Bill C-46 (Historical)

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 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.

Canada-Panama Free Trade Act

[Some hon. members]

Agreed.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Mr. Speaker, the Liberals vote against the amendment.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry, QC]

Mr. Speaker, the members of the Bloc Québécois vote in favour of the amendment.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, the NDP is in favour of this amendment.

[Helena Guergis, Independent, Simcoe—Grey, ON]

Mr. Speaker, against.

[André Arthur, Independent, Portneuf—Jacques-Cartier, QC]

Mr. Speaker, I vote against the amendment.

(The House divided on the amendment, which was negatived on the following division:)

Vote #100

[The Deputy Speaker, Conservative, Andrew Scheer]

I declare the amendment defeated.

The House resumed from October 20 consideration of the motion 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 read the second time and referred to a committee.

[Gerald Keddy, Conservative, Parliamentary Secretary to the Minister of International Trade]

Mr. Speaker, it is a pleasure to join the debate on the free trade agreement with the country of Panama. It is an opportunity that I would not want to miss.

Trade is important in my part of the world on the east coast of Canada and in the province of Nova Scotia. We have a long history of trading with all of the east coast areas, such as the Caribbean and Panama. For the life of me, I find the opposition to this agreement a bit difficult and ingenuous.

We already have a long-standing trading relationship between Canada and the country of Panama. We are only trying to set clear parameters and rules and have them apply to that trading relationship but for some reason some people and parties in this place are completely against having rules-based trading. For the life of me, it makes no sense.

As all members in this place know, this is a time when we need to open doors for Canadians, to level the playing field, to create new commercial opportunities and to work with our partners around the world to help Canadians succeed. Panama is a perfect example of a partner with great potential. Canadian manufacturers, exporters and producers, including small and medium-sized producers, need access to markets like this one in order to compete.

In 2009, our two-way trade in merchandise totalled $132.1 million. Key Canadian products, including machinery, motor vehicles and parts, pharmaceutical equipment and pulse crops were some of the driving forces behind this success. Canadian businesses want a deeper partnership with Panama so that they can take full advantage of this dynamic market and what it has to offer.

It is time to deliver on what our businesses and economies need to succeed.

Once the Canada-Panama free trade agreement is in place, trade in these and other products, like pork, beef, fish and seafood, paper products, construction materials and equipment, would become easier for Canadian companies.

Members of the House should recognize just how the Canada-Panama free trade agreement would benefit other regions. Let us take Quebec, for example. In 2009, Quebec merchandise exports to Panama totalled $30 million. These exports fell mostly in the areas of meat, vehicles, machinery, pulp and paper board, pharmaceutical products and scientific precision instruments.

Once implemented, the free trade agreement will eliminate current Panamanian tariffs on vehicles of up to 15%. It will eliminate current tariffs on pork of up to 70%. These are just a few examples of how this agreement would benefit Quebec sectors of export interest.

We have also mentioned in the House, Panama's focus on infrastructure investments which also present great opportunities for growth and infrastructure-related exports, such as machinery, a strong sector in Quebec and Ontario. I do not understand why the Bloc Québécois is against the bill that would provide so many economic opportunities for Quebec.

In Ontario, merchandise exports to Panama totalled $29.3 million in 2009. The key products driving these exports were pharmaceuticals, industrial and electrical machinery, vehicles and scientific and precision instruments. The free trade agreement would eliminate current Panamanian tariffs on a variety of products that are of interest to Ontario exporters. For example, once in force, the agreement will eliminate current tariffs on pharmaceuticals of up to 11%. The agreement will also eliminate current tariffs on industrial and construction machinery of up to 15%.

As everyone in the House knows, these difficult economic times have made our manufacturing sector vulnerable. This sector, in particular, needs new opportunities for growth and our government is acting by providing these opportunities through the Canada-Panama free trade agreement.

Canadian exports, particularly goods, are already at a disadvantage when compared to many of our main competitors. If we delay the passing of this agreement, like the NDP and the Bloc Québécois would want us to do, we risk seeing Canadian exporters and investors further disadvantaged in Panama. We would be setting our companies up to compete on an uneven playing field in a market where we see economic potential.

The Canada-Panama free trade agreement would also benefit Canadian businesses in the western region of our country. In 2009, total merchandise exports from western Canada amounted to $22 million.

In Manitoba, producers of precious stones and metals, as well as those of iron and steel, would benefit from the elimination of current Panamanian tariffs of up to 15% on their exports. Our agricultural producers in Saskatchewan would be able to export their pulses and cereals without facing tariffs of up to 15% and 40% respectively.

More broadly, Panama maintains tariffs averaging 13.4% on agricultural products with tariffs reaching peaks as high as 260% on some of those products. This agreement would eliminate tariffs on 94% of agricultural exports from Canada to Panama.

The power-generating machinery and information and communication technology sectors in Alberta would benefit from the elimination of Panamanian tariffs of up to 15% on their exports to that market.

In British Columbia, exporters of fats and oils would see the elimination of Panamanian tariffs of up to 30%, while wood producing exporters would be able to export their product to Panama without facing tariffs of up to 15%.

Closer to home, in Atlantic Canada, we would also benefit from the Canada-Panama free trade agreement. In New Brunswick, producers of frozen french fries would no longer be faced with Panamanian tariffs of up to 20%. Paper and paperboard producers would see the elimination of tariffs of up to 15%.

