Canada-Panama Free Trade Act

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

This bill was last introduced in the 40th Parliament, 3rd Session, which ended in March 2011.

Sponsor

Peter Van Loan  Conservative

Status

Third reading (House), as of Feb. 7, 2011
(This bill did not become law.)

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

This enactment implements the Free Trade Agreement and the related agreements on the environment and labour cooperation entered into between Canada and the Republic of Panama and done at Ottawa on May 13 and 14, 2010.

The general provisions of the enactment specify that no recourse may be taken on the basis of the provisions of Part 1 of the enactment or any order made under that Part, or the provisions of the Free Trade Agreement or the related agreements themselves, without the consent of the Attorney General of Canada.

Part 1 of the enactment approves the Free Trade Agreement and the related agreements and provides for the payment by Canada of its share of the expenditures associated with the operation of the institutional aspects of the agreements and the power of the Governor in Council to make orders for carrying out the provisions of the enactment.

Part 2 of the enactment amends existing laws in order to bring them into conformity with Canada’s obligations under the Free Trade Agreement and the related agreement on labour cooperation.

Part 3 of the enactment contains coordinating amendments and the coming into force provision.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Votes

Feb. 7, 2011 Passed That 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, be concurred in at report stage.
Feb. 7, 2011 Failed That Bill C-46 be amended by deleting Clause 63.
Feb. 7, 2011 Failed That Bill C-46 be amended by deleting Clause 12.
Feb. 7, 2011 Failed That Bill C-46 be amended by deleting Clause 10.
Feb. 7, 2011 Failed That Bill C-46 be amended by deleting Clause 7.
Oct. 26, 2010 Passed That the Bill be now read a second time and referred to the Standing Committee on International Trade.
Oct. 26, 2010 Passed That this question be now put.
Oct. 20, 2010 Failed That the motion be amended by deleting all the words after the word "That" and substituting the following: “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, be not now read a second time but that it be read a second time this day six months hence.”.

Canada-Panama Free Trade ActGovernment Orders

February 7th, 2011 / noon
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NDP

Alex Atamanenko NDP British Columbia Southern Interior, BC

Mr. Speaker, I will continue what I started the other day. The free trade agreement between Canada and Panama is in line with the Canada-U.S. strategy of signing a series of bilateral agreements.

I will continue to talk about the testimony we heard at the Standing Committee on International Trade, in particular the testimony of Todd Tucker, who appeared before the committee on November 17, 2010. He said this:

I have two central points. First, Panama is one of the world's worst tax havens. It is home to an estimated 400,000 corporations, including offshore corporations and multinational subsidiaries. This is almost four times the number of corporations registered in Canada.

Second, the Canada-Panama trade agreement should not be thought of primarily in the traditional terms, or solely in the traditional terms, of cutting tariffs. Instead, it should be seen for what it is, which is hundreds of pages of text that commit Canada and Panama to follow certain domestic policies. The pact would give new rights to the Government of Panama, and to the hundreds of thousands of offshore corporations located there, to challenge Canadian anti-tax-haven initiatives outside of the Canadian judicial system.

...What makes Panama a particularly attractive location for tax dodgers and offshore corporations? Well, for decades, the Panamanian government has pursued an intentional tax haven strategy. It offers foreign banks and firms a special offshore licence to conduct business there. Not only are these businesses not taxed, but they're subject to little to no reporting requirements or regulations.

According to the OECD, the Panamanian government has little to no legal authority to ascertain key information about these offshore corporations, such as their ownership. Panama's financial secrecy practices also make it a major site for money laundering from places throughout the world. According to the U.S. State Department, major Colombian and Mexican drug cartels, as well as Colombian illegal armed groups, use Panama for drug trafficking and money laundering purposes. The funds generated from illegal activity are susceptible to being laundered through Panamanian banks, real estate developments, and more.

Panama's domestic legal regime is supplemented by a steadfast refusal, thus far, to engage in far-reaching tax information exchange agreements with its key trading partners. Up until last year, Panama had no international tax treaties of any kind. Now it is on track to have up to a dozen or more double-taxation treaties signed this year.

...The Canada-Panama trade deal would worsen the tax haven problem. As the OECD has noted, having a trade agreement without first tackling Panama's financial secrecy practices could incentivize even more offshore tax dodging. But there's a reason to believe that the trade deal will not only increase tax haven abuses but will also make fighting them that much harder.

