Bill C-8 (Historical)
Canada-Jordan Free Trade Act
An Act to implement the Free Trade Agreement between Canada and the Hashemite Kingdom of Jordan, the Agreement on the Environment between Canada and the Hashemite Kingdom of Jordan and the Agreement on Labour Cooperation between Canada and the Hashemite Kingdom of Jordan
This bill was last introduced in the 40th Parliament, 3rd Session, which ended in March 2011.
Peter Van Loan Conservative
Committee Report Presented
(This bill did not become law.)
October 20th, 2010 / 3:55 p.m.
John Cannis Scarborough Centre, ON
I'll be sharing my time with my colleague, Ms. Hall Findlay.
Briefly, I know you didn't really cover a lot of Bill C-8, and I understand why, and I appreciate just a short brief in terms of the elimination of the tariffs and that it will take effect immediately. I think that's a plus for our cattlemen here in Canada, and thank you for putting that on the record. So I really don't have a lot to ask you on Bill C-8, as you haven't a lot to offer us.
Because we're moving toward the Canada-Europe FTA, I just want you to take a couple of moments and maybe give us some of the obstacles or some of the things we should be looking forward to or anticipating from your industry's perspective. Then I'll turn it over to my colleague.
October 20th, 2010 / 3:45 p.m.
The Chair Lee Richardson
As I say, we've kept Mr. Masswohl long enough and we will get into his testimony. We'll probably do an opening statement of 10 minutes--if that works for you, Mr. Masswohl--and then do a round of questions.
I'd like to complete the meeting with another brief in camera session on the European Union. I have some suggestions for a change of date there, so we'll discuss that.
Okay, with that update, again, thank you, Mr. Masswohl, for coming.
John Masswohl, again, is the director of government and international relations for the Canadian Cattlemen's Association, here today to offer a position on Bill C-8, an act to implement the Free Trade Agreement between Canada and the Hashemite Kingdom of Jordan.
Mr. Masswohl has been in front of the committee before and has proven very helpful to us. I should say at the outset that we welcome your statement and views today.
I will remind members, as in the past, that if there are further questions after the meeting today, we have always found the Canadian Cattlemen's Association to be very useful in providing additional information if asked for.
With that, thank you again for coming. Mr. Masswohl, would you open with an opening statement?
October 20th, 2010 / 3:45 p.m.
The Chair Lee Richardson
We will come to order with meeting number 29 of the Standing Committee on International Trade in this session of Parliament.
Today we are going to continue our discussion of the free trade agreement between Canada and the Kingdom of Jordan. This is a referral from the House of Bill C-8, plus an agreement on the environment between Canada and the Hashemite Kingdom of Jordan and the agreement on the labour co-operation between Canada and the Hashemite Kingdom of Jordan.
We have had witnesses for one or two meetings and we are going to continue this. I would like to just bring to the attention of the committee the difficulty I'm having confirming witnesses. I have received a list from all the parties concerned, and we have contacted everyone on the list that you have submitted and those that have been submitted by the government as well.
We're having trouble with having the people here when we happen to meet and when they're available and that sort of thing. So today I'm grateful that we have our old friend, John Masswohl, director of government and international relations with the Canadian Cattlemen's Association with us, but he will be the only witness appearing today.
I'd like to try to avoid that in future—not just having you here, John, although it's always a pleasure. We want to hear a number of witnesses. So if I could ask some of you maybe to touch base with those on the list that you submitted and ask if they can't free up a Monday or a Wednesday to appear at the committee, then we can get this done.
How are we doing for the next meeting?
October 18th, 2010 / 3:50 p.m.
Andrew Casey Vice-President, Public Affairs and International Trade, Forest Products Association of Canada
Thank you, Mr. Chairman.
Thank you again to the committee for inviting us to appear on Bill C-8, an act to implement the Canada-Jordan free trade agreement.
It was our pleasure to be here when you were studying the Canada-Colombia Free Trade Agreement. I'm going to make a similar case today as to why we support this particular bill and this agreement. Even though the numbers may not be staggering, I think it sets a precedent for this industry from our standpoint, which we'd like to see carried forward in a number of other areas in the world.
By way of introduction, the Forest Products Association of Canada is the national voice, the national trade association, for Canada's lumber, pulp, and paper producers. We have about 22 members in our association and that membership represents the lion's share of Canada's forest products industry nationally from coast to coast in communities across the country.
The industry represents about 12% of Canada's manufacturing GDP and about 2% of GDP in general. We continue to employ over 220,000 Canadians directly. If you add our indirect employment of another 340,000 or so, we get up in and around the 600,000 job mark. That is, of course, spread across the country in pretty much every single province.
I want to mention one other aspect of this that leads you to a place where I want to go, which is the community aspect. Obviously, a lot of those jobs are located in rural parts of the country, and they're also centrally located in a number of small communities across the country. The past two to three years have obviously been extremely difficult for this industry, as members around this table and members in the Commons know. Daily, we've seen members from all parties get up and express support for the industry. For that, we're appreciative. Many of you have communities that have been subjected to the hardship this industry has been subjected to over the past couple of years, so you're no stranger to it.
Thankfully, we're starting to see a light at the end of the tunnel, to use an overused expression, or a light around the corner, or whatever you want to call it, but things are looking up. We're seeing the markets in China start to grow. We're seeing an increase in pulp sales and wood sales to markets such as that and we're feeling somewhat optimistic. Of course, we still need the U.S. housing market to rebound for it to really be rock solid and for us to feel comfortable moving ahead.
