USDA Revokes Preferential PACA Treatment for Canadian Shippers

Recently, the U.S. Department of Agriculture announced its intention to immediately remove preferential treatment the Canadian produce industry received under the Perishable Agricultural Commodities Act (PACA) by removing the waiver for bonding requirements for dispute resolution services. Therefore, as of this week, Canadians are now required to post a bond, double the amount of their claim, in order to file and dispute with PACA.

Since the 1930’s the Canadian and United States governments have had a long-standing agreement that allowed reciprocity for Canadians to have access to the U.S. PACA dispute resolution system. This reciprocity was agreed to by the two countries based on Canada’s ability to provide several key services including inspection service, a licensing and dispute resolution program, and insolvency protection tools similar to the PACA trust. For over 30 years, the third component (PACA Trust provision) has been unattainable in Canada, despite being a high priority for many produce organizations from both countries and intense effort over the last three years during the RCC negotiations between the U.S. and Canadian government to harmonize key regulatory areas.