I would like to take a few minutes, as we talk about this free trade agreement, to talk a little bit about free trade agreements in general.

What we hear on this side, and what I have been saying, is that we need to have fair trade as opposed to corporate free trade. Many of these agreements that our country or other countries have signed tend to emphasize giving more rights to the corporations, as evidenced by the agreement we signed with some European countries that has affected our shipbuilding industry by allowing more Norwegian ships to come in tariff-free.

Canada has always been a trading nation. Free trade has not been, in many instances, that positive, although there have been beneficial effects. There is some evidence, and I have been reading through some information on this, that when the Canada-U.S. Free Trade Agreement was signed in the 1980s under the Mulroney government, there were some facts that were presented to provinces that were not quite the same documents circulated at the federal level. In other words, there is some question as to whether or not the provinces received enough information about the agreement. I will be studying that document further, just to see how it relates to what we are experiencing today.

We know that since our free trade agreements were signed, we have lost something like 300,000 manufacturing jobs in Canada. Just as an aside, it is shame that I cannot go into a store and buy a pair of shoes made in Canada. It is with difficulty that I found a jacket and winter boots made in Canada. Thank goodness we have a couple of companies in Montreal, Quebec that still manufacture winter boots.

We have seen the softwood lumber sellout. We have seen the hardship that has caused in our communities. We have seen cheap energy continuing to flow to the United States, knowing that we cannot cut back on that without cutting back on our own domestic consumption, thanks to NAFTA. We see in this time of instability in the world that east of Ottawa we have to import 90% of our oil. In fact, we are exporting our oil south from the west.

Chapter 11 of NAFTA allows corporations to sue Canadian governments, and millions of dollars of our taxpayers' money have gone to defending our provincial and federal governments as a result of these ludicrous lawsuits.

I would just like to conclude by saying that we really need to take a good look at these agreements so that they are in the best interests of the people of both countries.

Canada-Panama Free Trade ActGovernment Orders

February 7th, 2011 / 12:05 p.m.
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Conservative

Bradley Trost Conservative Saskatoon—Humboldt, SK

Mr. Speaker, I know the hon. member is one of the New Democrat members most interested in agricultural issues. I was very interested to note that he did not address agricultural issues, at least in the portion of his speech that I heard. Maybe he did in the earlier portion.

I was wondering if the member would respond to that, because one of the things we heard in committee as we discussed the Canada-Panama trade agreement, as with most of them, is that the agreement would have marked benefits for our agricultural producers. We produce very different crops from what they do in Panama. Canada is not known for growing a lot of bananas. So we will not be competing with Panama in that way. However, be they our wheats, pulses, or processed foods, there are very good openings in Panama.

I am wondering why the hon. member has not talked about the advantages that the Canada-Panama trade agreement will have for our agriculture industry.

Canada-Panama Free Trade ActGovernment Orders

February 7th, 2011 / 12:10 p.m.
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NDP

Alex Atamanenko NDP British Columbia Southern Interior, BC

Mr. Speaker, the member asks a logical question.

My understanding is that we do trade with Panama at the current time. We trade with many other countries. In any trade agreement we have to look at the positive and the negative aspects.

The fact this country is or harbours a paradis fiscal , a tax haven that is sucking millions of dollars, and also that it should not be supporting the drug trade, I think overrules the fact that we may gain a few small markets in this country.

Canada-Panama Free Trade ActGovernment Orders

February 7th, 2011 / 12:10 p.m.
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Liberal

Geoff Regan Liberal Halifax West, NS

Mr. Speaker, first I must inform you that I will be splitting my time with my hon. colleague from Don Valley East.

I am pleased to have the opportunity to speak to Bill C-46, the free trade bill between Canada and Panama. This bill seeks to implement the Canada-Panama free trade agreement, the Canada-Panama agreement on labour co-operation and the Canada-Panama agreement on the environment. It is a bit of a mouthful.

I will also be—

Canada-Panama Free Trade ActGovernment Orders

February 7th, 2011 / 12:10 p.m.
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Liberal

Geoff Regan Liberal Halifax West, NS

Thank you, Mr. Speaker, for that clarification.

I want to say a few words about the bill in the context of the reality of the government's trade policy and foreign policy generally.

