Month: June 2018

Applicants for DRC membership, members, responsibly connected individuals and employees must meet certain conditions in order to become a member and maintain membership in DRC.  When those conditions are not met, applicants and members may be required to post financial security.  Financial security is a sum of money held by DRC (for a defined period of time) as a promise to conduct business in accordance with our rules.  If the member violates a provision of the DRC by-laws and Operating Rules, like failing to pay an arbitration award, DRC may distribute the funds, as provided in the Security Agreement in place between the member and DRC.

DRC sometimes requires financial security for reasons such as: employing an individual who has previously been insolvent; being named in a court order; being expelled from DRC within the last five years; and the list continues.  Additionally, a member who would normally be expelled from DRC membership may avoid expulsion by posting financial security.

There are two types of financial security: (i) applicant / member; and, (ii) employee.  Applicant and member bonds** are required when the applicant or member is responsible for an act that would trigger our bonding policy (i.e. filing a proposal with creditors for cents on the dollar).  In the example, the amount of security required would start at fifty thousand dollars but could increase when considering aggravating and mitigating factors such as, the size of the business, the impact a potential insolvency may have on the industry, the type of operation, prior violations, the reason for seeking financial security, etc.

Members and applicants may also be required to post financial security when they employ an individual who does not meet the membership qualifications as defined in the DRC Operating Rules.  Unlike applicant and member bonds, employee bonds are set at a maximum of twenty-five or fifty thousand dollars, depending on the individual’s violation and their new role at the member company.

If a member has posted financial security, for any reason, and they fail to meet their debts as they come due or suspend the operations of a business with money owing, DRC will use that money to pay other members who submit a proof of claim.  We would caution, please do not extend additional credit based on the assumption a company has a bond posted, and therefore you will get paid either way.  Particularly in the case of an employee bond with a set maximum, it is not likely the financial security will cover all claims if the employer finds themselves in serious financial trouble.

For the list of members with financial security posted, log in to the members only section of our website, click on the “publications” tab and open “DRC Members Who Have Financial Security Posted.”

If you have any questions about our bonding policy please contact our office.

DRC Help Desk | 613-234-0982 | [email protected]

** for the purposes of this article, “bond” is used to refer to “financial security”

United Fresh Produce Association’s United FreshMKT

DRC will be exhibiting at the United Fresh Produce Association’s United FreshMKT this June 25-27, in Chicago, IL. Come say hi to Fred Webber, Luc Mougeot and Andrea Bernier at booth #1152.  We’ll be on hand to answer any questions you may have regarding the upcoming regulatory changes coming to Canada and the impacts on Canadians and non-Canadians alike.  Under the new regulations, more Canadian companies than ever will be required to have a DRC membership and we strongly encourage all members to verify that they are buying and selling only with fellow members.

Fred Webber, President & CEO, will be addressing several of the volunteer councils speaking to multiple committees updating them on the regulatory changes occurring in Canada. If you would like to learn more about how those changes may impact you, please contact our office.

DRC Help Desk | 613-234-0982 | [email protected]

CPMA Convention and Trade Show – SFCR & Grade Standards

April 24-26, 2018 DRC attended the CPMA Convention and Trade Show in Vancouver, BC.  Thank you to all of our members who stopped by our booth.  It was a pleasure seeing familiar faces and meeting new friends.

We were pleased with the informed discussions and engagement that took place in our booth around the upcoming Safe Food for Canadians Regulations.  Members and non-members a like dropped by to learn more about the trade and commerce aspects of the proposed Regulations and how the changes may affect them and their trading partners.

In addition to the SFCR discussions, there was keen interest in DRC’s latest project: harmonizing the Canadian and US grade standards.  As part of its long term strategic plan, the DRC has always envisioned a time when the Canadian grade standards for fresh fruit and vegetables would be housed within and maintained by the DRC. The passage of the new Safe Food Canadians Act and their soon to be implemented proposed Safe Food for Canadians Regulations present a new opportunity to incorporate the 2009 changes into the standards that are now part of a referenced document entitled Canadian Grade Compendium – Volume 2 Fresh Fruits and Vegetables.

DRC Help Desk | 613-234-0982 | [email protected]

Let’s assume that you received product in a deteriorated condition, you requested a federal inspection and the results of the inspection report support a breach of contract. You sell what you can after the product continues to deteriorate quickly but unfortunately there are some cartons left that cannot longer be sold.  If you still have more than 5% of the product left, in accordance with section 9 of the DRC Trading Standards before dumping or donating, make sure you take the following steps:

1. Communicate with your trading partner. Find out if he requires evidence that the product left has no commercial value or if they just need a dumping certificate. If you had a phone conversation with your trading partner, make sure you send a quick email confirming the details of the conversation.
2. If you are not able to reach your trading partner it is your responsibility to show that the product that you will be dumping or donating has no commercial value. Your next step would be to call for a follow-up government inspection which would show the advanced deterioration of the product which would make it no longer marketable. The results of the follow-up government inspection should show that the product no longer has any commercial value.
3. Request a dump/disposal/donation inspection. The CFIA and the USDA inspection services can provide a Notice or Inspection Certificate showing the amount of product dumped or donated in their presence. This document does not confirm the product has no commercial value.

Following the above steps will help avoid a dispute over dumping product received in deteriorated condition and in the event that you are involved in a dispute, these steps will provide the necessary supporting documents for your actions.

Please remember we are here to support and assist our members. Contact the DRC Help Desk with any questions or concerns at:

DRC Help Desk | 613-234-0982 | [email protected]