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

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Mr. Speaker, I am happy to have the opportunity today to speak to 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. I will allude to those agreements as well with respect to the environment and labour co-operation. We definitely need to have a holistic approach when we talk about trade.

The Liberal Party supports sending the bill to the trade committee for further study. The Liberal Party, as the party of free trade, has always promoted efforts to expand the access of Canadian companies to foreign markets. We understand the importance of allowing companies to succeed not only domestically, but abroad as well. After all, we are a trading nation and 80% of our economy depends on exports. Therefore, we must always look for new opportunities to break down barriers and bolster trade.

Ideally, we would like to see Canada open up markets on a multilateral basis. It is important that we recognize we can do much better if we have a multilateral approach. However, with the Doha Round negotiations of the World Trade Organization currently stalled, that means Canada has to focus on bilateral agreements, and that is understandable. The agreement with Panama is one of those agreements that should be pursued. It will provide access to a small but very important Panamanian market.

I have a few key statistics to set the context when I talk about market size. First, Panama has a population of 3.5 million, but, more important, it also has a GDP of $26.2 billion and it is growing. There is some economic growth there as well. Last year we exported over $90 million to Panama and imported $40 million, with a total bilateral trade of $132 million. There is definitely some potential there.

However, the current expansion of the Panama Canal is where there are real opportunities for Canadian companies. Construction, environmental engineering and construction firms will have the opportunity to hopefully gain access to that major initiative.

In 2008, I had the distinct pleasure, along with my colleagues from the trade committee, to travel to Panama to see the canal first-hand. I had the opportunity to look at Panama as a possible jurisdiction for free trade and to pursue a free trade agreement with it. I saw the canal, which carries such a large portion of the world's trade, and marvelled at the engineering that allowed for its creation. I also saw the dynamic and modern city of Panama, which is a business hub for that region. The message conveyed to us was that Panama was stable. It is a modern country that has made significant progress in terms of development and democracy over the years.

Panama has also taken tremendous pride in reclaiming the canal from American control back in 1999. The canal's ambitious expansion is part of a sense of ownership and the understanding that the canal is key to the country's future prosperity.

However, there are some concerns I want to raise with respect to this debate. It is good that we are pursuing this free trade agreement, but it has very minimal impact in the context of our overall trade. While our competitors, other countries, other jurisdictions are pursuing aggressively courting other major developing economies like China and India, Canada is lagging far behind. I believe we are going about this in the wrong way in how we pursue our trade policy.

Canada should be focusing its trade agenda on larger growing markets like Brazil, India, China and Russia, where there are more opportunities for Canadian companies. By focusing on large markets, we can set the template that can be easily transferred to small markets, thereby speeding up the overall negotiation process.

To that effect, the Liberal Party recently presented, as part of our platform and as part of our international outlook, a global networks strategy, which really articulated a trade policy agenda going forward. That would work as a means to generate economic opportunities with the countries I alluded to before, the emerging major powers.

This proposed agreement would provide an opportunity to look at areas of trade and investment, financial services, transportation, higher education, research and development, energy, natural resources and a whole range of areas. I wanted to take this opportunity during the debate in the House to mention this because it is so important that we do this.

It is important for us to look at trade as a means to gain access to markets. This is the first time in over 30 years that we have had trade deficits, something which has alarmed many businesses. Small and medium-sized enterprises in my riding have had to close their doors because of lack of opportunities, not only in the domestic market but in the foreign market as well.

Panama is a first good step, but the real opportunities are in countries like China, Indian and Brazil.

Going back to the comment I made earlier, with respect to having a holistic approach when it comes to free trade. I mentioned that the agreements on the environment and labour co-operation were very important. We also need to talk about this when it comes to trade.

As Canadians, we value market access and market fair play. We want to reduce tariffs. We want to promote economic opportunity. However, we have a responsibility that goes beyond that, too. We have a responsibility, as global citizens, to invest and ensure that we hold ourselves and our trading partners to the best possible environmental standards, that we take this opportunity to talk about labour co-operation and labour standards and ensure that countries comply with international standards. We also have a responsibility to address issues of human rights.

The Liberal Party has always talked about this kind of approach. We have not only talked about free trade but fair trade as well. We have also very much promoted the importance of the environment and labour. It is something we have discussed with regard to many trade agreements and it is important we do not miss the opportunity in this debate.

