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

[The Deputy Speaker, Andrew Scheer]

Order, please. I think if we stop the member here we could probably accommodate one question or comment. The hon. member for Etobicoke Centre.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Mr. Speaker, these are important issues, tax haven status and that it is a hub for drug dealers, but I would like to set those aside. In fact, Canada is not a boy scout when it comes to drug dealers. Some people would make the claim that in British Columbia the biggest agriculture crop is cannabis.

I would like to raise the issue of human rights, which is of greater importance. Free traders in Canada for a couple of decades have suggested that we do a Central American free trade area, CAFTA. Thankfully, we have not done that, because a number of the regimes there are tremendous abusers of human and democratic rights.

In the last decade, Panama has made tremendous progress in that particular area and, approaching in a piecemeal fashion where we encourage countries that have shown progress on human democratic rights, perhaps that provides an example to other regimes in the area recently. In the past few years, Guatemala obviously has--

[The Deputy Speaker, Andrew Scheer]

I have to interrupt as we are rapidly approaching the end of the time allowed. I will hand the floor back to the member for Elmwood—Transcona for a very brief response.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Mr. Speaker, I was just finishing the answer to the question from the member for Mississauga South when I ran out of time. He wanted to know why the Americans were not ratifying the agreement.

The example of AIG is one of the reasons that the American congresspeople give for not wanting to ratify the agreement. While they have AIG people getting this huge amount of bail-out money just two years ago and paying themselves huge bonuses, they find that AIG is suing the government--

[The Deputy Speaker, Andrew Scheer]

Order, please. It being 1:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

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.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Madam Speaker, a few weeks ago, the Bloc Québécois and I spoke out against Bill C-46, the Canada-Panama free trade agreement. The Conservatives' eagerness to ratify this agreement was one of the reasons we could not support it. About a month ago, while we were considering this bill in the House, we found that it was not in line with the Bloc Québécois' values and beliefs or those of Quebeckers.

Our position remains unchanged because we have seen no indication that neither workers' rights nor the tax haven situation in Panama has improved since then. My Bloc Québécois colleagues and I will never be able to support any agreement, treaty or government decision that does not respect these fundamental rights. We will never accept such an agreement unless we can be certain that these rights will be respected.

Before going any further, I would like to answer a question that was asked by the Conservative member for Abbotsford. After my last speech on this subject, he asked why the Bloc Québécois would not at least allow this agreement to go to committee to ensure that amendments are made that would satisfy the Bloc. I would say that if some of these problems could be fixed in committee, we would be in favour of sending the bill to committee. However, some of the problems with the agreement or relations with Panama are beyond Canada's control. For example, there is the issue of police repression of unions. As my colleague, the member for Joliette said, although we could study the issue in committee, we would be wasting our time if the Panamanian leaders have no interest in examining and addressing the situation.

That said, since I have the honour of speaking on this topic today, I think it is important to briefly reiterate the Bloc's position on bilateral agreements. The Bloc Québécois is not a protectionist party. Quebec exports 52% of what it produces, and our businesses, especially cutting-edge businesses, could not survive in the domestic market alone. That is why the Bloc Québécois supported NAFTA, the North American Free Trade Agreement, and was the first party to propose entering into a free trade agreement with the European Union. Clearly, our party supports free trade.

We believe that in order for trade to be mutually beneficial, it must first be fair. This would be easy if the Conservatives were willing. A trading system that results in exploitation in poor countries and dumping in rich countries is not viable. Members can be assured that the Bloc Québécois will never tolerate a system of free trade that would result in a race to the bottom. We simply want to increase wealth and not poverty, in Quebec, Canada, and in the countries with which we are signing agreements.

We are well aware that 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. We are in favour of a real policy of multilateralism, not the shameless pursuit of profit at the expense of people's living conditions and the environment, which is all too often the case with the bilateral agreements that the government wants to sign.

I would like to remind the members of an aspect of this agreement that the Bloc Québécois finds very worrisome, and that we proclaim loud and clear every time we have the chance.

Panama is still on the OECD's grey list of tax havens, and it is even on France's blacklist of tax havens. Yes, I said France. Obviously Panama poses a problem.