That said, one of the things the industry needs to do—and has been doing for the past couple of years—is preparing for when those markets do return. We've identified a four-part plan, if you will, a strategy on where we need to go.
A big part of that, of course, is to become more productive and more competitive ourselves. It is incumbent upon our companies to do a lot of that, and they've been doing this over the past couple of years. Some of the restructuring you've seen--the difficult decisions that have been made in terms of closing mills--is part of the restructuring and part of that new competitiveness going forward.
Another element of it is to better our environmental and sustainable resource management track record further. We are leaders in the world. That has increasingly become a market advantage for the industry. We need to continue along that path and use this to our best advantage in the marketplace.
A third part of our strategy going forward is looking to maximize the resource. You've seen terms likes “added value”, but this is more a question of maximizing the tree and what we extract out of that tree. Right now, we use about 95% of the tree, but we'd like to it up that closer to 100%. This takes you into a world where you're into the bioeconomy, with bioenergy and biochemicals that can be extracted from the tree, a world where you still have the wood/pulp base as your economic base for the products, but then you go beyond that by expanding into the bioeconomy side of things.
A fourth part of the strategy going forward--and that's where this free trade deal comes into play--is that we need to expand and diversify our existing markets. Obviously, the U.S. market is our most important market. It will remain so for quite some time. It represents about 70% of our product exports. We export about $24 billion a year in total, so it's a fairly significant portion of our product that goes to the U.S.
But we can't depend solely on the U.S. marketplace. The softwood lumber dispute has shown that there are times when the relationship can be a little frayed. For that reason, the industry has looked to other marketplaces such as China and India. In this case, believe it or not, we see some potential in the Middle East, and maybe just in that context, it will open up the Jordan bracket.
You've probably seen the numbers. I think Canada's total exports to Jordan represent something like $60 million a year. As for our percentage, I think we happen to be the largest single exporter to Jordan at around $11 million a year. Those aren't big numbers, obviously, for an industry exporting $24 billion a year outside of our borders, but there are two important opportunities, one on the paper side and one on the lumber side.
The Jordan forest products market represents a general marketplace of about $370 million. Unfortunately, we account for only about 3% of that marketplace. It's also a market that's growing. Depending on the product lines, you're looking at 16% to 100% growth over a year-to-year basis, so we see enormous potential there.
Certainly, on the paper side, there's some potential to get rid of the tariffs and make us more competitive vis-à-vis some of our main competitors coming out of Indonesia and Germany. On the lumber side, we're seeing a very important marketplace in the form of plywood. Again, the reduction or elimination of tariffs would give us a leg up on some of our major competitors, primarily, again, coming out of Indonesia and of course China.
Again, as I've said, at $11 million, what we're sending there now is not a big number. Even if that were doubled it wouldn't be a big number in the grand scheme of things. But the reality is that a lot of these products come from certain parts of the country and can sometimes come from one particular company. So when you narrow it down, all of a sudden what seems to be a fairly insignificant number can be a very significant number for one or two companies.
We certainly feel that's the case here with the Jordan deal, where most of the products come from the two provinces of British Columbia and Quebec. If we can increase market share in that regard, that would be an important step in expanding existing markets and maybe even diversifying existing markets.
I'll leave it at that.
I am ready to answer any questions, and I can do so in French, if you prefer.
Thank you again for the opportunity to appear today, Mr. Chair.
October 18th, 2010 / 3:35 p.m.
The Chair Lee Richardson
Ladies and gentlemen, we're about to begin and resume the Standing Committee on International Trade. This is meeting number 28 of this session.
Today we are going to deal with two matters. First of all, we're going to continue our reference for Bill C-8, an act to implement the free trade agreement between Canada and the Kingdom of Jordan.
To that end, we are pleased to have with us witnesses today from the National Labor Committee, from the United Steelworkers, and from the Forest Products Association of Canada. I'm going to start by introducing them. We will have just about an hour for our witnesses and then I believe we're going to go in camera for committee business in about an hour from now.
With that, let me first introduce Charles Kernaghan. Mr. Kernaghan is the executive director of the National Labor Committee. He's joined by Tim Waters. Tim, of course, is the political director of the United Steelworkers. Joining the committee again, we also have with us Andrew Casey, who is the vice-president of public affairs and international trade for the Forest Products Association of Canada.
We're going to ask our witnesses to give us a little perspective on where they're coming from and what their views are on this potential Canada-Jordan free trade agreement, with its accompanying labour agreement and an agricultural agreement as well.
It's the usual format. I'm going to ask Mr. Kernaghan to start. He will be followed by Mr. Waters and then Mr. Casey. They'll give up to 10 minutes each of discussion and then I'll open it to questions.
Without further ado, Mr. Kernaghan, would you begin?
October 6th, 2010 / 4:20 p.m.
The Chair Lee Richardson
Ladies and gentlemen, we're moving now to an order of reference from the House of Commons, that being Bill C-8, An Act to implement the Free Trade Agreement between Canada and the Hashemite Kingdom of Jordan, the Agreement on the Environment between Canada and the Hashemite Kingdom of Jordan and the Agreement on Labour Cooperation between Canada and the Hashemite Kingdom of Jordan.