Tremendous progress has been made in Panama. I saw it first hand. However, I believe we can continue to improve the situation there and also create a framework of going forward for other free trade agreements as well.

As I indicated, in terms of investment abroad, it is not only important to simply to have a free trade agreement with Panama. It is also important that we invest in the trade commissions and foreign embassies abroad that provide support to businesses.

There are many examples in my riding of businesses, particularly the small and medium-sized enterprises. Larger corporations tend to have that infrastructure in place. The small and medium-sized enterprises are looking for opportunities. Not only do they need market access, but they need the market intelligence, the data, the relevant information to better understand the market so they can better position themselves.

I would encourage the government, when it does invest or does pursue these free trade agreements, to also look at areas and means as to how we can really bolster our foreign embassies and trades abroad because it is so important.

Above and beyond pursuing a global network strategy in terms of free trade agreements and investing in foreign trade commissions, we also need to start putting together Team Canada missions. The Liberals pursued this very aggressively in the 1990s. It was an opportunity for us to really brand Canada. I realized this as a result of my travels abroad, even when I was in Panama, Colombia and other jurisdictions. It is very difficult to talk about free trade because some of the perceptions and stereotypes that exist do not necessarily reflect the economic reality and potential of Canada.

It is important that we brand Canada. It is important that we work together, all parliamentarians, in travelling abroad with business leaders and leaders from all sectors of the Canadian economy to brand Canada and to show that we have enormous potential. It would give us the leverage needed to ensure we could successfully pursue other bilateral trade agreements. This would be a step in the right direction. However, we need to ensure that we also pursue some of those key markets, as indicated, which are very important to our businesses, as well.

I would like to take this opportunity again to say that the Liberal Party looks forward to this debate and discussion. We would like to take this into committee, study it, bring forward witnesses, talk about issues that have been raised in the House and ensure that we promote trade in a manner that really benefits the economy as a whole. However, I would like to, from a local perspective, from my constituency of Mississauga—Brampton South, take the opportunity to emphasize the importance of focusing our resources and our strategies around promoting small and medium-sized enterprises and giving them the tools they need to succeed not only domestically, but abroad as well.

There is enormous potential with Panama because of the expansion of the canal. I am confident the Canadian companies that have expertise in engineering and infrastructure would ensure we could meet the requirements of Panama. We will be able to pursue that after we push forward this free trade agreement. This is really encouraging because a lot of companies in my riding and across the country would benefit from that. I hope all parliamentarians take it under consideration as part of our economic recovery going forward.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, I listened with great interest to my colleague. We lament the fact that he is no longer the trade critic for the Liberal Party. The one time, since I have been in Parliament, where the Liberal Party did not act as a sock puppet to the Conservative trade deals, regardless of how bad they were, was when he was trade critic. He came back from Colombia and stood with the New Democrats and the Bloc and said no to the Colombia trade deal. That was a proud moment for the Liberal Party. It was the last time that it took any principled position at all on trade and it was under his leadership as trade critic.

As the member well knows, the biggest problem with the Panama trade deal, and the elephant in the room, is the dirty drug money laundering that takes place in Panama. It is tied for worst in the world, according to the IRS, for drug gang, dirty money laundering. It is a tax haven. It is a fiscal paradise.

The Hells Angels are listening to the debate and saying, “Great, the Conservatives are helping us yet again by bringing absolutely no regulation on dirty money laundering in Panama”. We had the parliamentary secretary saying that the government would send a letter and ask the Panamanians to stop the dirty drug money laundering. The member knows that this is a crock. It is ridiculous.

Given that there is nothing that deals with dirty drug money laundering, with the Hells Angels use of Panama as a tax haven, why is the Liberal Party supporting a deal that so clearly goes against the interests of Canadians, against our Canadian police officers who are trying to fight dirty drug money laundering? Why is the Liberal Party capitulating yet again to the Conservatives on a trade issue?

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Mr. Speaker, I take exception to the comment made about the current trade critic. The member for Willowdale has done an exceptional job for the Liberal Party, for our caucus and for her constituents in representing trade issues. She very much promotes free and fair trade. She is very much concerned about human rights and so is the Liberal Party.

