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

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, a lot of good points were made by my colleague. It is obvious he thoroughly researched the matter. He raises a lot of concerns about this agreement, which are not being responded to fully.

Within the context of how Canada holds itself out to the world, we hold ourselves out to believe in fair working standards, reasonable pay, protection of the environment, livable communities. It is a real stretch to entertain an agreement with a country such as Panama. My colleague has raised a number of critical points.

In her testimony before the committee, Dr. Teresa Healy, senior researcher for social economic policy department of the Canadian Labour Congress, pointed out a number of important issues, which I was not aware of before. One was this. In 2010 apparently President Martinelli announced unilateral changes to the labour laws. One of those changes ended environmental impact studies on projects deemed to be of social interest. He is even undermining basic environmental assessment which is internationally recognized.

How can we conceive of entering into an agreement that he will balance environment and the economy?

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

Mr. Speaker, that is a very good question.

There is trade, albeit limited trade, with Panama. Whether we sign an agreement, ratify the agreement or not, it will not stop trade.

The member for Winnipeg North should recognize that. Trade will continue under the current conditions. The current high dollar is what is really determining the trade balance in this situation. As the dollar goes up, our exports will become more expensive and our imports will be cheaper. It is an issue of the dollar.

The member is absolutely right about the lack of trust in those governments with which we negotiate. They do not honour commitments they make in terms of labour or environmental rules. We have seen this over and over again. Once the agreement is signed, they start backtracking on these promises, if they even make the promises.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, 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. The Liberal Party will be supporting the bill.

I would like to raise a couple of concerns about the government's lack of action on increasing U.S. protectionism and its failure to seize trade opportunities with Indian recently, China, South Korea and other countries. I will also raise concerns about the lack of a tax treaty.

Canada is now experiencing the first trade deficits it has seen in 30 years. Indeed, the country set a trade deficit record in July of $2.7 billion. The government's priorities are concerning. Rather than pursue east-west bilateral or multilateral trade opportunities with growing economies such as India and China, the government is focused on trade agreements with smaller nations, representing a small fraction of our trade. It focuses on a misguided crime and justice agenda, which does little to stimulate the economy or to create jobs.

The Liberal Party supports the principle of free trade. Canada is a trade-dependent nation. Eighty per cent of its economy depends on access to foreign markets for Canadian exports. Liberals support initiatives that create jobs and improve market access for Canadian businesses.

In 2008 Panama had one of the highest real GDP growth rates in the Americas at almost 11%. Despite the global economic downturn, Panama posted a positive growth in 2009 at 2.4%, a trend that is expected to continue throughout 2010 and 2011.

The expansion of the Panama Canal is currently under way and is slated to be completed by 2014 at a projected cost of $5.3 billion. The expansion is expected to generate opportunities for Canadian companies in such areas as infrastructure and construction, as well as the environment and heavy engineering, consulting services, capital projects, human capital development and construction materials.

Like the Canada-Chile and Canada-Costa Rica free trade agreements, the North American Free Trade Agreement and the free trade agreement with Jordan, the Canada-Panama free trade agreement would include side agreements on labour co-operation and the environment.

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, which requires both countries to ensure that laws, regulations and national practices 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 would include complaints and dispute resolution processes that would enable members of the public to request an investigation into the perceived failures of Canada or Panama to comply with these agreements.

Yes, Panama is a relatively small economy, as I mentioned. In 2009 Canada exported only $90 million of goods to that country. Yet it is a relatively stable country that has made significant progress in recent years in terms of development and democracy, which Canada is well-placed to continue to encourage.

In spite of the global economic downturn, Panama's GDP grew at almost 11% in 2008, one of the highest in the Americas, and is forecast at almost 6% in 2010. In 2009 bilateral trade between the two countries totalled $132 million, Canadian exports making up $91 million of that and imports $40.7 million.

Primary Canadian exports to Panama include machinery, vehicles, electronic equipment, pharmaceutical equipment and frozen potato products. Canadian service exports include financial services, engineering, information and communication technology services. Merchandise imports from Panama include precious stones and metals, mainly gold, fruits, such as bananas, nuts, fish and other seafood products.

