Debates of Feb. 3rd, 2011

The House proceeded to the consideration of Bill C-46, An Act to implement the Free Trade Agreement between Canada and the Republic of Panama, the Agreement on the Environment between Canada and the Republic of Panama and the Agreement on Labour Cooperation between Canada and the Republic of Panama, as reported (without amendment) from the committee.

He said: Madam Speaker, I am pleased to rise on the NDP amendments to take out certain key portions of Bill C-46, which is the implementation legislation on the free trade agreement with Panama.

The reason why the NDP is opposing this agreement, as many of the witnesses who came before the standing committee can attest, is because this is just another symbol of what has been a pretty dysfunctional trade strategy from the government.

Over the last 20 years, the middle class has been gutted. We have seen reduced incomes for most Canadian families and increasing inequality. Inequality in Canada is at the same level as it was in the 1920s. A lot of this is due to a series of bad right-wing economic policies that have been put forward, first, by the Liberal government and continued by the Conservative government. One of the components within that is how the Conservative government approaches trade strategy.

We will hear Conservatives in the House talk about how this is a fantastic opportunity and that Canadians will prosper. Canadians have heard that line in agreement after agreement. The government said the same thing about the softwood lumber sellout. It said the same thing about the ship building sellout. It said the same thing about the buy America sellout.

However, we have seen the contrary. We have seen middle class incomes eroding, poor Canadians getting less and struggling harder to make ends meet. In part, it is because the government signs these agreements without due thought to the consequences.

This may be surprising, but the Conservative government does not even do impact studies before it signs these agreements. It just goes ahead from the back of a napkin, hoping and praying that everything will turn out right.

It is fascinating to actually look, in real terms, at the export figures. Every time we have signed a bilateral trade agreement, our exports to those markets have actually gone down and not up.

We will hear some bafflegab from Conservatives later today and they will use a very clever trick. Instead of using real dollars, they will use current dollars. As we know, if we use current dollars, we can throw out anything and show that people are earning more money because the inflation rate and devaluation that takes place is not taken into consideration in that purchasing power. It is the same thing with exports. In real terms, in constant dollars comparing apples to apples in the markets that the Conservative government has signed these bilateral trade agreements, our exports have gone down. That is a statement of fact.

The Conservatives will try a lot of bafflegab, but a real reason why their trade strategy is so dysfunctional is because they have not done their homework and checked the figures. In fact, the NDP did the research through the Library of Parliament because, after asking DFAIT month after month, the Department of Foreign Affairs and International Trade was unable to give the actual real-term constant dollar value of our exports to those markets.

I will cut to the chase. We have a dysfunctional Conservative government with a dysfunctional trade strategy. The government is making most Canadians poorer because it is not giving due thought to the impacts of what these trade agreements are and has a rabidly right-wing approach on trade agreements generally.

We have signed a trade agreement with Panama, but what is the problem with Panama? In a study from the Internal Revenue Service of the United States, tax havens and criminality are mentioned as well as what happens in Panama because of its encouragement to launder dirty money. The study says that 75% of all sophisticated drug trafficking operations use offshore secrecy havens like Panama.

I will cite from Tax Havens: How Globalization Really Works by Ronen Palan. He states, “It is evident to all who have studied the offshore banking business that its growth has been fuelled by the phenomenal increase in cash from the U.S. drug trade”.

The IRS states that of the investigations it has conducted, 45% involved illegal transactions derived from legal income and about 55% of cases actually dealt with illegal income from drug trafficking. The IRS cites the offshore money laundering havens where this takes place, which is very interesting. Leading them all is Panama and the Cayman Islands. The sites named by the IRS account for 85% of all cases involving transactions of illegal income.

It is not simply a process of signing a trade agreement with just any country. We are talking about the leading money laundering dirty drug money tax haven in all of the world tied with the Cayman Islands. The the government has a trade agreement with it.

I will not have time today to go into the labour violations, environmental standards or treatment of aboriginal people in Panama. However, I know my NDP colleagues will be mentioning this over the next few hours and days of debate. Instead I will focus on the issue of the money laundering of dirty drug money.

The Conservatives know full well the fundamental issue that has come up and stopped Congress in the United States from moving forward with a trade agreement with Panama. It apparently has higher standards than the Conservative government. One would think the Conservative government would then say that it would negotiate hard on behalf of Canadians, that it would put a stop to the money laundering of dirty drug money and that it would demand a tax information exchange agreement with the Panamanian government. It did not do that.

It sent a letter last year and the Panamanian government did not deign to respond for a long time. However, because the Conservatives are soft on the crime of money laundering dirty drug money decided they wanted to move ahead with the trade agreement, despite the fact it had absolutely no commitment from the Panamanian government to clean up the mess.

What response did they get? We will hear Conservatives say that they got a commitment from the Panamanian government to clean up all the money laundering of dirty drug money that takes place in Panama. That is what they will tell parliamentarians and the public, but they do not have a tax information exchange agreement. Even something minor like a double taxation agreement only deals with legal funds. It does not deal with the money laundering of dirty drug money that takes place in Panama as I speak.

The Conservatives did not get any of those assurances. However, there is a clause in the bill. What does the clause in the trade agreement actually say? It says that nothing should impede the transfer of funds in or out of the country. I guess what the Conservatives are saying is that not only is having a tax haven okay, which they are fine with as they are soft on the money laundering of dirty drug money, but it also says that they cannot stop the flow. If the Hells Angels decides it wants to money launder in Panama, I guess that means the trade agreement says that is okay, too.

These are the fundamental points about which people who voted for the Conservatives in the past should be concerned. We are not talking about economic development or progress. This dysfunctional trade policy has actually put the lie to those pretensions.

We would not be seeing most family incomes and exports to those bilateral markets go down in real terms, despite the bafflegab where the Conservatives try to magically produce, on the basis of current dollars, some kind of magical formula that does not take into consideration the fact that exports have gone down because the export strategy, pretty pathetically, is dysfunctional and failed. It is not just that. The agreement itself allows that protection and comfort for the money laundering of dirty drug money.

This is fundamentally hypocritical. It is appalling to me that a Conservative government that is so soft on white collar crime and so soft on the laundering of dirty drug money, if it is trying to push an election at the same time, would actually bring this bill forward. Over the next days of course we are going to be raising these issues, and of course Conservative voters would be the most concerned about this hypocrisy from the Conservative government.