When it came to the free trade agreement with Colombia, we worked very hard in committee to raise legitimate issues with respect to free trade. We worked very hard with the then trade critic as well to ensure we had a side agreement to address those issues. This party is not only committed to free and fair trade, but also to human rights. I am confident that our member for Willowdale will address these concerns if the bill is sent to committee.

With respect to the question around money laundering, again this has been raised on numerous occasions. If this is a legitimate concern, then I legitimately believe that this can be addressed during the committee hearings. I am confident that we can find a solution to deal with this issue, if it does exist to the extent that the member describes it.

This is an opportunity for all of us to come together and find a solution. As I said before, it is absolutely critical that we pursue free trade agreements. It is unfortunate that any time we talk about free trade, the NDP finds some excuse to oppose it. It is frustrating because we need to find opportunities for companies, especially in foreign markets, to expand, grow and create the jobs that we need, so we can have a quality of life not only for ourselves but for future generations as well.

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

Mr. Speaker, first, I want my Liberal colleague to be well aware that the Liberal Party's current position is in line with the position it has taken in the past. When Paul Martin was prime minister and Liberal leader, he signed a tax treaty with Barbados that did not include an information exchange agreement. That encouraged Canadian companies to set up subsidiaries in order to evade Canadian income tax. I know that Paul Martin himself benefited from this.

Once again, is the member aware that this is the good old Liberal way: signing agreements with tax havens where friends of the party can set up subsidiaries and avoid declaring and paying tax on income, because they would be exempt from declaring it here in Canada?

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Mr. Speaker, I remind the member, when he asks his question, that referring to the integrity of the former prime minister is something I do not think is a proper assessment in this debate. When he pursued free trade agreements, he did so keeping in mind Canada's national interests, and that includes Quebeckers as well.

The businesses that had opportunities to succeed in these free trade agreements not only existed in other parts of the country but in Quebec as well. Quebec companies very much rely upon free trade agreements and opportunities abroad with respect to economic opportunities, for creating jobs and ensuring they have an opportunity to succeed and create a footprint that can really make Quebec and Canadians proud of the opportunities we have with free trade agreements.

As I indicated, any questions on money laundering or tax evasion will be addressed in the committee hearings. This is where some of the work will be done and it will allow us to have the opportunity to ensure we deal with it in a manner that is in our national interests.

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

Mr. Speaker, I am pleased to speak on behalf of the Bloc Québécois to Bill C-46, An Act to implement the Free Trade Agreement between Canada and the Republic of Panama.

This is important because we are talking about the position of the Conservatives and the Liberals. The people who are watching have seen what their position is. The main reason why the Bloc Québécois is opposed to this agreement and will not support it is that Panama is on the OECD grey list of tax havens.

I will read the four OECD criteria for determining whether a country is a tax haven: nil or nominal taxation; a lack of transparency; laws or administrative practices that prevent the effective exchange of information; and indications that the country is attempting to attract investments that are purely tax-driven and not for economic activity.

One way a country can deal with one of these criteria is to sign a tax information exchange agreement with other countries, and that is what the Bloc Québécois is calling for. The European Union and the United States are working to that end. They have shown that they want to sign a free trade agreement with Panama, but they are dragging their feet because, with the recent financial crisis, the leaders of those countries are very reluctant to develop trade with countries that promote tax evasion. That is a fact.

I understand that the Liberals support this agreement because, when they were in power, they led the way with this sort of agreement. None other than the Liberal leader, who was the prime minister of Canada at the time, promoted a free trade agreement with Barbados. His own companies benefited and got huge tax breaks. The problem is that, when we ratify an agreement with Panama, we will be telling Canadian companies that if they set up a subsidiary that has its own income in Panama, they will not have to declare that income here in Canada.

We do not want that. We do not want the government to encourage Canadian companies to evade taxes and use their income to create subsidiaries in Panama just so they can avoid declaring that income here in Canada. Why would they not do that if there were an agreement that let them do business with Panama? And to top it all off, it would be legal to create subsidiaries whose declared income would not come back to Canada.

What the Bloc Québécois is asking for is simple. We want a tax information exchange agreement, which is what the OECD calls for. Such an agreement must not exempt Canadian subsidiaries in Panama from income tax. This would be equitable and logical.

All the taxpayers here in Canada pay their taxes and work hard to pay those taxes. They are seeing their pension income decrease. It is happening, and the media are telling us that the main pension funds have a solvency ratio of 87%, which means they have a shortfall of 13%.