Panama is a relatively small economy, but it is an important player in the Americas and an important market for Canada. In fact, it is a stable country which has made significant progress in recent years in terms of development and democracy, which Canada can play an important role in encouraging.

I had the experience four years ago of being part of a delegation led by the Speaker to three francophone countries in Africa, Benin, Burkina Faso and Mali, with the purpose of encouraging democratic development by holding conferences and discussing how our system works as opposed to theirs. That was an important process.

We talked, for example, about the role of an official opposition and how important it was to have one. Even if my colleagues opposite may not always enjoy that experience, they know it is important to have one. That was actually a novel concept for some of the parliamentarians we were talking to. We could see how the discussion was getting them thinking about ways they might want to see change in their own country. There are things that we as a country can do to encourage democratic development.

Of course, Canada is a trade-dependent nation. Eighty per cent of our economy depends on access to foreign markets for Canadian exports. Imagine that. That is incredible. Eighty per cent of our economy depends on access to foreign markets.

It used to be, 20 years ago, that 90% of our exports went to one country, the U.S., and these days it is about 80%. That has been a change, but is still a huge proportion of our exports and economy that is dependent upon one trading partner, the United States, a very important partner and good friend. It is a good sign that there has been some progress in increasing our trade elsewhere and we should keep trying to do so.

That is one of the reasons the Liberal Party supports the principle of free trade, because Canada is an exporting country. If we cannot get access to other markets, we have real problems. That is why the negotiations that led to the Canada-U.S. Free Trade Agreement were started under the Trudeau government. I have some knowledge of that because my dad was the minister of international trade at the time. Interestingly, the secretary of trade for the U.S. had the same last name. His name was Donald Regan as opposed to Gerald Regan, who was my dad.

Canada-Panama Free Trade ActGovernment Orders

February 7th, 2011 / 12:10 p.m.
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Liberal

Geoff Regan Liberal Halifax West, NS

Ronald Reagan was the president, but that is Reagan not Regan. Let us make that clear. He had an extra “a” in his name.

There are many benefits of trade and we have seen over the past 50 or 60 years, with increasing trade liberalization, an improvement in the standard of living for millions and billions of people. Clearly, there is a long way to go for lots of folks around the planet and we still want to see better lives for people in many countries, but trade can play a positive role in improving people's lives by giving them access to markets.

I mentioned Africa. One of the problems it has is getting access to markets in the U.S. and Europe for its cotton and textiles. It has beautiful cotton fabrics that were made into dresses and shirts. It had trouble getting access to those markets because of subsidies and tariffs, and so forth. These issues are real from both points of view.

The Conservative government's mismanagement of our trading relations has resulted in trade deficits for the first time in 30 years. That is alarming for Canada and should be alarming for Canadians. For the first time in 30 years, under this regime, we are falling behind our competitors in emerging markets like China and India.

We suffered the embarrassment of not gaining a seat on the UN Security Council. Speaking of China, the government's clumsy approach in its attitude toward China was very much an element of that, one of the factors involved, as well as its decision to cut aid to many African nations. It certainly offended those nations and many Middle Eastern countries were unhappy with the government's approach on a variety of things.

It surprised me that the government actually decided to campaign for a seat on the UN Security Council when it ought to have been fairly obvious that with all the things it had done in recent years, it was unlikely to gain that seat and how badly it misjudged the number of votes it would have. For a Prime Minister who is often talked of as a political strategist, it is surprising that he would not see the dangers of that move.

However, the current government is also falling down on protecting Canadian interests vis-à-vis our largest trading partner, the U.S, not only on things like softwood lumber and other agricultural products, et cetera, but in relation to the current talks on the common perimeter where the government does not want to share with Canadians what it is planning to do and what it has in mind. It has not set out to the House or to Canadians what its approach is, what its attitude is, what its vision is for border issues and therefore, for issues such as immigration. We ought to have control over what happens with our immigration and refugee policies. Canadians are concerned that the government wants to surrender our sovereignty. We do not agree with surrendering any of that.

Recently we saw its approach to the situation in Egypt. The government has been slow to respond and very hesitant. We have been less forthcoming, in terms of supporting the protest, in terms of supporting principles like human rights and political freedoms, than the U.S. has been. That is disappointing. We need to have a long-term view and recognize that if we support regimes which do not allow those kinds of freedoms, in the long term, the effects would be negative for us. If we look at the history of many countries, we can see that.

