind senators, please, no long preambles on your questions. We’re familiar with the topic matter here.
Senator Loffreda: Thank you to our panellist for being here this morning.
In Canada, the issue is not that lending will be curtailed. That’s not the concern. It’s that risk assessment is going to be increased because of the priority being created. If risk assessment is increasing, then the return that the banks or the lenders will want will also increase. Maybe that has not been the case in the U.S., and I would like you to elaborate on that.
I won’t get into it — I don’t have the time — but Canadian banks do lend the same way that U.S. banks lend. This is why it’s totally different here in Canada. Given the fact bankruptcies and insolvencies are so low, why do we need the bill here in Canada?
Mr. Henkel: Thank you very much for the question.
On the latter part, the U.S. is a good example of why the PACA trust is so indispensable. Certain banks, given that we have a large number of banks in the United States, simply do not educate themselves and act responsibly. I’ve been involved in numerous lawsuits where banks had loaned to agriculture concerns and simply did not know anything about PACA. They came in and used legal processes to seize all the assets, leaving the produce sellers with no assets at all to pay for the perishable produce that they had sold. That would be on the second part of your question.
On risk assessment, I am certainly ignorant of the way credit is extended in Canada, but bankers in the United States are aware of PACA, and it has not in any way impeded the flow of credit to the industry. I can only say that the PACA trust has been around for 40 years, and it’s worked quite well. The only complaints ever seen in the literature were in the first few years after the PACA trust was adopted in 1984. After that, you simply don’t see complaints anymore, which has to mean, at least to me, that it’s not a major issue.
Senator C. Deacon: Thank you to our witness for taking the time. I’m assuming you’re not in Spain on vacation.
We’ve had this agreement mutually between our two countries for 30 years, from 1994 to 2014. Do you have any insight as to why Canada backed out of the agreement in 2014 and why it hasn’t continued?
Mr. Henkel: I don’t think it was so much Canada backing out. What I understand is that the USDA, which is regulating the PACA, had been in continuous negotiations with Canadian authorities for Canada to implement a reciprocal PACA trust protection so that U.S. sellers into Canada would be treated equally, as they are in the United States.
In 2014, the USDA removed the waiver of the double-bond requirement. That is very important because, in the U.S., as part of the PACA statute — the PACA trust is only part of it. You also have the formal PACA complaint before the USDA, which is a powerful way for produce sellers, farmers, to collect. You don’t have a jury. You have the USDA, which are experts in the industry, determining the dispute. It’s much faster. You get paid within approximately a year, a year and a half at the most, versus a lawsuit, which can drag on multiple years. It’s much cheaper. The lawyer fees are much reduced.
The most important thing and the reason why, in my view, Canada should adopt the PACA trust is you get the benefit of a USDA reparation award. That simply means that the buyer who hasn’t paid for the produce, if they don’t honour the reparation award, will lose their license. Licensing is mandatory in the U.S. If you lose your license, you’re out of the trade. That is the huge hammer that allows unpaid sellers to collect. It is much better than going through a lawsuit, even a federal lawsuit under the PACA trust, where you have massive attorney fees. Even if you win the case, you have to go collect the money.
Having the option and bringing back reciprocity to get the formal complaint before the USDA and not having to post the double bond would be an advantage to Canada, and apparently, as I understand the negotiations, the USDA is willing to reopen and get rid of that double-bond requirement if Canada would adopt a PACA-like trust mechanism.
Senator C. Deacon: Thank you very much.
Senator Varone: Thank you, Mr. Henkel.
My understanding of U.S. bankruptcy law is limited, but I know that, generally speaking, there are four categories: secure creditors, priority unsecured, general unsecured and equity holders. Each one has the ability to create a trust. Where does PACA land for its membership in that hierarchy of creditors? Where are they placed?
Mr. Henkel: PACA is at the top. There are even disputes that they go above the bankruptcy counsel. They have a super priority. They are paid first. If the assets are insufficient to pay all the PACA trust creditors in full, they share pro rata.