We're going to begin the discussion of this bill with a briefing by the Department of Foreign Affairs and International Trade to give members some background. We will be pursuing this topic until it is dealt with in committee. I'll just advise the committee that on the return from the break week following this week, we will return on the Monday to hear our first witnesses on this subject.
I've asked for suggested witnesses from all. I've heard from the NDP and the government. So if you have witnesses you'd like to propose for this debate as time goes on, please get them in to the clerk. We certainly have enough to begin that consideration on the first Monday, but we'll be at it for awhile, so you're welcome to get those in over the next 10 days.
With that, let me please introduce our guest. We have a familiar face returning to the committee, the assistant deputy minister of trade policy and negotiations, Don Stephenson.
Don, thank you very much for coming back. I see you've brought a crew with you—for your self-defence, I'm sure. We only have about 40 minutes today once we get started, so I don't think it will be too rigorous this first go-round.
Joining Mr. Stephenson is Doug George, the director of bilateral market access and the chief negotiator of the Canada-Jordan free trade agreement. We also have returning to us a familiar face, the general counsel for the market access and trade remedies law division, Tom Zuijdwijk. Thank you for coming back. As well, we have John Holmes, the director general of the Middle East and Maghreb bureau.
From the Department of Agriculture and Agri-Food, we have Gilles Gauthier, who's been here before as well. He is the director general and chief agriculture negotiator of the negotiations and multilateral trade policy directorate. And from the Department of Human Resources and Social Development Canada, we have Debra Robinson, the director of international labour affairs.
Thank you all for coming. I'm going to ask Mr. Stephenson if he would give us a brief opening statement or overview for as long as he needs, and then we'll have a round of questioning.
Canada-Panama Free Trade Act
September 30th, 2010 / 10:25 a.m.
Bryon Wilfert Richmond Hill, ON
Mr. Speaker, I am pleased to participate in the debate on Bill C-46, as I did the other day on Bill C-8 which dealt with another free trade agreement the government is proposing. This bill deals with a free trade agreement with Panama.
Obviously, free trade agreements are important to Canada given that we export over 80% of our goods, and obviously Canada needs to be competitive in the international community. It is disturbing that for the first time in over 30 years, we have a significant trade deficit. The government needs to look at a comprehensive approach in terms of how we deal with the issue of trade in the international community.
At the moment we have what I would call one-off agreements. There is one with Jordan and now there is this one with Panama. We also debated one involving Colombia. The difficulty is that our competitors are taking a much more aggressive approach. For example, we have no free trade agreements with any state in Asia. With markets such as Japan, China, India, the ASEAN members, this is very important, and a multilateral approach particularly with ASEAN would be beneficial.
We are still in negotiations with Korea; I believe we are in the seventh round now. With Singapore, we are in the ninth round. This is disturbing, given that the Americans have been reaching out. We see the Japanese concluding free trade agreements with countries as diverse as the Philippines and Mexico, yet at the same time, we are doing these small agreements.
The one with Panama is fine. We on this side of the House certainly support the bill going to committee. However, in terms of the big picture, there are real issues that we need to be grappling with on the issue of free trade. A multilateral approach gives us a bigger market. For example, ASEAN, with 590 million people from Vietnam, the Philippines, Indonesia, et cetera, is very important, yet we are simply chipping away at it. We do not have a coherent policy in terms of how we should tackle trade issues.
As a significant amount of our trade, some 75% or 80%, is with the United States, when there is an economic downturn in that country, as we have seen, it has an impact on our economy. We need to diversify, but diversifying with Jordan and Panama is not going to solve things in the big picture. It is not going to deal with what our competitors have been doing internationally. We need to be in the game. We have been more on the sidelines. We have to engage in these major markets. There are opportunities for us out there, but the government needs to lead. The government needs to demonstrate.
A few years ago, the Canadian Chamber of Commerce wrote a very compelling paper about China. It clearly indicated that there was no policy of the government in terms of how to engage that market. For example, Canada is a world leader in the area of environmental technology, particularly with respect to clean air, clean water and contaminated sites. This is very important work and certainly is useful for China. We need to be part of that, but we are not seeing the kind of leadership needed in order to go forward.
From that standpoint, the agreements the government has been putting forward simply focus on a very small niche. They do not deal with the kinds of issues they should be dealing with.
We are seeing an increase in protectionism in the United States. That is of concern, particularly in the area of agriculture. It means difficulties for our farmers. It is a difficulty in terms of our being able to compete in the international arena. The United States' protectionist policies are having an effect here. With respect to the America first policy, the government had discussions with the United States and changes were made in terms of Canadian companies being able to compete, but that only affected 37 of the 50 states in the U.S. It is important that we be there.
The Conservative government has not shown the kind of leadership that is needed on the multilateral side, in terms of being much more visible in the United States. Policy in the United States is not done in Washington; it is done in districts and states across the U.S. That is where we need to be focusing our efforts.
Canadian businesses can compete with anyone in the world if there is a level playing field. When there is not a level playing field, obviously we often face difficulties.
Although my party supports this bill going to committee, the fact is that we would like to see a clear strategy, particularly for the emerging key markets, such as Brazil, India, China, and Japan. We have watched and continually see the United States, Australia, and others being very aggressive, particularly in their talk about a big Asia Pacific free trade zone. If they are in first, we obviously will pick up the pieces.
I think Canadian businesses deserve more than picking up the pieces. They deserve the opportunity. Again, we have to be aggressive. We can talk free trade, but we really have to demonstrate it. The only way to demonstrate it is to show leadership.
