Quebec’s maple syrup rebels face financial ruin

BATTLING CARTEL

about 50 producers locked in various pitched battles across Quebec with the federation, which wants the Varins and others to pay it 12 cents — set to jump to 14.75 cents next year — for every pound of syrup they sell to retailers.

Several maple syrup producers say the accumulation of fines and lawsuits could force them to hand over the keys to their sugar shacks and the deeds to their sugar bushes to creditors.

The stakes are high because maple syrup is a big and very profitable business: oil sells for about US$50 a barrel; maple syrup fetches US$1,200 a barrel.

Quebec is effectively the OPEC of maple syrup, producing about 70 per cent of the global supply, and it holds about $240 million of syrup in its Global Strategic Maple Syrup Reserve in Laurierville, Que. But the maple syrup federation’s rules — they decide who can tap maples and how many, force farmers to sell all syrup (except small containers sold at the sugar shack) through its system, pay producers and set syrup prices — have come under increasing fire.

Since the Financial Post last year reported the struggles of Quebec’s maple syrup rebels, their cause has made world news, reported by The New York Times, the Weather Channel, the BBC, Vice and, this month, Vanity Fair.

Steve Côté worked for years in construction in Toronto before he returned to the family farm in SaintMathias-de-Bonneterre, five kilometres from the New Hampshire border. He and his wife, Caroline Morin, and their four daughters now run a sugar bush with 25,000 taps. The federation seized his 2013 syrup crop when it learned Côté, 51, had sold maple syrup outside its regime. It stationed 24-hour security guards outside his sugar shack in 2015 to make sure he handed over every drop of syrup. This year, he agreed to turn over all his syrup to the federation.

Côté has continued to battle the federation in court and at the marketing board, but has repeatedly lost, and now owes $560,000.

“In four years, I have not invested a cent in my sugar shack,” Côté said.

He can pay part of his debt to the federation with the syrup it seized. However, he will have to pay income tax on that syrup, and will still be $200,000 short. The Financière agricole du Québec can help him borrow $450,000, which he could add to the $500,000 mortgage on his sugar bush.

“I’ll make the interest payments, but for the next 19 years I won’t eat,” Côté said. He is not sure that makes sense. The family income now comes only from his wife’s job at a daycare in Sherbrooke, Que.

“It will break my heart to hand over the keys to the sugar shack, to abandon the farm that my father worked so hard for,” he said. “Everything here we built from the sweat of our brow. A union is supposed to help its members, not sue them and put them out in the street.”

Another syrup rebel, Angèle Grenier, awaits word from the Supreme Court on her request to appeal her conviction for selling syrup outside the cartel. She owes the federation $450,000 in fines and has paid $125,000 in legal fees. If the court refuses to hear the case or rules against her and the federation enforces the full fine, she said, “I will definitely go bankrupt.”

Raymond and Thérèse Lebel, both in their 70s, have boiled syrup at their sugar shack in St-Zachary, Que., for 56 years. With 8,000 taps, they hold a valid export permit for syrup. Still, the federation deems their syrup sales to New Brunswick illegal, and has fined them $284,000. “They are destroying people,” Thérèse said.

Simon Trépannier, executive director of the syrup federation, called the syrup rebels “anarchists.”

“Their main goal is to drive up their fines so high that it will make headlines in the newspapers that make us look bad,” he said in a phone interview last week from Quebec City, where the province’s farmers’ union held its annual conference.

Trépannier also accused Quebec’s agriculture minister of using an office slush fund to bankroll a rival farmers’ group that supports the report of Florent Gagné, who recommended that Quebec dismantle the syrup cartel.

“Pierre Paradis gave $25,000 from his discretionary fund to the Union Paysane,” Trépannier said. “For the minister to use a third party to promote his report, with public money, is outrageous.”

Paradis’s office did not return calls for comment.

Trépannier said sugar bush valuations are so high — thanks to the federation — that rebels can easily borrow money to pay their fines and stay in business.

He also noted syrup producers can freely sell syrup at their sugar shacks or at farmers’ markets without paying a cent to the federation. The cartel has been a huge success that built Quebec into a syrup powerhouse, he said.

“In the ’80s, there was no syrup development because there was a total free market,” Trépannier said. “When the producers organized themselves, the market started to grow.”

This year, the federation gave permission for five million new taps. Quebec next year will have 48 million taps, compared to 12 million in the U.S., four million in Ontario and two million in New Brunswick. That’s cold comfort for those buckling under the existing rules. Back in Oka, Varin said the federation has also demanded she reveal the names and addresses of all her clients. She refused.

“It’s crazy to think,” she said, “they want to legalize pot, and we maple syrup producers are facing prosecution. They treat us like criminals. But we are proud of ourselves and we don’t want to quit.”