FOR A STRONG AND

COMPETITIVE MAPLE
INDUSTRY
21 MEASURES FOR GROWTH

FOR HARMONY
FOR PROGRESS

Report prepared by:

FLORENT GAGN
December 2015

Table of contents

INTRODUCTION.................................................................................................................................4
MANDATE........................................................................................................................................................ 4
STUDY METHODOLOGY AND PROCESS........................................................................................................... 4
SUMMARY ........................................................................................................................................7
CHAPTER 1: A UNIQUE BUSINESS MODEL ................................................................................ 10
1.1 QUBECS MAPLE INDUSTRY: AN OVERVIEW..................................................................................................... 10
1.2 A HIGHLY REGULATED SECTOR.......................................................................................................................... 11
1.3 THE ORGANIZATION OF THE MAPLE INDUSTRY...................................................................................................... 12
1.4 TIME TO TAKE STOCK .......................................................................................................................... 14
CHAPTER 2: A GLOBALIZING INDUSTRY IN AN EVOLVING MARKET ....................... 15
2.1 A THRIVING INDUSTRY ............................................................................................................................. 15
2.2 A MORE COMPETITIVE GLOBAL MARKET ............................................................................................................. 18
2.3 THREAT OR OPPORTUNITY?............................................................................................................................ 20
2.4 PROMOTION AND MARKET DEVELOPMENT ................................................................................................ 22
CHAPTER 3: AN OVERLY RIGID, CLOSED SYSTEM ........................................................................... 26
3.1 CALLING THE SYSTEM INTO QUESTION.26
3.2 MORE FOCUSED CRITICISMS ........................................................................................................................... 28
3.3 CHANGES ARE NEEDED .................................................................................................................... 30
CHAPTER 4: REPOSITIONING THE BUSINESS MODEL ...................................................................... 31
4.1 ADAPTING IN CONTINUITY ....................................................................................................................... 31
4.2 DIRECT SALES TO CONSUMERS ........................................................................................................ 32
4.3 RETAIL SALES WITH THIRD PARTIES......................................................................................................... 33
4.4 PRODUCTION QUOTAS ....................................................................................................... 36
4.5 AN OFFER THAT ADAPTS TO THE MARKET ............................................................................................................. 41
4.6 THE MAPLE SYRUP RESERVE ............................................................................................. 43
4.7 PAYMENTS TO PRODUCERS .................................................................................................................. 46
4.8 UNION REPRESENTATION AND THE MARKETING MONOPOLY ................................................................ 48
4.9 RELATIONS BETWEEN THE FEDERATION AND PRODUCERS .................................................................................. 51
4.10 THE RGIE DES MARCHS AGRICOLES ET ALIMENTAIRES DU QUBEC ........................................................................ 54
4.11 SYNERGY BETWEEN ALL STAKEHOLDERS ........................................................................................................... 56
CHAPTER 5: FROM THOUGHT TO ACTION ........................................................................................ 60
5.1 IMPLEMENTATION CHALLENGES .................................................................................................................. 60
5.2 PROVIDING SOME DIRECTION .......................................................................................................................... 62
IN CONCLUSION: TRUSTING IN OURSELVES....................................................................................... 64
LIST OF RECOMMENDATIONS.......................................................................................................... 66

Writing: Florent Gagn

Proofreading: Diane-Michle Potvin
Graphic design: Jean-Simon Gagn

Introduction
Mandate
In a statement issued on May 15, 2015, Minister of Agriculture, Fisheries and Food Pierre Paradis
expressed concern about the future of Qubecs maple industry.

I notice, he said, that our position as a global leader in the maple industry is in decline. As
Minister of Agriculture, I cannot let the situation continue. I want to encourage Qubec
entrepreneurship, and it is my duty to find solutions. In this context, he announced his decision to
entrust the undersigned with the mandate to conduct a comprehensive study of the situation and
make recommendations.

Specifically, this study aims to identify the causes that have led to a loss of relative market share
and the obstacles to the development of Qubecs maple industry, and to determine possible
positions to adopt to ensure that Qubec remains the world leader in this industry.

Study methodology and process

The Ministre de lAgriculture, des Pcheries et de lAlimentation provided the author with extensive
reference materials in the course of this reports preparation. These documents contained
descriptions of the legislative and regulatory framework for Qubecs maple industry, statistics on
the various parameters of maple syrup production and marketing, and elements of interaction
between various industry partners in relation to problems or difficult situations that may have arisen.
They also included reports or more general reference materials on the agricultural sector.

The Federation of Quebec Maple Syrup Producers showed a similar openness and said that it
welcomed the conduct of the study. Throughout the process, it showed excellent collaboration by
making available a considerable amount of reference material that provided a comprehensive
insight into the policies, programs and methods of the Federation. In addition, on October 6, 2015,
the Federation submitted to the undersigned a memorandum titled ENTRETENIR ET
4

DVELOPPER LE LEADERSHIP ACRICOLE QUBCOIS in which it expressed its desire to

[Translation] further embed Qubecs maple syrup industry in the global food market of the 21st
century. It made commitments and recommendations to that end. Other industry partners also
provided valuable information for the study and made suggestions for the future.

Discussion and consultation meetings were held with representatives of the Ministre de
lAgriculture, des Pcheries et de lAlimentation (MAPAQ), the Ministre des Forts, de la Faune et
des Parcs, the Federation of Quebec Maple Syrup Producers (FPAQ), the Conseil de lindustrie de
lrable (CIE), the Association des rablires-Transformateurs des Produits de lrable (AETPE),
the Conseil des appellations rserves et des termes valorisants (CARTV), the Union paysanne,
ACER Centre, Farm Credit Canada as well as the Forest Lavoie Conseil consulting firm.

In addition to that consultation, around 80 people were met individually or in small groups so they
could add their contribution to the project. Some of these people were specialists, such as
Jean Pronovost, who chaired the Commission sur lavenir de lagriculture et de lagroalimentaire
qubcois and whose report was made public in 2008, and Normand Bolduc, who prepared a
report in 2004 about the maple industry at the request of the Table filire acricole. Other
stakeholders working in maple product processing and marketing or in equipment sales were also
consulted.

Finally, meetings were held, sometimes at the other partys request, with individual producers, who
mostly had major recriminations against the current marketing system and its management by the
Federation, or supported it but wanted improvements. Many emails and phone calls were also
received from people wishing to discreetly share their views.

The author of this report would like to thank all those individuals and organizations for their valuable
collaboration. Though the views expressed were very diverse, and even sometimes completely at
odds, they were all highly relevant to the theme of this study and reflected the will of everyone to
contribute to the continued development of a strong and competitive maple industry in Qubec.

Florent Gagn
December 11, 2015

Summary

Every year, Qubec proudly produces over 100 million pounds of maple syrup. It is the worlds
largest producer of this commodity in an overall market of around 160 million pounds. This market
is on the rise, and the growth prospects for the coming years are most interesting.

Although the good performance of Qubecs industry has enabled a

context of stable and relatively high prices for our producers, it also
stimulated the growth of production outside of Qubecin New
Brunswick and Ontario, and especially in US states located directly

Despite Qubec's
comfortable lead, the
potential of US producers
needs to be taken into
serious consideration.

south of the province and the Great Lakes. For the moment, Qubec
has a comfortable lead, but the tremendous potential of US producers deserves to be taken into
serious consideration when the leaders of Qubecs maple industry make decisions to ensure its
medium- and long-term prosperity.

These decisions need to take into account an important fact: Qubecs producers, as well as the
other stakeholders in the industry, operate under a very different model than producers in other
jurisdictions. While the latter are in a free market context, without restrictions other than those
dictated by supply and demand, Qubec producers have chosen, for better and for worse, to adopt a
Plan conjoint and other regulatory mechanisms under the Act respecting the marketing of
agricultural, food and fish products.

This business model has enabled Qubecs maple industry to grow and
The industry is
healthier today
but needs to
continue evolving.

consolidate its position on solid foundations, including by reducing the risk for
producers and encouraging investments. Productivity and product quality
underwent significant growth thanks to the efforts of dynamic Qubec
equipment manufacturers, who developed cutting-edge tools and devices. As

for marketing, large buyers also benefitted, notably through better supply chain security, which is a
sine qua non for developing their markets. In short, the industry is healthier today, but it is essential
that it continue evolving.
7

So, do production quotas in a developing export market and the centralized marketing of maple
syrup by the Federation of Quebec Maple Syrup Producers still correspond, without qualification, to
the needs of todays context, where a growing part of production is in the hands of external
producers over which we have no control? Can maple syrup pricing on the basis of the balance of
power between the Federation and the Conseil de lindustrie de lrable get away with distancing
itself from the usual rules of a market economy? Is the Federations near-total control over the
various marketing channels necessary to maintain our gains? Is the system by which producers
behaviour is monitored and sanctioned by the Federation excessive? Or does it, by its very nature,
generate deviance? Can we achieve improvements in various components of the existing system
that would be beneficial to all without calling into question the entire model?

If no one wants things to regress to the way they used to be, it is clear
that the business model needs to be repositionedwe have to make it
more elastic, less all-encompassing, and give it the flexibility to cope

The business
model should be
repositioned.

with the demands of a globalized industry. It is also essential that the model let Qubec producers of
all categories feel at ease and work within it with professionalism, talent and commitment, in
harmony rather than under a system of inspections and investigations that carry a heavy financial
and human cost.

The Federation of Quebec Maple Syrup Producers is not closed to change. In a memorandum
dated October 6, 2015, titled ENTRETENIR ET DVELOPPER LE LEADERSHIP ACRICOLE
QUBCOIS, it expressed commitments and recommendations that demonstrate that it is aware
of the need for adjustments. The courses of action that it presents are valid and deserve to be
supported. However, they do not call into question the most basic elements of the model, which still
appears highly necessary.
Changes should particularly focus on the following elements:
Conce rte d e fforts s hould be m a de to de ve lop markets.
P roduct qua lity s hould be cons ide re d jus t a s im porta nt a s incre a s ing volum e .
The Federation should ease the administrative burden on producers.
The Plan conjoint should exclusively concern bulk production.
P roduction quota s s hould be a bandoned.

 A de ve lopm e nt pla n s hould be put forwa rd.

P rice s s hould be tte r re fle ct m a rke t conditions .
The conce pt of m a rke ting e xclus ivity s hould be re vis e d to a llow for a gre e d e xce ptions .
S urplus production m a na ge m e nt s hould be a pproa che d m ore dynamically and in a way that
respects buyers needs.
Concre te s te ps s hould be ta ke n to re s tore ha rm ony with a ll produce rs.
The Rgie des marchs agricoles et alimentaires du Qubec should contribute to the desired
changes by amending certain practices.
Cons ulta tion a nd coope ra tion be twe e n s ta ke holde rs s hould be m ore e ncoura ge d.
The la w s hould be a m e nde d to give the responsible Minister power of initiative and oversight.
Qubec has all the elements it needs to ensure the growth and development of its maple industry. If
it is willing to do so, it can create the changes needed to leave today and yesterday behind and
move toward a most promising tomorrow.

Chapter 1
A unique business model
1.1 Qubecs maple industry: an overview
Qubecs maple industry is periodically the subject of monographs published by the Ministre de
lAgriculture, des Pcheries et de lAlimentation. The latest monograph, which dates back to 2011,
provides fairly comprehensive quantitative data on the demand, supply, economic benefits,
marketing channels and competitiveness of the industry.

The Federation of Quebec Maple Syrup Producers also publishes a series of documents that
provide a rather detailed description of the characteristics of maple syrup production in Qubec and
of the industrys structure. Most of these documents, like those of the MAPAQ, are available online.

Repeating all this data in this report would be tedious, especially since it is public and easily
accessible. However, for brevity and to facilitate the understanding of readers less familiar with the
field, let us take a brief look at the broad strokes of this industry.

For years, over 80% of worldwide maple products and maple syrup production originated in
Qubec. According to the latest data, Qubec now accounts for 70% of global production.
However, over a 10-year period, this production increased from around 108 million pounds to over
160 million pounds in 2014.
The relative decline of Qubecs share, while worrying, conceals an
actual increase of approximately 30% of its production, which grew from
85 million pounds to 114 million pounds over the same period. It was

For years, Qubec

accounted for over 80%
of global production.

mainly US production which grew faster than Qubecs (more on this

later), while production in Ontario and New Brunswick experienced
more moderate growth.
10

Global demand has been growing steadily for 10 years, especially in Japan and Europe (particularly
Germany). The largest consumer, however, remains the United States by far, with a volume of
around 72 million poundsnearly half of global consumption, which is currently estimated at
156 million pounds.