The existing Panama Canal, vital for the international trading system, is undergoing a massive expansion, with completion slated for 2014. The $5.3 billion expansion is already generating business opportunities for Canadian companies. Canada will immediately eliminate over 99% of its tariffs on current imports from Panama should this proceed.

The free trade agreement also addresses non-tariff barriers by adopting measures to ensure non-discriminatory treatment of imported goods and promoting good regulatory practices, transparency and the use of international standards.

On the matter of a tax agreement, my party has some concerns that nothing has been undertaken. The concerns reflect the lack of a tax treaty. Neither a DTA, which is a double taxation agreement, or a TIEA, a tax information exchange agreement, has been signed with Panama. However, the Liberal Party will support this bill on the basis that a tax agreement will ultimately be achieved between our two countries. We will not put the benefits of free trade on hold while we wait for either a DTA or a TIEA. We believe a delay would take away the clear competitive advantage that a free trade deal would give Canadian businesses and farmers given the lack of free trade that currently exists between Panama and the United States.

At this point I wish to highlight some real concerns about the Conservative government's approach to international trade. We are losing the concept of free trade with our biggest trading partner to the south, the United States. When the recession hit, the U.S. government responded with protectionism in putting forth its buy American policies and tighter rules and regulations. The Conservative government initially stood by watching as if it did not know what had hit it. It engaged in photo ops in Washington, not realizing that the battle needed to be fought across all states at the state level.

By the time a so-called exemption was worked out, which itself required significant concessions by Canadian provinces, the protectionism in the United States had already hurt Canadian businesses, costing real Canadian jobs. The exemption only covered 37 states, a great example of how it is not just Washington that must be engaged.

Despite our vociferous efforts to get the Conservative government to engage much more forcefully at the state level, the government did not seem to understand either the whats of the negative effects on Canadian business or the hows of fixing the problem, and here we are again. The United States is threatening more protectionist legislation with its foreign manufacturers legal accountability act, which, although not technically aimed at Canada, would significantly hurt many Canadian businesses and affect many Canadian jobs.

I also want to use this opportunity in the debate on the merits of free trade to encourage the government to do much more in its dealings with China, South Korea and others. I acknowledge the announcement and production of the report last week between Canada and India, and I am encouraged that this is moving in the right direction.

I urge the government to capitalize on the extraordinary growth and scale that presents such fantastic opportunities for so many Canadians here and around the world, an economy that is growing at an incredible rate.

There are incredible investment opportunities being made in infrastructure, water, sewage treatment and public transit. We have been told repeatedly by the Chinese people that they are looking for green technology, for forestry products and for investments in the financial services industries. There are tremendous opportunities for trade in educational services, in co-operation and engagement not just at the Canada-China level but provincially and municipally as well.

We in the Liberal Party have stressed and will continue to stress the importance of Canada in the world. In support of this, we have proposed the concept of global networks. We say that the older, simpler concept of trade and commerce on its own, of simple export and import of goods and services, should be expanded to include all kinds of engagement on all levels, such as education, culture and environmental co-operation, a much greater engagement, a much broader engagement and exchange of people and ideas.

I look forward to this bill moving along as quickly as possible while formalizing a solidified tax treaty. In doing so, I intend to give my full support to the bill and I urge all hon. members to do the same.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Mr. Speaker, I wonder if my hon. colleague is aware that in four short years our Conservative government has signed new free trade agreements with Colombia, Peru, Jordan, Panama and the European Free Trade Association states of Iceland, Norway, Switzerland and Lichtenstein.

Our government continues to work to open doors around the world so that our producers, our job creators, can continue to exploit export markets and trade from one end of this continent to the other, as well as across the seas in Europe and Asia. We are doing everything we can to ensure we open up markets for our producers.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

I am aware of that, Mr. Speaker.

However, the fact is that the government spent the first three years with the Prime Minister being churlish with China and ignorant of India. The government has had four trade ministers in five years, denying any of them any real opportunity to build important and sustainable relations with other ministers in other countries, trade relations, foreign relations or simply relations between people. Changing trade ministers almost every year is not good for policy or for defending Canadian interests abroad.