I think that the people of Quebec and Canada should expect the government not to sign trade or free trade agreements with countries that are on the OECD's list of tax havens. This is not Canada's list; it is the OECD's. In response to that, the Conservatives told us today, through the parliamentary secretary, that the Minister of Finance wrote a letter to the leaders of Panama. He told them that they must do what is necessary to be removed from the OECD's list of tax havens.

A lot of good that does to have the Minister of Finance write a letter. They will take that letter and file it away in the circular file. Thank you very much. Why? Simply because being a tax haven has its advantages. That is the reality. These countries have no intention of co-operating, and that is why Panama is on the OECD's grey list of tax havens. If Panama had wanted to co-operate in the past, if it had wanted to be respectful of other countries, it would not be on the grey list of tax havens.

Why does the government want to sign an agreement at any cost and as quickly as possible, if not to encourage Canadian businesses to set up subsidiaries there? Sure, they want to do business in Panama, but by setting up subsidiaries that will enable them to evade taxes on their revenues.

The Liberal member says that we can discuss this in committee, but a discussion will not work. Either we sign an information exchange agreement that prohibits tax evasion by Canadian companies or we do not sign the free trade agreement with Panama.

The Liberal Party and the Conservative Party want to sign the agreement anyway, without requiring a tax information exchange agreement and without requiring that Canadian companies not establish subsidiaries, whose revenue they would not have to declare in Canada. This inevitably encourages tax evasion. What will happen? The same thing that has happened over the past two months. At France's request, the HSBC Bank had to provide a list of clients with Swiss bank accounts, which included some Canadians. Canada did not care. In the past, the Liberals did not care, just as the Conservatives do not care now. France did care because the French people were tired of paying taxes while the rich evaded taxes.

Today, Canada has had to come around because we have a minority government. The Conservatives were afraid of paying the political price. Canadians on the list given to France are being asked to pay up. We know very well that tax evasion is a Criminal Code offence. However, the Conservative government has not indicated that people who evaded taxes will face criminal sanctions.

Today, the Conservative Party, supported by the Liberals, will sign a free trade agreement, supposedly for the sake of potential trade between Canada and Panama. By the way, Panama is a small country. That is not the issue. Yes, we can do business with Panama, just as we can with other countries. It is worthwhile. However, we cannot do business with a tax haven and legalize it in an agreement, in an international treaty, that would allow our Canadian and Quebec companies to create subsidiaries that would be exempt from paying tax on their Canadian revenue. We would be encouraging them to evade tax.

The Bloc Québécois stands up for all Quebeckers, not for the few rich people who might take the opportunity to establish subsidiaries in Panama and, with the free trade agreement, legalize the situation. That is what the Liberals did with Barbados when then prime minister, Paul Martin, had interests in that country. He signed a free trade agreement with Barbados to legalize his own personal business. The Conservatives are doing the same thing for some of their friends.

I find that sad. Quebeckers and Canadians work too hard in order to pay their taxes to then have a few rich and privileged people do business with a tax haven and establish subsidiaries that they would then be allowed to use to hide revenues that should be declared in Canada and therefore taxed in Canada. It is simple: when a subsidiary is established in a tax haven, which, as the OECD explains, imposes no or only nominal taxes, the company pays no tax on business done with that country. In this case, the country we are talking about is Panama. And the company would be crazy not to do this, because the Conservative Party, with support from the Liberals, would ratify this agreement without requiring a tax information exchange agreement, which the Bloc Québécois and the OECD are calling for, and without requiring that tax-exempt revenues be covered by this agreement. A company that establishes a subsidiary in Panama would then be subject to Canadian laws and tax rates, not Panamanian tax rates. This would be a good way for Canadians and Quebeckers to do business.

This would also be a good way for the public to know that everyone doing business with Panama is paying their fair share of taxes, just like the citizens. Once again, the Conservatives are succumbing to the Liberal phobia of allowing the rich to avoid paying taxes.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the economic arguments for free trade agreements are very compelling on a number of points.

There are some side issues, and they are part of this debate. The United States signed an agreement with Panama three years ago, and the Panamanian Congress ratified it 13 days later. But here we are three years later and the U.S. Congress has still not ratified the Panamanian agreement.

