International Trade Committee on Sept. 27th, 2012

[The Chair, Conservative, Rob Merrifield]

That's right, and now we're voting on the amended motion.

[Ed Holder, Conservative, London West, ON]

It's on the amended motion.

[The Chair, Conservative, Rob Merrifield]

We've passed the amendment, and now we're voting on it as amended. That's right.

[The Clerk of the Committee, Mr. Paul Cardegna]

The question is on the motion in the name of Gerald Keddy, as amended by the committee.

(Motion as amended agreed to: yeas 6; nays 5)

[The Chair, Conservative, Rob Merrifield]

We have our witnesses with us. I believe you're prepared to answer any questions we may have. We'll move right into questions and answers, unless you have an opening statement of any kind.

Please go ahead, Mr. Ambassador.

Just before that—

[Ed Holder, Conservative, London West, ON]

I apologize, Mr. Ambassador, and to you, Chair.

I have a point of clarification. I know we have two sets of speakers. Is it your intent to split the time so that we can hear equally from both?

[The Chair, Conservative, Rob Merrifield]

We have the ambassador here. I don't believe there's much of an opening statement, so my intent would be to finish off the first hour with the ambassador and then move into the second hour. That's my intent, unless you would like to further exhaust—

[Ed Holder, Conservative, London West, ON]

I'd like to hear them equally. That's why, with the limited resources—

[The Chair, Conservative, Rob Merrifield]

Let's see how it goes.

Please go ahead, Mr. Ambassador.

[His Excellency Jorge H. Miranda Corona, Ambassador, Embassy of Panama in Canada]

Thank you, Mr. Chairman, and thank you all for inviting me to attend this meeting.

In fact, we received the invitation just yesterday, on short notice, so we got the instructions today. I'm prepared for your questions. I don't have anything like a statement to deliver right now—

[The Chair, Conservative, Rob Merrifield]

Okay. We'll go right to questions and answers.

Mr. Davies, the floor is yours.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chairman.

Thank you, Ambassador, for being here today. I'd like to welcome you and your assistant to our committee.

Mr. Ambassador, in previous parliamentary hearings and debates, serious concerns were raised by a number of sources that Panama is a known tax haven. The practice of people sheltering money in offshore accounts with little or no disclosure requirements is estimated to cost governments billions of dollars around the world in lost tax revenue, including Canada.

What can you tell us about the state of tax secrecy or sheltering laws in Panama today?

[Jorge H. Miranda Corona]

Thank you very much for your question.

What I could say is that in order to comply with international standards and the issues that you are raising today, Panama has negotiated with several countries what we call in Spanish tratados para evitar la doble tributación, double tax treaties, and actually we have negotiated that agreement with your country, although it has not been signed yet. It is a treaty that we have signed already with Spain and other countries, OECD countries, which were basically the countries that were having some issues in regard to these issues that you raised recently. We are expecting to sign this treaty soon with your country. Both countries can benefit from that treaty, especially to avoid what you mentioned.

[Don Davies, NDP, Vancouver Kingsway, BC]

Ambassador, there is a difference between a treaty on double taxation and a treaty that obligates the countries to exchange tax information. Those are two different treaties. Are you talking about Canada signing a double taxation treaty, as opposed to a tax information exchange treaty? That is what you actually said.

[Jorge H. Miranda Corona]

It is a treaty to contain mechanisms to exchange information according to our interests and laws. We have signed this treaty, which I can send to you if you want, with Italy, Spain, France, Belgium just to mention a few.

[Don Davies, NDP, Vancouver Kingsway, BC]

Have you signed that agreement with Canada?

[Jorge H. Miranda Corona]

Canada has not signed the treaty yet, but we are expecting your government to do so in the coming months or whenever you are able to do so, because now it's in legal wording.

[Don Davies, NDP, Vancouver Kingsway, BC]

Ambassador, I understand that the current Conservative government wants us as parliamentarians to ratify a free trade agreement with Panama before we have a tax information exchange agreement in place. Now I understand, if I am correct, that this is the opposite approach to what the U.S. Congress took, which was that they would not ratify a free trade agreement until a tax information exchange agreement was completed. Is that correct? Was that the approach the U.S. Congress took?

[Jorge H. Miranda Corona]

I don't really know the policy towards the United States of America. What I can say is that we had two treaties with the U.S. recently that related to this. They are the tax information treaty that I mentioned, as well as the free trade agreement that is in place right now with the United States.

[Don Davies, NDP, Vancouver Kingsway, BC]

I congratulate you, Ambassador, on signing the tax information exchange agreements. I understand that has taken Panama off the grey list, because Panama has now apparently signed the minimum required, which is 12 agreements, I believe. Is it 12 agreements Panama has signed now?

[Jorge H. Miranda Corona]

We have signed 14 agreements.

[Don Davies, NDP, Vancouver Kingsway, BC]

I congratulate you on that, but my first question was really directed more at whether you have changed the bank secrecy laws in Panama that change the actual domestic internal banking disclosure requirements in Panama. Has there been any domestic change in those laws?

[Jorge H. Miranda Corona]

We have not considered ourselves banking secrecy. We are expecting this treaty to provide more information to the rest of the world in that line. We are out of the grey list, as you mentioned.

What I could also say is that there is a high-level commission in Panama working on this issue, especially to provide information and other laws to combat money laundering and drug trafficking as well. We are—

[Don Davies, NDP, Vancouver Kingsway, BC]

Do you acknowledge that's been a problem in Panama in the recent past? Has this problem of a lot of laundered drug money finding its way into the Panamanian banking system been a problem in Panama?

[Jorge H. Miranda Corona]

I don't have figures right here about money laundering in Panama, but if I asked my authorities back in Panama, I could share with you what the Panamanian authorities are doing towards and against money laundering in my country. However, I don't have the figures with me right now.