Nova Scotia exporters of Christmas trees would be able to have their products enter the Panamanian market without tariffs of 15%. Vehicles and parts exporters from the province would also benefit from the elimination of current Panamanian tariffs of up to 20% on their products.

I want to raise one more point before I conclude my speech. I am sure everyone in the House read the Edmonton Journal this morning and Paul Vieira's article out of the Financial Post that was in there. He states, which is worth repeating:

It's easy to brush off or ignore the federal government's attempt to play up the virtues of its recently negotiated free-trade deal with Panama. The country has a GDP of $28.2-billion, which pales in comparison with Canada's $1.5 -trillion economy, and exports to Panama were a rather meagre $91-million last year.

If that is all that people can see in this agreement, then it all stops there. We need to look to the future, and not just for the future of Canada but also for the future of Panama.

Rather than focus on the country's size, we should focus on the crucial piece of infrastructure in that Central American country, the Panama Canal. Experts tout that the super tankers coming from China will need to pass through a bigger and refurbished canal set to open in 2014 to drop off goods to the U.S. ports and the Canadian ports in the Gulf and Atlantic coasts.

The way Asian trade has been growing and will resume growing once we get a recovery with momentum, it will overwhelm existing Pacific ports. Panama is the key country in the trading block known as the Central American and Caribbean region, or the CAC. This part of the world is small but its economies are indeed growing and are expected to advance at a slighter faster pace than many of the advanced economies in the years ahead.

There are advantages for Canadian companies in this region, as the companies are relatively easy to get to. They are in the same time zone. At least, when it comes to most of the Caribbean, language is not a barrier as English is widely spoken or understood, as well as French, leading some companies to eye the area as possible locations for call centres or other back-office operations. Canadian banks have invested heavily in the Caribbean. Mining companies are also active in the region.

Why would we not want to increase trade with Panama? Why would we not want to put rules-based trading in place where we already have trading? Why would we not want to strengthen our trading agreement with Panama with the inclusion of an agreement on labour and the inclusion of an agreement on the environment? Why would we not want to see life for Panamanians improve?

I, for the life of me, cannot understand the opposition to this deal.

Finally, it has been a pleasure to speak to this bill and I move:

That this question be now put.

[The Speaker, Liberal, Peter Milliken]

The motion is in order.

Questions and comments on the speech, the hon. member for Halifax West.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, at the beginning of his speech, my hon. colleague from South Shore--St. Margaret's spoke about the long trading history our province of Nova Scotia has had the Caribbean region.

I think of the Caribbean region as a little more than Central America as the history of trade because we think of the many years over which Nova Scotia would ship fish to the Caribbean and then the ships would not come back empty. They would come back with things like molasses and sometimes some other liquid products from sugar cane that were well known and a source of considerable wealth in his part of Nova Scotia and other parts of Nova Scotia. Particularly during the time of prohibition in the U.S., the region was known for the movement of some considerable quantity of rum.

What does the member see in this agreement in terms of benefits for businesses in Nova Scotia and their workers but also in terms of the benefits for people in Panama.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Mr. Speaker, it is certainly true, particularly in the coastal areas of the riding that I represent, that there was a lot of trade and there still is ongoing trade with the Caribbean and Central America. One of the main products that was shipped down to Central America was fish. However, interestingly enough, a lot of dynamite out of the Dynamite Wharf on Mahone Bay Islands was shipped down. A lot of the schooners coming out of LaHave shipped a lot of fish and dynamite down there and absolutely brought rum back. It was a great commodity with a great marketplace in Atlantic Canada.

Based on that history, we can see the advantages for Panama, for Canada and particularly for the east coast today.

I will go back to my original statement. Panama is an area that is growing and it is looking for partners throughout the world. We will see the twinning and the opening of the second Panama Canal in 2014. The infrastructure development that is going on there today is tremendous. There are opportunities there now for Canadian companies and businesses, including east coast companies. We have the ability to provide logistical support when the traffic moving through the Panama Canal increases by about 30%. This is a part of the world that is growing already by 3% to 4% and we expect will grow by much more than that when the economy starts to improve. It is also a part of the world, as I mentioned before, that is not only in our same time zone and has the ability to dialogue with Canadian companies in English and in French, but it is also a part of the world in which we should be interested. We should want Panama, the rest of Central America and the Caribbean countries that need opportunity. They have a growing population and we want them to do well, and they will do well, especially if we reinforce the trading opportunities that we already have with them.

It is not as if we are not trading with Panama now. We will continue to trade with Panama. To have rules based trading only strengthens those trading opportunities for Panamanians and for Canadians.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, I hope the hon. member is aware that the Bloc Québécois' position has always been clear: Panama is a country on the OECD grey list of tax havens. Before the treaty is ratified, we would like the government to sign a tax information exchange agreement banning income tax exemptions for subsidiaries created by Canadian companies in that country. I want the Parliamentary Secretary to the Minister of International Trade to get the message that the Bloc Québécois will never promote setting up Canadian subsidiaries in tax havens. I hope he will support the Bloc's request.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Mr. Speaker, the question goes back to my original statement that rules-based trading can only improve the situation that already exists for trade between Canada and Panama. However, we should be clear that the Minister of Finance has already written to his counterpart in Panama, asking that it undertake its obligations. The government of Panama has made a commitment to undertake obligations for tax information sharing with the OECD. That should answer the hon. member's question.