Ladies and gentlemen, distinguished Committee members, good afternoon.
Allow me to introduce myself. My name is Martin Dupont, and I am Executive Director and Industrial Commissioner with the Drummondville Economic Development Authority. The Canada Border Service Agency's announcement that a number of regional offices, including one in Drummondville, would shut down starting on April 1, 2011 has met with strong opposition in our community. Today I am tabling with the Committee a document that deals with the need to preserve this tool for economic development in the Centre-du-Québec region.
Like several other socio-economic players in the region, we were surprised to hear this news. In my presentation today, I would like to begin by explaining the Agency services provided by the Drummondville office in our area and in the Centre-du-Québec region as a whole, discussing how important that Agency presence has been for several years now, and finally presenting arguments in support of maintaining such services in the Drummondville area.
Founded in 1984, the Drummondville Economic Development Authority aims to promote economic development in the RCM of Drummond. It is our responsibility to manage and develop the industrial parks, where more than 700 manufacturing businesses are located, as well as the Drummondville regional airport.
The Drummondville CBSA office serves three sufferance warehouses. One of them is located in Drummondville and is managed by carriers. It is a private warehouse. A second one, located in Victoriaville, is managed by the Cascades company. There is a third one in Richmond which is managed by Richmond Courtiers En Douanes Ltée. The idea behind a sufferance warehouse is to store merchandise that is still under bond. Because customs service is available in Drummondville, the response time is quite quick. As soon as a request is sent to the office, a customs official can immediately go on site so that goods can be delivered without any additional delays. Furthermore, a number of carriers in the Drummondville region—there are 72 of them—take advantage of local customs clearance, given that they are nearby and goods can then be delivered to a variety of different destinations elsewhere in Quebec and Canada. Closure of the customs office will therefore have a direct impact on these transportation companies that have located in the region precisely because of access to a regional sufferance warehouse.
There are also six bonded warehouses: Bourret Transport - Bourret Entreposage, B.R. Logistique International, VC999, CDM PapiersDécors, Aliments Trans Gras Inc., and SMTCL Canada Inc. These private warehouses are used mainly to store raw materials in large quantities at today's prices, for four years. As the merchandise leaves the warehouse, it is cleared by customs. Having customs service close by provides many benefits to the region. There is no bonded warehouse in either Victoriaville or Richmond. The Drummond office therefore serves the Greater Centre-du-Québec Region, with its six bonded warehouses in various industrial parks.
A company by the name of VC999, which is a Swiss company, specifically decided to locate in our industrial area because there was a customs office nearby. It covers all of North America, developing its markets there. Finally, we have an S.O. type sufferance warehouse which is under the control of the customs office but is managed by Primewood Lumber. This type of warehouse is used to store low-risk goods. In this case, the material is lumber.
Customs services are also available at the Drummondville regional airport, as well as the one in Victoriaville. Indeed, our organization is also intending to complete a major development project there at a cost of $9 million. Foreign companies located in our region naturally use the Drummondville airport; they use chartered planes. Passengers travelling on these chartered planes are cleared through customs in Drummondville. The airport also provides seaplane service. Seaplanes are chartered and are then able to land on the river. This is the only seaplane base between the United States and Northern Quebec. Naturally, many U.S. pilots land on the river, resupply and then go through customs.
In actual fact, the Drummondville office is far from being simply a point of service like the other local offices. In addition to contributing directly to the economic dynamism of the entire region, it provides the Centre-du-Québec area with an essential means of attracting large import and export businesses. Starting from the port of entry at the border, the Lacolle office, which is considered to be the largest border crossing, many carriers stop at the bonded warehouses in Drummondville before continuing on to Thetford Mines or other municipalities across Quebec. Most of them have their goods cleared through customs in Drummondville.
As well as the various reasons demonstrating the importance of maintaining customs services for businesses in the region, there are other factors that bear mentioning and which clearly show the need to keep the Drummondville customs office open.
First of all, this particular customs office was first established in the early 1900s, which marked the beginning of the industrial era in our city. This is proof of the long-term importance that has been placed on customs services there. If the Drummondville office were to close, in order to keep the same level of service, the operations previously carried out at the local office would now have to be provided elsewhere. There is therefore considerable risk that such a solution would not adequately respond to the needs expressed by businesses in the region. Finally, this would mean longer waiting periods and slower customer service for users. For the time being, customs officers can easily go on-site and carry out inspections at no cost. That way, shipment deliveries are not delayed. However, if the office is moved to another location, there will be far more delays for users.
Before closing, I would just like to say that we believe that it is important to relate the facts and statistics we have collected regarding the Canada Border Services Agency office in Drummondville.
According to our information, the local Drummondville office handles a high level of customer traffic which is continuing to grow. In 2009-10, customs declarations were filed for 5,600 transactions a year for sufferance warehouses, and 5,500 transactions per year for bonded warehouses. According to our estimates, Canada Border Services Agency revenues for the Drummondville office alone are between $500,000 and $700,000 per month, in the form of GST and customs duties.
Furthermore, due to globalization, there is an ever-growing number of SMEs and large companies that use customs services. As a result, a whole range of services would be affected by such a change, and many businesses in the area—and throughout the Centre-du-Québec and Montérégie region, given that many companies there use the same customs office—would see their business impacted.
In addition, as a general rule, when an office handles over 5,000 customs declarations per year, that volume is deemed sufficient to justify assigning a customs officer. For purposes of comparison, in 2009-10, the Drummondville customs office handled a total of 11,000 customs declarations.
According to the announcement made by the Canada Border Services Agency, the goal of this restructuring is to transfer the commercial operations of nine inland customs offices with low throughput, including the one in Drummondville, to another service location nearby. In our case, it is inconceivable that the Drummondville office could be considered an inland customs office with low throughput, given its high level of use.
Finally, one question remains, which is that when the volumes handled by other nearby customs offices are compared to the situation in Drummondville, it is clear that the Drummondville office has the highest level of traffic compared to those in Granby and Sherbrooke.
In closing, the Drummondville Economic Development Authority, and the entire region are calling on the Canada Border Services Agency and the government of Canada to keep the Drummondville customs office open for the following reasons: first of all, offering customs services is an integral part of our economic development strategy; customs services are part of the tool kit of all the regional and local development organizations; the announcement of this closure has elicited a deep sense of dissatisfaction among business people in the region and profound concerns for our exporters and importers; finally, despite the availability of new technology, a human presence will always be required, especially for on-site verifications.
Therefore, considering that the Canada Border Services Agency has had an office in Drummondville since the early 1900s; considering that this decision will compromise the economic development of the Centre-du-Québec region and our ability to attract foreign subsidiaries; considering that we are one of the regions in Quebec experiencing the greatest economic growth; considering that many of our SMEs are importers and exporters; considering that the RCM of Drummond and the Centre-du-Québec region require customs services in order to support and grow the local economy in the region; considering that this customs office has a high level of traffic and that demand is continually on the rise; considering that government services should be provided where economic activity is occurring, and not the reverse, on behalf of businesses in the Centre-du-Québec region, we are calling on the Canada Border Services Agency to reconsider its decision to close the customs office in Drummondville, and asking the government of Canada to intervene and take action on this critical issue.
In closing, ladies and gentlemen members of the Committee, I would like to thank you for your attention during my presentation. I hope that my comments here have helped you to understand the importance of maintaining a Canada Border Services Agency office in the Drummondville area.
Thank you.