The CEO of Global Container Terminals says he wants to dispel any myths and misconceptions about foreign trade zones.
Responding to recent concerns raised by Delta politicians and in the media, Michael Moore, CEO of Global Container Terminals, has written a letter to council offering assurances local governance and taxation would not be bypassed.
"We are not asking for any exemptions from local regulations, changes to municipal taxes, or reductions in federal and provincial corporate taxes," wrote Moore.
"What we are asking for are changes to federal programs, simplifying access, providing a single federal point of contact, reducing or removing the restrictions on added value in those programs, and creating local structures that will improve marketing. These proposals are national in scope, and are not directed at any particular region."
GCT Global Container Terminals Inc. a wholly owned subsidiary of the Ontario Teachers' Pension Plan and one of the largest financial institutions in Canada, wants the federal government to explore establishing foreign trade zones. The company operates four container terminals through several principal businesses including TSI Terminal Systems Inc. at Deltaport.
Global Container Terminals is part of a steering committee chaired by Moore that includes YVR, CN, CPR, Port Metro Vancouver, Halifax and Montreal Ports, and CentrePort in Winnipeg.
Meanwhile, the B.C. government this year hired a firm to research the potential competitive advantages of foreign trade zones. That study has been completed and the government is currently reviewing the findings.
Foreign trade zones exist in numerous jurisdictions around the world.
They were created in the United States to provide special customs procedures, including duty-free treatment, to U.S. firms engaged in international trade-related activities. By having goods sitting in the zones, duty payment is deferred on those items until they are brought out for sale in the market. The zones are supposed to help to offset customs advantages available to overseas producers who compete with domestic industry.
However, there's been uncertainty around what the potential impacts could be for a host community, including growing concern about what could happen in South Delta, mentioned on numerous occasions as the prime candidate for a zone.
At Delta council a few weeks ago, local politicians raised questions including whether speculators buying up agricultural properties in South Delta are anticipating lands being converted for industrial purposes without Delta's or the Agricultural Land Commission's consent. Other concerns included whether municipal zoning regulations and taxes will be avoided by firms within the trade zones.
Delta North MP Guy Gentner recently warned council a trade zone could become an autonomous authority within the community. Gentner said he received materials through an Freedom of Information Request including a 'briefing note' from IMS Worldwide Inc., a foreign trade zone consultant, stating local site controls on Canadian foreign trade zones should be restricted.
In a recent letter to council, Susan Jones with the Boundary Bay Conservation Committee listed a myriad of concerns, including environmental impacts associated with establishing a foreign trade zone, coupled with the proposed doubling of container capacity at Deltaport.
Moore, who also provided a submission paper by his steering committee, told council the creation of special zones will increase B.C.'s and Canada's attractiveness to investors, importers and exporters, bringing economic benefits not only to the province but also host municipalities. The recommendations to amend Canada's foreign trade zone-like policies, noted in the submission, also include allowing Canadian companies that sell a significant proposition of their production within Canada to participate, as well as allowing the deferral of GST/HST until products depart the zones to the Canadian market.
The findings of the study done for the B.C. government will be made public later this year.