In general, as an example of a bankruptcy I have been involved with, Country Fresh had a business in Canada, and they declared bankruptcy. We went through the Texas bankruptcy, in which I led the PACA group. The result is that all the PACA trust creditors were paid in full. Unfortunately, the class I represented that had sold into Canada, since they had no PACA remedy, they were not paid. They took that as a loss.
That’s a prime example of how it is beneficial to both Canadian and United States produce sellers to have a PACA remedy so that if the person that they sell the perishable produce to — you have to remember the nature of this industry. You’re selling highly perishable produce that you can never repossess, and you’re selling it thousands of miles away sometimes. The value of each load is huge. It can be tens of thousands of dollars just for a single tractor-trailer load. The produce seller needs that protection so that they can get paid. The end result is if they get paid, the banks have more collateral. The produce seller has money to pay the workers and the taxes. Everyone benefits from it.
Senator Varone: Thank you.
Senator Fridhandler: Mr. Henkel, I don’t know if you had a chance to look at the Canadian bill, but I would like to know whether we have an equivalency of what you call “produce sellers” under PACA to suppliers that we have under our proposed legislation.
Mr. Henkel: I have only a minimal understanding, so my answer will be with that caveat. As I understand it, unless it’s the same as the U.S., you’ll lose reciprocity and you will lose the benefit that you’re trying to seek to obtain. I would assume that you could discuss that with the USDA to see if that would be acceptable.
From what I understand, the amendment is going to change who has the right to seek the remedies. I think that would be fatal to having reciprocity, and you would lose the very benefit you’re trying to obtain by enacting the PACA trust.
Senator Fridhandler: Is there any limitation or ceiling on what you would call produce sellers? For example, are the mega farms covered by PACA, or are there any qualifications to be a produce seller?
Mr. Henkel: The scope of the PACA is anyone who buys or sells perishable agricultural commodities or offers to buy or sell. There is no dollar limitation. I can sell one tractor-trailer load, and I have the right to remedies, or I could be a multibillion‑dollar industry. There is certainly no dollar limitation. This is a remedy.
I heard the prior speaker briefly discussing the chain. That’s exactly right. Farmers sell to marketing companies. Marketing companies sell to brokers. Brokers sell to distributors. There is a whole chain here. It’s not simple. Farmers do not sell to Walmart. They do not sell to Costco. They go through a chain. That’s why it’s critical to have payment integrity at every level of the chain.
Senator Robinson: I understand in Canada we have the Safe Food for Canadians Regulations that require anybody moving produce to be licensed. We do have a similar situation in Canada. I think you’re saying within PACA you have licence.
In your opening remarks, you mentioned something about only financially viable companies remain in the industry. Could you explain or expand on that, please?
Mr. Henkel: The USDA has made it a policy in licensing that if you do not pay, you will get sanctions. You will look at the produce industry publications, red book, blue book, and almost on a weekly basis you see produce sellers who in the past were still viable companies who did not pay their bills on time. They will receive sanctions, usually a fine. If it continues, you can even have a licence revocation. The end result is, and the USDA has mentioned this, that we only want financially viable companies, because food is obviously absolutely critical, and payment is the grease that gets the food to the tables. The USDA has made it clear that we do not want insecure companies or companies who cannot pay their bills on time. By eliminating those, the banks’ job is much easier. They are dealing with financially secure companies. They know if their client doesn’t get paid, they can go through the USDA PACA proceeding, get paid, and there is the collateral to pay the bank. Everybody wins.
The Chair: Thank you for that.
Senator Ringuette: The USDA has a full licensing scheme for all interveners in the process, from the grower to the supermarket. We don’t have such a system here. What do you propose will happen if we don’t have such a system in regard to reciprocity?
