U.S.-Canada free trade benefits New Brunswick business

High hopes for free trade benefits are bringing a mini-boom to New Brunswick business.

Twice in a week, free trade prospects have been credited in major business moves. J.D. Irving Ltd. announced a $130 million tissue-manufacturing expansion program and a decision to build a $50 million potato-processing plant near Grand Falls.

The free trade deal between the United States and Canada played a decisive role as Irving went ahead with an expansion program for high-quality tissue products. The integrated Saint John-Dieppe tissue operation was described by Irving officials as the first of its kind in Atlantic Canada.

Bernard Valcourt, federal minister of Oceans and Fisheries, said last week that announcement of a Cavendish Farms Ltd. potato plant at St. Andre justified his faith in the free-trade pact.

Valcourt said the plant would have been built in the United States had it not been for the free-trade agreement. At one time, Cavendish considered building the potato plant in northern Maine.

Free trade went into effect Jan. 1, 1989, with a 10-year goal of eliminating tariffs between the United States and Canada. New Brunswick business owners shipping tissue products, processed potatoes and other goods across the border apparently expect the removal of tariffs to pay off in a more profitable export business.

The Irving plans for tissue manufacturing include an existing processing plant in Saint John and a new, $30 million tissue-conversion plant that opened Monday in the industrial park in Dieppe, near Moncton.

Free trade gave his firm a door to U.S. markets, said Robert Irving, vice president and general manager of Irving Tissue.

Irving said he still expected the competition to be rough. “We will continue to have one advantage though,” he added, “and that is the fact we are fully integrated … processing from the tree to the finished tissue, which few others can claim.”

Wood chips, a byproduct received from saw mills, are gathered and trucked to the company’s Saint John pulp mill, where they are processed into dioxide- and chlorine-free pulp. The pulp is transferred to Irving’s Saint John tissue mill and made into tissue products.

The product then is trucked to the modern, state-of-the-art facility in Dieppe, where it gets the final touches, Irving said.

Irving estimated that the Dieppe plant, together with the tissue mill in Saint John, represented an investment of approximately $130 million in buildings and equipment. The two sites would employ about 260 people when operating at full capacity.

Valcourt, representing the federal government and the Atlantic Canada Opportunities Agency, said it would have been advantageous to expand into Quebec, but that the company chose to remain in New Brunswick.

Irving said the two tissue plants would keep raw resources at home — something too many Canadian entrepreneurs had forgotten.

Irving said he had lived in Moncton 13 years and found it an ideal distribution center. He said the city was strategically located “to make the anticipated breakthrough into the U.S. market.”