From an economic point of view, the maple industry remains sizeable. Qubec has over
13,500 maple syrup producers working some 7,200 sugar bushes. The number of sugar bushes
has declined since 2000, but has been increasing slightly in recent years. Additionally, there is a
marked trend, in all producing regions, towards larger businesses.

Qubec production in 2014 represented a farm gate value of $318 million. It was also observed that
revenue growth in the maple industry outpaced that of the entire agricultural sector in recent years,
thanks to a combination of price maintenance and increased sales volume. The financial situation
of maple producers has improved and is now considered very healthy overall. The value of
businesses keeps growing, and the number of direct and indirect jobs is estimated at 5,000,
including around 700 jobs in the processing sector.

1.2 A highly regulated sector

In addition to remaining the worlds main producer even though its
Qubec stands out for
the structuring of its
maple industry.

relative share is slipping, Qubec differs from other jurisdictions in the

way it structures its maple industry. While maple syrup producers in
the United States and other provinces produce and sell their syrup

freely according to market rules alone, Qubec producers are required to work within the specific
framework whose foundations lay in the provisions of the Act respecting the marketing of
agricultural, food and fish products (R.S.Q., c. M-35.1).
This law (ARMAFFP), which was adopted in 1956, was a victory for Qubec farmers at the time. It
was the culmination of a long struggle to restore a balance between agricultural producers and the
buyers of their products. The law was substantially overhauled in 1990 and has since been the
subject of various amendments, although the principles and implementation mechanisms have
remained basically the same.

11

Essentially, the law establishes a set of rules that allow producers to take collective and organized
control over the production and marketing of their products. It offers producers the possibility of
implementing a joint plan that gives them the power to collectively negotiate the conditions under
which their product will be marketed and those in which it will be produced.

Additionally, the law gives the board responsible for administrating the joint plan the power to
formulate and adopt by-laws for its implementation and operation. The law also specifies the
supervisory and regulatory powers of the Rgie des marchs agricoles et alimentaires du Qubec
(RMAAQ), whose role is to promote efficient and orderly marketing, foster the development of
harmonious relations between parties and arbitrate disputes.

The ultimate goal of these combined legal provisions is to establish an equitable economic
relationship between producers and buyers and ensure a fair price is reached.

1.3 The organization of the maple industry

Over the last 25 years, maple syrup producers gradually availed themselves of the provisions of the
ARMAFFP. The first provincial joint plan was actually adopted in 1990; it applied to maple water
and maple syrup produced in Qubec and sold in barrels or in bulk. Originally, the Plan conjoint did
not cover syrup produced at a producers sugar bush and sold directly to consumers, and syrup in
small containers sold to a third party. It was amended in 2001 to regulate the sale of syrup to a third
party. However, in accordance with the ARMAFFP, direct sales to consumers remain excluded.

Around the same time, the first marketing efforts began with the establishment of the
Regroupement pour la commercialisation des produits de lrable du Qubec, consisting of
representatives of buyers and producers. The Regroupement supported inventories, the first step
towards the creation of a reserve. The first agreement on the marketing of syrup sold in barrels or in
bulk was signed in 1998 with buyers; this agreement laid out the conditions to be recognized as an
authorized buyer, set the minimum price for each grade of syrup and defined payment terms for
buyers.

12

Furthermore, in 2000, the Federation created a syrup bank, called the strategic maple syrup
reserve. This tool is used, among other things, to mitigate production variations due to weather
conditions. For buyers, it guarantees a consistent supply. The initial objective was to hold in reserve
a quantity equivalent to half of the annual demand.

The Regroupement pour la commercialisation des produits de lrable du Qubec experienced

difficulties that led it to be dissolved in 2002 and replaced by the current sales agency. The
Rglement sur lagence de vente des producteurs acricoles, approved by the Rgie des marchs,
assigned the marketing of bulk maple syrup to the Federation, which acts as an exclusive sales
agency. The regulation excludes the sale of syrup containers under 5 L. It also provides that
producers be paid only for the syrup sold, according to payment schedules and terms it establishes,
and that fees for marketing and storage can be charged to all producers.

For a quarter of a century,

Qubec has strongly
stood out from other
maple syrup-producing
jurisdictions.

In 2003, an additional step was taken with the adoption of the

Rglement sur le contingentement de la production et de la mise en
march du produit vis par le Plan conjoint des producteurs
acricoles du Qubec, which introduced the concept of supply
management. From that moment, every producer under the joint plan

had to obtain a production quota from the Federation based on their production history. For 2004,
the quota was set to 75% of historical production. Thereafter, adjustments were made to take into
account the evolution of demand and specific situations such as the start-up of new maple
businesses.

With the Plan conjoint, the marketing agreement, the sales agency, the strategic reserve and
production quotas, Qubec strongly differentiated itself from other maple syrup-producing
jurisdictions in the last quarter century. For better or for worse, Qubec producers are working in a
legal and regulatory environment that has no equivalent anywhere else.

1.4 Time to take stock

13

Maple syrup has traditionally been associated with Qubecs

food and culinary culture and, more generally, has served as
an iconic emblem of the province. The maple industry,

The greatest danger the

industry could face is falling
into complacency.

through its size and its place in Qubec and in the world, has become a flagship of Qubec
agriculture. However, the greatest danger it could face is falling into complacency and refusing to
see that real threats are looming on the horizon and have begun taking shape, including the
observed acceleration of US production. Chapter 2 will give us the opportunity to analyze this issue.
Furthermore, relationships between various stakeholders in the maple industry have been under
constant stress for several years, and some fundamental differences of opinion have surfaced.
Many are those who demand targeted adjustments or even radical changes to the imposing legal
and regulatory apparatus that characterizes our maple syrup production and marketing. Qubecs
experience, expertise and development potential must serve as cornerstones to define and
implement adjustments that have become essential.

14

Chapter 2
A globalizing industry in an evolving market
2.1 A thriving industry
First, we should mention that Qubecs maple industry is not in a weak or declining state, far from
it. Like any sector of the economy, our maple industry has its share of difficulties and could
probably use some improvements, as we will see later, but the first thing that must be noted and
even emphasized is the strength and vitality of this area of the agricultural world.

Over the last 20 years, the maple industry has experienced major progress which can be easily
summed up with a few figures:
In 1985, Qubec sugar bushes had 14 million taps; in 2000, there were 33 million, and there
are about 43 million today. The total potential is estimated at 100 million.

Cumulative Number of Taps in Qubec, Out of an Estimated Potential

of 100 Million
100

Millions of taps

80
60

43
40
20
0

33
14

1985

2000

2015

Year

15

 P roduction quota le ve ls gre w from 65 million pounds, when quotas were implemented in
2004, to 111 million pounds in 2014.
G loba l production ha s grown ra pidly ove r the la s t 10 ye a rs , increasing from 108 million pounds in
2004 to around 160 million pounds in 2014.
During the s a m e pe riod, Q u be c incre a s e d its production from 86 million pounds to
113 million pounds, but its relative share of global production slipped from 80% to 70%.

Qubec and Global Production

180

160.6

160

145.9

Tons of maple syrup

140
120
100

36.5

108.5

30%

25%
46.9

Production
outside Qubec

20%

22.1
Production in
Qubec

80
60
40

109.4

113.7

2009

2014

86.4

20
0

2004

Year

Source: Federation of Quebec Maple Syrup Producers, Dossier conomique et Statistiques agricoles, 2014.

Ca na dia n e xports incre a s e d from 72 million pounds in 2010 to 85 million pounds in 2014an
18% increase.
O n a ve ra ge , in the la s t five ye a rs , Q u be c e xporte d 70% of its a nnua l production.

16

 The price pa id to produce rs for m a ple s yrup increased from $1.54/lb in 2001 to $2.80/lb in
2014; the price has also greatly stabilized since 2009, as opposed to the erratic variation
observed in previous years.

Weighted Price. All Grades Included. in Qubec

20002014. Excluding Flavour Defects
3

2.78 2.82
2.72 2.74

Weighted price ($/lb)

2.8
2.6
2.4
2.2

2.02 2.03 2.02

2.90 2.87

2.22 2.22
2.14 2.18 2.15

2
1.8
1.6

1.54

1.4
1.2
1
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Year
Source: Federation of Quebec Maple Syrup Producers, Dossier conomique et Statistiques agricoles,
2014.

The num be r of maple businesses grew only slightly, but we see more and more larger-sized
businesses as well as the development and use of advanced technologies.
O ve r the la s t five ye a rs , the Federations sales increased by about 10% per year, and
payments to producers increased by 8.5% per year.
The fina ncia l s itua tion of m a ple produce rs is ge ne ra lly ve ry good; a ccording to S ta tis tics
Canada, the net income after amortization of maple businesses (17%) is significantly higher
than that of all agricultural operations (7.3%).
In the past, the Qubec maple industry has gone through difficult years, and producers alternately
suffered from the vagaries of nature, a lack of organization or the omnipotence of buyers who
dictated the rules.

17

The industry is generally much healthier now, largely thanks to the

collective efforts of producers who took action using the means offered

The industry is
generally much
healthier now.

by the ARMAFFP. Buyers also played an active role in this effort to

clean up and consolidate the industry, and the relationship between
producers and buyers has greatly improved in recent years.

While tensions still persist between the industrys various stakeholders, the great battles of the
past are essentially behind us, and progress has been significant. Although its actions have
been (sometimes wrongly, sometimes rightly) heavily criticized, the Federation of Quebec Maple
Syrup Producers must be recognized for its major contribution to this organizing effort. Today,
the Federation is able to guarantee volumes and ensure a constant supply thanks to the
strategic maple syrup reserve, which is probably its most valuable achievement.

Despite the criticism some parties have levelled at it, the Federation transformed Qubec maple
syrup into a product thats available to buyers and profitable for producers. Even among those
who strongly criticize the organization, its policies and its practices, most agree that the situation
was worse in the past and that destroying everything that has been built would be indefensible.
The most widespread idea is that the current system has produced great things, but must now
continue to evolve and adjust to the changes necessitated by a world that itself is changing
rapidly.

2.2 A more competitive global market

Qubec is still, by far, the world leader in maple syrup production. However, it would be wrong
to believe that this is set in stone and that we can ignore whats going on elsewhere with
impunity. This is especially relevant considering that over 70% of our production is destined for
the export market. Developments in the US maple industry deserve special attention, and so do
those in New Brunswick and Ontario, though to a lesser degree.

Recognizing this, the Federation and the Conseil de lindustrie de lrable (CIE) joined forces in
2014 to commission a study: the tude sur le contexte de dveloppement de lacriculture en

18

Amrique du Nord. Some of the elements highlighted by this study, which was conducted by the
Forest Lavoie Conseil consulting firm, were the scale of US production growth in recent years
and the tremendous potential of US producers. The study, which is available online, also
showed that:
The num be r of ta ps in US states increased by 45% between 2007 and 2015, going from
8.2 million to 11.9 million.
The yie ld pe r ta p is now s ignifica ntly highe r tha n tha t of Q u be c de s pite the two be ing s im ila r
10 years ago.
The two pre vious factors enabled US production to grow by 45% between 2007 and 2012.
The high a nd s ta ble price of m a ple s yrup a nd the cons is te ncy of m a rke t conditions
established in Qubec are the main factors driving the development of US maple syrup
production.
Larger maple businesses are more numerous and are responsible for a greater share of
production. Technology also plays an important role in productivity.
US produce rs re ce ive a bout $0.50 more per pound than Qubec producers, in part because
they do not contribute to the costs of Qubecs marketing system while still reaping its
benefits. This additional income is then used to invest in advanced technology and develop
new taps in a system free of production quotas.
According to s om e s tudie s , US te rritory holds theoretical potential for 2 billion taps. It is
estimated that the most easily accessible and usable maple trees, in the short term, number
around 200 millionwhich is still impressive, especially considering that only 6% of this
volume is currently being used. For comparison purposes, Qubec is said to have tapping
potential for 100 million maple trees, 43 million of which are already in use. As for Ontario, it
has a tapping potential of about 108 million, of which only a small percentage is in use.
The s tre ngth of the m a ple indus try growth in the US has so far caused Qubec to lose around
1.2% of its market share on average over the last 10 years in an otherwise growing global
market. Despite its market share decreasing from 78% to 69%, Qubec still sells 12 million
more pounds annually than it did 10 years ago.
G loba l cons um ption a ctua lly incre a s e d by 35% in the la s t five ye a rs , going from 114 million
pounds to 156 million pounds, which allowed Qubec to increase its sales despite growing
US competition.

