Yesterday, an article was published on the Canadian Food Inspection Agency's intention to shutdown their division Destination Inspection Service (DIS). Today, more details are shared in a Q&A with Ron Lemaire, President of the Canadian Produce Marketing Association. He explains why these services are so critical for Canada and what the impact of a termination would be.
Q: Why are inspection services so critical?
A: Destination Inspection Service is not simply a quality inspection program. It is the backbone of fair, transparent, and functional produce trade in Canada as it supports:
- Market stability by providing a neutral third‑party inspection that both buyers and sellers trust.
- Food affordability by eliminating the need for risk premiums on product entering Canada.
- Reciprocity with the United States—a key pillar of our produce trade relationship. The USDA maintains its own robust destination inspection program paired with PACA protections. Canada's DIS provides the reciprocal assurance that U.S. exporters expect when shipping north.
- Domestic grower protection, ensuring Canadian producers have a fair mechanism to resolve disputes when shipping across the country.
- The functionality of the entire business integrity framework, including Dispute Resolution Corporation (DRC), which relies on DIS to adjudicate disputes and maintain fair trading practices.
Without DIS, grade standards lose their purpose, the tools from the DRC become compromised, and government is forced to take on broader licensing and enforcement responsibilities—reversing decades of efficient, collaborative progress.
Q: What would the impact of termination be?
A: The impact would be immediate, severe, and system‑wide. Since DIS is one of the core pillars keeping Canada's fresh produce supply chain fair, stable, and predictable, elimination would destabilize the entire market. Without DIS, Canada loses its only national, impartial mechanism for verifying grade, condition, and quality at destination. That means disputes become harder to resolve, evidence becomes contested, and transactions take longer and cost more. Before DIS existed, U.S. and offshore suppliers regularly added 10–15 percent risk premiums to shipments coming into Canada because there was no trusted government inspection to validate condition on arrival. Removing DIS puts us directly back into that inflationary environment at a time when grocery affordability is already a national priority. Food waste is also an issue as inferior product will be dumped into Canada as we saw prior to DIS and these products did not have the same shelf life when moving to rural or remote communities.
Q: Will there be an impact on trading relationships?
A: Yes, trading relationships will be compromised. The U.S., Mexico, and all major exporting nations maintain federal destination inspection systems, and Canada's DIS is what allows us to demonstrate reciprocity and alignment—especially with the U.S. USDA program and the broader Perishable Agricultural Commodities Act (PACA) framework. Without DIS, Canada cannot meet one of the foundational requirements for preferred PACA access. Even though we have made progress on bankruptcy protection, removing DIS takes away a key pillar needed for reciprocity. As a result, Canada will never regain preferred PACA access without DIS, meaning Canadian growers and shippers will continue to be forced to post bonds worth double the value of a claim whenever they dispute a load in the U.S. That is a permanent competitive disadvantage.
Domestically, Canadian growers lose their only neutral inspection tool when shipping across provincial borders. Internationally, suppliers shipping into Canada will face greater financial exposure due to unverifiable inspections and higher dispute risk—leading to reduced volumes, lower grade, tightened terms, and higher prices for Canadian consumers.
In short, terminating inspection services would destabilize the market, raise costs, weaken trade continuity with the U.S. and global partners, reduce confidence in Canada's regulatory credibility, and put both Canadian producers and consumers at a significant disadvantage.
Q: What is CPMA's role in this?
A: We are in contact with the President of CFIA and his senior team, ADM at AAFC, the Prime Ministers Office and the Minister of Agriculture's team working on solutions. When we were informed by the CFIA President of the intention to eliminate DIS, we treated it as a critical and urgent threat to the integrity of Canada's fresh produce supply chain. CPMA immediately mobilized. We've met twice with the President and his VP's and other government departments.
We also convened with CFIA leadership alongside the DRC and industry representatives CPMA Chair Steve Bamford and CGIM Chair Quinton Woods. In that meeting, we delivered a unified and unequivocal message of serious concern. We made clear that:
The decision was based on flawed cost assumptions—DIS is a cost‑recovery program, and the $900,000 loss cited by CFIA does not reflect DIS operations.
No regulatory or trade impact analysis (RIAS) was conducted.
No consultation occurred with the industry, despite the massive economic, commercial, and trade implications.
We engaged government partners at multiple levels to ensure they fully understood the consequences of such a decision—from destabilized pricing and weakened food security to significant risks with our U.S. trading relationship. Since learning of this issue, we have briefed our key U.S. and Mexican trade association partners. Both jurisdictions will be working to inform the Canadian Government how important this tool is for industry and the Canadian consumer.
Our rapid intervention, and the alignment across industry representatives, contributed directly to securing open dialogue and we are working to push for a reversal of decision. CFIA did commit to reviewing the financials and providing this information to the industry.
© CPMA
Ron Lemaire.
Q: Anything else you would like to share?
A: Yes, definitely. DIS is not "just an inspection program." DIS is a trade‑enabling system. It's one of the quiet pieces of infrastructure that keeps fresh produce moving fairly, quickly, and predictably in Canada. When it works, you don't notice it. When it's gone, the whole market feels it.