Mr. Henkel: Farmers and growers are not required to hold a USDA PACA licence. Only traders are required to hold it. I cannot opine or discuss the Canadian system. I’m ignorant of that. But under the U.S. PACA law, farmers are not required to hold a PACA licence. It is limited to those who I’ll call dealers and brokers. Growers are not required to have a PACA licence.
Senator Massicotte: You mentioned everybody wins. But I thought the way the system worked is that when you have certain proceeds, the secured bankers, predominantly bank loans, get priority, given their security. Therefore, what you have is a bunch of creditors, usually smaller enterprises, who may suffer from it. But if you have a process whereby part of those proceeds, which is usually quite limited, is basically allocated to certain creditors as a starting point, it seems to me those who are not part of that priority are losers. Therefore, it’s not everybody wins. It’s a certain small sector wins, because of their ability to influence the legislators. Meanwhile, where is the fairness?
Mr. Henkel: Thank you for the question.
You’re certainly correct. If you only have $100 of assets in the PACA trust, the PACA creditors are out $120. There will be nothing left for anyone else. There is no doubt about that. I will only say that in politics, it’s up to the politicians to determine what is fair and what is not fair.
In my view, as a lawyer who has been in the produce industry for three decades, food is absolutely critical to our economy and our society, and the ability to get paid is so critical that it’s worth the protection for this type of industry where you have a perishable product sold at a high value to a buyer you’ve never met in person and whose credit you cannot check. The end result is you have to have this protection to have the commerce and food that we all need.
Senator Yussuff: Where would employees’ remittance and unpaid salary such as pensions and other contributions rank in the bankruptcy system compared to the PACA?
Mr. Henkel: Thank you for the question.
Generally, in my experience, aside from whatever the legal priority is, PACA is usually at the top. The end result is the bankruptcy judges, who are more adept at doing liquidations and doing reorganizations, find a way. I have seen that done, for example, in Country Fresh, where the employees were paid in full. Certainly, in the case of a reorganization, where the company is viable, the management is responsible, and if they are going to come out of bankruptcy, the employees get paid. That’s the end result. Now, there may be restructuring or employees lose jobs, but they’re still usually paid through their salaries and taxes get paid as well.
There will be occasions where there is certainly a no asset situation and everybody loses, including the produce sellers. It’s not like the produce sellers are being paid in full and everyone is getting nothing. Usually, if you have a very low asset trust or bankruptcy, everyone loses. So the question is, is it fair for the produce sellers who created the produce not to get paid first? It’s simply a question of priorities.
Senator McNair: Thank you, Mr. Henkel, for your testimony today.
Can you explain to me what the standard payment terms are between the farmer and the dealer? What typically are the terms?
Mr. Henkel: Between the farmer and the dealer, generally the farmer wants 30 days or less. The PACA trust only applies to short-term extensions of credit. No person in the industry generally will go more than 30 days. PACA normal is 10 days for payment. Generally, the industry is anywhere from 10 to 20 days to get paid. If you agree to payment terms exceeding 30 days, you do not have the ability to have the PACA trust.
The Chair: Mr. Henkel, thank you very much for joining us from Spain today. I know it was complicated, and we really appreciate your insight. Thank you.
Mr. Henkel: Thank you.
The Chair: We will proceed to our clause-by-clause study of this bill. We have officials, as you have seen, who have joined us here in case there are any points of clarification: Martin Simard, Senior Director, Corporate, Insolvency and Competition Directorate; Paul Morrison, Senior Policy Analyst, Corporate, Insolvency and Competition Directorate. From Agriculture and Agri-Food Canada, we have Tom Rosser, Assistant Deputy Minister; and we’re hoping that Mr. Chhabra, who was with us last week, will join us. He is the Director General for Marketplace Framework Policy Branch. He is somewhere in the building.
We will proceed now to clause-by-clause consideration of Bill C-280, An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (deemed trust — perishable fruits and vegetables).
I’ll go through some of the operating principles here as we begin.