Currently, penetrating the Korean market is an issue, particularly in the automotive sector, and the Japanese are carefully watching our discussions. If, and it is a big if, a free trade agreement were to occur between Canada and Korea, the Japanese would be particularly anxious to come to the table. At the moment, the Americans are talking to them about possible free trade.
Some people say that we could never get a free trade agreement with Japan because of agriculture. I do not know of too many people in this House who represent ridings that have a lot of rice. Rice is always the one issue the Japanese deal with. Even then, Japan was able to conclude a successful agreement with the Philippines, for example.
The issue in this agreement, and we are supportive of sending it to committee, is the Canadian merchandise we export to Panama: machinery, electronic equipment, pharmaceutical equipment, et cetera. It is a relatively small market. It is also important that we look at some of the other free trade zones in Latin America.
Latin America has developed, along with states such as Argentina, Uruguay, and Chile, zones in which there is a free flow of goods and where tariffs have been dropped so that businesses can compete. As a country, we need to send out a very clear message that we are prepared to enter into agreements where it is in our national interest.
Obviously, we have to look at environmental issues. This country has traditionally been a leader on climate change, clean water, and clean air issues. Countries really need that expertise.
Not only are Canadians very cost effective in terms of what they are able to produce and export, we can do it in two official languages, which is very helpful. Again, if we are not at the table, that is a problem.
We also have to look at the issue of labour co-operation. I notice in this agreement that there is a side agreement on labour co-operation. Obviously we have to expect that what we are asking is what we would demand at home, including the right to association, the right to collective bargaining, and the abolition of child labour. These are standards we have, and we would expect the same in dealing with other countries.
I know that some colleagues have concerns on the labour end of it. When it goes to committee and we have the appropriate witnesses, we can have those kinds of discussions and strengthen, if need be, those provisions. I think that is important. No piece of legislation I have seen in 14 years here has ever been perfect. That is why we send it to committee, where colleagues have an opportunity to look very carefully at legislation, hear from witnesses, and move forward.
My understanding, in terms of the major stakeholders on this particular bill with Panama, is that there are no major objections. On the whole, it is a fairly straightforward agreement. Again, it will give us some access, but we have to build on that, particularly in the Central American region in countries such as Nicaragua, Guatemala, and Costa Rica. Those countries are also looking at better co-operation. As a balance to the United States, I think Canada could play an important role.
Again, it is the whole issue of having a level playing field with access to markets. We need to be able to at least secure that. When we are looking at new partnerships, we must be able to tell our business community to go forward with the opportunity.
There were reservations about the free trade agreement with the United States and whether we could compete. Obviously, we can compete extremely well when a level playing field is available.
Canada's total exports to this particular country amount to 12.6%. Imports amount to about 17.3%. Over 80% of Canada's economy depends on trade. To keep that, we need to have as much access to markets as we can.
Former Prime Minister Trudeau, in the seventies, talked about a third option, and that third option was to diversify. If we had diversified in the seventies and eighties, maybe we would be in better shape than we are now.
Tariffs are the worst thing that can happen to a trading nation. Obviously, I am not old enough to remember the Great Depression in the 1930s, but some of my colleagues on the other side might. The first thing that happened was that major tariff barriers went up, and protectionism became rampant. That is not something we want to do. That was not good. We need to make sure that we have protection.
We also need to demonstrate leadership when it comes to issues such as climate change and the environment. The Conference of the Parties will soon meet in Mexico, and that will be an opportunity to strengthen international regimes.
Canada is traditionally well known for its international leadership, particularly in areas of multilateralism. The International Criminal Court is an example.
The 11th Conference of the Parties, in 2005, was the most successful COP ever to deal with developing a clear climate change regime internationally. That was important. The former Liberal government got a lot of accolades because of that. Again, it was because of the fact that we demonstrated leadership. We need to continue to do that. We need to continue to say to our allies and others that if protectionism is wrong, this is what we are prepared to do to focus forward.
The European Union has some very stringent policies, particularly when it comes to foodstuffs, even in terms of colouring food. We have to be able to talk about these issues with colleagues. We have seen other countries react to issues in this country, and we need to have a strong voice on those issues. Some of my colleagues, particularly those from Newfoundland and Labrador, are well aware of the issue with regard to the seal hunt.
What are we doing to educate? What are we doing to get our message out on some of these issues so that these sudden trade barriers will not come forward and harm the interests of Canadian farmers and producers, whoever they happen to be?
It is instructive to look at what went forward when we made an agreement with Israel in 1997. That was an opportunity to start further negotiations in other areas of the Middle East. Bill C-8, the Jordan agreement, will build on that. The gulf trading area, a Middle East trading area, is important all the way from the United Arab Emirates to Algeria. That is another market we could penetrate.
In other words, what is the strategy? What is going to be the policy in order for us to move forward? We on this side of the House are quite willing to work with the government to develop a strategy, because it is in our nation's interest. If we do these kinds of things, we will serve our citizens well.
Non-agricultural products, particularly fish and seafood, would be helpful for our markets, but that is only one part of the puzzle. It would be nice to see a really strong policy that the government, members of the opposition, and members of key sectors that deal with international trade really hammer out together. It would be the kind the policy and the kinds of tools we need to be much more aggressive.
