B.C. Tree Fruits, $58 million in debt, files for creditor protection
PENTICTON, B.C. - Premier David Eby has announced millions in additional funding for British Columbia's beleaguered fruit industry, a day after a growers co-operative that has served farmers for almost a century filed for creditor protection citing more than $58 million in liabilities.
Eby said at a news conference Tuesday that the fate of the BC Tree Fruits Cooperative, which provided storage and packing services for farmers, is now in a judge's hands.
A petition filed in B.C. Supreme Court shows the co-operative received a repayment notice last week related to more than $50 million in debts to Canadian Imperial Bank of Commerce.
The co-op's petition shows it is "non-compliant" with the loan agreements to CIBC.
A statement from the co-operative issued Monday said the decision to file for creditor protection stemmed from the group's "liquidity crisis," with stone fruit crops damaged by "unusually severe" weather this year identified as "the final tipping point" in a series of factors.
In mid-January, the Interior saw several days of frigid temperatures that killed off active buds in trees that had only just begun to recover from the 2021 heat dome and had gone through a harsh winter in 2022.
The petition says the harvest for cherries was cut by 85 to 90 per cent, while all other stone fruit harvests were "reduced to zero."
The petition says CIBC is "supportive" of the co-op's restructuring under the Companies' Creditors Arrangement Act. The law allows insolvent firms with more than $5 million in debt to restructure operations and temporarily stave off collection efforts.
As the co-op's lawyers were in court Tuesday, Eby and B.C. Agriculture Minister Pam Alexis held a news conference in Penticton, announcing supports for farmers.
Eby said he had called on the federal government to help the province's farmers, writing to Prime Minister Justin Trudeau for help in this "urgent moment."
"We need them to step up," Eby said. "We're facing a crisis like this. We deserve the same treatment as farmers in Saskatchewan and Ontario and Manitoba, in Alberta. The crops are different here, the needs are different here and we need a federal government that responds to that."
He said he wanted the federal government to pause payments from farmers for advance loans for two years, among other requests.
"Farmers cannot afford to make those payments right now," he said.
Eby said tweaks to the province's AgriStability program will see farmers get an additional $15 million in claims for crop losses, and also announced another $5 million for a "tree fruit climate resiliency program."
He said the province is also temporarily exempting farmers from an Agricultural Land Reserve rule requiring that fruit processed on a property must also be produced there.
The co-operative announced last month that it was shutting down due to "extremely low" estimated fruit volumes, and "difficult market and financial conditions."
The crisis, the petition says, had "been building for many years."
Filing for creditor protection in court was an effort to "maximize recovery for all stakeholders," the group's statement said.
The petition filed in court to start the process shows the co-op and a subsidiary had more than $111 million in assets as of last year, including several properties, though one Kelowna property worth $21 million is in the process of being sold.
The petition said the co-op and its subsidiaries had more than $58 million in liabilities as of last year, including the debts to CIBC, and amounts owing to growers and other creditors.
Eby said Tuesday that the province would monitor the creditor protection process "closely" and see what could be done to ensure that "key assets are protected," or if services that it used to provide might be able to continue through the proceedings.
"The co-op has had some big challenges. They had some governance issues that the province tried to support with some funding, they're facing some significant debt obviously," he said.
"It was not, I'm sure, an easy decision for the board to decide to wind up operations. It was quite sudden, from the provincial government perspective, and now we're in a situation where it's in court and we're going to make sure that we're doing all we can to protect farmers while recognizing that the co-op is now in this court process."
Eby said growers in B.C. also faced unfair competition from subsidized produce imported from the United States, and "profiteering" by grocery retailers.
— By Darryl Greer in Vancouver
This report by The Canadian Press was first published Aug. 13, 2024.