Meanwhile, the U.S. is engaging in increasing protectionism which already has hurt Canadian business, yet the Conservative government is doing virtually nothing about it.

I could go on about other countries and the policies of the government in respect to them, but let us focus on Bill C-46 and Panama.

In spite of the global economic downturn, Panama's GDP actually grew at 10.7% in 2008. That is one of the highest in the Americas. It is forecast at 5.6% for 2010, which would put it well ahead of most other countries, including Canada, in terms of our growth last year.

In 2009, bilateral trade between the countries totalled $132.1 million, with Canadian exports making up $91.4 million and imports of $40.7 million.

Primary Canadian merchandise exports to Panama include, and these are some of the major things that we sell to Panama: machinery; vehicles; electronic equipment; pharmaceutical equipment; frozen potato products; pulses, which are beans and lentils, important sources of protein; financial services; engineering; information and communications technology services. These are all important areas where we currently export and there is room for us to increase our exports to Panama, particularly in relation to agricultural products and things like fish, as we referred to earlier in the debate.

The existing Panama Canal is vital for the international trading system. It is being expanded with completion slated for 2014. That expansion, worth $5.3 billion, is expected to generate opportunities for Canadian businesses in construction, environmental engineering and consulting services, capital projects, and more. There are many opportunities that we can see. There are no guarantees at all, but opening trade with Panama, in spite of some concerns we have, is a positive move.

Canada-Panama Free Trade ActGovernment Orders

February 7th, 2011 / 12:20 p.m.
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South Shore—St. Margaret's Nova Scotia

Conservative

Gerald Keddy ConservativeParliamentary Secretary to the Minister of International Trade

Mr. Speaker, I listened attentively to the speech of the hon. member for Halifax West. I appreciate his support for Panama. I cannot say that I agree with everything he said in his speech, but it is nice to see the Liberals on board with our free trade agenda, especially in the Americas and on Panama.

Will we continue to see the Liberal Party support free trade agreements which are good for Canadian business and opportunities for Canadian workers, rather than as we saw in the 1993 election when the hon. member ran on a ballot against free trade?

Canada-Panama Free Trade ActGovernment Orders

February 7th, 2011 / 12:20 p.m.
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Liberal

Geoff Regan Liberal Halifax West, NS

Mr. Speaker, I favour free trade. I have indicated that many times in the past. I do not recall personally having debated that issue in 1993. We had many other issues to talk about then and since. However, it was certainly an interesting election campaign, as my hon. colleague recalls. I believe he was involved in the campaign but not as a candidate at that stage. That came later.

We as a party do support the principle of free trade, but it is important to examine each agreement by itself and bargain from the point of view of strength.

My main concern regarding the Canada-U.S. Free Trade Agreement is that Canada entered into its negotiations under the notion that this would be the economic policy as a government. The government of the day, under Mr. Mulroney, basically based its whole economic platform on establishing an agreement.

In that type of a situation the U.S. would expect to have good concessions or basically get whatever it wants. It would recognize it was in a strong position if Canada needed to have an agreement. I did not feel that was helpful, but in other respects there were many benefits which came from that agreement.

Canada-Panama Free Trade ActGovernment Orders

February 7th, 2011 / 12:20 p.m.
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Liberal

Yasmin Ratansi Liberal Don Valley East, ON

Mr. Speaker, I believe the free trade agreement that was negotiated in 1993 offered too many concessions, wide concessions, and was not thought through properly. I am wondering whether the member believes the Panama deal has been thought through and if there are certain aspects of the deal that concern him.

Canada-Panama Free Trade ActGovernment Orders

February 7th, 2011 / 12:20 p.m.
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Liberal

Geoff Regan Liberal Halifax West, NS

Mr. Speaker, I thank my hon. colleague from Don Valley East, with whom apparently I am not sharing my time because we are giving 10 minute speeches, as has been explained.

That is an excellent question. We do have some concerns. There are concerns that have been raised regarding such things as whether or not Panama is a tax haven and what impact that may have.

We know that the two governments are in discussions regarding not only the sharing of tax information, which I believe is the primary thing Canada wants, but also the issue of double taxation, which both countries ought to want. In fact, it is important that we have that type of sharing if we are to avoid issues such as tax havens. It is vital that our tax authorities at Revenue Canada have access to the information that Panama has on our taxpayers if in fact they are trying to hide income illegally and improperly. We are not talking about what is being done properly. However, if something is done illegally that is a different matter and we ought to know that.