The Americans certainly have not been sitting idly by. The Australians, in particular, have been very aggressive in Asia and have reaped a number of benefits. ASEAN, of course, which was getting closer on trade issues with China, now realizes that they cannot put all their eggs in one basket. They are wondering where Canada is on the international stage. They see where the Australians and the Americans are, and they are saying that we need to be there.
Some people do not know that in Indonesia, for example, we are the fifth largest investor, particularly in the area of mining, but our approach is not necessarily coherent. It is not necessarily a policy to say, “Go out there and good luck”. That is not the way to build good trade relations.
Obviously, we support the faster elimination of tariff barriers, particularly in those areas that are important to Canadian industry. In this agreement, Panama will see the elimination of at least 90% of current barriers on goods coming from Canada, which is obviously a positive, but where are those big deals we need to hear about in the House? Where are those big negotiations going on?
On this side, we are watching very carefully the issue of Korea. That is very important because of the nature of that market. We need to be able to say to our businesses that there are tremendous opportunities out there. We do not want to be dealing just with our American friends, which is great, but given policy there, we need to make sure that we are at the forefront.
We were one of the first major countries in China. We had a tremendous opportunity there. Mr. Chrétien led a number of Team Canada missions there in the 1990s. We were leaders. Unfortunately, relations with China changed with the current government, and we lost a lot of ground.
We have to continue to have a consistent policy on how to deal with our trading partners. We cannot be all things to all people. We have to have a particular niche. For example, on the environment, we could have a whole Team Canada just dealing with environmental issues in the Pearl River Delta. There are days when the smog is so thick it rolls into Hong Kong and one cannot see across the harbour. We need to take advantage of those things.
People cry out and say that they need to see Canada there. It would be very helpful if we would do that. Although we will support the bill going to committee, we want to look at the issue of labour to make sure that the guarantees are there. We want to make sure that if these things can be strengthened, that will be done. We welcome the opportunity, but we want to see the bigger picture. We want to see more emphasis on multilateralism, and if that goes forward, it will benefit Canada in our future trading relationships around the world.
Canada-Panama Free Trade Act
September 29th, 2010 / 4:15 p.m.
Jean-Yves Laforest Saint-Maurice—Champlain, QC
Madam Speaker, I am pleased to speak on behalf of the Bloc Québécois to Bill C-46 to implement the agreement negotiated by representatives of the Department of Foreign Affairs and International Trade with the Government of Panama. We oppose this free trade agreement. It is not that the Bloc Québécois is against free trade and free trade agreements, but in this case, there are strong reasons that justify our opposition.
Panama has one of the most well-developed economies in Central America. However, the Bloc Québécois does not believe we should ratify a free trade agreement with Panama when it is still on the OECD's grey list of tax havens. Every country turns to that organization for that list; it is used as a reference. People at the OECD evaluate different criteria with regard to tax havens, which I will say more about later.
We asked departmental representatives a few questions. They said that Canada is currently negotiating a tax treaty with Panama in order to tighten the rules on banking transparency to better combat tax evasion. However, there is no mention anywhere of such a treaty with Panama in the Department of Finance's register of tax treaties currently in effect or under negotiation.
It is clear to us that Panama is still on the OECD grey list and France's blacklist of countries that promote tax evasion. That is the major reason we oppose such an agreement.
The other reason we object to implementing this free trade agreement is that we do not get the impression that workers' rights are very well protected in Panama. In June 2010, the right-wing government of Ricardo Martinelli passed Law 30, which is considered to be anti-union. This law is said to include labour code reform that is seen as repressive since it would criminalize workers who demonstrate to defend their rights.
On August 5, the Panamanian government agreed to review this law, but we have every reason to be concerned about the desire of the Martinelli government to respect the conventions of the International Labour Organization integrated into the side agreement on labour standards.
For these two major reasons—which we will look at again in more detail—we believe that we should delay the ratification of the free trade agreement, in light of the adoption of Law 30, with which the Panamanian government has taken a real step backwards.
Although two days ago we were talking about the Canada-Jordan free trade agreement—Bill C-8—which we were in favour of, we do not agree with the Conservative government's strategy of focusing on bilateral agreements instead of multilateral ones, which are preferred by the Bloc, as we said yesterday.
The Bloc Québécois believes that a multilateral approach is more effective for the development of more equitable trade that protects the interests of all nations.
I would like to come back to the issue of respect for human and labour rights in Panama. Human rights are guaranteed by the Constitution, and in general, they are respected. That is a fact. However, the judicial system still has a number of problems in Panama, including the conditions of imprisonment, the length of preventive detention, corruption, and the lack of independence of the judicial system. In rural areas, there are problems with child labour and with indigenous communities and marginalized ethnic minorities, as well as discrimination against women.
In recent months, Panama has seen a wave of what is considered to be anti-union repression. Sources estimate that between two and six people died, and about a hundred were injured during violent protests that followed the June 2010 adoption of Law 30, known as the “sausage bill”, because it contains all kinds of reforms, such as reforms to the labour code and to environmental legislation.
The reform of the labour code is seen as repressive, because it would make it a crime for workers to demonstrate to defend their rights.
Some of the country's environmental groups submitted an application for support to the UN environment program to convince the Panamanian government to review changes that will diminish the state's ability to preserve its natural resources.
Unions have asked for support from the international labour federations while the Inter-American Commission on Human Rights is asking for an investigation of police brutality during protests against Law 30 in July 2010. According to our sources, the Panamanian government is conducting its own investigation.