19

 Howe ve r, Q u be c
s s a le s on the US m a rke t ha ve not incre a s e d s ince 2007 de s pite this
market still being Qubecs main export market and the main consumer.
The Fa rm Bill a dopte d by the US gove rnm e nt in Fe brua ry 2014 includes a new program
worth about $20 million per year to support the maple industry.
Ba s e d on the e conom e tric m ode ls us e d, it is e s tim a te d tha t US production, which wa s
36 million pounds in 2013, could increase to 44 million pounds in 2018.
For their part, Americans are monitoring the situation closely. An article
published in the November 7, 2015 edition of The Economist described

The OPEC of maple

syrup.

the Federation of Quebec Maple Syrup Producers as the OPEC of maple

syrup and questioned its strategy. Just like OPEC, it reads, the Federation controls the level of
production to keep prices high and stable. After discussing the potential strength of the US by
reminding readers that the state of New York alone has more maple trees than all of Qubec, the
author writes that US producers definitely have the ability to surpass Canadian production.
Continuing his parallel with OPEC, he then explains that the Federations strategy of limiting
production and maintaining a high price may have the dual effect of stimulating US production and
encouraging consumers to substitute maple syrup for cheaper products. In such a context, the
Federation could find itself forced to choose between tightening quotas or letting the price of maple
syrup fall.

One can certainly disagree with or qualify the authors views, but it is clear that a fundamental
question is being posed, and that it would be unwise, to say the least, not to take it as seriously as it
deserves. After all, market forces will inevitably be shaping the evolution of an important sector of
Qubecs economy.

2.3 Threat or opportunity?

Though Qubecs maple industry remains strong, it is obvious that the global context has changed
irrevocably and that it would be rashirresponsible, evento close our eyes to developments in
other maple syrup-producing jurisdictions in North America and mainly in neighbouring US states.
During consultations with associations and people working in Qubecs maple industry, the
development of US production was one of the most commonly discussed topics.
20

In general, stakeholders took the issue very seriously; most of them felt that published data grossly
underestimated the growing and accelerating US phenomenon. This was particularly true for
equipment suppliers, who had the advantage of working directly in the field with US producers. The
Forest Lavoie study also reported marked underestimations when comparing data from various US
sources and the situation actually observed in the field.

In fact, some believed that the US could experience annual growth rates of 10%, or even more, in
the coming years. At this rate, a production of 37 million pounds in 2015 would reach almost
50 million pounds as soon as 2018 and 60 million pounds in 2020. While remaining hypothetical,
these projections should be taken seriously.

Some viewed the development of US production as a direct threat to

Qubecs interests, foreseeing that Americans will be self-sufficient in
less than 10 years and that Qubec will thus be deprived of its main
foreign market, which currently absorbs 66% of our maple syrup

Opportunities will
come back to those
who will be able to
develop and seize
them.

exports.

Without disputing these figures, others were more optimistic and viewed the development of US
production as a sign that the global market for maple products is strong and will remain so in the
coming years. For them, opportunities will come back to those who will be able to develop and
seize them.

Still, all the stakeholders consulted insisted that the situation needed to be brought under control
and that Qubec had to act to remain a major and competitive player in the maple syrup industry.
Though few thought that Qubec could take back the market share that would return things to the
way they were 10 years ago, many believed that Qubec can and should continue developing its
maple industry, which still has the potential of one and a half times its current production.

In other words, Qubecs 10% drop in global production share in recent years is not perceived as a
catastrophe in itself, nor as a goal to recapture, but rather as a serious signal that cannot be
21

ignored. The worst approach would be to let events take their course and leave everything up to the
market and the seasons. If Qubec wants to ensure the sustainability of an industry that has been
developing well for 20 years, strong measures must be taken without delay.

22

2.4 Promotion and market development

The first of these measures is most certainly to ensure progressive market development. If the
sustainability of Qubecs maple industry is to be reconciled with an accelerated development of
US production, it is essential that global demand for maple products grow. This is a course of action
that is as sound as it is necessary, and it demonstrates the intent of all parties not to remain
passive about the situation. Initiatives in this direction are already underway.
For instance, the Federations organizational structure includes a
Promotion, Innovation and Market Development Service whose
mandate is to increase the reputation, visibility, value and sales of

Only growth in
demand can ensure
the future.

Qubec and Canadian maple products nationally and internationally. In

collaboration with all its partners, the Federation was also closely involved in the development and
implementation of a long-term international strategy known as New Generation of Maple 2020,
which is periodically updated and serves as the basis for developing five-year action plans.
More recently, the tude sur le contexte de dveloppement de lacriculture en Amrique du Nord,
commissioned from Forest Lavoie Conseil by the Federation and the Conseil de lindustrie de
lrable (CIE), included an appendix with an action plan submitted to the attention of partners. After
warning of the dangers of maintaining the status quo, the authors pointed out: [Translation] a
strategy wherein markets would be developed in a forceful and concerted manner seems most
appropriate to limit the impact of the growth in US production on Qubecs industry. The action
plan identified four targets and proposed specific courses of actions to achieve each of them.

Authorized buyers, represented by the CIE, have also made significant efforts in recent years to
grow sales, especially exports, which are on the rise right now. In 2014, Canada (mainly Qubec)
was exporting $310 million in maple products to 88 countries, including 63% to the United States,
9.6% to Japan, 8.4% to Germany and 4% to the United Kingdom.

While the Federation and buyers had somewhat tense relations in the past, they now seem to have
moved on to collaborating and trying to find possible solutions to improve the maple industrys
23

competitiveness together. They are aware of the challenges, including the issues brought up by the
accelerated development of US production, and so they jointly took the initiative to commission the
study conducted by Forest Lavoie Conseil. They were invited to work together to implement the
action plan appended to the report.

If it is to remain competitive and ensure its development, the Qubec maple industry has no choice
but to continue and ramp up its efforts to develop markets and take its rightful place within them.
Though all signs are positive regarding the potential for growth in global consumption of maple
products, it is clear that the benefits of such a development will come to those who will have worked
to bring it about.
Producers and buyers, respectively represented by the Federation and the CIE, have a leading role
that they need to play with discipline and determination. Governments also have their contribution
to make by maintaining their support for the generic promotion of maple products in international
markets.
In this context:

It is recommended that the Federation of Quebec Maple Syrup Producers, the Conseil de
lindustrie de lrable and other partners in the maple industry work together, with
support from the MAPAQ, to ensure the healthy development of the international market
for Qubecs maple syrup.

Furthermore, these market development efforts should not only target higher volumes but also
focus on the development of a Qubec brand image built on the authenticity, quality and
traceability of our products. Interesting initiatives have already been launched, but we are still far
from done on those fronts.

In 2014, the Federation and the CIE joined forces once more to commission a study on the subject.
Both organizations were alarmed by the growing number of signs that maple products could be
subject to tampering and alteration, as this unfortunately happened elsewhere for other industries
such as olive oil and wine. The absence of guarantee on the quality of Qubecs maple syrup may
24

turn out to strongly harm the image of the product, especially on the international market.
The report by the consulting firm Zins Beauchesne and Associates, titled De lrable la table :
tude de faisabilit pour garantir lauthenticit du sirop drable, was not able to arrive at a
consensus approach with industry stakeholders to develop a comprehensive, integrated system to
ensure the authenticity, traceability, quality and safety of Qubecs maple syrup. However,
interesting and promising avenues were identified. The reports main recommendation included
proposals for international monitoring and random quality checks to detect counterfeiting and poor
quality. Additional recommendations were also made to ensure Qubecs product is of better
quality.

Bank on the development

of a "Qubec" brand
image focused on the
authenticity, quality and
traceability of our product.

During consultation meetings with industry stakeholders as part of

this study, the issues of quality, authenticity and traceability of
Qubecs maple products were raised as major factors for the
promotion of Qubec products on the international market. In a
context of greater competition with producers in other jurisdictions,

it would be in Qubecs interest to pitch its identity and connect it ever more closely to the concepts
of quality, safety and authenticity, which are highly prized by todays increasingly demanding and
knowledgeable consumers. The demand for organic syrup is also high, and producers should be
encouraged to transition to this type of production.

In this regard, Qubec already has valuable tools: inspections by ACER Centre, producer
identification and traceability, mandatory certifications for processors and sellers, the Act respecting
reserved designations and added-value claims and its traditional image to promote the
development of distinctive and high-quality products in Qubec.

For its part, the Federation has stated its commitment to maintaining producers investments in
research and development of new products and to developing, in concert with the industry,
marketing initiatives to raise consumers level of knowledge and confidence. In its memorandum
titled ENTRETENIR ET DVELOPPER LE LEADERSHIP ACRICOLE QUBCOIS, dated
October 6, 2015, the Federation outlined several interesting measures to foster market
development and better meet consumer needs. It is desirable for the Federation to move forward
25

with these measures, which directly concern product quality and authenticity.

At the International Maple Symposium organized by the Federation in November 2015, the themes
of quality and authenticity were heavily discussed as an essential condition for success in market
development.

In this context:

It is recommended that Qubecs promotional efforts focus not only on the availability
and security of the provinces maple syrup supply, but also on the distinctiveness of
Qubecs product, concretely supported by a strong process that guarantees quality
and authenticity.

26

Chapter 3
An overly rigid, closed system
3.1 Calling the system into question
Though the maple industry is still thriving overall, strong measures are needed, as we mentioned in
the previous chapter, to ensure the maintenance and development of Qubec production when
faced with the rise of US and, to a lesser extent, Ontario and New Brunswick production. In this
context, developing markets is an essential process that must absolutely be undertaken as a
priority. Yet, even though this measure is imperative, it would be nave to think that it is, by itself,
the solution to every issue faced by Qubecs maple industry.
No one can dispute the fact that the Federation took steps that made the industry healthier, but its
relations with producers have had major shortcomings. These difficulties are not new and continue
to this day, representing a serious obstacle to the healthy development of the industry. They also
did not go unnoticed by local and foreign media.

Relations with producers

have had major
shortcomings.

In an article titled Maple Syrup Rebellion, published in the

April 25, 2015 edition of the Financial Post, journalist Peter
Kuitenbrouwer described in great detail the tense relations between

the Federation and several of its members. Other media outlets, in turn, highlighted the rivalry
between producers and the Federation, which was exacerbated by dramatic seizures of syrup
barrels from producers and the surveillance of sugar bushes by private security guards hired by the
Federation, the costs of which were then billed to the producers concerned.

During consultations conducted as part of this study, this discontent was felt very strongly. While
the Federation considers that the situation is confined to a few producers it describes as
recalcitrant and says that the vast majority of producers are satisfied, it quickly became clear that
the unrest goes far beyond what the Federation is willing to admit. Either there is a disturbing
information gap between the Federations establishment and a growing number of producers, or,
more likely, the Federation has deliberately made the strategic choice of minimizing the problem.
27

This unfortunate situation is far from new; it has characterized the last 30 years of Qubecs
production and marketing coordination.
During this study, we met with producers who called into question the entire system built on the Act
respecting the marketing of agricultural, food and fish products. In their view, the existence of a joint
plan, a sales agency, a union representation monopoly, the Federations regulations, supervision
performed by the Rgie des marchs and the other characteristics of the Qubec system is a
breach of their rights and freedoms. They are calling for the full right to produce and market the
fruits of their labour as they want. The Federation, its regulations and its application of those
regulations (which they deem authoritarian) are seen as components of a legal cartel backed by the
State.

One stakeholder summed up his thoughts as follows: [Translation] Currently, without a quota,
producers can only sell in small containers (while being harassed by the Federation, which
continually requires evidence and launches investigations with the Rgie) or sell or export their
syrup through illicit channels. The option of delivering it to the Federation results in excessive
payment delays or, for production without quotas, gives rise to severe penalties.

Proponents of this view are quick to compare the situation of Qubec producers to that of
producers in other provinces and in US states, who work in total
freedom. In a market characterized by the predominance of exports and
by growing competition from other jurisdictions, they view Qubecs
current system as a heavy, inflexible handicap to the provinces

It is often more
realistic to work to
improve existing
things.

performance as well as a source of injustice for affected producers. They

feel that the current system has lost its place, its purpose and its legitimacy.

This perspective reflects an ideology which we feel is entirely defensible, with logical and
well-founded arguments. In the long term, it would certainly be desirable that Qubecs economic
agents in the agricultural industry be able to work in conditions offering the same freedoms and
opportunities as those their competitors enjoy.

