Good morning. My name is David Lomas, vice-president, marketing and business development, with the international division of Connors Bros. Clover Leaf Seafoods Company. I'm going to shorten the company reference to just Connors, going forward, in the interests of time.
Thank you, on behalf of Connors, to all members of the Standing Committee on International Trade for the opportunity to participate in the consultation process on the Pacific Alliance free trade agreement.
Connors is one of Canada's oldest food companies. We have operated a sardine and herring cannery in Blacks Harbour, New Brunswick, since the 1880s. We currently employ about 600 people at our Blacks Harbour facility and are one of the main employers in Charlotte County, New Brunswick.
The majority of our production from Blacks Harbour is exported. In addition, we operate an international sales and marketing office in Saint John, New Brunswick, which sells canned seafood through our own brands in more than 50 markets around the world.
Our Canadian head office is in Markham, Ontario. We are responsible for just under half of all canned seafood sales in Canada through our own brands, Clover Leaf and Brunswick. In addition, we have a sushi-quality frozen seafood service business through our Anova unit.
We are affiliated with Bumble Bee Seafoods in the United States, with its headquarters in San Diego, California; and we are owned by Lion Capital, a U.K.-headquartered private equity firm.
Our company activity, as both an exporter and an importer of seafood products, provides us with insights into both sides of international trade in seafood, particularly in shelf-stable canned seafood.
Connors understands the following regarding a potential FTA between Canada and the Pacific Alliance. The Pacific Alliance was created in 2011 and its members are Chile, Peru, Colombia, and Mexico. In 2017 the Pacific Alliance invited certain observer states, including Canada, to become associate members. While Canada has FTAs with all four members, associate membership would involve a new FTA with the alliance as a bloc.
Connors is not importing any products into Canada from Pacific Alliance members at this time, other than a relatively small amount of canned Atlantic salmon from Chile. We currently export a relatively small amount of canned sardine and herring products to Mexico from Canada under NAFTA. Each of the Pacific Alliance members has a diverse and well-developed seafood industry. Mexico, Chile, and Peru each have robust canned sardine and canned mackerel industries that actively compete against Connors in global markets, in addition to having solid and entrenched branded distribution in their local markets.
Connors has several concerns related to a potential Pacific Alliance FTA with respect to our Canadian operation. Current herring resource constraints in Canada mean that there are no market outlet advantages gained by an FTA with the Pacific Alliance for our company with canned sardines and herring production from our Blacks Harbour facility. We currently have to procure finished goods, mainly from Europe, to meet our overall corporate requirement for our branded sales in Canada and in other international markets.
Our labour cost differentials versus Pacific Alliance members put our continued production at risk in New Brunswick. Also, our labour standards and obligations are disproportionately higher than many competitive sources of supply by Pacific Alliance members, which further affects our competitiveness.
There is also the issue of differences in regulatory requirements versus Pacific Alliance members. Our Blacks Harbour operation is subject to compliance under a number of Canadian regulatory bodies, including CFIA and DFO. Having operations in the Pacific Alliance being subject to the same regulatory conditions and standards as those imposed on Canadian harvesting and manufacturing operations is critical to our continuing long-term competitiveness, and to ensuring a level playing field for our products both domestically and abroad.
We are unclear as to what implications an FTA with the Pacific Alliance bloc would have with respect to NAFTA.
In closing, the pre-existing FTAs between Canada and Pacific Alliance members, along with the concerns cited above mean, at least to Connors' current perspective, that there are no easily identifiable new and significant trade opportunities that would open up under an FTA with the bloc for exports of our shelf-stable and canned seafood products from Canada.
Thank you for this opportunity to appear as a witness.