While major European corporations are leaving that country because of its lack of banking transparency and its promotion of tax evasion, Canada wants to send its companies there. Does that make any sense? We need to think about this. The fact that France is pulling out of the country and we want to go in needs some serious consideration.

The Bloc Québécois feels it is imperative that, before concluding a Canada-Panama free trade agreement, the Conservative government sign an information sharing agreement with Panama. Nonetheless, this agreement must not exempt subsidiaries located in the targeted jurisdictions from paying income tax.

I want to repeat that, even though the free trade agreement signed on May 14, 2010, comes with a comprehensive agreement on labour co-operation, protecting labour rights in Panama remains a serious concern.

President Ricardo Martinelli's right-wing government passed Law 30, legislation that is considered anti-union, just a few months ago in June 2010. It is unbelievable. Basically, the law criminalizes workers who demonstrate to defend their rights. Here we are in 2010 and that government is still passing that kind of legislation. Once again, this certainly gives us something to think about.

We also know that Panama was shaken in recent months by crackdowns described as anti-union. Between two and six people were killed and about 100 were injured during violent demonstrations that were held after Law 30 passed in June 2010.

As a member who comes from the agricultural labour movement, I naturally believe that workers' rights are universal rights, and no trade agreement, no free trade agreement—and I mean none—should be entered into without absolute assurance that workers' rights will be respected. That is a fundamental principle of fair trade. That is how fair trade begins. It is not rocket science.

Accordingly, we rigorously apply that principle to all of our actions and the decisions we make. That is one of the reasons we simply could not support the Canada-Colombia free trade agreement recently. Our party acts in accordance with our values and policies.

Even though on August 5, 2010, the Panamanian government agreed to review this law, we nonetheless have cause for concern about the Martinelli government's true willingness to respect the International Labour Organization conventions. Why is the government in such a hurry to ratify this agreement? Should we not ensure that the Panamanian government is backing down on Law 30 before we make any commitment? Why not make sure the Panamanian government reverses its decision and supports labour rights in that country instead?

Without any assurance that workers' rights are respected in Panama and considering that this country is still on France's blacklist and the OECD's grey list of tax havens, it is not possible for the Bloc Québécois to support this bill.

[Niki Ashton, NDP, Churchill, MB]

Madam Speaker, I would like to thank my colleague for his presentation. He has raised some extremely serious points about the bill we are debating today.

I would like his opinion or that of the Bloc on the government's agenda with regard to this free trade agreement. It took the same approach with Colombia and other countries, an approach that ignores human rights, fairness and transparency. These values are important to Canadians but, as we can see, the government is taking a very different approach.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Madam Speaker, I want to thank my colleague for her excellent question.

I was elected to sit in this House two years ago. I have had to take a stand on a number of issues, the Canada-Colombia free trade agreement in particular. The Bloc Québécois thinks it is unfortunate that the government, which the Liberals are supporting more and more, insists on concluding bilateral agreements knowing that this will lead to situations like the one we experienced with Colombia and the one we are currently going through with Panama.

Quebeckers are in favour of free trade. We were the first to want a free trade agreement with the United States. The Bloc Québécois was one of the first political parties to support NAFTA. Our political party and the Province of Quebec support free trade, but we prefer a multilateral approach in order to avoid thorny problems arising every time.

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

Madam Speaker, I appreciate the debate that is going on. However, I disagree with the position taken by the NDP and the answer of the member from the Bloc.

It is interesting to talk about the bilateral agreements that we have been signing as a government, but I am sure the hon. member understands that the multilateral forum, at least at Doha, has failed. As it is not moving forward, Canada has no choice but to look at bilateral trading agreements, so that we have jobs and opportunities for Canadian workers.

The Panama Canal is being expanded to double its present capacity. A lot of trade out of Asia, China in particular, will be coming to the east coast through the Panama Canal. Panama is a key country in Central America. It is a country we need to look to the future with. We need to be part of that future.

What is wrong with putting rules in place for our trade with Panama? Rules-based trading has to be better than non-rules-based trading.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Madam Speaker, I want to thank my colleague for his comments and his question.

Yesterday afternoon, we talked about this at the Standing Committee on International Trade. Indeed, the Doha Round negotiations are causing problems and leading us to sign more bilateral agreements. I think we should ask ourselves why there are problems in the Doha Round negotiations and then try to resolve them. We know that the biggest problem has to do with everything that is happening in the agriculture sector. Why not bring everyone to the table to resolve the problems in the Doha negotiations and then sign multilateral agreements?