Is the member aware of the reasons that the Americans have not proceeded with ratifying that agreement?

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

Mr. Speaker, at a time of financial crisis and stock market crisis, I can understand why the Americans do not want to sign or ratify any agreements with countries that are known tax havens.

I appreciate my colleague's question. Of course he was on the Liberals' side back when he was defending the treaty with Barbados, which is also a tax haven. I am very disappointed that the Liberals are siding with the Conservatives and have not examined their consciences regarding some of the bad decisions they made when they were in power. Once again, the Liberals are not offering any change. It is not surprising that they are having such a hard time these days, and it will only get worse in the weeks and months to come.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, as with the Canada-Colombia agreement, the Liberals and the Conservatives are refusing to listen to the public. As the member is well aware, only the Bloc Québécois and the NDP were able to address the constant human rights violations in Colombia. The Conservatives, on the other hand, wanted to support the government in Colombia. Panama has some of the worst tax loopholes in the world. Yet the Liberals and the Conservatives want to endorse the actions of a country that is a known tax haven.

Why are the NDP and the Bloc Québécois the only parties that are listening to Canadians? Why do the old parties—the Conservative Party and the Liberal Party—always go along with the lobbyists instead of listening to people who want a fair and equitable tax system and want us to put an end to tax havens instead of helping them grow?

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

Mr. Speaker, my colleague is absolutely right. He was against the free trade agreement with Barbados for the same reason we are discussing today.

At the time, the most powerful and most significant lobbyist was the Prime Minister of Canada; he had interests in Barbados. I can understand why friends of the Liberal Party and the Conservative Party force the government to sign a free trade with a country, when signing such an agreement legalizes the business they do with that country.

I am very surprised. The Liberal Party and the Conservative Party say we will improve the treaty in committee, but there is nothing to improve. Either we sign a tax information exchange agreement before signing the free trade agreement, or we do not. There is no room for negotiation. That is how it works all over the world. The OECD is asking that exchange agreements on personal information, tax information in particular, be signed.

The Conservative Party and the Liberal Party, on behalf of a few of their supporters who will make money in Panama, a known tax haven, are thumbing their noses at the right approach to politics, an approach the Bloc Québécois has been using since it arrived in the House in 1993 and the approach the NDP seems to be using.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, after hearing interventions from the Conservatives and the Liberals around this bill, I am saddened to have to stand in this House, although I have enjoyed hearing the speeches from the Bloc.

As members are well aware, when we talk about Panama we are talking about a country that is tied for the worst money laundering tax haven on the planet. That is according to the U.S. Internal Revenue Service. This is the reason the U.S. has not ratified an agreement with Panama, and yet the so-called anti-crime Conservatives are pushing ahead with this deal with a drug gang, drug money, money laundering, tax haven country.

The Conservatives are bringing it to the House of Commons with the explanation that the reason there is not one word in this agreement that in any way would close off the money laundering, close off the drug money, is that they sent a letter to the Panamanian government. They did not say how, whether it was sent by snail mail or by email. That somehow resolves the money laundering issues that made the U.S. Congress say no to this deal, say it is not going to pass this deal, and which are the reason the U.S.-Panama agreement has not been ratified.

For the Conservative government to pretend it is somehow anti-crime is a real crock when put in the context of presenting this bill, because this bill does not deal in any way with money laundering or drug money and does not in any way close those loopholes. The bill in fact widens them. Hells Angels across the country are rejoicing. The Conservatives have done something incredibly stupid and appallingly irresponsible, but they expect members of Parliament to ratify it.

In a normal functional Parliament, all three opposition parties would say, no, this is irresponsible and they are not going to ratify this deal. Sadly, the Liberal Party is once again endorsing Conservative action. We have seen this before. We saw this with the softwood lumber sell-out, which cost tens of thousands of jobs across this country and crippled many of our softwood lumber communities, and yet the Liberals just rubber-stamped it.

We saw this with the shipbuilding sellout. We had in this House hundreds of shipyard workers from across the country pleading with us that members of Parliament should put in place protections for this key strategic industry, our shipbuilding industry. The Liberals endorsed the Conservative action. That was irresponsible.

