For years, dozens of rebels — as a Quebec judge dubbed them — sold their syrup on the black market in an act of defiance

It’s high season for sugaring off in Quebec, with the weather right for maple sap that boils down to good syrup. But Steve Côté’s taps aren’t running, very few of them anyway. This spring will likely be the last at his sugar bush in Saint-Mathias-de-Bonneterre, nestled in the hills near the border with New Hampshire. Soon, he says, he’ll sell the farm with 25,000 tapped sugar maple trees and head some place without Quebec’s rigid regulation on syrup sales.

His father and grandfather started the sugar bush. The farm’s been in his family for 52 years. “You can’t imagine how tough it is,” Côté, a 53-year-old father of four, said.

Distroscale

Côté is a maple syrup rebel at the end of a maple syrup rebellion. He was part of the band of rural Quebec producers who resisted the province’s syrup cartel. The cartel — officially known as la Fédération des producteurs acéricoles — fixes the price of syrup, assigns quotas to producers and controls bulk syrup sales.

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For years, dozens of rebels — as a Quebec judge dubbed them — sold their syrup on the black market in an act of defiance. The rebellion played out in a series of dramatic clashes between the federation and the rule-breakers. Producers snuck barrels of syrup out of their sugar shacks in the middle of the night for sale on the black market. The federation posted guards outside problem sugar shacks. Inspectors raided sugar bushes, checked production logs and bank accounts, sniffed out black market sales and seized syrup.

For every pound sold illegally, the federation charged a fine. The rebels racked up hundreds of thousands of dollars in fines and started contesting them in court. Now, most have exhausted all legal recourse or signed settlements out of court.

Photo by Laura Pedersen/National Post file photo

It appears the rebellion is about over. It’s time to pay, but for Steve Côté, the only way to do that is to sell his sugar bush and become an exile in less-regulated Ontario or New Brunswick or the northeastern United States.

The federation isn’t buying it. This week, executive director Simon Trépanier accused the rebels of deliberately dragging out the process, incurring more fines and interest and legal fees, making the amount owed so grotesque that they were looked upon sympathetically by the media. “Those individuals are looking to be the victims,” he said. “They’re still speeding on the highway at 150 km/h.”

“I don’t think I’m playing the victim,” Côté said. “They’re saying we dragged it out before the courts and everything, but I didn’t have the choice. I thought that maybe we would have won something but now we see that we didn’t win anything.”

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“Still today, I think it’s just f—ing unbelievable that somebody has a right on my sap that’s coming out of my tree. It’s just crazy. But that’s what the court said.”

Angèle Grenier battled the federation for 15 years and became the rebellion’s unofficial leader. When the federation claimed she owed more than $300,000 for bypassing its controls and selling to buyers in the Maritimes, she went all the way to the Supreme Court of Canada in an attempt to upend the system.

But after the court refused last June to hear her appeal, Grenier had to admit the battle was lost. In October she sold the sugar bush she had bought in 1994. She used the proceeds to pay an out-of-court settlement reached with the federation and fees associated with her legal challenge.

Still today, I think it's just f---ing unbelievable that somebody has a right on my sap that's coming out of my tree. It's just crazy. But that's what the court said

“To them, I was the worst criminal,” she said in an interview this week. “To have peace and quiet, I sold.”

She said she could not bear the thought of turning around and joining the federation’s marketing scheme after all these years.

“It would be against my values, because I think the producers are imprisoned now, and it will only get worse,” she said.

“Right now, (the federation has) a monopoly over everything. They have the courts and the government on their side.”

She knows of other producers in her region of the Beauce, which lies south of Quebec City above the Maine border, who have moved to New Brunswick to escape the restrictions imposed by the Quebec federation. But at 60, she is not ready to start anew.

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“It cost me a lot, but I don’t regret it,” she said of her battle. “I brought attention to our problems with syrup production in Quebec.”

The federation changed the syrup industry rules 15 years ago. Before, the price of syrup would fluctuate, depending on the season. Since no one controls how much sap flows from the trees each year, a boom season sent the price down while a bad season pushed the price so high consumers were turned off. To insulate producers from the volatile market, the federation implemented a quota system and fixed the price of syrup. While producers can sell as much as they want directly to consumers, all bulk sales need to go through the federation — which charges a $0.14/pound fee for administrative and marketing costs.