28

However, it is often more realistic and certainly easier to work to improve existing things instead of
dreaming of a radical change which, in practice, is unlikely to become a reality. The Qubec model
has had definite successes and produced tangible benefits for the maple industry and for
producers, but it undeniably needs improvements and even major changes if optimal conditions for
the evolution and development of a strong export industry in an increasingly globalized and
competitive world are to be established. It seems more productive to work on the desired changes
instead of tearing everything down and starting from scratch.

3.2 More focused criticisms

In fact, many people have serious complaints against the Federation and Qubecs marketing
system without necessarily calling their existence and all their workings into question. Still, they
definitely make striking, direct and often severe statements on the current situation.

Generally, they deplore the fact that the Federation is too powerful and that, according to them, it
has built over the years a very tight system that gives it the right of life and death over producers
and other industry stakeholders. The ARMAFFP, by giving the Federation the ability to enact
regulations that legally compel industry players, is in their eyes a disproportionately strong tool
which the Federation has abused.

They consider that the State has abdicated its responsibility to legislate in
this field and fell back too easily on an external bureaucracy with a
distinctly "all-or-nothing approach. Obviously, the detractors continue, it

A system that
encourages
deviance.

aimed for all, and got its wish thanks to a triple threat of a monopoly,
union democracy they call questionable and supervision by the Rgie des marchs agricoles often
judged complacent. More specifically, they attack the Federations regulations, especially the
Rglement sur le contingentement de la production et de la mise en march du produit vis par le
Plan conjoint des producteurs acricoles du Qubec. Their complaints include that the allocation of
quotas to producers by the Federation is done in a restrictive, obscure and even arbitrary way.
Many say that the system is too rigid and that as a result, a lot of producers are put in a situation

29

where they have no choice but to deviate from it to sell their production. Its a system that
encourages deviancewhich the Federation never fails to punish heavily afterwards.
In this regard, they denounce the activism and zeal of the Federation, which does not hesitate to
prosecute its members as well as harass them with repeated administrative and legal procedures,
administer unfair penalties to them, cut their eligibility for other agricultural support programs and
contact financial institutions to have their credit suspended. Some freely go so far as to speak of a
regime built on terror and intimidation, designed to keep producers well behaved and muzzled so
that they do not express their dissatisfaction too openly. These threats can be made following a
simple disagreement on the interpretation of the regulatory text.
One producer who has been waiting for a quota for several years expressed his exasperation in this
way: [Translation] The Federation should help me or leave me alone. Those few words reflected a
sense of deep frustration and abandonment felt by many towards their union, which they viewed
more like a distant and authoritarian bureaucracy that defends a rigid system and its own corporate
interests rather than taking its members side.

Other producers provided extensive documentation illustrating the difficult personal experience
theyve had in recent years when they were in conflict with the Federation. In some cases, they
were led into a financial dead end, and some even had their personal and psychological health
affected.

Among all these testimonies, there are probably exaggerations, frustrations being vented or even
scores being settled; we must be prudent in our assessment. However, the testimonies are too
numerous and diverse, and the documentary evidence too fleshed out, to overlook the conclusion
that the Federations policies and their application have created profound unrest.

3.3 Changes are needed

30

The system needs to be

simplified, relaxed and
oxygenated.

Given that Qubec producers will face increased external

competition in the coming years, it wont be enough for them to
focus solely on growing internal and external markets if the maple
industry is to develop in a healthy and harmonious way. It will be

essential that they, with help from the State, make the appropriate corrections to the Qubec
system to make it more efficient and able to meet the expectations we can legitimately have for it.
Though the system has been successful in some areas, it needs to be simplified, relaxed and
oxygenated.
If we work courageously and judiciously at solving our problems, we can maintain a prosperous
maple industry that will be a source of satisfaction and pride for all those who work in it and a
motivating environment for those who will eventually take up the torch. To this end, the next chapter
lays out courses of action that we encourage all those who care about the good functioning and the
necessary development of Qubecs maple industry to adopt.

31

Chapter 4
Repositioning the business model
4.1 Adapting in continuity
As weve seen, Qubec stands out from other maple syrup-producing jurisdictions due to the
existence of a collective production and marketing system that has no equivalent elsewhere. In other
provinces and US states, maple producers freely produce and sell their products under free-market
rules. While it must be recognized that our collective scheme has allowed the establishment of a fair
price for producers and of a constant and sufficient supply for the market, we must also realize that
this system is very rigid and badly needs to be modernized and adapted.

While preserving the gains it has enabled, the system needs to be simplified, liberalized, lightened
and refreshed in several aspects. For reasons of its own, the Federation has chosen over the years
to take a very comprehensive approach in its designs and implementation, which has led to it having
a tight control over almost everything related to the production and marketing of maple syrup. In fact,
nothing escapes it, except for small containers sold directly to consumers by producersand even in
that case, it tries to insert itself into the process by demanding accountability.

Even though such an autocratic ideology may have seemed

appropriate in the first years of the system, it now appears to be

An autocratic ideology
that is being questioned.

increasingly called into question, not only based on the principles

arising from the rights and freedoms we enjoy as citizens, but also due to its peculiarity when
compared to what is happening elsewhere in developed countries. This last point is especially salient
in a strongly export-oriented industry. For these reasons, we must not hesitate to make the necessary
changes or even to sacrifice some sacred cows.

32

4.2 Direct sales to consumers

Currently, there are three marketing channels for maple syrup in Qubec:
Direct sales to consumers by the producer of containers of less than 5 L (approximately 10% of
production)
Sales to a third party (a grocery store, for example) by the producer or a producer-processor of
containers of less than 5 L (approximately 5% of production)
Bulk sales of containers of 5 L or more, usually in barrels (approximately 85% of production)
The Plan conjoint des producteurs acricoles du Qubec does not apply to the first channel (maple
syrup produced in a producers sugar bush and sold directly to consumers by this producer).
Accordingly, the Rglement sur lagence de vente des producteurs acricoles and the Rglement
sur le contingentement do not apply. This sales channel therefore allows a producer who so wishes
to produce the quantity they want and sell it at the price they set.

In principle, this freedom should exempt the Federation from needing to control or request
information from producers engaged in this type of production. The Federations president actually
recently stated that producers can make unlimited use of this sales channel [Translation] without
any sort of control or scrutiny from the Federation (Info-Sirop newsletter, June 2015).
However, during the consultations, several participants complained that they were being held
accountable by the Federation for this type of sales even though it is not covered by the Plan
conjoint. We have indeed seen that the Federation asks producers to declare annually, when
renewing their registration forms, the number of their direct sales of small containers to consumers.
In addition, many producers in this category said they had been subjected to repeated requests from
the Federation that went as far as demanding lists of all the names of those who purchased their
product, with purchase amounts and quantities. These requests are accompanied by threats to
inform, in case of non-compliance, La Financire agricole du Qubec that there is a dispute, which
would cause producers to lose access to the programs it administers. In other cases, the
Federations requests were explained by a need to control the quality of the product, even though
this product is not covered by the Plan conjoint nor by the Rglement des producteurs acricoles sur
les normes de qualit et le classement.
33

The Federation would greatly contribute to improving relations with

producers of this type if it freed them from all forms of control,
administrative hassles and scrutiny. Given that the product concerned is

Requirements we
would be hardpressed to justify.

not covered by the Plan conjoint, it appears difficult to justify burdening

producers with these restrictions and requirements we would be hard-pressed to justify, except
perhaps an exaggerated desire for supervision and control on the Federations part.
Consequently:

It is recommended that the Federation of Quebec Maple Syrup Producers amend its
practices so that the production and sale of maple syrup not covered by the Plan conjoint
may be conducted freely and without administrative hassles for producers.

4.3 Retail sales with third parties

It is estimated that there are just over 500 maple producers who package their syrup in containers of
less than 5 L or process it into derivative products (maple butter, maple taffy, candy, maple sugar,
etc.) and who market their products through third parties, including wholesalers, grocery stores and
convenience stores. Most often, these are small artisanal producers who are meeting local demand
for a product in the region, or larger companies working in wider markets.

The Plan conjoint has applied to this type of production since January 2001, unlike direct sales of
small containers to consumers. In addition, these producers are also covered by the Rglement sur
le contingentement, but their situation is completely different from that of bulk producers.

Producers in this category develop their own markets and thus contribute to the prosperity of
Qubecs maple industry. Their work targets market demand not for a standardized product, but for a
more differentiated one which is often closely associated with the producer through particular
packaging. This business model is based on integration between production, processing and
marketing instead of focusing solely on volume like bulk producers.

Through vertical integration, this sector becomes more efficient at adapting quickly to consumer
34

demand and providing the expected innovations. The emphasis is firmly on business opportunities in
a market that favours a differentiated product often associated with its producer.

But in reality, these producers are subject to supervision that is hardly compatible with their situation,
since the Plan conjoint is in no way intended to stimulate entrepreneurship,
The Plan conjoint
was essentially
designed for bulk
production.

variety in business models, the production of differentiated products or the

satisfaction of market demand for original products. The Plan conjoint was
obviously designed essentially for bulk production and marketing, and is

unsuitable for this sector.

Also, imposing production quotas to producers who sell their product at retail through third parties
seems completely at odds with the dynamics of those businesses which, through their efforts,
creativity and initiatives, directly contribute to market development. Indeed, it would seem perfectly
normal and defensible for producers who process and market their own product in small containers
to be able to produce the quantities they need, especially when it allows them to bolster the
development and vitality of the maple industry.

Moreover, the level of control exerted by the Federation pursuant to the Plan conjoint for this type of
producer appears excessive and difficult to justify. For example, section 14 of the Rglement sur le
contingentement de la production provides that producers who make third-party retail sales must
submit copies of their sales invoices to the Federation. Nevertheless, the annual producer
registration form not only asks for the total quantity of product sold to third parties, but also includes
an appendix titled Register of third-party retail sales, in which the producer is asked to provide the
name of each customer and specify for each one the point of sale, whether it is a new customer, the
nature of the product sold, the quantities and amount of each sale and the number of sales per year
to this customer.
On its website, the Association des rablires-Transformateurs des Produits de lrable issued a
news release in which it invites its members to be cautious regarding the Federations demands. It
expresses the following reservation: [Translation] Customer lists are trade secretshighly
confidential information that you have the right to protect.
35

In case of non-compliance, the Federation may demand that producers provide even more accurate
and complete information such as production volumes and schedules, detailed accounts of all sales
with supporting documents, invoices for purchases of small containers, electricity or oil bills, the
number of taps in operation, the sugar bushs cadastral designation, any lease or management
permit issued for public land, bank statements and a copy of their financial reports for several years.
In addition, the form letter the Federation uses for this purpose sets out a possible threat to transfer
the case, when applicable, to the Rgie des marchs agricoles et alimentaires du Qubec (RMAAQ)
for an investigation or to ask La Financire agricole du Qubec to suspend the producers eligibility
for its programs and services. The Federation bases its authority on a provision of the Plan conjoint
which states that it may obtain from producers all information deemed useful to the application of the
Plan conjoint and of regulations.
It is difficult to understand what purpose the Federation may derive from all these heavy and detailed
requirements besides establishing its power and wish for absolute control, in addition to imposing a
very substantial administrative burden on targeted producers.

Since the sale of maple products to third parties takes place in a context that is very different from
that of bulk producers, one can seriously question the necessity and relevance of applying to the
former a joint plan clearly designed and controlled by the latter.

In a 2004 report, the president of Qubecs Table filire acricole, Normand Bolduc, had already
recommended that sales of products to third parties be exempted from the Rglement sur le
contingentement to allow producers to continue developing their markets. The Federation
vehemently and authoritatively rejected this recommendationjust like the rest of Mr. Bolducs
report, in factwith a response delivered in a magisterial and belligerent tone.

Nevertheless, this recommendation still appears valid 11 years later. In fact, we believe it does not
go far enough and that there is now a need to remove these constraints for maple producers who
engage in third-party retail sales, in order to simplify and streamline the regulation of maple
production.
36

Consequently:

It is recommended to exclude from the Plan conjoint the production and marketing of
maple syrup produced and sold by a producer to a third party in containers of less than
5 L.
With these changes, the Plan conjoint and the Federations supervision
would now apply exclusively to bulk production. As this production
represents 85% of total production, the benefits associated with the

The Plan conjoint

would now apply
exclusively to bulk
production.

products collective marketing would not be compromised by this

streamlining of the maple industrys operational framework. On the
contrary, there is reason to believe that refocusing the Plan conjoint onto its main purpose would free
the Federation from many self-imposed constraints and allow it to better serve Qubec maple
producers, who are overwhelmingly engaged in the production of bulk maple syrup.