Number one: If at any point a senator is not clear where we are in the process, please ask for clarification. I want to ensure that at all times, we have the same understanding of where we are.
Number two: In terms of the mechanics of the process, when more than one amendment is proposed to be moved in a clause, amendments should be proposed in the order of lines of the clause.
Number three: If a senator is opposed to an entire clause, the proper process is not to move a motion to delete the entire clause, but rather vote against the clause as standing as part of the bill.
Number four: Some amendments moved may have consequential effects on other parts of the bill. It is, therefore, useful to this process if a senator moving an amendment identifies to the committee other clauses in the bill where this amendment could have an effect. Otherwise, it would be difficult for members of the committee to remain consistent in their decision making.
Number five: Because no notice is required to move amendments, there can, of course, have been no preliminary analysis of the amendments to establish which ones may be of consequence to others and which ones may be contradictory.
Number six: If committee members ever have any questions about the process or about the propriety of anything occurring, they can certainly raise a point of order. As chair, I will listen to the argument, decide when there has been sufficient discussion of a matter or order and make a ruling.
Number seven: The committee is the ultimate master of its business within the bounds established by the Senate, and a ruling can be appealed to the full committee by asking whether the ruling shall be sustained.
Number eight: I wish to remind honourable senators that if there is ever any uncertainty as the result of a voice vote or a show of hands, the most effective route is to request a roll call vote which obviously provides unambiguous results.
Finally, senators are aware that any tied vote negates the motion in question.
Any questions about all of that?
Senator Massicotte: I’m not sure how to proceed. I’ll be right up front. I favour the resolution of Tony, our colleague, to the amendments. At the same time, I refuse the bill at large from the fact that it’s so unfair. How do I proceed from a voting sense? Must we do paragraph by paragraph and simply retain —
The Chair: You can support the amendment and vote against.
Senator Massicotte: Okay.
The Chair: At the end of the day.
Senator Massicotte: You keep the final vote really totality until the very end?
The Chair: That’s what happens. Then we ask if it’s going to go. If you want to for some reason support an amendment, even though you don’t support the bill — the amendment would, in some cases, perhaps change a senator’s mind or vote, but if that’s not the case, then you’re — okay?
Any other comments or questions before we proceed?
Senator C. Deacon: I appeal to colleagues, if you will, that if you intend to defeat the bill, I hope that you do so in the chamber and speak to the reasons why. This is an important bill to our agricultural sector and the perishable fruit and vegetable producers. My request to you as colleagues would be to support the amendment, if you like it, or not, but if you want to defeat the bill, let’s defeat it in the chamber and be transparent. I mean if you want to vote against the bill. Yes.
The Chair: Vote against it. Yes.
Senator Loffreda: Only the chamber can kill the bill.
The Chair: We are sending the bill to the chamber for third reading. Thanks, Tony.
Is it agreed that the committee proceed to clause-by-clause consideration of Bill C-280, An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (deemed trust — perishable fruits and vegetables)? Agreed or not.
Hon. Senators: Agreed.
The Chair: Shall the title stand postponed?
Hon. Senators: Agreed.
The Chair: Shall clause 1, which contains the short title, stand postponed?
Hon. Senators: Agreed.
The Chair: Shall clause 2 carry?
Some Hon. Senators: Agreed.
The Chair: Did you say no, Senator Varone? Are you doing the amendment now?
Senator Varone: I have my comments as to the reason no, and then it follows right into the amendment.
The Chair: You can just proceed by reading your amendment and then whatever comments you want to make.
Senator Varone: It’s the comments first that explain the amendment, so it’s the other way around. Thank you.
Thank you, senators, for your indulgence. My concerns are genuine, and my proposed amendments are not inconsequential. They are not amendments for the sake of amending. If adopted, they will make for a strong, clear, more unambiguous bill that will protect those farmers in need of protection.
I hope you had a chance to read what I sent on Friday where I outlined my concerns. I will be brief in outlining how I got here, and it began by trying to further the bill’s intent, which is to protect farmers during bankruptcies and insolvencies.