On July 14, 2010, the International Trade Union Confederation, together with its affiliated organizations in Panama, firmly condemned violent repression of the strike movement by workers and demanded the immediate repeal of “the controversial Law 30, which has become a licence to kill for the police, creating a climate of extreme violence” among the people. I am quoting from the article entitled “New Panamanian Law Threatens Environment and Human Rights.”
On August 5, the Panamanian government agreed to review the law. We should monitor this issue before going any further. Otherwise, after signing the agreement, Canadian corporations may find that they are damaging the environment or contravening the International Labour Organization's core convention, C87. That is rather important.
I will now return to the issue of Panama being a tax haven on France's blacklist and the OECD grey list. The latter lists countries that have committed to exchanging tax information but that have not substantially implemented the rules.
Section 26 of the OECD model tax convention provides the most generally accepted standard for the bilateral exchange of tax information.
There is no indication, on the Department of Finance web site of treaties and conventions, that an information exchange agreement is being negotiated with Panama.
Before entering into the Canada-Panama free trade agreement, the Conservative government absolutely must sign a tax information exchange agreement with Panama and this agreement must not allow subsidiaries located in the targeted jurisdictions to be tax exempt.
Obviously, it is important that this agreement be concluded, negotiated, drafted and signed before finalizing the free trade agreement. It is also clear that, under such an agreement, corporations cannot use their presence in Panama to justify tax evasion. For the Bloc Québécois, it is entirely inconceivable that we would be associated with such a practice.
With this free trade agreement, we will likely see more trade and a significant increase in Canadian investment in Panama. We will see more taxpayers, both individuals and businesses, earning income in both Canada and in Panama. That is why it is essential for the Government of Canada and Panama to sign the type of information exchange agreements I was talking about earlier.
Since Panama is a tax haven, such a free trade agreement would become an invitation to evade taxes, or use loopholes in the law to help a taxpayer avoid paying a tax he or she normally should.
At the end of the day, should a free trade agreement promote tax evasion? It is a very serious question because we would not want Canada to inadvertently promote investments that encourage tax evasion under the pretext of concluding more trade agreements and lowering taxes. That makes absolutely no sense.
For example, a company whose income would be legally taxed according to the rate in effect in Panama would be tempted to set up a business structure to take advantage of this near-zero tax rate.
The Conservative government is already signing tax treaties with tax havens and we all know it. The Bloc Québécois absolutely believes that we need to be vigilant because in June 2010 the government signed tax information exchange agreements based on the OECD model with eight jurisdictions: Bahamas, Bermuda, Dominica, the Cayman Islands, Turks and Caicos, St. Lucia, St. Kitts and Nevis, and St. Vincent and the Grenadines.
This information tells us that we absolutely must be careful; the Conservative government absolutely must avoid putting Canada in a position, once again, of promoting tax evasion, when there are plenty of workers in Quebec and Canada who can barely manage because they have to pay their taxes.
In La Presse on July 6, 2010, we read:
In return for these agreements, Canada seems to have given these jurisdictions an advantage. Subsidiaries of active Canadian companies domiciled in these islands can effectively repatriate their foreign profits to Canada tax free.
Bermuda, Bahamas and the other islands will thereby have a similar status to Barbados, which has been the only tax haven to have this privilege.
It is high time we gave ourselves a real policy of multilateralism.
The current course of globalization, a phenomenon bearing both great hope and great injustice, must be redirected. Disparity between rich and poor, the failure to respect rights and freedoms and the lack of regulations on the environment and labour give rise more to despair than to hope.
Openness to trade and the establishment of international regulations to counter protectionism and protect investment are good things that the Bloc supports. That does not mean that trade rules should have precedence over the common good and the ability of governments to redistribute wealth, to protect their environment and culture and to offer their citizens basic public services such as health care and education. These fundamental elements must always take precedence over any trade that we establish in order to increase our exports. These basic criteria must guide our negotiations and intentions to sign free trade agreements with other countries.
Quebec is a trading nation. Our companies, and especially our cutting-edge companies, could not survive on just the domestic market. International exports account for one-third of Quebec's GDP. If interprovincial trade is added, exports represented 52% of Quebec's GDP in 2005.
Protectionism is not in our interests, and that is why Quebec, and Quebec sovereignists in particular, massively supported the free trade agreement with the United States and then NAFTA.
That is also why the Bloc Québécois was the first party in the House of Commons to call for a free trade agreement with the EU.
Then again, it would be naive and false to claim that everything is just fine, in the best of all possible worlds. While freer trade has led to greater wealth overall, it has also produced its share of losers. And that is unfortunate.
The trade environment has worsened considerably over the last few years, and we must take that factor into account. Between 2003 and 2007, Quebec went from a large trade surplus to a $13 billion deficit. In 2006, every Quebecker therefore consumed $2,000 more than he or she produced. And this only covers our international trade balance; another $5 billion deficit must be added in interprovincial trade, which also made us considerably poorer.
The result of this trade deficit is that our manufacturing sector has become dangerously weak. Between 2003 and 2007, it lost nearly 150,000 jobs, which was nearly all the jobs lost in this sector in Canada, including 65,000 lost since the Conservatives came to power, mainly because of foreign competition and a strong Canadian dollar. Trade liberalization can only be profitable if it is guided by certain rules; otherwise, it is a race to the bottom.