That is an important concern. We are happy to see that this discussion is going forward and are anxious to see that it concludes successfully. However, at the same time we feel the general principle of this agreement is a good one and we ought to support it.

Canada-Panama Free Trade ActGovernment Orders

February 7th, 2011 / 12:25 p.m.
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Liberal

Geoff Regan Liberal Halifax West, NS

Mr. Speaker, my hon. colleague from Kings—Hants, the former trade critic, is suggesting I take my time, but I do not think I will be allowed to do that. I am sure he would love for me to go on at great length about this. I trust he would enjoy it.

The way the government has treated border issues and trade issues with a variety of countries, particularly with the U.S., is a concern. Until last August I was the Liberal critic for natural resources. When I look at the government's attitude toward the softwood lumber agreement I find it has been quite weak.

Canada-Panama Free Trade ActGovernment Orders

February 7th, 2011 / 12:25 p.m.
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Liberal

Yasmin Ratansi Liberal Don Valley East, ON

Mr. Speaker, I rise today in support 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 has been mentioned, Canada is a trading nation. In the global economy, it is important to get preferential agreements with countries, which is beneficial to both partners. We have seen the impact of relying too heavily on one trading partner. We have seen the government's lack of action on increasing U.S. protectionism and its failure to seize trade opportunities in China, South Korea and other countries.

The Conservative government's mismanagement of Canada's trade relations has led to the first trade deficit we have seen in over 30 years. The trade deficit record last July was $2.7 billion. Therefore, it is important that as a country we need to increase our efforts and our engagement in order to improve the economic situation, increase international trade, and help the Canadian economy.

Canada has always supported free trade. Our origins are that of a trading nation, having started with fur, wood, and other natural resources. The portion of our economic activity attributed to trade is greater than that of most other nations. Indeed, approximately 80% of our economy and millions of Canadian jobs depend upon trade and our ability to access foreign markets. We are, after all, a very small country. Our population is 32 million which, one day the U.S. ambassador told me, could fit into the State of California. Taking that perspective, we need to ensure that we make agreements that are based in the interests of Canada.

If a free trade agreement is negotiated properly, Canadian exporters benefit from the reduction and elimination of tariffs on their goods destined for other countries. Canadian manufacturers benefit from the reduction and elimination of tariffs at the Canadian border on the various materials that go into their products. Canadian consumers benefit from lower prices of imported goods when tariffs on these goods are reduced or eliminated.

I think it is important to note that people do look at the best return on their investment, and everyone is an economical shopper. In this global age, where we are exposed to just about any goods and services, it is important that when we make deals we are able to ensure a better deal for Canada.

We have heard the debate on protectionism and what steps could best promote Canadian business success and generate Canadian jobs. However, most Canadian businesses that serve domestic markets do benefit from free trade because they are forced to innovate and compete with others from abroad, provided that those abroad comply with international rules on trade, tariffs and non-tariff barriers. In the long run, Canadian businesses are more than capable of being strong, innovative, and competitive without hiding behind protectionist walls.

We know that when we are promoting trade in our green technology, as we have seen in examples such RIM et cetera, we need to be strategic and smart because we live in a global village. In that village, everyone knows what the prices are. We could go on eBay and get things from Australia that could be cheaper than what we could get in Canada. This makes businesses innovate, so they can compete in the global market.

The Liberal Party has always supported economic growth through proper free trade agreements. It also supports any initiatives that will improve access to foreign markets for Canadian businesses. It is important to note that we cannot rely heavily on one trading partner because, as was said, when the elephant rolls over, it is the poor mouse sitting next to it that might get hurt. It is important for us to be careful when we are negotiating but ensuring ensure there is freer trade with far more nations, rather than relying heavily on one partner.

Although Panama has a small economy and Canada's existing trade with that country is relatively limited, there are opportunities for Canadian businesses.

The expansion of the Panama Canal is currently underway and it is slated to be completed by 2014 at a projected cost of $5.3 billion. That is an interesting sum of money. The expansion is expected to generate opportunities for Canadian companies in such areas as infrastructure and construction, as well as environmental, heavy engineering and consulting services. In the area of capital projects, opportunities will be generated in human capital development and construction materials.