I had two amendments drafted to define the farmer, ensuring that indeed the farmer who would benefit from such bankruptcies or insolvencies and not other players along the supply chain, like the Loblaws, the Costcos or the Sobeys.
I had concerns over the phrase “deemed to be held in trust” as I did not fully understand its impact on the hierarchy of creditors in Canadian bankruptcy.
I confirmed that the language in Bill C-280 was ambiguous and would create a litigious issue as to where the trust would land in the Canadian bankruptcy hierarchy, and it could possibly undermine the deemed trust status given solely to source deductions: UIC, CPP, the Wage Earner Protection Program Act, the Holy Grail of the Canadian bankruptcy hierarchy.
Given U.S. bankruptcy hierarchy does not have a deemed trust status category in its hierarchy, and conferring deemed trust status to Canadian farmers of fresh fruits and vegetables and understanding the corresponding reciprocity that would ensue and allow U.S. producers of fresh fruit and vegetables to use the deemed trust status and rank pari passu with source deductions, UIC, CPP, the Wage Earner Protection Program Act, I concluded that Bill C-280 required further amending.
My earlier definition of farmer did not go far enough, and I wish to thank Senator Robinson for her intervention and her teaching as she highlighted the term “dealer” being those who aggregate the fresh fruits and vegetables of the smaller farmers and bring them to market. As such, I amended my definition of farm-to-gate definition as provided by the CPMA to now include primary dealers.
Of note is the email from the clerk yesterday. The Conference Board of Canada has confirmed that in 2023 the Canadian agricultural, forestry, fishing, hunting sector bankruptcy and insolvency and proposal rates compared to the national average of all of the other industries were much less.
Notwithstanding that, an argument can be made that no enhanced bankruptcy protection is required for this sector in Canada, and the reality of resurrecting reciprocity with the U.S.A. is important for our Canadian exports of fresh fruits and vegetables into the U.S.A., and as such, I wish to move forward on my proposed amendments.
As I outlined in my note in the hierarchy document, the Canadian Bankruptcy and Insolvency Act has six category levels of payouts, the highest being the super priority and the second highest being the deemed trust, and then they all fall in line with their equivalency in the U.S. My proposed amendments clearly outline where a farmer’s claim would land, and that would be under the secured creditor category in Canadian bankruptcy, below deemed creditors or deemed trust and below the super priorities. And that is where they land in the U.S.
My amendments, therefore, are straightforward and do four simple things, all designed to help Canadian farmers: one, define the farmer, thus ensuring the farmer truly benefits; two, include and define the dealer, ensuring the same benefits; three, ensures that everything that is deemed to be held in trust resides in the secured creditor status; and four, ensure that bankruptcy hierarchy is equal in both Canada and the U.S.A.
The amendments were distributed yesterday. I can read them or we can dispense.
The Chair: We can start, and, as we operate in the chamber, we can also dispense so that we don’t have to read through it all. People have had copies. Senator Marshall, you have a question?
Senator Marshall: Would the senator take a question?
Senator Varone: Absolutely.
The Chair: I think we have to do that after. We need to move this, and then we have debate, rather than having the discussion first. We will do that after the amendment has been actually moved.
It is moved by the Honourable Senator Varone: That Bill C-280 be amended on clause 2, page 1, at line 8, by replacing lines 8 and 9 with the following — shall I dispense?
Hon. Senators: Dispense.
The Chair: All right. Everybody is reading along. Now is the time for debate and questions.
Senator Marshall: Thank you. Will the senator take a question?
Senator Varone: Yes.
Senator Marshall: When I read through your amendment, a lot of it is focused on the reference to the supplier, and you have broken it out between two groups, primary agriculture producer and then the purchaser of perishable fruits. It’s like you have split up the supply chain. That’s my interpretation of it.