4.4 Production quotas

As a result of the adoption in 2003 of the Rglement sur le contingentement de la production et de la
mise en march du produit vis par le Plan conjoint des producteurs acricoles du Qubec, the
Federation started imposing, during the 2004 season, quotas on the production of maple syrup in
Qubec, except for producers who sell their product in small containers directly to consumers.
Initially set at 65 million pounds, the overall quota has been revised steadily and is today set at
110 million pounds.

According to the Federation, the first purpose of the quota is to pass on the markets message to
producers, since the total quota is established based on overall market demand. The quota is also
used to establish payment priorities for producers when syrup is sold to buyers. Thus, syrup
produced by a producer within their authorized quota is paid at the price set out in the sales
agreement, less contributions, in proportion to the total quantity sold out of all of Qubecs
production.

37

Producers who produce more than their quotas must deliver this product to the Federation, but they
can be paid for it only when all the in-quota syrup has all been sold and paid for. They are allowed to
use their surplus to complete their quota in a subsequent year. As for producers without a quota,
they cannot produce except for direct sales to consumers in small containers, which is excluded from
the Plan conjoint.

It goes without saying that the system is very restrictive for producers. Those who have no or
insufficient quotas are doomed to stagnation or are strongly tempted, by necessity, to produce
outside the rules of the system, which is strongly reprimanded and a source of severe tension
between the Federation and the producers affected by this situation.

Criticism about the way the Federation manages quotas comes hard
and fast. Besides the text of the Rglement sur le contingentement,
which makes for a very dry read, no clear policy seems to exist on the

This system is very

restrictive for producers.

procedure for granting the right to produce or the order of priority that must be followed. If such a
policy exists, producers do not seem to be aware of it. In fact, many producers claimed that the
Federations control over production is applied arbitrarily and gives rise to acts of favouritism or to
questionable arrangements to settle derogations or grant rewards to informers in such situations.
It was not possible, within the limited framework of this study, to fully verify the merits of such claims,
which remain troubling if only for the sheer number and diversity of the people who made them. One
thing is certain: the issue of quotas is, by far, the main point of friction between producers and the
Federation. It has been the cause of numerous investigations, seizures, prosecutions and
proceedings before the RMAAQ.
Are quotas effective in limiting production? Is it even necessary to limit production? Those are
important questions.

By the Federations own admission, quotas do not limit the total quantity of syrup to be produced.
The quota certificates delivered to producers show the quantity in units of mass i.e., in pounds. A
producer can exceed this quantity and deliver it to the Federation, the only restriction being that the
38

syrup will be paid for only when the entire quota volume has been sold on the market.

It goes without saying that depending on the seasons and the operating conditions, the average yield
per tap can vary and create a situation where producers end up exceeding their authorized quotas.
What happens to the surplus? Producers can use it to complete their quotas in a subsequent year or
deliver it to the Federation, which will pay them according to the terms mentioned above. Over-quota
syrup is never destroyed or discarded. It is then fully marketed, in compliance with current
regulations. Another possibility is for this surplus syrup to be sold on the black market.

Furthermore, producers without a quota simply cannot produce syrup besides the amount they can
sell directly to consumers in small containers. They cannot store their syrup in barrels to sell them
freely to buyers, since the regulations strictly prohibit it.

Currently, there is no data on the quantities that may be produced in contravention of the
regulations, but it is generally accepted that there is a major clandestine syrup productionnot only
from producers without a quota, but also from producers who have a quota and exceed it. This
production can be sold to buyers who pay cash, which is of course interesting for the sellers.
Although it deviates from the regulations, syrup produced without a quota can end up on the market,
just like syrup produced over a quota.

Quotas have in no way

prevented legally and
illegally produced surplus
syrup from reaching the
market.

Though the Rglement sur le contingentement may have curbed

the number of taps, one cannot deny that it has not prevented
legally and illegally produced surplus syrup from reaching the
market. In a study conducted in 2005 (only a short time after the

introduction of quotas), economists Pierre Fortin and Marc Van Audenrode had already made the
following observation: [Translation] Whether production quotas are effective for eliminating syrup
surpluses is uncertain. First, they introduce a significant financial incentive to cheat, which can
undermine both their social and economic effectiveness. Secondly, the markets for maple products
are subject to interprovincial and international free trade.

39

This last point is very important. The merits of imposing production

quotas are even more questionable in a context where our maple
industry is largely export-oriented and now operates in an
environment where other players have a larger role and are free to

Qubec is hindering its

development in an
international race where the
other players are speeding
up

produce as they wish. How do we explain and justify Qubec hindering its development in an
international race where the other players are speeding up and are not limited in any way?

In correspondence on the subject, one producer said: [Translation] I have nothing against quotas,
but since this is a global market, Id like the quotas to be global. Otherwise, let me have the same
freedom too. A provincial quota for a provincial market is fine, but we are far from that. Why do we
have a provincial quota when there are international players? Wheres the justice in that?

Back when Qubec was the source of over 80% of worldwide production, the relevance of
maintaining a quota system was a less pressing question. In a global market where other players
take up more room, the question becomes fundamental. While production quotas and centralized
management of bulk sales can function quite well in a closed market or in a near-monopoly market
where all players are subject to the same rules, this approach becomes
This approach
becomes downright
problematic in a
more open market.

downright problematic in an open market. This observation is all the more

important for highlighting unfair treatment: producers outside Qubec get to
reap the benefits of Qubecs system without having to pay for it in the form
of production restrictions or contributions to marketing costs.

It can be argued that the system has helped to build a price; we must recognize that fact. But at the
same time, isnt it ironic that despite our producers working under a collective marketing system
whose ultimate goal is to provide them with optimal income, they have lower revenues per pound for
their product than producers in New Brunswick, Ontario and the United States? This paradox
remains disappointing to say the least, even though we can attempt to rationalize it.
In such a context, would it not be better to let the price undergo a slight correction in favour of a
greater volume, with just as interesting and likely higher income for producers? If, as the Federation
alleges, the aim of quotas is to pass on the markets message to producers, what better way to
communicate that message than having a fair price and letting production adjust?
40

It would be mistaken to expect an anarchic development of production that would crush the price.
Producers must make significant investments to develop their production; this cannot be done
quickly. We must also consider the ability of equipment suppliers to keep up with installation
demand. In addition, Qubec has already put nearly 50% of its tapping potential to work, and
operating new sugar bushes is likely to be more demanding in the future. US producers, with their
formidable potential for development, and the province of Ontario, with its largely untapped capacity,
represent a much more concrete threat of loss of control than the development that can still take
place in Qubec. It may be unfortunate, but that is the reality we face. Can we avoid it?

The overall quota for Qubec has not been increased since 2009. But since that time, global
demand has risen by about 15 million pounds, roughly the yield of 5 million taps. The Federation
says it is aware of the need to increase production and is awaiting a decision from the RMAAQ
regarding the addition of 500,000 taps in the 2016 season. For subsequent years, the Federation
would like to obtain the authorization to increase the quota itself to respond to market needs with
flexibly. Ultimately, it would like to add an additional 2 million taps in 2017.

When you consider the twin facts that all lights are green for market
development and that the Federation itself says it is willing to relax
restrictions on production levels, it may be worth wondering what the

Quotas are not the real

stabilizing element for
the maple industry.

purpose of imposing quotas on Qubecs maple industry is, considering

that maple producers elsewhere are free to produce as they wish.
In fact, the real stabilizing element for Qubecs maple industry is the buyer-seller collaboration
brought about by the establishment of a marketing agreement and the maintenance of a strategic
reserve to absorb surpluses and ensure supply consistencyquotas have nothing to do with it.

Rather than limit production, wouldnt it be more judicious to devote our resources to designing a real
plan to develop Qubecs maple potentiala plan that identifies objectives, timelines and means of
action, and that producers could use as a solid reference tool for their business decisions? The
industry would be better served by replacing the control approach that has prevailed thus far with
41

policies focused not only on volume, but also on quality and productivity, while being in line with
growth potential of global demand.
Producers must be given back the right to produce and measure up to external competition in
optimal success conditions. The threat of competition should be a stimulus to growth. As a bonus,
such a shift would decriminalize maple production and restore harmony between the Federation
and all producers.
In this context:

It is recommended that production quotas for maple water, concentrated maple sap and
maple syrup produced in Qubec be abolished.
It is also recommended that the MAPAQ define and implement, together with the
Federation of Quebec Maple Syrup Producers, a plan for developing maple potential in
Qubec.

4.5 An offer that adapts to the market

Without quotas, is there a risk of production significantly exceeding the Federations capacity to
receive it and market it? We feel this risk is relative and manageable, since the Federations pricing
mechanism and syrup acquisition policy are powerful tools that supply is bound to adjust to.

As weve seen, the current quota policy was not designed as a tool to control the quantity of syrup
produced, but more as a payment priority tool. All the syrup produced is either sold or placed in
reserve as provided by the rules, or else it is sold clandestinely. And in any case, Qubec cannot
control external volume in an open and international market such as the one this product is sold in.

In fact, abandoning quotas can only help create healthier and more realistic pricing dynamics.
Between 2000 and 2014, the weighted price of maple syrup increased from $1.56 to $2.92, an
increase of about 80%, while the production volume increased by 33% during the same period. This
means that the revenues of maple producers have grown much more
Create healthier and more
realistic dynamics.

as a result of the rise in price rather than volume. In addition, the poor
42

harvest of 2008 led to a hike in the price of syrup that has not gone down since.
It would be desirable to see the balance shift more towards productivity and rigorous management
instead of a simple power dynamic between the Federation and buyers. It would certainly offer better
guarantees for the establishment of a fair price and a better equilibrium between market forces.
Moreover, in a global marketplace, pricing will need to take into account global supply and demand in
the future. If, as the Federation claims, one of the goals of quotas is to pass on the markets message
to producers, it is clear that setting a fair price is a much more direct and effective way of getting
producers to understand that message and regulate their production accordingly.
Moreover, the Federation must manage inventory and could very well, even in the absence of
quotas, have a direct influence on production levels by setting the total quantity it can receive from
producers each year based on market demand and the level of the reserve. Beyond that quantity,
the Federation could, for example, offer a lower price for any additional quantity. Producers would
have the choice to either accept the reduced price or sell their surplus production themselves. This
approach would have the advantage of being less drastic and authoritarian than the current quota
system while still influencing producers behaviour.

It would also be a way of giving producers a certain degree of freedom, as syrup offered to the
Federation and not bought by it could be sold directly by producers. In the present state of affairs,
syrup produced over the quota or without a quota causes problems, as we have seen.
In this context:

It is recommended that the Convention de mise en march du sirop drable establish a

two-price system for bulk syrup: one price for syrup bought within the level of acquisition
set by the Federation of Quebec Maple Syrup Producers for each marketing year, and
another, lower price for any syrup exceeding the desired volume.
It is also recommended that the Rglement sur lagence de vente des producteurs
acricoles be amended so that producers can freely market any volume offered to the
Federation for collective marketing purposes and not accepted by it.

43

4.6 The maple syrup reserve

One of the greatest and most significant contributions the Federation has made to our current
system is, without a doubt, the creation of the strategic reserve. With it, the Federation has the ability
to guarantee security of supply, despite volume changes resulting from seasonal variations or
fluctuations in the market. This mechanism is certainly a major factor in stabilizing the supply and
price.

Created in the early 2000s, the maple syrup reserve has allowed the removal from the market, in
certain years, of syrup quantities that were not needed by buyers. Conversely, at other times, it also
compensated for sales that could not be fulfilled by just that years production. Maple syrup
production was less abundant between 2005 and 2008, and the reserve had to compensate; while it
contained 60 million pounds in 2004 and 51 million pounds in 2005,
the reserve was down to 37 million pounds in 2006 and found itself
empty in 2007 and 2008. The 2009 harvest was good, and the
reserve began to recover slowly to reach 17 million pounds in 2010

The reserve is one of the

Federations most
significant contributions to
the current system.

and 36 million pounds in 2011. Today, it is once again at 60 million

pounds.
Such a mechanism obviously mitigates the effect of weather and other hazards on volumes and
prices, and has some advantages for both producers and buyers.

For producers, the system provides a more stable income since it is based on the overall sales of the
sales agency and not on production. In high-yield years, the surplus will go to the reserve and
producers will not be paid for this excess production, while in low-yield years, sales might surpass
current production and need to be fulfilled using the reserve, which will lead to higher income for
producers than just that years production would have. Thus, producers enjoy more stable income
year after year and can better plan their investments.
For buyers, the primary advantage of the reserve is that it guarantees supply security, especially
during lower-yield years. Conversely, in good production years, the fact that a certain quantity of
44

syrup not required by demand is set aside has a stabilizing influence on the price and can keep it
from collapsing.

