Good morning, Chair and members of the committee. I'd like to thank you for inviting me to speak here today on behalf of Cavendish Farms.
My name is Ron Clow. I'm the general manager of Cavendish Farms.
Cavendish Farms is a food company that's part of the Irving group of companies. We're a proud Canadian company and a leading processor of frozen potato products. We're the fourth-largest frozen potato producer in North America.
We also have a fresh potato business. And we have a frozen appetizer business that is located in southern Ontario. We have two french fry plants and a fresh potato plant on Prince Edward Island, a province that's well known for potato growing. Our appetizer plant is located in Wheatley, in southern Ontario.
Cavendish has 700 employees in P.E.I. We have our head office in Dieppe, New Brunswick, with about 100 people. We have 140 in our facility in Ontario.
We would like to thank the federal government for the increased focus on free trade, and we support the timely conclusion of the Canada-Panama Free Trade Agreement, as well as the continuation of negotiations with the Caribbean countries. These markets have huge potential for our exports of frozen potato products.
We're here today to discuss the Canada-EU comprehensive free trade agreement, the potential benefits for Canadian agriculture, and the opportunities for Atlantic Canada specifically.
As you know, Canada and the EU have entered a critical stage in the negotiations. We'd like to bring to your attention how important it is for our regional economy that Canada gain the immediate and complete elimination of duties on Canadian fried potato products. Currently, the tariff stands at 14.4%. We're hopeful that this tariff will be immediately eliminated through these negotiations. Sweet potatoes and fried vegetable tariffs are even higher, at 17.3%, and we hope that this tariff, too, is repealed in a timely manner.
Of Cavendish's current production, only 12% is consumed in Canada. The rest is largely exported to the United States, the Caribbean, and Central America. Some is exported to Asia. To date, our product is not exported to Europe, with the exception of Iceland, where we've seen a 40% increase since the conclusion of the EFTA agreement.
This gives the committee an idea of the potential we have seen in the EU market. Atlantic Canada, in particular, stands to gain from the successful conclusion of this negotiation due to the inexpensive cost of shipping by sea. It is as cheap for us to ship product to Europe out of Halifax as it is to truck it to a market like Chicago.
As a family owned Canadian company, we'll ensure that Canadian manufacturing and processing facilities continue running and that 940 jobs are protected, while we focus on more production through our facilities and more employment.
The elimination of the EU duties on french fries from Canada through this comprehensive trade agreement will level the playing field with the EU. Currently we impose a 4% tariff on imports versus a 14.4% tariff on our exports. It will allow Canada to enter into free trade with Europe ahead of the United States. It will contribute to the success of the economy in Atlantic Canada and will reinforce the comparative advantage enjoyed by the P.E.I. potato industry from being situated next to two excellent ports, Halifax and Saint John.
We ask that the committee recommend that the negotiators continue the good work, that they pursue the complete elimination of the EU duties on frozen potato and vegetable products, and that it comes into effect immediately upon implementation of this historic agreement.
Thank you for the opportunity to appear before this committee today. I'm pleased to answer any questions the members may have.