Municipal councils in the greater Saint John area are supporting an application by Enterprise Saint John to have a designated free-trade zone in the region.
A free-trade zone is a special class of economic zone that allows goods to be stored and manufactured without being subject to customs duty, according to Enterprise Saint John CEO Steve Carson.
Benefits to community, companies
"Basically there are two benefits," Carson said. "From the community's perspective, it allows you to package the logistics of ports and transportation into a one-stop shop that you can promote around the world. It also gives you access to federal government dollars to help market your free-trade zone point."
That would mean Port Saint John, marine operator DP World and local manufacturing companies could benefit from duty and tax deferrals, he said.
A manufacturer could ship parts of a particular product to Saint John, where the finished version would be assembled in the free-trade zone. Duties would not be applied on the parts but on the finished products, when they're shipped, for example, to the U.S. or elsewhere in Canada.
"Let's say a bicycle manufacturer is looking at coming to the country," Carson said. "The wheels could come from China, the frame from Europe, and they're looking for a place in North America to assemble all the of the parts."
"If 90 percent of those bicycles were being exported to the United States. They wouldn't pay duty or taxes on those parts while they were being processed and transferred. The 10 percent being sold in Canada would be subject to the taxes and duties."
Another kick at the can
The idea of a free-trade zone in Saint John was first floated "quite a few years ago," according to Carson.
At that point Canada did not have a designated foreign trade-zone program. Requests to pilot the program in New Brunswick were met with a lukewarm response by the federal government, Carson said.
Now that a free-trade zone program has been developed, and the federal government is establishing such points across the country, "we're certainly keenly interested in becoming one of those designated communities," Carson said.
'Wide variety' of real estate options
The location of the free-trade zone is still up for discussion.
"The geographic boundaries are very flexible," Carson said. "This could [be] in our industrial parks, Colonel Nase Boulevard in Grand Bay-Westfield, or Millennium Drive in the KV. It's important that we have a wide variety of real estate options."
Municipal councils in Saint John, Quispamsis and Grand Bay-Westfield have already written or pledged to write letters of support for the designation.
Rothesay council voted to write a letter of support at its meeting Monday night.
The letters of support will be included in an application package to the federal government which, Carson hopes, will be reviewed and approved in the coming months.
"This isn't a big game changer," Carson said, "but it's an important tool for the toolbox."