In addition, the reserve stabilizes the market for the entire maple industry, even outside of Qubec.
Producers in other jurisdictions benefit from this mechanism just as much as Qubec producers do,
without needing to contribute to the cost of maintaining it. Although this may be difficult to implement,
we will one day need to find a way to restore fairness and let foreign producers pay their share of the
reserves costs. To this end, the Federation should put the subject on the agenda of discussions with
the representative bodies of producers in other jurisdictions. MAPAQ representatives could also
raise the issue with their federal and provincial counterparts first, and with the US thereafter.
During the consultations we conducted, the need for a strategic
The need for a strategic
reserve was not
questioned.

reserve was not really questioned. Most stakeholders recognized

that this mechanism has helped stabilize our system and has served

as a solid foundation for real and sustainable progress in Qubecs maple industry. However, many
want changes to be made so this tool can be put to better use, including by developing a reserve
management mechanism that is more dynamic and more focused on the needs of customers.
Given the quantities involved, it is clear that proper inventory management, taking into account
production and sales, is essential. To this end, the Federation commissioned a study in 2010 which,
based on various parameters, showed that the ideal target level for the reserve should be 40 million
pounds. This is a good guideline for reasonably eliminating the possibility of shortages while not
immobilizing too great a volume of maple syrup, which would be detrimental to producers, since they
are not paid for quantities put into the reserve. The study is expected to be updated periodically so
that the progression of the situation can be monitored.

While welcoming this move, some criticize the Federation for managing
the reserve in a way thats too focused on volume and not enough on
quality and market needs. Of the 60 million pounds of syrup currently

Management thats
too focused on volume
and not enough on
quality.

stored in the reserve, about 18 million, or a third, is industrial-type syrup

with few outlets on the market. This includes a certain amount of syrup with the flavour defect known
45

as buddy taste, also called R5 syrup. Some say that the Federation should destroy R5 syrup
outright or simply no longer accept it.

When purchasing syrup from the reserve, buyers have to buy batches made up of syrups from
various grades in proportions determined by the Federation. These lots may contain industrial syrup,
including R5 syrup. The Federation also creates some mixtures on its own to recycle certain syrups
and create a more standardized product.

Moreover, since 2013, the price paid by the Federation to producers for AA, A or B syrup is the
same. This encourages producers, and the Federation itself during the packaging of surpluses, to
make mixtures and create B syrup (using AA/A combined with C/D), which is worth more than C and
D. It is basically a kind of levelling down that allows the Federation and producers to get a better
price for lower-grade syrup. As a matter of fact, classification data from June 2014 and June 2015
show a volume decrease of 3.5% for AA-grade syrup and 4.2% for A-grade, while the volume of
B-grade syrup increased 3.5%. This situation is difficult to reconcile with the notion of quality, and it
promotes the development of an increasingly standardized product.
This approach, which affects the quality of the product, is viewed in the marketing sector as a
serious problem. People want the Federation to be more responsive to customers needs and more
open to finding better modes of operation in collaboration with buyers. Hopes were expressed that
the Federation would care more about satisfying its customers with a quality product and meeting
their standards instead of imposing the purchase of whatever it has in batches. The Federation has
actually started taking measures in that direction, including changing its method of paying producers
to discourage the production of industrial syrup. It is also hoped that the Federation would adopt a
more advertising-oriented approach in its marketing process to better satisfy its customers and to
facilitate the development of new markets.

Some have suggested that the sales agencys governance model be amended to hand the reins
over to a board of directors comprised of businesspeople who would be responsible for developing a
flexible and dynamic model to monitor market needs.
In this context:
46

It is recommended that the Federation continue its efforts to manage the strategic reserve
in a more dynamic way while focusing on the quality of the product offered and the
adaptation of its sales methods to the expectations and needs of buyers.

4.7 Payments to producers

Under the Rglement sur lagence de vente des producteurs acricoles, bulk maple syrup producers
must market their product exclusively through the Federation. Concretely, they can deliver the
product to an authorized buyer who will receive it on behalf of the Federation, or they can deliver it
directly to the Federation.

The sales agencys is responsible for billing buyers and paying

producers. The regulation provides that producers are paid only when
the (in-quota) syrup is sold, and that they are paid only in proportion to

Producers complain that

they are not paid quickly
enough.

overall sales. Also, the regulation provides for payment in three instalments (July 15, November 15
and March 15 of the following year), the highest one being the March 15 payment. Producers
complain that they are not paid quickly enough, while they must incur substantial costs at the
beginning of a production season and have to absorb those costs until they receive payment.

The Federation has been sympathetic to this issue. It went to La Financire agricole and obtained a
line of credit that allows it to pay an advance of $1.25 per tap. It also has a banking line of credit and
its own resources, which is uses to enact a system of advance payments that entitles producers who
sign up for it to advances of up to 75% of the syrup delivered after classification (excluding industrial
syrup). Later in the year, the advances can reach up to 90% of the syrup delivered based on
estimated sales. The Federation negotiated assistance from Agriculture and Agri-Food Canada to
pay the interest. This program has greatly improved the situation, and about two-thirds of producers
make use of it.

However, there is still harsh criticism since producers must also contribute to the costs of the
collective marketing system. Currently, these costs are set at 12/pound of syrup delivered: 2.50 for
47

the administration of the Plan conjoint, 4.00 for inventory management, 4.75 for promotion and
research activities and 0.75 for quality control. This amount is deducted at source, and the net
proceeds are earned progressively by producers based on sales made, which can stretch over
several years. For illustrative purposes, as at March 15, 2015, producers were still awaiting
payments for the 2010 (5% of the total), 2011 (16%), 2012 (12%) and 2013 (11%) production years.
These combined amounts, together with the fact that over-quota syrup is paid only after full payment
of all in-quota syrup, explain the discontent expressed by many producers, who never fail to note
that producers in Ontario, New Brunswick and the US are always paid cash on delivery.

Moreover, the syrup inventory held in the strategic reserve is a cost borne entirely by producers
since, by definition, that unsold syrup is not payable under the regulation. Since the reserve is here
to stay, one can consider that, given a constant inventory, that syrup is a fixed asset that is frozen
and will not bring in any income to producers. Considering the target
That syrup is a fixed
asset.

inventory level is 40 million pounds, this means a sum of around

$120 million belongs to producers and is, of course, not in their pockets.
This shortfall is also a major source of discontent, exacerbated by the

fact that several producers seem unaware that syrup in the reserve has not been purchased by the
Federation, but is instead held in their name by the Federation.

The Federation is aware of the problem and has been working for a
few years to find a solution to finance the reserve. In May 2015, it
announced

that

it

had

taken

an

important

step

in

The Federation is working to

find a solution to finance the
Reserve.

the

implementation of a $60-million financing program that will be used to provide advances of up to 50%
of the value of in-quota product stored in the reserve. These advances will bear interest at rates set
by the lending bank. The Federation hopes that part of the interest will be supported by the
governments. If this program materializes, it means producers would be freed from shouldering the
costs of 50% of the target reserve. It is important to quickly find a solution to remedy this problem.

Specifically, the Federation would like to partner with the MAPAQ to make maple producers eligible
for Agriculture and Agri-Food Canadas AgriRisk Initiatives as part of the financing of the strategic
48

reserve. This would round out the support already provided by the Agri-Qubec and AgriInvest
programs.
In this context:

It is recommended that the MAPAQ and La Financire agricole support the Federation of
Quebec Maple Syrup Producers in its efforts to develop and implement a program to
finance the strategic reserve.

4.8 Union representation and the marketing monopoly

Over the course of this study, many comments were made to denounce the
Federations monopoly on the representation of maple producers. The vast
majority of these comments condemned rather vehemently what is

A model that is
unique to our
province.

perceived as an opaque cartel set up with help from the State and headed by a heavy, expensive
and finicky bureaucracy. More specifically, there is no hesitation in questioning the very foundations
of the Farm Producers Act, which basically enshrined the agricultural union model that has been in
force in Qubec for over 40 yearsa model that is unique to our province.

The democratic legitimacy of such a system is being rejected. Although maple syrup producers can
refuse to join the Federation, they must still pay union dues and cannot join another union. Many
seek the freedom to join a union of their choice. Assuming that the single-union situation is
maintained, producers are asking, as a minimum, that better instruments be used to periodically
reconfirm members willingness to recognize this association and entrust it with its mandates.

Clearly, this is an issue that is raising an increasing number of questions, and answers will need to
be foundnot only regarding the democratic principles in question, but also taking into account the
new context brought about by the opening of economies and the liberalization of markets. These
fundamental questions, however, are not unique to the maple industry.

We need only recall that in its 2008 report, the Commission sur lavenir de lagriculture et de
49

lagroalimentaire qubcois examined the Qubec model of agricultural unions and made comments
about it that remain highly relevant today. The Commissions recommendations may eventually
serve as a backdrop for a reorganization of maple producers, while helping us avoid repeating the
battles of the past or losing sight of the cohesion that producers must demonstrate in the face of an
increasingly competitive foreign market.
Given this broader context, and assuming significant changes to the maple industry would start
being implemented in the wake of this study, we feel it would not be relevant, wise or realistic to
hope for simultaneous fundamental changes to current representation structures. For this reason, we
believe that the reforms necessary for the full development of Qubecs maple industry must first be
achieved within existing structureswith the necessary adjustments, but without attacking the basic
parameters of agricultural unions. This choice is purely strategic and does not constitute a proper
response to an issue which is important in itself and deserves to be studied at some later date, in a
broader framework.

In this context:

It is recommended that the Federation of Quebec Maple Syrup Producers continue to

represent Qubecs maple producers and remain the central marketing mechanism for
maple syrup, since other major changes need to be implemented quickly to ensure the
full development of Qubecs potential.

Should we impose to all

producers the concept of
exclusivity?

Does maintaining the Federations current status necessarily imply

imposing to all producers the concept of marketing handled
exclusively by the Federation? Could we imagine, without tearing the
system down, that some producers might freely choose to sell their
products as they see fit? This is an interesting hypothesis, since

criticism against the Federation overwhelmingly concerns its absolute control over production and
marketing conditions, and not so much the concept of a union monopoly.

50

The first goal of collective marketing is to ensure that producers, as a group, have sufficient clout to
obtain a fair price for their product on the market. To achieve that end, producers need a
representation mechanism that is strong enough to be in balance with buyers, who themselves are
organized for the same purpose. But there is no compelling reason why 100% of producers or 100%
of buyers would need to be included in this mechanism. In fact, in the present state of things, buyers
are not all members of the Conseil de lindustrie de lrable (CIE); similarly, producers in other
jurisdictions benefit from the structuring effect of the Qubec model without belonging to it.

Given this situation, why not allow producers who wish to market their bulk syrup production
themselves to do so? We need not fear that the system will be dismantled or even significantly
weakened. First, buyers are bound by an agreement with the Federation which forbids them from
purchasing syrup from a producer covered by the Plan conjoint. Secondly, the vast majority of
producers are satisfied (75%, according to the Federation) with the system set up by the Federation,
which has the benefit of being well known, of guaranteeing stability for producers and of freeing them
from any marketing concerns.

Despite this, some producers would rather sell their own products, essentially outside Qubec or to
outside buyers. Such an arrangement would also help stimulate the growth of Qubecs maple
industry and should be allowed, on the condition that their product be inspected and classified, and
that these producers continue contributing to the costs of the collective marketing system since they
are benefiting from it.
In this context:

It is recommended that maple producers be allowed to withdraw from the collective

marketing system, and that this right of withdrawal be granted by the Federation when
producers accept to pay fees equal to those set for participating producers and agree to
comply with other conditions regarding product inspection and classification.

51

4.9 Relations between the Federation and producers

The Federation has a complex relationship with its members due to its dual role as a union
association and as manager of the Plan conjoint. As a union association, it must serve members and
devote itself to defending their interests, but it frequently ends up in conflict with some of these
members in applying the Plan conjoint and the related regulations. Some have alluded to a bosss
union that no longer defends its forcibly recruited members. In Section 3.2, we described the
context and perception of many producers who are in conflict with the Federation and have
experienced its wrath.

For its part, the Federation argues that its surveys show that 75% of its members support its
methods. To the extent that it is well-founded, this indicator does however reveal that a significant
number of producers are unsatisfied, whether because they oppose some of the Federations
actions or because they are seriously questioning the more fundamental elements of the system.
Moreover, it is likely that some of producers choose to keep quiet for fear of reprisal or to avoid
attracting trouble.