From the witnesses that we heard this morning, Mr. Henkel and Mr. Lee, both of them were very emphatic that they didn’t support or think we should break up the supply chain. Mr. Lee said we need to protect the full chain to provide comparison with the U.S., and Mr. Henkel also said on occasion that payment integrity is needed in every level of the supply chain.
Can you tell us why you split it up as you did?
Senator Varone: Yes, primarily because those that I wish to protect are the ones that extend credit in the system: farmers, aggregators, dealers. They are the ones that are extending the credit. The Sobeys and the Costcos extend no credit, and therefore they can be deemed to be a supplier and require no support through this bill. That was the primary reason.
Senator Marshall: Mr. Henkel, when he was testifying, was not saying everybody is selling to Walmart or Costco or these big firms, so it just seems like you’ve fractured up this supply chain but it’s not well defined. It will not only be Costco not getting their money. It will be some smaller organizations.
Senator Varone: I left it, senator, to include dealers and tried to make it as wide as I could for the primary sellers.
Senator Martin: I think, senator, it’s not wide enough, as we heard from our previous witnesses about the need to regain reciprocity.
This amendment consists of two parts, limiting the definition of “supplier” and adding a secured creditor. We oppose both of these for a number of reasons.
First, the bill was intentionally drafted to include packers, marketers, et cetera, in the protection measures. Changing “supplier” to farmer or the dealer removes this protection.
As noted by the Canadian Produce Marketing Association, a deemed trust would promote fairness and financial stability along the entire chain and support the payment to suppliers all the way back to the growers.
The Fruit and Vegetable Growers of Canada said:
The interconnectedness of the chain that ensures the supply of fresh and frozen fruits and vegetables all the way from farm to table is another reason for the need to protect suppliers at all levels, starting with the growers, but also the wholesalers, distributors, and brokers.
Second, if this amendment passes, then Canadian growers will not be able to access the U.S. PACA — we just heard that — dispute resolution provisions, the restoration of which was a key incentive behind this bill. The Canadian Produce Marketing Association noted this when they said:
. . . limiting the definition of “supplier” under Bill C-280 would not create an equivalent protection to that provided to the industry in the United States under the Perishable Agricultural Commodities Act (PACA), which covers all suppliers along the chain, and would therefore hinder Canada’s ability to obtain the reinstatement of reciprocal protection for Canadian sellers under PACA.
This means that this amendment will effectively gut the intent of the bill.
I know this was considered in committee at the House, and it was rejected, but I know we’re looking at it again. I thought today’s witnesses really answered a lot of those concerns.
I’m concerned an amendment, whether a rejection of the bill at committee or we put forward a report in the Senate, in effect is gutting it and, in essence, killing this bill. It’s been such a long process, as we heard.
I’m an urban Canadian. I don’t understand this fully. As I’m listening to our officials, as well as to other witnesses, I believe it’s very important that we keep the definition as is. It’s been well documented and studied. Thank you.
Senator C. Deacon: I absolutely believe, Senator Varone, you are putting this forward with absolute integrity and you believe in the best interests of the bill. I believe that fully.
My concern is we’ve seen before that, if we amend a private member’s bill, it goes to the bottom of the Order Paper in the House and rarely ever re-emerges. We almost had this three years ago with Bill C-208 and the intergenerational transfers. It was almost amended, but the Senate held firm. We were told that there was a huge problem that was going to emerge if we made that change and provided equity to farmers. The problem actually did not emerge. In the end, three years later, Finance Canada did plug a hole in what they thought was an urgent issue that had embarrassed the Finance Minister to being above the fold in The Globe and Mail trying to go against the will of Parliament three times after that bill passed.
If there is an issue here, if the witnesses today were wrong, and, in fact, you are fixing a problem in a way that actually fulfills the intention, that’s one path. The other is maybe there isn’t the issues that are being seen and that you’re addressing. If they are there, there’s an incentive to fix them on the part of the government.