The fact is that a Liberal government would take a different approach. We would focus on the global network strategy that I talked about in my speech. We would work in partnership with business, universities, civil society and private citizens in order to better leverage Canadian relations with the world. We would harness our multicultural communities as a natural bridge to the fastest growing economies in the world, the economies of India and of China, which the Conservatives have so neglected over the years, and other growing economies. We would return to the very successful team Canada mission approaches focusing on several sectors where we have had a comparative advantage, areas like education and clean energy technologies.

A Liberal government would clean up the fiscal mess that the borrow and spend Conservatives have got us into.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, it is important to understand that this issue is not black and white. that there are things to do, but that a trade agreement is a positive development for agriculture and agri-food and other sectors, plus the expansion of the Panama Canal.

There have been some concerns and a lot of those concerns, quite frankly, are a consequence of the inaction of the government not having a plan to deal with the tax issues and not having a plan to broaden its interests in, as the member referred to, China and India. In fact, it has damaged those interests and I think the member may have something to say about that.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Mr. Speaker, I would like to comment on the advantages of this agreement and why we have chosen to support it.

We support the agreement for two reasons: first, it would l provide significant improvements and opportunities for significant Canadian enterprises; and second, it would encourage Canadian jobs.

Many Canadian companies are already active in Panama, including AIMCo, the Bank of Nova Scotia, Borealis, Canaccord, Brookfield, Talisman, SNC-Lavalin and other engineering construction firms, and this would continue.

Many of the witness who came forward at committee stressed how Canada would have a comparative advantage in this agreement since the United States has not yet signed an agreement with Panama.

There would be significant advantages from a job creation standpoint and from a comparative advantage economic standpoint for Canada.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I am pleased to rise here 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 am pleased to do so because I have the sense that by participating in this debate, much as our party critic in this area did, one is really doing something positive, not only for the Quebec nation, but also for the Canadian nation. Indeed, some members of this House are taking a back door approach in order to sign a free trade agreement that will be extremely harmful to Panamanians, Canadians and Quebeckers.

I would like to begin by saying that the Bloc Québécois will not support this implementation bill, and for a reason that is very important to us: Panama is a tax haven. Not only is it a tax haven, but it is on the OECD's grey list. Accordingly, it is a tax haven that does not co-operate with the OECD and does not sign the agreements set out by that organization.

Furthermore, Panama has seriously repressed its union movement. I would remind the House that in June 2010, the Panamanian government passed Law 30, which is considered to be very anti-union by the World Federation of Trade Unions and the International Labour Organization.

Of course, the government members will tell us that the president of Panama announced on August 5, 2010, that he plans to comply with all ILO conventions and remove the repressive aspects of the law. So far, however, no such action has been taken and we can only wonder what the real scope of the labour co-operation agreement with Panama will be. In that regard, I would also like to point out that the other co-operation agreements we have signed, whether concerning the environment or labour rights, have never been very effective and have never produced anything beyond meetings and symposiums. They have never led to any corrective measures when it comes to labour rights. Therefore, that is our second reason for opposing this free trade agreement.

I would also like to add that the Bloc Québécois is not completely inflexible on this issue. In 1994, the Bloc Québécois, who had been in the House for one year, supported the North American Free Trade Agreement, although, at that time, the Bloc was unaware of the magnitude of the effect that chapter 11 would have on the protection of American and Mexican investments in Canada. Clearly, this chapter also applies to the protection of Canadian investments in the United States and Mexico.

The fact remains that we supported this agreement at the time. We also supported free trade agreements with northern European countries. A Conservative member mentioned it earlier. We have absolutely no problem with this.