To boost maple syrup’s profile nationally and abroad, the federation’s marketing efforts include the creation of a maple mascot, Siropcool – the “smartest superhero in the Galaxy” who looks like a drop of syrup and gets his “lightning-quick reflexes” and “unlimited supply of brilliant ideas” from living among maple trees.

Producers aren’t paid immediately for the syrup they sell through the federation system. And those who produce over their quota must send the surplus barrels of syrup to the federation’s reserve. They’re paid for those barrels whenever they’re sold — which can take years, since the federation only dips into the reserve during years when the industry’s output can’t meet demand.

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The federation says the majority of its members are content with the rules, which were set by producers themselves in the early 2000s. A federation poll of member producers found 82 per cent were happy. But two recent reports, one commissioned by the provincial agriculture minister in 2016 and another last month by the Montreal Economic Institute, found the rules were hurting Quebec producers while encouraging their competitors outside the province. (Trépanier, the federation boss, wrote a letter calling the latter report a “slap in the face.”)

The fines charged to the rebels work out to more than a third of the value of syrup believed to have been sold on the black market. Trepanier said the fine is $1.20/pound. The price of syrup is about $2.90/pound, depending on the grade. “When somebody’s telling you that he received a $300,000 fine, it’s because he probably produced three times that amount in syrup value,” Trépanier said. “It’s directly related to the amount of syrup they sold on the black market.” The federation also retroactively charges its per-pound fee on the syrup sold, plus interest.

The federation says the fines it collects are “reinvested” into maple syrup promotion — after paying any legal fees associated with defending the fines in court.

Hans Mercier, a lawyer in Saint-Georges in the Beauce, represented several maple producers, including Grenier, in their legal fights against the federation. But after last year’s Supreme Court setback, he has grudgingly raised the white flag.

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“The legal avenues have pretty much been exhausted, and now the battle has become political for those who are still fighting,” he said this week. The diehard rebels — “the last Mohicans” — are now pinning their hopes on possible changes to the North American Free Trade Agreement targeting supply management.

The syrup federation’s marketing rules “are essentially extreme protectionist measures,” he said.

He found it incredibly sad to see Grenier forced to sell her property to pay up, and she is far from alone, he said. “And it is the federation that pockets these penalties. … It does not go to the government; it does not go to the producers.”

In last chapter of this rebellion, it seems to have gotten deeply personal. All the players know each other. In an interview this week, Trépanier, the federation GM, seemed to know each rebel leader personally. He rattled off their names, and what became of them. “Angèle Grenier, you knew she sold her farm?” Asked whether the penalties were too severe, since some were forced to sell farms that had been in the family for generations, Trépanier replied: “Are you talking to Steve Côté?”

Photo by Laura Pedersen/National Post file photo

Côté refused to join the federation in the early 2000s. He didn’t apply for a quota; he sold his syrup to whomever he wanted. After the federation started pursuing him, he was fined for illegally producing and selling syrup between 2006 and 2012.

Initially facing more than $650,000 in fines, Côté said he spent two years producing syrup that went directly to paying off his debt to the federation. This year, he’s only running 7,000 of his 25,000 taps to produce syrup just to sell direct to customers at his sugar shack, under watch by the federation. But with almost $400,000 left to pay, he’ll go bankrupt if he doesn’t sell.

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Côté said he had a prospective buyer last year who pulled out after apparently hearing from the federation that the farm wasn’t worth much.

“He’s got a great farm and a large number of trees and right now he’s refusing to have any quota. And because of that, his farm doesn’t have any value,” Trépanier said. When asked whether he told Côté’s buyer something similar, Trépanier said, “Everybody knows, because he’s in the media.” For his part, Côté said the only reason he hasn’t accepted the federation’s quota offer is because he’d have to pay the hundreds of thousands in fines and fees first.

While he doesn’t think the rebellion is dead, Côté acknowledged it is fading. The producers are worn out. “Most of the guys they just can’t fight anymore. They don’t have any money left.”

Maybe after it’s all settled — if he can sell his place in the hills in Saint-Mathias-de-Bonneterre and pay his debts — Côté will head to Ontario.

“It’s hard to give it up,” he said. “I’ve been raised in that place. I know every tree.”

With files from Peter Kuitenbrouwer, Financial Post