Though disappointing, this situation is in no way surprising, given the scope of the powers that the Act
respecting the marketing of agricultural, food and fish products, particularly section 93, grants to a
board of producers. This almost total delegation of authority raises many questions in itself,
especially since it benefits a monopoly that becomes a de facto legislator that carries out its own will.
This is the crux of the problem.

This situation is not

surprising given the
scope of the board's
powers.

Has the State gone too far in handing over its powers to a Federation
that adopts regulations with force of law, without the criteria or controls
that the government imposes on itself for its own lawmaking? In
addition, the government is often perceived not only as having overly

abdicated its responsibilities, but also as complicit, or at least complacent, with respect to the abuses
that can arise from this situation. Evidence of this includes the time the government cancelled the
effects of three rulings in favour of buyers and producers prosecuted by the Federation by adopting

52

Bill 21 (2011, chapter 28), passed on November 30, 2011, which retroactively validated applicable
penalties.

With this delegated authority, the Federation has chosen a maximalist approach that ensures it has
direct and extensive control over the actions of maple producers. The producers obligations as
defined in the Plan conjoint des producteurs acricoles du Qubec, along with the many prescriptive
provisions of the Rglement sur lagence de vente, the Rglement de mise en march du sirop
drable and the Convention de mise en march, among others, result in close and very restrictive
supervision for producers. Together, all these tools and their implementation place the Federation in
the role of a watchdoga role it plays with a vigour that many consider disproportionate and
unreasonable.

It is widely felt that this whole regulatory apparatus creates a strong incentive to cheat. Many believe,
moreover, that the regulation is so rigid and covers such a wide range of topics that a majority of
producers would find themselves in non-compliance if everything were to be checked; the most
conservative estimates mention a proportion in the range of 25%, which is still very alarming and
points to a systemic problem. It is perhaps revealing that a recent ruling by the Rgie des marchs
agricoles brought to light improper conduct by both the Federation and a producer who also
happened to be one of its former presidents.

The Federation has undertaken numerous actions against producers,

whether before the Rgie des marchs agricoles or regular law courts,
particularly for the production of maple syrup beyond quotas, the sale

The Federation has

undertaken numerous
actions against
producers.

of syrup outside the Federations collective system, the imposition of

various penalties and damages, and applications for injunctions and authorizations for seizures before
judgment of maple syrup from alleged defaulting producers.

It is in this context that the Federation has used security guards to monitor the activities of certain
producers suspected of being at fault, which prompted many astonished reactions among maple
industry stakeholders and, on a wider scale, sparked media involvement that unfortunately spread
53

beyond Qubecs borders.

Aside from legal proceedings, the Federation also resorts to other means to secure control over
non-compliant or alleged non-compliant producers. It can reach out to banks and credit unions to
have a producers credit cut off if it has a dispute with that producer.

The Federation can also send a notice to La Financire agricole du Qubec to block a producers
access to any of the organizations programs and services, such as income protection and financing
programs (e.g., Agri-stabilisation, AgriStability, AgriInvest and Agri-Qubec) for any production by
this producer. Such interventions are possible under an agreement between La Financire agricole
and the Federationan agreement that was made when La Financire agricole and the UPA shared
the same president... Were this type of penalty applied to a production sector other than the maple
industry, it would stand out as particularly unfair, and it is surprising to see a government agency
supporting such actions.

Whats worse, the financial resources available to the Federation and its determination to pile on the
procedures are likely to end up causing the financial ruin of any producer targeted.

Is the Federation going too far? Is it using disproportionate force to

protect the collective system? Do its methods respect the principles of

Is the Federation going

too far?

natural justice, whereby producers can have a fair hearing and present
their case when their rights and interests are directly concerned? Is it still possible, in these
situations, for the Federation to act and make decisions impartially, objectively and without
prejudice?

These are complex questions, and it certainly falls to the Rgie des marchs agricoles and the
courts to come to the necessary insights and act as protectors of the rights and freedoms
guaranteed by our rule of law. However, it is up to the Federation to reflect, without delay, on its
ways of dealing with its members and to question the relevance of maintaining what is increasingly
seen as a climate of fear resulting from an authoritarian and unfair approach. Is it acceptable, in a
54

democratic society, to see methods used that have so much in common with what could be
observed in totalitarian societies elsewhere in the world? Does the need to protect the collective
marketing of maple syrup justify such abuses?

In this context:

It is recommended that the Minister of Agriculture prohibit La Financire agricole, and the
MAPAQ if necessary, from complying with the Federations requests to block a maple
producers access to government programs and services such as AgriStability,
AgriInvest and Agri-Qubec or any other program or support service of that nature.
It is also recommended that the Federation conduct a thorough review of its methods of
intervention with producers in order to favour an approach based on conciliation,
persuasion and collaboration rather than confrontation.

4.10 The Rgie des marchs agricoles et alimentaires du Qubec

During consultations conducted as part of this study, many criticisms were leveled at the Rgie,
usually to denounce the sway the UPA and the Federation of Quebec Maple Syrup Producers hold
over this government agency.
Some described it as a UPA senate filled with members and
The organization is
criticized for endorsing the
Federation's decisions
without question.

support staff either originating from that sector or converted to the

UPAs school of thought. The organization was more specifically
criticized

for

endorsing

the

Federations

decisions

without

sufficiently questioning them, whether when examining regulations

submitted for approval or resolving disputes brought to its attention.

Others criticized the Rgie for its ineffective management and for making decisions excessively
slowly. Finally, some complained that during the periodic review exercises provided for in section 62
of the ARMAFFP, the Rgie merely hears the various parties views without subjecting them to any
55

criticism, let alone doubting them.

It is indeed surprising to witness the difference between the Rgies and the governments approval
process for adopting regulations. Government regulation, in addition to undergoing a rigorous
internal process during its preparation, must be published in the Gazette officielle prior to being
approved, so that it is brought to the awareness of interested parties, and also to allow anyone who
wishes to make comments, suggest amendments or even express objections.

In contrast, a draft regulation submitted to the Rgie by a board of producers is subject to no public
disclosure, and even those who venture to request a copy prior to approval are by no means
assured of obtaining it. In a democratic context, such a lack of forthcomingness is highly
questionable, since the matter at issue is the adoption of a text that will form a basis for legislation
and bind citizens. It would be natural to expect that the draft regulation be released and that the
Rgie welcome comments from stakeholders before ruling.

Furthermore, it seems that when analyzing a draft regulation, the Rgie does not really question the
desirability, validity or impact of the proposed text, but rather tends to rely on the representations
made by the marketing boards. As the law grants marketing boards many significant powers, it
would be fitting for the Rgie to provide a counterbalance and guarantee the rigour and impartiality
of the exercise.

Other criticisms directed at the Rgie reflect much more the disappointment or disillusion of certain
producers with regard to the very concept of collective marketing and its legal consequences rather
than the actual complacency of the Rgie toward the Federation. At the very least, there is clearly a
rather widespread negative perception and an apparent lack of justice.

In this context:

It is recommended that the government be especially careful when appointing members

to the Rgie to ensure that it is staffed by competent and independent individuals,

56

according to the rules set out on the matter by the Act respecting the governance of
state-owned enterprises.
It is recommended that the Rgie use its next strategic planning exercise to identify
measures to correct or mitigate the apprehension of bias that it may project.
It is recommended that the periodic report provided for in section 62 of the ARMAFFP be
prepared by external contractors rather than being drafted in collaboration with the Rgie
or, if it is made with the Rgie, that the analytical and critical part of the exercise be
performed by an independent firm.

It is recommended that any draft regulation submitted to the Rgie for approval be
published beforehand to disseminate it and allow stakeholders to make comments and
suggestions that the Rgie will take into account in its analysis.

4.11 Synergy between all stakeholders

The maple industry is a complex and diverse field where different stakeholders are driven by
common interests that can unite them and, equally, by special interests that can sometimes place
them on opposite sides. In both situations, although they have not always managed it, they need to
keep dialogue lines open and collaborate for the good of all.

In recent years, buyers and producers have progressively moved

from

traditional

model

characterized

by

distrust

and

confrontation to a relationship based more on discussion and

Buyers and producers have

moved to a relationship based
more on discussion and
collaboration.

collaboration. Both parties are increasingly working together to

find courses of action to improve the industrys competitiveness, particularly through a CIEFPAQ
standing committee.

57

From this committee came the idea to jointly conduct a study on the maple industrys development in
North America to analyze the threat from the US, which has proven to be very real. Following this
study (by Forest Lavoie Conseil), the parties designed, in collaboration with the same firm, a plan of
action to promote continued growth of the industry in Qubec and to counter the threat. Furthermore,
buyers and the Federation are currently bound by a marketing agreement that was freely negotiated
and agreed to between the parties, without intervention from the Rgie des marchs agricoles. This
is an encouraging sign that things are progressing and that working in concert is advantageous.

In addition, 20 or so years ago, the MAPAQ put forward an interesting approach to promote
cooperation among various stakeholders in the same sector of the food industry. Along with other
similar initiatives, this was the origin of the Table filire acricole. Since its creation in 1995, the
Table filire acricole has gathered representatives from the production, processing, distribution,
marketing, promotion, research and manufacturing sectors as well as from the cooperative
movement and governments. Its mission is to structure and develop the maple industry on national
and international markets.

Over the years, this mechanism has allowed the parties to better understand each other and discuss
their common concerns. Various growth-promoting actions were conceived and brought to fruition
thanks to this mechanism. However, many stakeholders in the industry believe that the Table has
not achieved its full potential and lacks consistency and dynamism.

At a time when the Qubec maple industry is being compelled to undergo changes in order to
maintain and consolidate its position in a more open and competitive global market, the importance
of developing and sharing a common vision in terms of major objectives and actions becomes even
greater.

The last strategic plan (2012) prepared for the Table filire acricole provided an overview of various
issues that remain relevant today and which may represent, for stakeholders, as many opportunities
58

to exchange knowledge, proposals and concrete commitments to collaborating for the good of a
better-understood common interest.

With the challenges confronting the Qubec maple industry and the
A shared vision is a
condition for success.

changes it will inevitably experience, the need for a shared vision and a
meaningful action plan becomes a condition for success that is more

essential than ever before. This synergy of thought and action between maple industry stakeholders
within Qubec appears indispensable, but it shouldnt stop there; appropriate means must also be
found to ensure that Qubec is present and well-represented in discussion forums with Canadian and
US colleagues.

In this context:

It is recommended that the MAPAQ encourage cooperation between the parties,

particularly the Federation and the Conseil de lindustrie de lrable, and examine the
relevance of renewing the Table filire acricole by reviewing its composition so that it
can be a dynamic forum for discussion, exchange and cooperation between all
stakeholders and demonstrate active and constant leadership.

Furthermore, the Ministre des Forts, de la Faune et des Parcs has important responsibilities in the
management and development of Qubecs public forests. The Sustainable Forest Development Act
(chapter A-18.1) provides that sugar bush management is permitted if a permit is obtained from the
Ministre and if set conditions, including the payment of a fee, are met.

Currently, about 20% of maple syrup production in Qubec comes from

the operation of sugar bushes situated on public domain land. This
percentage varies greatly from region to region. As for the total potential

Better understanding
Qubec's real maple
potential.

that public lands may be able to offer for maple development, precise and
recent data is not available. However, estimates based on forest mapping indicate that the number of
taps may be just as high as in the private domain. It will no doubt be appropriate to conduct a more
59

accurate inventory in order to better understand Qubecs real maple potential.

The Ministre des Forts, de la Faune et des Parcs wants to participate in maple development in
Qubec as part of its existing responsibilities that are aimed at ensuring cohabitation on public
domain of sugar bushes and logging; the Ministre is also mindful of socio-economic development in
the regions in its policies concerning public forests.

However, exercising these responsibilities is difficult to reconcile with the Federations regulatory
approach, which not only sets the level of maple syrup production but also determines the
beneficiaries of the quotas it grants and other conditions. For example, if the Ministre wants to
promote, for socio-economic reasons, the development of new sugar bushes in a region, it may
prove to be impossible because of the Federation deciding to grant its quotas to producers who are
already operating in that region or, through its policies, supporting producers from other regions. The
Ministre thus finds itself boxed in by the Federations decisions, on which it has not been consulted.

In this context:

It is also recommended that the MAPAQ, the Ministre des Forts, de la Faune et des
Parcs and the Federation establish a working committee to agree on a common approach
to promote maple development on Qubec public land.

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Chapter 5
From thought to action
5.1 Implementation challenges
The questions in the preceding chapters are complex. The proposed changes undeniably represent
significant challenges that affect the interests, sometimes incidental but often vital, of the people and
organizations involved.