Continue reading if interested in more details about the impact.
DIS reports are a neutral reference point
First, DIS is Canada's only national, impartial dispute-resolution evidence source. It provides federally recognized, standardized inspection reports that both sides trust—condition defects, grade defects, weight/size/count verification, fresh-cut and bagged salad condition, and even destruction/dump certificates. Those reports are the neutral reference point that allows buyers and sellers to resolve problems quickly and fairly. If DIS disappears, you create an "evidence vacuum." Everyone is forced into private inspections, and in our industry private inspections are routinely contested: "your inspector versus mine." That doesn't reduce disputes; it extends them, increases legal costs, freezes payments longer, and raises risk for everyone in the chain.
Increased transaction risk
Second, removing DIS increases transaction risk—and when risk goes up, costs go up. The practical reality is that buyers protect themselves. Without a trusted CFIA inspection available on arrival, receivers will tighten acceptance, place more shipments on hold while private inspections are arranged, reject loads faster, and demand more third-party verification. With perishables, that "arrival friction" becomes a real barrier to trade. Product is delayed, shelf-life shrinks, disputes escalate, and volumes shift to suppliers or markets with stronger verification systems. Even without changing a single regulation, the loss of predictability acts like a market access barrier for Canadian product and a market stability problem for Canadian buyers.
Canada – U.S. reciprocity issue
Third, there's a serious Canada–U.S. reciprocity issue here. North American produce trade operates on a regulatory mirror: the U.S. has a fully developed destination inspection system through USDA, backed by the broader PACA framework. Canada's DIS is part of what sustains the expectation that both countries operate with credible, neutral, government-validated verification. If Canada removes DIS, it risks being interpreted as stepping away from shared principles of fair-trading mechanisms. That invites the possibility—at minimum—of reduced confidence among U.S. shippers and, at worst, pressure on the reciprocity and equivalency that underpin our trade relationship. That matters not only for imports into Canada, but for Canadian exports going south where we rely on a stable, trusted framework. In addition, we further distance ourselves from regaining preferred access under the U.S. PACA. While Canada has taken steps toward addressing bankruptcy protection, eliminating DIS would remove one of the core pillars required for PACA reciprocity. Without DIS, Canada cannot credibly argue that we offer a comparable, neutral, government‑validated inspection mechanism. The result is simple: Canada will never regain preferred PACA access without DIS. And that has real economic consequences. As it stands today, Canadian growers and shippers must post a bond worth double the value of the claim if they want to dispute a load in the U.S.—a cost structure directly tied to our lack of preferred PACA status. By removing DIS, we lock Canadian producers into this punitive framework indefinitely, increasing their financial exposure and eroding our competitiveness in the U.S. market.
Increased risks for Canadian importers
Fourth, DIS supports "off-continent" imports and the integrity of claims processes. For product coming from South America, Europe, or Africa, CFIA documentation can be critical for insurance claims and for demonstrating legitimate destruction or dumping of spoiled goods. Without an official CFIA witness and standardized reporting, importers may struggle to prove a product was truly unsalvageable—for insurers, and in some cases for tax/duty recovery processes. That shifts risk back onto Canadian importers and can shrink supply, reduce variety, and concentrate the market toward only the largest players that can absorb the losses internally.
Weakening of domestic oversight
Fifth, the domestic implications are real and often overlooked. This isn't only about imports. Canadian grower-shipper operations rely on DIS as a neutral tool when product moves across provincial borders. Removing it takes away one of the only nationally consistent mechanisms that protects fair dealing inside Canada. When domestic oversight weakens, it doesn't stay domestic—it spills over into export credibility because trading partners take signals from how you govern your own market.
Canada a competitive outlier
Sixth, Canada risks becoming a competitive outlier. Other major produce‑exporting regions maintain strong federal inspection and verification systems. If Canada dismantles DIS, we weaken our ability to demonstrate transparency, national consistency, and alignment with international norms.
The loss would be much, much bigger
And finally, I want to be very direct on the economics: even if CFIA's $900,000 loss figure were accurate—which we do not believe it is, given DIS is cost recovery and we haven't been shown the numbers—this is a public good that supports billions in trade. For less than a million dollars, government provides the neutral "legal oil" that keeps the fresh produce market from grinding into constant disputes, delayed payments, and litigation. Eliminating DIS doesn't remove cost; it pushes cost outward—onto growers, importers, retailers, and ultimately Canadian consumers—while increasing the likelihood that government will later be forced to assume even broader licensing, verification, and enforcement burdens.
So, my bottom line is this: DIS is not optional infrastructure. It underpins fairness, predictability, and confidence in the system. If we remove it, we destabilize the market, elevate inflationary pressures, weaken our trade posture, and create long-term reputational damage that is extremely difficult to reverse.
For more information:
Ron Lemaire
President
Canadian Produce Marketing Association (CPMA)
Tel: (+1) 613-291-5110
[email protected]
www.cpma.ca