[Niki Ashton, NDP, Churchill, MB]

Madam Speaker, it is an honour for me to rise in the House today and speak to Bill C-46, Canada-Panama Free Trade Act.

I rise, along with many of my colleagues who have spoken in this House, opposed to this free trade agreement. We have brought forward a critique and recommendations that speak to our concerns about this free trade agreement and about the government approach to bilateral free trade agreements.

I would like to begin with a story that I was witness to just a while ago in my home constituency. I was in The Pas, Manitoba, one of the communities that I represent, at the announcement of federal infrastructure funds that were to be used to help the local pulp and paper mill to develop a more green approach in its production.

There was quite a bit of support for this initiative. While we were sitting and talking about how important this commitment was to the plant and to the community, one of the speeches by a government member referenced the importance of bilateral free trade agreements to Canadians as a whole.

The irony is that the pulp and paper mill we were in is across the street from a lumber mill that has been shut down for a year and a half as a result of the softwood lumber agreement. Some people who were laid off from the lumber plant now work in the pulp and paper plant. This community was hurt a great deal as a result of that shutting down. Many jobs were lost. And the community was saddened by the wholesale export of trees that come from our area only to be processed south of the border or overseas.

Everybody knew that the government did not stand up for the people in my community or the people across Canada who depend on the jobs in the lumber industry. Free trade agreements are not always fair. Some have caused the loss of good-paying jobs and the loss of support for communities all across our country.

The irony is that we are hearing about how these free trade agreements will make Canadians' lives better, when in fact we know that this not the case.

Bilateral free trade agreements usually favour the dominant economy and ultimately facilitate a degree of predatory access to the less powerful economy. This is more apt to happen in bilateral agreements than in multilateral ones. In this case, Canada is the dominant economy, and this deal is characterized by imbalance.

Since this is true, why do we keep negotiating these kinds of trade agreements? Does the government not care about this imbalance? Does it have no qualms about the challenges that will come of our being given greater access to Panama, whether we are concentrating on resource extraction or on extending our export-driven interests? It is a question that needs to be asked.

Canada's reputation is built on multilateral co-operation, consideration of human and environmental rights, and fairness in our work at the international level.

We have seen, certainly in the area of foreign affairs, a different approach on the part of the government, an approach that throws away some of the core values that Canada was built on, and on which my generation was raised.

When we look at this trade agreement, there are some points that cause concern. Labour rights are something that we in Canada uphold and respect. We believe that working people have the right to form unions and negotiate for a decent wage and decent benefits. This is not the case in Panama. If we go through with this agreement, we will be going against Canada's tradition of fairness for workers.

In July, there was a new wave of anti-union repression in Panama. Several workers were killed, over 100 were injured, and over 300 were arrested, including the leaders of the SUNTRACS and CONATO trade unions. This was the government of Panama's brutal reaction to protests against legislation restricting the right to strike and the freedom of association. The legislation provides for up to two years in jail for workers who take their protests to the streets.

It is despicable for us to engage in a trade deal with a government that undertakes this kind of repression toward working people. It is something that we will continue to see as a result of the bilateral free trade agreement with Colombia. But here we have a chance to stand and say no, this is not right. This is a government that denies its own citizens basic rights such as the right to unionize and the right to strike.

Another glaring hole in this free trade agreement is the failure to deal with the fact that Panama is an offshore banking centre and a tax haven, with a serious lack of transparency that displays excessive banking secrecy. We in the NDP have been critical of the government's failure to act against offshore tax havens and tax loopholes that benefit Canadian entrepreneurs. Here we would be engaging in a free trade agreement with a country that turns a blind eye to these destructive practices and is showing no interest in correcting them.

We in the NDP stand in opposition to these elements, which accompany this trade agreement. These elements are either not being looked at or they are being viewed in an unrealistic way. The government apparently thinks it is okay to enter into bilateral free trade agreements with a country like Panama that has such disregard for principles that are important to Canadians.

On the environmental side, there is reference to the existence of an agreement on the environment. But given the government's approach to anything environmental, whether it is in our country or abroad, we doubt that this agreement will be taken seriously.