If we effectively kill this bill by, in committee, voting against it or amending it — and that is accepted by the chamber — I was on AGFO six years ago, and I was hearing about this. I was hearing about it five years ago, four years ago. This is a constant thorn in the side of our food producers. We saw in COVID how important domestic food production is to our country.
From my standpoint, despite the fact I believe you absolutely are doing this with the best interests at heart, I cannot support the amendment.
Senator Ringuette: Not too long ago, this committee unanimously supported that the workers would come first in regard to bankruptcy. We dealt with that portion of the budget bill, and we supported it unanimously. Now we’re saying that Canadian workers are not good enough? There’s no reciprocity in regard to the U.S. in regard to protecting their workers and their salaries.
This morning, the U.S. lawyer indicated to us that part of that licensing and being able to access that deemed trust in the U.S. is that the invoice has to be paid within 10 to 20 days; otherwise, they do not have access to the system. I would like to have the opportunity — if not today, then maybe in the Senate — to include true reciprocity and the request in here that payments and invoices would have to be paid within 10 to 20 days, like in the U.S., and otherwise you don’t have access to it. That’s reciprocity.
Senator Marshall: Generally speaking, many senators see this as an imperfect bill, but we pass imperfect bills all the time. If this bill was enacted and causes a problem, I agree with Senator Deacon that it can be amended in the next omnibus bill. I’ve yet to see a perfect bill.
Senator Martin: I have a question for the officials based on what Senator Ringuette just said.
Would this bill, as written — if it were adopted — restore the PACA dispute resolution equivalency to Canadian growers?
Tom Rosser, Assistant Deputy Minister, Market and Industry Services Branch, Agriculture and Agri-Food Canada: Madam Chair, it remains to be seen whether the original bill would be recognized as equivalent by U.S. authorities. We have not officially sought their opinion on that.
I’m reacting to this largely in real time. My judgment is the probability of that happening might be diminished by the proposed amendments. It’s a question of probabilities. There’s no certainty that would happen irrespective of whether the bill is amended or not.
Senator Loffreda: Rather than risk increasing the price of fruits and vegetables for all consumers, in certain situations there is insurance that can be taken by the farmers, EDC insurance, that could range from 1% to 1.5%. I have confirmation of that from the banking industry. They won’t get back to us with a price for EDC insurance because it’s according to risk, obviously. This bill does increase the risks to the lenders. It will increase the costs of lending. Per se, there are simpler solutions.
To Senator Deacon’s comment, we value the farmers. Bringing this bill to Royal Assent, we won’t have less fruits and vegetables; bringing this bill to Royal Assent, we might have more expensive fruits and vegetables, may have more expensive fruits and vegetables because risk return is always the law when it comes to lending.
I can put my hand in the fire. I’ve done it for 35 years. Thank you.
An Hon. Senator: Question.
The Chair: Is it your pleasure, honourable senators, to adopt the motion in amendment?
Some Hon. Senators: No.
Some Hon. Senators: Agreed.
The Chair: We’ll have a roll call. Thank you.
Sara Gajic, Clerk of the Committee: The Honourable Senator Wallin.
Senator Wallin: No.
Senator Massicotte: No to the amendment, right? To clarify the question.
Senator Wallin: No to the amendment. Am I giving the right answer?
Senator Massicotte: Let me help you.
The Chair: Is it your pleasure, honourable senators, to adopt the motion in amendment, or the actual amendment? Is it your pleasure? My answer would be, no, it is not my pleasure.
Ms. Gajic: The Honourable Senator Wallin?
Senator Wallin: No. I have to say it one more time.
Ms. Gajic: The Honourable Senator Deacon?
Senator C. Deacon: No.
Ms. Gajic: The Honourable Senator Fridhandler?
Senator Fridhandler: Yes.
Ms. Gajic: The Honourable Senator Loffreda?
Senator Loffreda: Yes.
Ms. Gajic: The Honourable Senator Marshall?