We are following with great interest the negotiations for an agreement with the European Union, despite the fact that we have some concerns, we are waiting for explanations and we would like to see the documents. I would like to remind the members of the House that the unions have been asking for these documents. As parliamentarians, we should have them, as has been the case in the past. Surely, the members remember how, several weeks before the Summit of the Americas in Quebec City, the governments that were negotiating agreements around the free trade area of the Americas made their negotiation documents available. That is certainly not the case with Panama and the European Union. However, we must still give the government the benefit of the doubt. Quebec and the Bloc Québécois are among those who have been promoting a free trade agreement with Europe for an extremely long time already, at least a decade. We hope that such an agreement will yield positive results for Canada, Quebec and the European Union.

Once again, in certain cases, we do not support the signing of trade agreements with countries that do not abide by a certain number of rules. Such is the case with Panama and Colombia. It is absolutely unbelievable that the Canadian government would be so irresponsible as to want to sign an agreement with Colombia, knowing full well that human and labour rights are violated there on a consistent and repeated basis.

It is evident that what is important is to have a position based on principles. Yes, we support opening borders, but we also support complying with major international agreements on human rights, labour rights, environmental rights as well as cultural diversity, which is extremely important.

In the case of Panama, the situation is even more serious and, in my opinion, this has not received sufficient attention in this debate. An article appeared in Le Devoir on January 10, 2011, entitled “The Canada-Panama Free Trade Agreement—Cozying up to the Drug Trafficking Paradise”. It was written by Alain Deneault, the author of Offshore, paradis fiscaux et souveraineté criminelle, and Claude Vaillancourt, who is the co-president of ATTAC-Québec. Not only is Panama a tax haven that does not co-operate, even by OECD standards, but it is a tax haven that makes life easier for drug traffickers. And that is the kind of bill promoted by the Conservative government. It says it is tough on crime. It is tough on petty criminals, but it is the friend of big-time criminals and we have the proof: the Panama free trade agreement it is trying to make us accept.

I would like to read a paragraph from this article in the January 10, 2011 issue of Le Devoir.

Panama certainly deserves its bad reputation. This country's main economic activity is providing financial services to drug traffickers and multinationals. It has specialized, among other things, in discount flags of convenience, without any bureaucratic red tape. This allows vessels to sail without worrying about domestic laws and sailors' working conditions.

Capital enters and leaves Panama without any restrictions. Transactions are protected by banking secrecy rules, and there is no monitoring of financial activity. The Organization for Economic Co-operation and Development (OECD), which is nevertheless fairly accommodating when it comes to evaluating how co-operative tax havens are, has placed Panama on its “grey list”.

Panama is a tax haven, and one that makes life easy for drug traffickers and money launderers. We are talking about organized crime, the mafia and other criminal groups or organizations. This will have disastrous effects on Panama. It will allow organized crime groups from Canada to launder their money in Panama. It will also allow some organizations that are currently located in Panama to benefit from the rules in the free trade agreement and locate here, in Canada and Quebec.

I remind members that the OECD has come up with four criteria to determine whether a country is a tax haven. The first is whether the jurisdiction imposes no or only nominal taxes. For example, I remember the case of Barbados—I believe—where the tax rate is regressive instead of progressive. The higher the profits, the lower the tax rate. They start with the wonderful rate of 3% and go right down to the alarming rate of 1%. Since Canada has signed a double taxation treaty with Barbados, if a Canadian company operating in Barbados meets a certain number of administrative criteria and has paid that wonderful tax rate of 1% on its profits, it is able to repatriate money to Canada tax free. That was the first criterion.

The second criterion is a lack of transparency. I have already said that Panama fits the bill. The third criterion is whether there are laws or administrative practices with respect to the exchange of information. Panama has refused to sign the 12 bilateral agreements to meet the OECD standards. The fourth criterion is whether there is any indication that the country is attracting investments solely for tax purposes and not for the purposes of economic activity.

Panama fits that definition of a tax haven. As I mentioned, since it has refused to sign the 12 agreements, it is currently on the grey list. So before we implement this agreement, we must be certain that Canada has signed a tax treaty with Panama and that Panama meets the OECD criteria. Otherwise we would simply be an accomplice to international organized crime.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the member's input into this bill, a trade deal with Panama, has been straightforward and thoughtful.

As I understand his reasoning, he is very concerned about human rights abuses and also disrespect for union principles. The rest of the stuff seems to be okay, though.