We have already cited the Colombia trade deal, a massive sell-out of human rights, a complete repudiation of Canada's principle, a principle and a value that the vast majority of Canadians share, that we do not reward regimes for killing trade unionists and human rights activists in their countries. Yet the Conservatives and the Liberals endorsed that government and the actions of its intelligence service and paramilitary and military groups and the ongoing killings of human rights advocates and trade unionists in Colombia.

Now this bill has been brought forward, which implicitly endorses the idea that Panama can be a tax haven for dirty drug money laundering.

When the IRS says Panama is tied for worst in the world, one would expect the Canadian government to be a bit more responsible. The Conservatives have not been responsible. They have not dealt with it in any way, and that is why the NDP is standing up in the House and saying this is irresponsible.

Canadians are calling out for a fairer tax system, calling out for an end to the shell game where big Canadian corporations and the wealthy can transfer their money overseas and not have to pay taxes on it, while the hard-working middle class and poor Canadians have to work and pay their taxes. They contribute to their country. Here we have the Conservatives, with Liberal support, saying they will facilitate money laundering, facilitate tax havens and let people move money to Panama and not have to pay taxes on it. That is absolutely irresponsible. It is the only word one can use to describe it.

Then we have to think that because the Conservatives have taken this irresponsible action that there must be some merit to it and maybe it is because they have some strategy around trade. Sadly, not even that is the case.

When we look at all the bilateral agreements Canada has signed, such as those with Israel and Chile, the famous shipbuilding sellout, the EFTA deal, the one with Costa Rica, when we look at all those FTAs, in case after case after case we sign the FTAs and exports to those markets from Canada drop. That is the absurdity to all of this. We have a lot of free trade cheerleaders but not a lot of them are doing their homework. They are actually not looking at the export statistics.

The government will say it is going to throw out some figures that are in constant dollars and say that shows a growth in trade. However, yesterday the Parliamentary Secretary to the Minister of Finance, a man who I admire, actually was able to say that we have to take real terms to talk about the cost of the Canadian deficit and debt. He actually talked about that. There is one financially literate member among the Conservatives.

Here we have a situation where not a single Conservative, in real terms, has looked at the export figures that have actually declined. I compliment the parliamentary secretary because he understands the difference between current dollars and constant dollars. Nobody else on that side appears to know the difference. People who know the difference know that our exports have declined in every single bilateral market. Therefore, there is a fundamental problem.

Now, Conservatives will say that maybe exports have declined in real terms, maybe we do not know what we are doing with money laundering, but surely this contributes to prosperity. Again, we have to look in real terms and talk about constant dollars to get the most recent figures about what has happened to family income in Canada. If we go back to the NAFTA days and the signing of the Canada-U.S. Free Trade Agreement, sadly, we will see that for middle class and poorer Canadians, in every single case there has been a decline in real income.

We sign these bad trade agreements, transfer out Canadian raw resources and have them processed and value-added overseas. We outsource the jobs that were in Canada before, take the good family-sustaining jobs and replace them with service industry jobs that are lower paying. We have more burger flippers than we have ever had before in this country, but we have lost half a million good manufacturing jobs largely because many of these trade agreements are structured so that Canadian companies can take their factories and manufacturing capacity overseas.

When we look at the overall income of the average Canadian family, it is no secret why the debt load of the average Canadian family has doubled over the past 20 years. It is because real income has declined for every single income category except one, and that is the real reason why we are seeing this dirty drug money laundering bill today. The wealthiest of Canadians now take 52% of all Canadian income, most of the Canadian income pie, and those are the folks who would love to take their money to Panama and not have to pay taxes on it. We are seeing a hollowing out and a very bad, dysfunctional export strategy.

In this corner of the House we are standing up for the average Canadian family and saying that, if the government has such dysfunctional trade and export strategies, it is up to us in this NDP corner of the House to say no to bad trade deals and no to deals that are irresponsible. That is what we are doing.

[The Speaker, Liberal, Peter Milliken]

There will be five minutes for questions and comments on the hon. member's speech when the debate resumes.

The House resumed 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 a second time and referred to a committee, and of the motion that this question be now put.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Mr. Speaker, today we are debating 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.

To begin, I would like to say that the Bloc Québécois does not support this bill, mostly for the same reasons that it is against so many bills concerning the implementation of bilateral free trade agreements between Canada and certain countries. In this particular case, there is the additional issue of Panama being a tax haven, one that is on France's blacklist and the OECD's grey list. The latter lists countries that have committed to exchanging tax information but that have not substantially implemented the rules.