We understand the importance of trade and trading with countries. In this day and age, we would not be where we are without trade. What we oppose is bilateral free trade agreements that reject fair and sustainable trade. This rejection often generates discontent and increased protectionism. We have all seen the destructive impact of the NAFTA on the U.S. economy and, quite frankly, on our own.

To end, I would like to return perhaps to the people I represent and the way in which we have seen jobs taken away from our area, good paying, community sustaining jobs, as a result of free trade agreements that have failed to put Canadians first. This is one more example of that pattern.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, the member will know there are 350,000 foreign companies registered in Panama to take advantage of its tax haven status and the Canadian government has done absolutely nothing to try to get a double taxation avoidance agreement signed with Panama before it proceeds to ratify this agreement.

In February of this year, France took very proactive action. The French government levied a tax of 50% on dividends, interest, royalties and service fees paid to anyone based in France to a beneficiary based in one of the countries on its blacklist. Guess what? Within months, Panama signed a double taxation avoidance agreement with France. That is an example of where we can get results and action.

I would like to know what the member thinks about the government's lack of action, to try to implement a free trade deal with a country and not even try to deal with the issues of a tax haven.

[Niki Ashton, NDP, Churchill, MB]

Madam Speaker, absolutely this is a real failure to show interest in building a bilateral free trade relationship, and certainly engaging in an agreement without dealing with such a glaring absence of accountability and transparency on the part of Panama. One would think it would be interested or enthusiastic about entering into trade with Canada. Instead of Canada saying that the government is interested but has some serious concerns with respect to the area of tax havens, and of course we are saying with respect to labour issues and the environment, the government is throwing its hands up and going for the lowest common denominator instead of making a real difference.

[Don Davies, NDP, Vancouver Kingsway, BC]

Madam Speaker, it is a great pleasure for me to stand up on this issue again and talk once more about the importance of trade to Canada, but more importantly, to talk about the principles that underpin a sound, fair and effective trade policy.

I want to underscore from the beginning something that my colleague said so well, which is that I think all Canadians understand the importance of trade to our country. I think all Canadians want Canada to have a healthy, vibrant trading relationship with countries that help to provide a sound basis to the Canadian economy and allow us to build an economy that is strong, environmentally sensitive, sustainable and fair.

I think trade relationships with other countries and Canada can be built on such a foundation. The New Democrats are constantly a voice of patience and intelligence in urging this House to pursue such a policy. The particular bill before this House is something that does not meet those criteria, and accordingly, it is something that our party is opposing.

Here are some of the reasons we are opposing this trade agreement.

This of course is a trade proposal and an agreement that would impose upon Canadians the obligation to provide very favourable trading terms to a country that I think has a very unenviable record on a number of fronts.

First, we are engaging in a NAFTA-style trade agreement with a country, Panama, that is an infamous offshore banking centre. It acts as a platform for multinationals and a conduit for opaque banking activities and tax evasion. Let me tell you what Congressman Michael Michaud, a Democrat, quoting from the U.S. State Department, recently said about Panama:

[Panama's] industrial policy is premised on obtaining a comparative advantage by banning taxation of foreign corporations, hiding tax liabilities and transactions behind banking secrecy rules and the ease with which U.S. and other firms can create unregulated subsidiaries. According to the State Department, Panama has over 350,000 foreign-registered companies.

This agreement would propose building a so-called free trade platform that would provide front corporations with additional powers and incentives to their right to challenge Canadian regulations and standards and shape trade to serve their needs, not the public interest of Canadians.

This trade deal would make it easier for Canadian and foreign corporations to move to Panama and flout Canadian labour laws, pay their workers in Panama an average wage of about two dollars an hour and not have to pay for pensions, benefits or sick days.

Canadian law states that workers enjoy certain minimum workplace safety laws and benefits. Corporations that would be established in Panama, and that this trade agreement would make easier to establish in Panama, do not have to do any of those things.

Let us stop for a moment. This is not just bad for Canadian workers, this is bad for Canadian businesses. Businesses that set up in Canada have to pay living wages and market wages. They very often have to establish pension plans and pay for health care premiums, insurance premiums, life insurance premiums, and workers' compensation premiums. In other words, they have to act like fair and responsible corporate citizens.