I would ask the member if he believes we should not be doing business with countries that do not respect a collective bargaining position and do not respect human rights. I wonder how he squares that with doing business with China.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, internationally, Canada has a responsibility to uphold major international conventions. And it should start by signing the seven fundamental conventions of the International Labour Organization.

There is a big difference between doing business with the entire planet—including countries that do not respect workers' rights—and having free trade agreements that favour trade relations between countries. There will be a number of debates about the possibility of a free trade agreement between Canada and APEC because certain member countries pose a problem. I want to make a distinction. I am not saying that we should not trade with China, Panama or even Colombia, but there is a big difference between trading and favouring these countries by signing trade agreements, such as free trade agreements, with them.

There is another reason. The Bloc favours a multilateral approach within the framework of the World Trade Organization as opposed to bilateral, piecemeal agreements that are directed at the weak, in essence, using the countryside to surround the cities, as Mao Zedong said. That is what Canada is doing with the United States.

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

Mr. Speaker, a number of South American countries are refusing to negotiate with Canada because of its free trade model. Does my colleague agree with that? Can he explain why these countries are not prepared to negotiate with us?

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I want to thank the hon. member for his question because it allows me to make another point I have not had time to mention.

One of the big negotiation problems Canada is running into with the South American countries is that it is trying to impose chapter 11 of the North American Free Trade Agreement, which gives multinational companies and corporations state status, thereby allowing them to sue another state before a special tribunal. Proceedings are under way. Canada had to pay $300 million for decisions Newfoundland made with regard to a forestry company whose name I forget, because it wanted to avoid going before the special tribunal under chapter 11.

In the free trade agreement between Canada and Panama, chapter 11 is chapter 9. When did this chapter 11 come to be? It did not exist in the North American Free Trade Agreement or on the international level. It appeared when the United States and Canada entered into negotiations with Mexico. Since we did not trust the Mexicans—we being Canada and the United States, not me—a chapter was included allowing Canadian and American businesses to challenge the laws and regulations of the municipalities, provinces and countries involved. These countries were targeted. That is why a large number of Latin American countries refuse to negotiate with Canada. They do not want to negotiate with the United States either because they know full well that the scales are tipped in favour of big business against national governments and national sovereignty.

[Shawn Murphy, Liberal, Charlottetown, PE]

Mr. Speaker, I appreciate being allowed a few minutes to speak in this debate.

In principle, I am going to support this agreement. I am going to talk about one issue which I think the House and the international trade committee should not lose sight of as this discussion goes forward.

A number of members have talked about the importance of trade to our economy. This is very true. It goes right back to our country's founding when our economy was based on the trade in lumber and fur. It has not stopped. Eighty per cent of our gross domestic product relates to trade.

In the last couple of years, there has been a lot more bilateral trade agreements entered into mainly with smaller countries, and mainly as a result of the near death of the WTO Doha round, which does not seem to be going anywhere very fast. It comes right down to the law of comparative advantage. Canada is a large country. It has a large geography and many natural resources. It benefits us to trade not only with the United States, our closest and most important neighbour, but with other countries around the world, such as Panama.

We cannot lose sight of the other side of the equation. Many countries of the world, such as Panama, are what we call developing countries. Through the law of comparative advantage, they also benefit from trade. Bilateral trade lifts both countries.

Our trade with Panama is more symbolic than anything. It is very insignificant. I believe there is $90 million of mostly manufactured Canadian products going from Canada to Panama. In return we import about $30 million of products, mainly nuts and tropical fruits that are generally not grown in Canada. Really there is no sector that will be advantaged that much, and likewise there is no sector that will be disadvantaged through the Canada–Panama free trade agreement.

We had the same debate on the agreement with Colombia. Anytime we get into these debates we are not dealing with perfect situations. There are always going to be issues with these countries. A lot of these countries have very troubling and difficult histories. Some have made tremendous improvements over the last number of years, while others have made slight improvements. We cannot ignore that. We have to keep pushing, nudging and urging those countries to improve their human rights issues, to improve their environmental laws and regulations, and of course to improve their tax issues also.