For a long time, Canada's trade policy was simply to improve access to foreign markets. From that perspective, it has been very successful. Today a majority of products, over 80% of world trade, flow freely.
However, we are now beginning to see the downside of unbridled liberalization: heavy pressure on our industry, offshoring and trade agreements that amount to a licence to exploit people and the environment in developing countries. The trade environment has changed in recent years and as far as Quebec is concerned, it is not for the better.
Joseph Stiglitz, Nobel Prize winner in economics and former vice-president of the World Bank, had this to say when he received his honorary doctorate from Université de Louvain on February 3, 2003:
As our interdependence has increased, we have discovered that we need rules to govern the process of globalization and to create institutions to help it function. Unfortunately, these rules are too often established by the rich countries to serve their own interests and especially individual interests within these countries.
The Bloc Québécois is proposing a change in Canada's trade priorities. Canada should now shift its focus from trade liberalization to creating a more level playing field. The Bloc Québécois believes that our trade policy must focus on fair globalization, not the shameless pursuit of profit at the expense of people and the environment.
That is the Bloc Québécois' position on Bill C-46.
Canada-Jordan Free Trade Act
September 27th, 2010 / 3:45 p.m.
Mario Silva Davenport, ON
Mr. Speaker, I am pleased to speak to Bill C-8, which is the legislation to implement the Canada-Jordan free trade agreement, and to lend my support in sending this bill to the trade committee.
As many members know, I have been on the trade committee for some time. The committee has had an opportunity to deal with a variety of issues, some of them contentious, some less so. The committee does good work in providing a forum for people to present their views and concerns on trade and the different trade agreements with the possibility of amending some of the legislation. The committee has had some success in doing so.
The trade committee is now considering the agreement with Panama and the agreement with Jordan, which is before the House. After members have spoken to this bill, we hope that the committee will have an opportunity to hear from the different sectors about their concerns as well as the positive aspects of this legislation, and how they would like the legislation to be implemented.
Canada and Jordan enjoy good economic and trade relations. We are good friends and good partners. Jordan has shown itself to be a country that we can deal with not just on trade and economic issues, but also on issues regarding peace and prosperity in the region.
Following a visit of His Highness King Abdullah II to Canada in July 2007, Canada and Jordan committed to explore the possibility of a free trade agreement. At the conclusion of King Abdullah's visit, a foreign investment promotion and protection agreement and a new air services agreement were announced. Canada has a bilateral air services agreement and a nuclear co-operation agreement as well as the FIPPA, which was signed at the same time as the FTA.
To give some background on this free trade agreement legislation that we are embarking to send to committee, on March 24, 2010 the Government of Canada introduced legislation in Parliament to implement the free trade agreement on goods only, and parallel agreements on labour co-operation and the environment. Free trade agreement negotiations were concluded in August 2008 and the parties formally signed the agreement and made it public on June 28, 2009.
Upon implementation of this legislation, we will see the immediate elimination of tariffs on over 99% of recent Canadian exports to Jordan. This will directly benefit Canadian exporters. Jordan will eliminate all non-agricultural tariffs and the vast majority of agricultural tariffs as well.
Once the free trade agreement comes into force, Jordan will immediately eliminate tariffs in the 10% to 30% range on many key Canadian exports, including pulse crops, frozen french fries, animal feed, various prepared foods, certain forestry products and machinery. These are sectors in which Canadian companies are world leaders.
Once the agreement comes into force, Canada will eliminate all tariffs on Jordanian goods, with the exception of over-quota tariffs on dairy, poultry and eggs, which are excluded from tariff reductions.
Canada and Jordan will commit to ensure that their laws respect the International Labour Organization's 1998 Declaration of Fundamental Principles of Rights at Work, which covers the right to freedom of association, collective bargaining, elimination of child labour, forced labour and workplace discrimination.
Canada and Jordan will also commit to protect occupational health and safety, maintain acceptable minimum employment standards and provide compensation for occupational injuries and illness. Migrant workers will have the same legal protections as nationals in respect to working conditions.
Many members in this House have raised the issue of human rights and the importance of making sure it is not overlooked but very much integrated into discussions and negotiations within our free trade agreements.
When we look at this legislation at committee, we will have an opportunity to hear from the business sector and also from the human rights community.
Our party has a very strong view on labour and human rights issues. We have done everything we can to ensure that labour legislation that is put forward in this House has the widest respect from all the communities and specifically addresses human rights issues.
The labour co-operation agreements also include effective enforcement mechanisms. Failure to respect International Labour Organization principles and domestic laws could result in an independent review panel assessing a monetary penalty as a last resort. Any such assessment would accrue to a special co-operative fund. The funds will be used to support the implementation of an action plan to ensure that identified problems are rectified. There will be a mechanism in place to look at labour law, human rights conditions and workplace safety. Health and safety and respect for human dignity are key components in this legislation and the trade committee will ensure that all those important key elements are part of the agreement.
The agreement also has a component that deals with the environment. It will commit Canada and Jordan to pursue high levels of environmental protection and to develop and improve environmental laws and policies. The agreement will also oblige the two countries to enforce the domestic environment laws to ensure trade and investments are not encouraged at the expense of those laws.
Canada has a golden opportunity to work as a partner not just with Jordan, but with other countries on environmental protection and stewardship. Canada is a country of rich resources, natural resources in terms of the very large mining and petroleum sectors, but also its abundance of water. We have very large and vast water resources. Water management is very important. Respect for the environment is something that we in Canada cherish. We have to ensure it is always at the forefront of these agreements.