Like the free trade agreements between Canada and Chile and Costa Rica, the North American free trade agreement, and the free trade agreement between Jordan, the Canada-Panama free trade agreement includes side agreements on labour co-operation and the environment. These are important aspects of the agreement.

The Canada-Panama labour co-operation agreement recognizes the obligations of both countries under the International Labour Organization's Declaration on Fundamental Principles and Rights at Work. Both countries are required to ensure that laws, regulations and national practises protect the following rights: the right to freedom of association, the right to collective bargaining, the abolition of child labour, the elimination of forced labour, and the elimination of discrimination.

The Canada-Panama labour co-operation agreement and the agreement on the environment both include complaints and dispute resolution processes that enable members of the public to request an investigation into the perceived failures of Canada or Panama to comply with these agreements.

The free trade agreement with Panama is another opportunity to increase access to more markets for Canadian farmers and businesses. As was pointed out, our farmers need access to more markets. We are a small country and our farmers need to be competitive and innovative. This agreement will give them access.

Panama is a relatively small economy. In 2009 we exported $90 million in goods to that country, which is not as large as some trading partners. It is, however, a stable country which has made significant progress in recent years in terms of development and democracy. Canada is well placed to continue to encourage that.

In spite of the global economic downturn, Panama's GDP grew to 10.7% in 2008, one of the highest in the Americas, and is forecast at 5.6% for 2010. In 2009, bilateral trade between the two countries totalled $132.1 million. Canadian exports made up $91.4 million and $40.7 million in imports.

In the merchandise area, exports to Panama include: machinery, vehicles, electronic equipment, pharmaceutical equipment, pulses and frozen potato products. In the area of service, Canadian exports include: engineering, information and communications technology.

Under the agreement Canada will eliminate over 99% of its tariffs on imports from Panama.

It is important to note that there is no debate here over the issue of human rights. As members of Parliament we may be concerned about it, but we defer on what approaches to take, whether it is through trade, opening up doors, or through the wagging of fingers. Wagging fingers is not a good idea. When I was in India, we discussed what Canada could export, and the first thing I was told was pluralism.

As the government is focusing on creating free trade agreements with other countries, it also needs to look at creating free trade agreements within provinces.

Canada-Panama Free Trade ActGovernment Orders

February 7th, 2011 / 12:35 p.m.
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Liberal

Judy Sgro Liberal York West, ON

Mr. Speaker, the human rights issue continues to concern me with respect to free trade agreements. When we are providing opportunities for free trade, we have to monitor human rights and labour rights.

These agreements may provide opportunities from a trade perspective, but how can they avoid exploiting some of the employees who would have additional work opportunities?

Canada-Panama Free Trade ActGovernment Orders

February 7th, 2011 / 12:35 p.m.
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Liberal

Yasmin Ratansi Liberal Don Valley East, ON

Mr. Speaker, I know the hon. member is very interested in labour law, and there is a side agreement on Labour co-operation that recognizes the obligations of both countries under the ILO.

On the other front, from a human rights perspective, I made a statement very quickly on whether we would like to engage with other countries. Through trade, we engage people, and through this engagement, people see how different people operate. If we were to shut the country, close the doors, close our borders, people would not understand how others operate. I gave a prime example of when I went to India, I was in the state of Gujarat, and I asked what would be the best Canadian expert and they said it was pluralism. We did not have to teach it to them. They understood how we, as Canadians, worked and lived in harmony, and respected our diversity.

Canada-Panama Free Trade ActGovernment Orders

February 7th, 2011 / 12:35 p.m.
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NDP

Dennis Bevington NDP Western Arctic, NT

Mr. Speaker, I rise to speak to Bill C-46 at report stage.

My opinion on the bill has not changed over the course of time of it being in committee. In fact, many of the things presented in committee spoke very strongly against the nature of the bill and against the bilateral free trade agreement with a country like Panama.

Panama along with Colombia are two countries that the Conservative government has decided, in its wisdom, to pursue free trade agreements with and have brought them forward in this Parliament. Neither of these countries is appropriate for free trade deals with Canada.

Clearly Colombia had so many human rights violations that the nature of our protection for those human rights issues, which we hold so strongly in Canada, were simply not there.

In the case of Panama, quite clearly there are human rights issues, but more overwhelmingly are the issues surrounding the nature of the Panamanian business community. That has been brought forward, in great detail, to Parliament through our work, through the work of some of the other parties and through the witnesses at committee and clearly this is not a nation that holds the same level of integrity and honesty within its corporate structures as we do in Canada.