We know that some countries are tax havens. The OECD has come up with four criteria to determine if a country is a tax haven. Countries wanting to do business or trade with countries that are tax havens must ensure that those countries do not meet these four criteria.

There are tax havens with tax rates so low as to be non-existent, with no transparency when it comes to their laws, specifically their tax laws, and with legal or administrative barriers to sharing information. They attract investments simply for tax reasons, not for any economic activity per se. One of those countries is Panama.

The Bloc Québécois wants Canada to ensure that it can do business transparently, that it can get all available information on, for instance, Canadian or Panamanian businesses that want to do business here, so we can see where the money goes, who is paying taxes and how much.

We are calling on the Conservative government to sign a tax information exchange agreement with Panama. At present, we have no guarantee that any tax information exchange agreements with Panama have been signed or that such agreements provide a tax exemption for subsidiaries located in jurisdictions with which we have agreements. What does that mean? It means that Canada signs many bilateral free trade agreements, and Canadian subsidiaries that operate on islands or in countries with which we have such agreements should, theoretically, bring profits earned there back to Canada in order to pay taxes.

Canada does not force them do so. In fact, in 2007, the Conservative government expanded the definition of designated countries in the Income Tax Regulations in order to accommodate a country with which Canada concluded a tax information exchange agreement. Thus, income earned by a business operated by a foreign subsidiary in a country that has concluded a tax information exchange agreement is tax-exempt.

In 2007, the Conservative government made changes that distorted information exchange agreements. These agreements not only allow information exchanges, but also allow subsidiaries located in the targeted jurisdictions to be tax-exempt. That is why the Bloc Québécois is calling on Canada to implement a real tax treaty to improve the transparency of Panama's financial institutions and effectively fight tax evasion before agreeing to ratify a free trade agreement. Since Panama is a tax haven, we believe it will be easy for companies and individuals to set up there or to invest money there. There will be no transparency, and we will not know how much money these people make, how much they should pay in taxes and whether these taxes will be sent back to Canada. That is one of the reasons we do not accept this free trade agreement.

There is another reason behind our position. The Bloc Québécois is open to trade, but not at just any cost. It is open to trade if human rights are respected. Panama has a right-wing government that adopted legislation considered anti-union on June 30, 2010. That legislation includes a labour code reform that is perceived to be repressive since it would criminalize workers who demonstrate to defend their rights. In August, the Panamanian government agreed to review the legislation. We still have cause for concern about whether Panama's government really intends to comply with International Labour Organization conventions. I think it is important to postpone signing the free trade agreement and ensure that the Panamanian government changes its attitude toward unions and workers in its country.

The Bloc Québécois is open to trade, but its focus is fair globalization. We believe that in order for trade to be mutually beneficial, it must first be fair. A trading system that results in exploitation in poor countries and dumping in rich countries is not viable. The Bloc Québécois will never tolerate a system of free trade that would result in a race to the bottom. The absence of environmental or labour standards in trade agreements puts a great deal of pressure on our industries, especially our traditional industries. It is very difficult for them to compete with products made with no regard for basic social rights.

The Bloc Québécois believes that child labour, forced labour and the denial of workers' fundamental rights are a form of unfair competition, just like, or even more than, export subsidies and dumping. Prohibition of these practices is widely accepted at the international level, as reflected by the large number of countries that have signed the International Labour Organization's eight fundamental conventions. We must have the means to protect ourselves against such practices.

Trade agreements and trade laws do not protect our businesses and our workers from this social dumping. If a country wants to benefit from free trade, in return, it has to accept a certain number of basic rules, with regard to social rights in particular. Environmental organizations and human rights groups have been concerned about this issue for a long time. More recently, though, it has become a major economic issue. Quebec has proportionally more industries threatened by competition from Asia than the rest of Canada. Quebec is at the forefront of this debate.

That is why the Bloc Québécois is urging the federal government to revise its positions in trade negotiations in order to ensure that trade agreements include clauses ensuring compliance with international labour standards as well as respect for human rights and the environment.

Is my time already up, Mr. Speaker?

[The Deputy Speaker, Conservative, Andrew Scheer]

Unfortunately, your time is up.

The hon. member for Elmwood—Transcona.