In this context, it is normal that the first instinct of those involved will be to try to gauge the impact
that the proposed changes may have on the situation they are familiar with, and, as the case may
be, on the situation they recommend or the situation they are concerned about. Because of a
protective reflex, there is often a strong temptation to put up walls of endless deliberations, and
ultimately to take refuge in the status quo, uncomfortable though it may be.

Preparing a concerted action on the changes to make, the ways to achieve

The proposed changes
undeniably represent
significant challenges.

them and the timeline to implement them is certainly a laudable goal to

aspire to and work towards. Realistically, however, the changes proposed
in this report, even if they fall largely within the frame of existing policies

and methods, have little chance of leading to a consensus that would allow the government, in
consultation with industry stakeholders, to implement them rapidly.

Moreover, we must acknowledge that under the current legislation, the Minister of Agriculture,
Fisheries and Food has few means of intervention at its disposal to make changes to the way
agriculture is organized, particularly in a sector or for a product covered by a joint plan under the
provisions of the Act respecting the marketing of agricultural, food and fish products. Although
section 20 provides that the government may suspend, amend or annul any decision of the Rgie,
this power to respond remains limited and serves only to block or amend decisions that have already
been made, without giving the government the power of initiative.

61

As weve seen, the ARMAFFP, along with having a very broad notion of marketing, entrusts the
administration of a joint plan to a board composed exclusively of agricultural producers, to which it
grants an impressive list of regulatory powers. While the Rgie des marchs agricoles plays a
supervisory role in the exercise of these powers, it is not empowered to act as a substitute for the
Minister of Agriculture for setting directions and making choices that are political in naturenor
should its role involve it.

In addition, during consultations, there were numerous complaints about the overly low-key role the
MAPAQ plays in Qubecs maple industry. There is a fairly widespread feeling that the Ministre no
longer has the expertise, the resources or the desire to be actively involved in developing policies to
support agricultural activity, and even less so to arbitrate conflicts that may arise between
stakeholders. Even for simple requests for information from department officials, producers are often
referred back to the Federation or the UPA.

The Commission sur lavenir de lagriculture et de lagroalimentaire qubcois made a similar

observation in 2008. In more general terms, it wrote that [Translation] the MAPAQ is not perceived
as a proactive organization with the necessary leadership to identify, through consultation, a
mobilizing vision of agriculture and agri-food.

Since it is up to the Minister to design policies and measures related to the production, processing,
distribution, marketing and use of agricultural products and to oversee their implementation, as per
the Ministres constituting legislation, it is all the more essential that he have the means to do so.
This shortcoming is particularly fraught with consequences when reforms are necessary that we
know in advance are unlikely to obtain a consensus and, especially in this case, to receive approval
from the Federation of Quebec Maple Syrup Producers.

For this reason, the law must provide the Minister with appropriate means of action.

62

5.2 Providing some direction

It is up to the Minister, and more broadly the government, to decide on the broad directions that
Qubecs agricultural sector should follow. This should also be the case for the maple industry,
which is the subject of this study and for which recommendations for change are made.

However, the Act respecting the marketing of agricultural, food and fish products does not, in its
present form, provide an opportunity for the Minister to intervene in
marketing, since these powers are fully delegated to other bodies, without
the Minister having any real oversight. In addition, the ARMAFFP applies

Give the Minister

room to act.

to the entire agriculture sector and applies without distinction to all

agricultural and food products. In this context, how can the law be changed to give the Minister room
to act without needing to resort to exception and setting maple production apart from other kinds of
production?

In this respect, an interesting parallel can be drawn between the Act respecting the marketing of
agricultural, food and fish products and the Act respecting land use planning and development
(R.S.Q., c. A-19.1): the latter gives municipalities significant and wide-ranging powers regarding land
use planning, as the ARMAFFP does for marketing boards. However, the Act respecting land use
planning provides that the government may periodically issue directions that municipalities have to
comply with when developing their planning tools. The ARMAFFP contains no such provision.

Taking inspiration from this model, the Act respecting the marketing of agricultural, food and fish
products could be amended to allow the Minister or the government to periodically issue directions
that must be taken into account in developing a joint plan or exercising the duties and powers of a
board of producers. These directions could be general and apply indiscriminately to any agricultural
product, or they could be specific and target a particular product, such as maple syrup. It would be
up to the Rgie des marchs to rule on the compliance of a joint plan or regulation with ministerial or
governmental directions. It could be provided that joint plans and regulations existing at the time
directions are issued would need to undergo adjustments, within a specified time, to bring them into
compliance with the directions.
63

This simple mechanism would make it possible to maintain an approach based on the delegation of
powers to non-governmental bodies while also protecting the governments role of providing
guidance and supervision. Thus, in the present case, the Minister could issue directions that reiterate
the recommendations he endorses from this study, along with any modifications he may deem
necessary. The ARMAFFP could also provide for a consultation process prior to the publication of
the directions.

Given the above:

It is recommended that the Act respecting the marketing of agricultural, food and fish
products (R.S.Q., c. M-35.1) be amended to grant the Minister of Agriculture, Fisheries
and Food or the Gouvernement du Qubec the power to periodically issue directions
regarding one or more agricultural products. These directions would need to be followed
when developing a joint plan, a marketing agreement and any implementing regulation.

64

In conclusion
Trusting in ourselves
The maple industry is globalizing and no longer belongs only to
Quebecers. Qubec remains by far the largest producer, but others

The maple industry is

globalizing.

have resolutely decided to become major players in this market. Its up to us to take the necessary
measures to ensure Qubec keeps the place it deserves. However, nothing can ever be taken for
granted, and this place will be recognized only if we earn it. Otherwise, other players with more
vitality, boldness, innovative spirit, and freedom of thought and action will find ways to snatch a
promising market out from under us.

In recent years, the Qubec model of collective marketing has experienced considerable progress.
The industry is healthier and more prosperous; among other things, price control ensured financial
stability and helped producers grow their businesses in an orderly manner and lay a solid foundation
for this industry. The system enabled a mechanism to guarantee supply security to buyers. Product
quality has improved. Technology has advanced and makes more generous yields possible.

Still, if the Qubec model is to survive, it needs to evolve. It is a model

If it is to survive,
the Qubec model
needs to evolve.

which, beyond its successes, has proven rigid, technocratic, centralized and
controlling. It has generated more than its share of discontent and even
conflict, particularly in respect of some of its producers. Without outright

destroying it, we need to make the model more flexible, simpler and lighter. We must free it from a
multitude of finicky controls that have given rise to expensive and excessive legal activism and
intervention methods that strain the boundaries of acceptability in a free society.

The Qubec model should also be reshaped to focus more on the rules of the market, which one
cannot ignore with impunity without suffering adverse effects. With the price of maple syrup
determined by parameters other than supply and demand and a tight control being exerted over
production volume, the Qubec model has come to promote the development of the maple industry
65

everywhere except in Qubec. It defies belief to see US and Canadian producers developing at
high speed while Qubec producers are constrained by production quotas and subjected to
meticulous inspections by Federation investigators. A repositioning of the model has become
essential.

The market for maple syrup, and for maple products in general, is experiencing significant growth
worldwide, and experts believe that the demand will keep growing in the long term. The Canadian
dollar currently provides very advantages conditions for our exports, and most economists predict
that this situation will last for several years. Free trade agreements provide a way to save
substantially on customs fees. All these factors combined pave the way for new development of
Qubecs maple industry.

Qubec producers have the right forest resources, climate, know-how and technology, as well as the
will and motivation to fully develop an industry they are proud of and
connected to by historical and emotional ties. They are aware of their
strengths and of the business opportunities available to them. An increasing

The greatest threat

to progress is often
within us.

number of them are also realizing that the greatest threat to progress often
lies within us: the danger of doing nothing, changing nothing, taking comfort in what we know and
never daring.

The recommendations formulated in this report are intended to be respectful of past achievements
without enshrining them. However, it is now time to make the necessary adjustments and define the
optimal conditions that will allow Qubec maple producers and other parts of the industry to reach
their full potential in a market that is increasingly open and competitivea market in which Qubec
can continue to play a significant role, if we take the steps to ensure it. Lets dare to do so!

66

List of recommendations
1- It is recommended that the Federation of Quebec Maple Syrup Producers, the
Conseil de lindustrie de lrable and other partners in the maple industry work
together, with support from the MAPAQ, to ensure the healthy development of the
international market for Qubecs maple syrup.

2- It is recommended that Qubecs promotional efforts focus not only on the

availability and security of the provinces maple syrup supply, but also on the
distinctiveness of Qubecs product, concretely supported by a strong process
that guarantees quality and authenticity.

3- It is recommended that the Federation of Quebec Maple Syrup Producers amend

its practices so that the production and sale of maple syrup not covered by the
Plan conjoint may be conducted freely and without administrative hassles for
producers.
4- It is recommended to exclude from the Plan conjoint the production and
marketing of maple syrup produced and sold by a producer to a third party in
containers of less than 5 L.

5- It is recommended that production quotas for maple water, concentrated maple

sap and maple syrup produced in Qubec be abolished.

6- It is also recommended that the MAPAQ define and implement, together with the
Federation of Quebec Maple Syrup Producers, a plan for developing maple
potential in Qubec.

67

7- It is recommended that the Convention de mise en march du sirop drable

establish a two-price system for bulk syrup: one price for syrup bought within the
level of acquisition set by the Federation of Quebec Maple Syrup Producers for
each marketing year, and another, lower price for any syrup exceeding the
desired volume.

8- It is also recommended that the Rglement sur lagence de vente des producteurs
acricoles be amended so that producers can freely market any volume offered to
the Federation for collective marketing purposes and not accepted by it.

9- It is recommended that the Federation continue its efforts to manage the strategic
reserve in a more dynamic way while focusing on the quality of the product
offered and the adaptation of its sales methods to the expectations and needs of
buyers.

10- It is recommended that the MAPAQ and La Financire agricole support the
Federation of Quebec Maple Syrup Producers in its efforts to develop and
implement a program to finance the strategic reserve.

11- It is recommended that the Federation of Quebec Maple Syrup Producers

continue to represent Qubecs maple producers and remain the central
marketing mechanism for maple syrup, since other major changes need to be
implemented quickly to ensure the full development of Qubecs potential.

12- It is recommended that maple producers be allowed to withdraw from the

collective marketing system, and that this right of withdrawal be granted by the
Federation when producers accept to pay fees equal to those set for participating
producers and agree to comply with other conditions regarding product
inspection and classification.
68

13- It is recommended that the Minister of Agriculture prohibit La Financire agricole,

and the MAPAQ if necessary, from complying with the Federations requests to
block a maple producers access to government programs and services such as
AgriStability, AgriInvest and Agri-Qubec or any other program or support service
of that nature.
14- It is also recommended that the Federation conduct a thorough review of its
methods of intervention with producers in order to favour an approach based on
conciliation, persuasion and collaboration rather than confrontation.
15- It is recommended that the government be especially careful when appointing
members to the Rgie to ensure that it is staffed by competent and independent
individuals, according to the rules set out on the matter by the Act respecting the
governance of state-owned enterprises.
16- It is recommended that the Rgie use its next strategic planning exercise to identify
measures to correct or mitigate the apprehension of bias that it may project.

17- It is recommended that the periodic report provided for in section 62 of the
ARMAFFP be prepared by external contractors rather than being drafted in
collaboration with the Rgie or, if it is made with the Rgie, that the analytical and
critical part of the exercise be performed by an independent firm.

18- It is recommended that any draft regulation submitted to the Rgie for approval be
published beforehand to disseminate it and allow stakeholders to make comments
and suggestions that the Rgie will take into account in its analysis.

19- It is recommended that the MAPAQ encourage cooperation between the parties,
particularly the Federation and the Conseil de lindustrie de lrable, and examine the
relevance of renewing the Table filire acricole by reviewing its composition so that

69

it can be a dynamic forum for discussion, exchange and cooperation between all
stakeholders and demonstrate active and constant leadership.
20- It is also recommended that the MAPAQ, the Ministre des Forts, de la Faune et des
Parcs and the Federation establish a working committee to agree on a common
approach to promote maple development on Qubec public land.
21- It is recommended that the Act respecting the marketing of agricultural, food and fish

products (R.S.Q., c. M-35.1) be amended to grant the Minister of Agriculture,

Fisheries and Food or the Gouvernement du Qubec the power to periodically issue
directions regarding one or more agricultural products. These directions would need
to be followed when developing a joint plan, a marketing agreement and any
implementing regulation.

70