Senator Marshall: No.
Ms. Gajic: The Honourable Senator Martin?
Senator Martin: No.
Ms. Gajic: The Honourable Senator Massicotte?
Senator Massicotte: Yes.
Ms. Gajic: The Honourable Senator McNair?
Senator McNair: Yes.
Ms. Gajic: The Honourable Senator Ringuette?
Senator Ringuette: Yes.
Ms. Gajic: The Honourable Senator Varone?
Senator Varone: Yes.
Ms. Gajic: The Honourable Senator Yussuff?
Senator Yussuff: Yes.
Ms. Gajic: Yeas, 7; nays, 4; abstentions, 0.
The Chair: I declare the motion in amendment is carried.
Shall clause 2, as amended, carry?
Hon. Senators: Agreed.
The Chair: Let’s carry on.
Shall clause 3 carry? Senator Varone?
Senator Varone: Agreed.
The Chair: I’m sorry?
Senator Varone: I’m sorry? Can we start over again? I lost my place.
The Chair: Do you have another —
Senator Varone: Yes, I have an amendment, and it has been distributed by the clerk.
The Chair: Okay. Have people read it? There is no more debate at this point, so — no, we’ll get to those numbers.
It is moved by the Honourable Senator Varone that Bill C-280 be amended in clause 3 on page 3 by replacing lines 14 and 15 with the following — do you want me to read it, or shall I dispense?
Hon. Senators: Dispense.
The Chair: Okay, everyone has a copy. Any comments or debate?
Is it your pleasure, honourable senators, to adopt the motion in amendment?
Some Hon. Senators: No.
Some Hon. Senators: Yes.
The Chair: Do you want a roll call on this.
Ms. Gajic: The Honourable Senator Wallin.
Senator Wallin: No.
Ms. Gajic: The Honourable Senator Deacon.
Senator C. Deacon: No.
Ms. Gajic: The Honourable Senator Fridhandler.
Senator Fridhandler: Yes.
Ms. Gajic: The Honourable Senator Loffreda.
Senator Loffreda: Yes.
Ms. Gajic: The Honourable Senator Marshall.
Senator Marshall: No.
Ms. Gajic: The Honourable Senator Martin.
Senator Martin: No.
Ms. Gajic: The Honourable Senator Massicotte.
Senator Massicotte: Yes.
Ms. Gajic: The Honourable Senator McNair.
Senator McNair: Yes.
Ms. Gajic: The Honourable Senator Ringuette.
Senator Ringuette: Yes.
Ms. Gajic: The Honourable Senator Varone.
Senator Varone: Yes.
Ms. Gajic: The Honourable Senator Yussuff.
Senator Yussuff: Yes.
Ms. Gajic: Yeas, 7; nays, 4; abstentions, 0.
The Chair: Okay. Shall clause 3, as amended, carry?
Hon. Senators: Agreed.
The Chair: Carried as amended.
Shall clause 1, which contains the short title, carry?
Hon. Senators: Agreed.
The Chair: Shall the title carry?
Hon. Senators: Agreed.
The Chair: Shall the bill as amended carry?
Some Hon. Senators: Agreed.
An Hon. Senator: On division.
The Chair: Do you want a roll call, or is it on division? On division. All right. The chamber will do it.
Is it agreed that the law clerk and parliamentary counsel be authorized to make the necessary technical, grammatical and other required non-substantive changes as a result of the amendments adopted in both official languages?
Hon. Senators: Agreed.
The Chair: Does the committee wish to consider appending observations to the report? No? Thank you.
Is it agreed that I report this bill as amended to the Senate in both official languages?
Hon. Senators: Agreed.
The Chair: Thank you, ladies and gentlemen. We have done this, so it will be reported to the Senate.
As Senator Deacon noted, if anybody would like to speak to this or reinforce their points one way or the other, that would be the place to do it. There will be a third reading vote there. Thank you all very much.
(The committee adjourned.)