Canada and Jordan will also ensure that environmental assessment processes are in place and will provide remedies for violations of environmental laws. The two countries also agree to encourage corporate social responsibility and to promote public awareness of engagement in environmental issues.
The agreement focuses on consultation and co-operation to address any matter arising under the agreement with access to an independent review panel as the last resort. Again, as I stated, the same type of process is in place for the labour laws that we hope to be part of the agreement.
In 2009 two-way merchandise trade totalled $82.5 million with the value of Canadian exports reaching about $65.8 million. This is not very large when we compare it to some other countries with which Canada trades. Our largest trading partner is the U.S., and there is the European Union as well. Our trade with Jordan is still significant in the sense that it is a partner we very much are trying to reach out to, and a partner which for many years has had very good relations with Canada. This is not just an act of friendship; we also hope that our trading relationship will grow over the course of a number of years once this bill has passed.
Top exports between the two countries include vehicles, forestry products, machinery, pulse crops, mainly lentils and chickpeas, ships and boats, and plastics. Imports from Jordan totalled about $16.6 million in 2009, led by apparel, jewels, vegetables and inorganic chemicals.
The Minister of International Trade has said that the Canada-Jordan free trade agreement, once implemented, will open doors to the growing economy and give Canadian businesses a real advantage in the broader Middle East and North African markets. This is an important gateway to many of those countries. As pointed out, this agreement will open doors to those particular markets in the Middle East and Africa.
Upon implementation, the free trade agreement will eliminate tariffs on over 99% by value of recent Canadian exports to Jordan, thereby directly benefiting Canadian exporters and workers. Two-way merchandise trade between Canada and Jordan was about $2.5 million but there is a great potential for growth in the future.
Mr. David Hutton, director general of the Canada-Arab Business Council, stated:
The potential for expanding that network across North Africa and throughout the Arab peninsula is exceptional. I certainly believe that the potential for Canada in that part of the world is as great as it is anywhere, if not greater.
The parallel agreements on labour and the environment will ensure progress on labour rights and environmental protection.
The agreement is part of a broader international trade strategy that the trade committee has been looking at. I am very much a part of that. In the past we have been successful in many of our trade agreements with Chile, Costa Rica, Israel and Peru, and the European free trade agreement. The agreement with the U.S. and Mexico is one that is well known to most Canadians.
Canada is continuing trade talks with other members of the European Union as well as the Caribbean community, Central American countries, the Dominican Republic, Korea, Sweden, as well as pursuing closer trade relations with India, Morocco and Ukraine.
India is an important emerging market. The BRIC countries, Brazil, Russia, India and China, dominate the markets. India, as the largest democracy in the world, has played a major role in that region in terms of expanding its trade.
As the vice-chair of the Canada-India friendship committee, I will take this opportunity to congratulate India and wish it all the best as it hosts the Commonwealth Games. Notwithstanding some of the negativity that we hear in the news, I think India will showcase its best to the world. I have had the pleasure of visiting India twice. It is an incredibly beautiful country with lots of history and wonderful sights to see and great people as well. It is a true partner with Canada.
The Hashemite Kingdom of Jordan is a relatively small country. Unlike India, which is one of the largest countries in the world with over 1.5 billion people, Jordan only has about six million people.
We need partners large and small, because Canada is a trading country. We are a small country as well with only about 33 million people. We have to make sure that we have partners in the right places.
Jordan has been a committed, dedicated partner with Canada and a dedicated partner in the Middle East peace talks. Many of us in the west have a better understanding of the relationship with the Arab world.
It is also an emerging country. It is a small country that actually pulls beyond its weight in many ways, especially on issues of peace and leadership in the Middle East. It is certainly a country with which, justly so, Canada should be pursing free trade, notwithstanding the fact that I believe this still has to go to committee and we still have to hear from the public.
However, from what I have been able to read from this agreement and what I have seen thus far, I think it is something to which we should lend our support. Certainly we as a party have taken the position that we support that this go to the committee and at the committee we would have an opportunity to take a look at this.
With everything that is going on, I have to say that it was an incredible summer where I had an opportunity to speak with many of my constituents and attend many events. The issue at hand for them, of course, is jobs and the economy. Unlike some parties, we do not fear trade agreements. We believe trade agreements can be a very important component in job creation and we can see different sectors that have, over time, developed thanks to free trade agreements and the opening of markets. We have to ensure that Canada as a free trade country aligns itself with different partners in order to allow access to our goods and services and to allow our companies to grow.
When my constituents, at their doors, spoke about jobs and job creation and their concerns about the economy, we have to ensure that we respect and address those issues. We as parliamentarians have an obligation to ensure that we are constantly fighting for Canadians, for our people and for all our constituencies across the country. Opening markets is certainly one way of doing it, and opening ourselves to a market that is growing and is a good friend and partner of Canada makes a lot of sense. So I will be lending my support for this initiative to go before committee.
The House resumed consideration of the motion that Bill C-8, An Act to implement the Free Trade Agreement between Canada and the Hashemite Kingdom of Jordan, the Agreement on the Environment between Canada and the Hashemite Kingdom of Jordan and the Agreement on Labour Cooperation between Canada and the Hashemite Kingdom of Jordan, be read the second time and referred to a committee.