To enter into this free trade agreement, pushing investment with Panama is like injecting more poison into our system. Our system may falter because of the opportunities that exist in this.

Free trade agreements need careful scrutiny, and we have been calling for that. Careful benefit scrutiny, net benefit analysis should take place on any free trade deal with any country in the world. I know we are negotiating a number of those, so there should be work put into that.

Take for instance the much wanted European free trade agreement. Many holes are showing up in that deal already. For instance, today there is a report coming out that indicates Canadian drug costs, drug costs that are directly related to government costs, are going to go up substantially if we go ahead with the European free trade deal as outlined, with the provisions in which the Europeans are most interested.

The opportunity to use generic drugs will be made more difficult. That difficulty is estimated to cost us in the order of $1.5 billion to $2 billion a year. Where does that come from? From the pockets of Canadian taxpayers. What benefits do we get from that? By going along with the Europeans on that, the net total investment in new research and development would be in the order of $400 million.

With the effect of marginal tax rate for corporations in this country of 18%, how much improvement to the economy has to go ahead to make up the difference of $2 billion to the taxpayers? There are no answers for that. No analysis has been done. That directly affects our federal government and all the provinces as well.

There was a curious reception that I went to the other night with the Japanese automotive association. There were opportunities for speeches. The Minister of International Trade made a fine speech about his total belief in free trade, the need to sign these agreements and to work on these things. That was fine. I accept that as his position.

However, the president of the Japanese automotive association said that the European free trade deal was not the panacea for the association, that it would lose on the deal if we signed with Europe.

Let us look at the Japanese automotive industry, one of the clear winners for Canada in the last decade with the setting up of new plants. Of the total number of vehicles produced, most are exported to the United States. Not only are the Japanese in Canada, probably because of our good conditions and public health care, but their product is part of our export development in manufacturing, which everyone in the chamber must understand is very weak on every other front.

The people who are doing a successful job for us in manufacturing automobiles and exporting to the United States are saying that we should look at the provisions of the European free trade deal. Quite clearly, we have to look at trade deals very carefully in this new world. This is not the old world of the 1980s and 1990s when the free trade mantra was something that no one could resist, that no political party was able to completely ignore, that no political party of the right was able to say anything other than it agreed.

Let me get back to the free trade deal with Panama. It is not really a free trade deal. This is about investment. This is about Canadian companies investing their profits in Panama, perhaps on the new expansion of the Panama Canal or a number of other areas. That is what is going to happen. Investors will be taking the money they make in Canada and investing it in another country.

What about agriculture? Riots are going on around the world right now over the price of agricultural products. Canada could do much better. A previous member spoke of pulses, the consortium of producers of lentils, peas and beans. I had an opportunity to speak with those people and they are not concerned about free trade. They are concerned about our railways that do not give them a proper deal on service. They have much more difficulty getting their products to the Canadian ports for export to the world market for produce that is ever-expanding and where the prices of products are going up.

When we talk about agriculture, we are talking about something that is going to be in great demand. When we think about agriculture in terms of free trade, what we should be thinking about is how to protect and enhance our agricultural capacity in our country. This is the way to deal with that.

What is Canada's trade? So much of it is energy and raw resources, the things the world needs, not what it wants. The world wants produced products, but it needs raw products and Canada is in a good position to provide those raw products. We do not want to sell them too cheap or give them away. We want to ensure that our children and grandchildren are well protected in our resources going forward. When we sign free trade deals with countries and say that we must give our resources in a fashion that we do not dictate anymore, we are giving up something, but what are we getting in return?

Let us talk about border security. A big issue right now is that the thickened border has slowed down free trade to the United States. That is nonsense. Trade since 9/11 to the United States has gone up consistently until 2008 when there was a recession and the value of the Canadian dollar accelerated. Those two factors hit our trade very hard with the United States. It went down from about $350 billion to about $100 billion, but it had nothing to do with free trade. It had to do with currency and our ability to deal with our own issues.

As for the currency, we do not have the opportunity to do like the Liberals did in 1993 and lower the interest rate because we are already at rock bottom. We are in a bind. What can we do, quantitative easing? What do we do to improve our currency position vis-à-vis the United States? That is the problem we have with trade with the United States.