The designation of Sault Ste. Marie as a Foreign Trade Zone Point is expected to increase international trade in the area and bring a much-needed boost to the economy.
Federal Economic Development Minister Mélanie Joly announced the designation in a virtual press conference on March 16.
Joly said the designation – a first for the North and one of only three in Ontario – will give local businesses a competitive edge, encouraging more foreign investment in Canada, and helping local businesses prosper.
“By getting this designation, we’re really cutting red tape,” she said.
“We’re making sure that businesses can have more time and more money to think about exporting and think about making sure that they can have access to the Midwest American market, but also to different countries around the world where we already have free-trade agreements,” she added, citing Europe and Asia as examples.
A Foreign Trade Zone is loosely defined as an area within a country that’s eligible for tariff and tax exemptions on the purchase or import of raw materials, components, or finished goods.
Those materials can then be re-exported without taxes or duties, or sold in the domestic market, in which case the taxes and duties would be deferred until the time of entry.
Because the Sault is located so close to the U.S. – it shares a border with Sault Ste. Marie, MI – Joly said it’s a natural fit for the designation.
The community’s distinct experience in manufacturing and, in particular, steel gives it an additional advantage, she added.
For small, local businesses that want to import and export, the Foreign Trade Zone designation frees up some capital and presents an ideal opportunity to “plug into the global supply chain,” said Rory Ring, CEO of the Sault Ste. Marie Chamber of Commerce.
Creating value-added products that can then be exported to other countries is “critical to the shared economic prosperity of our nation,” he added.
“A program like the Foreign Trade Zone helps reduce costs, it helps our companies be more competitive, and it gives us a great opportunity to develop the public and private partnerships that are needed to create the environment for the private sector to thrive,” Ring said.
“That is so critically important.”
The Sault Ste. Marie Economic Development Corp., which was integral to the process of acquiring the designation, will now take the lead in rolling out its associated programming.
A first step will be to form a task force comprising representatives from government and the private sector, which will then devise a plan for “how to best deliver services that are required under this new designation,” Joly said.