Canadian businesses would be affected by companies that could go to Panama, set up subsidiaries, and provide the exact same products that in many cases are being produced here, but those companies would not comply with any of that. I think any Canadian watching this debate or who follows this subject can easily see that is most unfair to Canadian businesses.

I want to talk about Panama's tax haven status. I think that is a major concern in regard to this proposed legislation.

In 2008, Panama was one of 11 countries that did not have a tax information exchange agreement signed or enforced. Panama is one of three states, with Guatemala and Nauru, that would not share bank information for any tax information exchange purpose.

The OECD blacklisted Panama in 2000 as an unco-operative tax haven. In 2002, in a letter from the Republic of Panama to the Secretary-General of the OECD, Panama committed to meet the OECD standards for transparency and information-sharing such that it would no longer be considered a tax haven.

Here we are today, in 2010, and Panama has not, to date, substantially implemented that internationally agreed tax standard to which it committed itself.

There was a study done this year by Cornell University that examined a study done by the IRS over a four-year period earlier this century. I think it was between 2004 and 2007. It found that Panama was tied for first in the country as a source of tax-laundered money emanating from the drug trade.

It is interesting that Panama is also tied to Colombia. In 1903, Panama was formally separated from Colombia, with the blessing and military support of the United States government. Today, Colombian banks retain a prominent role in the Panamanian banking system, as well as the offshore banking system in Panama. They are very active in managing the considerable assets of high net worth Colombians.

What is this about? Canadians are well aware of the fact that Colombia in particular is one of the world's most renowned narco states. It is one of the major suppliers of cocaine to North America, and there is a lot of illegally produced money in Colombia. The connection between Colombia and Panama and the way that this money is laundered through Panama is not a matter of speculation, it is a matter of fact.

These are the two countries that the Conservative government has hastened and rushed to sign free trade agreements with. I find this always very surprising, because the government likes to talk about how it is tough on crime. It talks about that for domestic purposes and tries to make it a wedge issue, to create fear among Canadians and use it as a political issue, but who does the government sign business agreements with? Out of all the countries in the world, who does it pick in this hemisphere? It is Colombia and Panama, two countries that are renowned for their drug production, for their tax evasion, and for their money laundering.

This agreement, if we leave everything else aside, would do one thing. It would make it easier for money to be laundered through the drug trade, because this agreement says that all financial transactions between Canada and Panama would be unregulated. That is just simply unsound, and it is curious.

I also want to talk a bit about the labour situation in Panama. Just this summer, in July, there were a number of trade unionists in Panama who gathered publicly. To do what? To protest in the streets. That is all they did. They peacefully gathered, assembled, and expressed their views. What happened? Over 100 people were attacked and injured, several workers were killed, and over 300 people were arrested, including leaders of the SUNTRACS and CONATO trade unions. This was the Government of Panama's brutal reaction to protests against new legislation that restricted the right to strike and freedom of association, including provisions to jail for up to two years any workers taking their protest to the streets.

That did not happen 10 years ago or 20 years ago. That happened this summer.

This is the record of Panama: jailing its citizens for having the audacity to protest legislation in the streets; killing and attacking trade union workers who simply want to gather and express their rights to join a trade union if that is their wish.

The Prime Minister, yesterday and today, is in the Ukraine, talking about standing up for human rights in the Ukraine, making it very clear to the world that, according to him, in that context, Canada wants to ensure that we promote human rights in the world, that we will not, I think, according to his words, sacrifice our principles in order to secure economic benefits or trade benefits.

Yet here at home, in the House of Commons, we are debating a bill that seeks to establish preferential trade relations with a country that absolutely obliterates human rights.

I do not think that anybody on either side of this House, including hon. members on the government side, would stand up for what happened in Panama this summer. I would like to hear from them. What is their position on human rights and signing trade agreements with a country that saw people attacked in the streets and jailed for up to two years for expressing their democratic wishes? What is their position on signing an agreement with a country that seeks to deprive its citizens of the right to join a trade union which, by the way, violates commitments made to the International Labour Organization and several treaties that Canada signed? Why would we want to sign an agreement with a country such as that?

The fact that that country violates human rights is something that should be of concern to all Canadians, and we oppose the bill accordingly.