There are some opportunities in this agreement with Panama. One that has been mentioned by previous speakers is the expansion of the Panama Canal. It is a $5.2 billion project. Canada has many engineering and construction companies that are well suited for this type of development and hopefully they will benefit from closer relationships with the country of Panama.

We are not dealing with a perfect situation, but I have reviewed the labour co-operation agreement. It is an agreement signed by Panama in which it agrees to respect the right of freedom of association, the right to collective bargaining, the abolition of child labour, elimination of forced work, and the elimination of discrimination.

I am not naive. I know that if we went to Panama today we would find abuses. We would find imperfect and problematic situations. However, from everything I have heard and read, I believe there have been significant steps made in the right direction. We see the same thing with some of the environmental issues.

It comes down to what comes first, the chicken or the egg. Do we wait until the country has a perfect record, perfect environmental regulations, no allegations of any labour code abuses and no allegations of human rights abuses, or do we wait until there is very significant development, put in place the framework for further improvement and allow the country to improve its economy with a free trade agreement with a developed country?

Those are the reasons I support the agreement going to committee for further study and review.

One issue that concerns me, which I will talk about for a few minutes, is the whole issue of tax havens and tax information. I would like us to move closer to an agreement, whether it is a double taxation or a tax information exchange agreement. There have been proposals from Panama to Canada and vice versa. It has not been finalized yet and hopefully this issue will be finalized shortly.

I am going to spend a minute or two talking about that issue because I feel strongly about it. We can talk about Panama, the Cayman Islands and Liechtenstein, but we should be talking about what is going on right here in Canada. We are basically not doing anything about tax evaders.

As a previous speaker alluded to, we have had two very serious situations recently. There have been 1,700 Liechtenstein accounts and 160 Swiss accounts. The names, account numbers and amounts are all clearly on the record. CRA officials know about it. They are all residents of Canada. They were given 30 days to walk into the nearest CRA office and declare amnesty. Are they fined? No. Are they charged? No. They might have to pay a small penalty, a bit of back interest or a bit of back taxes, but that is all that happens. To my way of thinking, that is a fundamental travesty of justice.

Let us say two kids went out last night, broke into a service station and stole a carton of cigarettes. Tonight they will be in jail and perhaps they should be in jail. But if a person puts $5 million in a Swiss bank account and leaves it there for 20 years, he is defrauding the Canadian taxpayers of probably $200,000, $300,000 or $400,000 each and every year. If the person is caught, what happens? He or she gets total absolute amnesty.

The person would then transfer the money to another haven, wherever it is around the world, because he or she has nothing to lose. If the individual is caught again, what does he or she do? Within 30 days the person would go in to the nearest CRA office, declare amnesty and the whole thing occurs over and over again.

The point I am trying to make is that Canada should be very aggressive. The people who are caught doing this should be charged, convicted and, if convicted, they should be jailed. I want to talk about tax havens, but I realize I am off topic.

In principle, this agreement should be signed. I know there is a tax issue. The whole tax issue should be worked on and I believe it will be finalized in due course.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Mr. Speaker, I listened to the presentation made by the Liberal member, who mentioned that he will vote in favour of the agreement presented by the government. I did not really understand what could possibly motivate him to support this bill. He said that human and labour rights are violated in Panama and that Panama is recognized as a tax haven on the OECD's grey list. An information exchange agreement is not even included in the main agreement. Only businesses will benefit from this agreement. Canadians will not derive any benefit from it, and the signing of such an agreement will also tarnish their country's reputation.

Does the hon. member see some advantage in supporting Bill C-46?

[Shawn Murphy, Liberal, Charlottetown, PE]

Mr. Speaker, on the issue of the labour agreement, I said that I am not naive enough to state in the House that everything is perfect, but Panama and Canada have entered into a labour agreement. It basically protects a number of issues. It is well-written. If the countries do not follow the agreement, further action will be taken. Also an environmental agreement has been signed and that again will push the envelope that much further.

From reading the background material, we are looking at a country that is moving forward. It has what I consider to be a significant gross domestic product increase every year. The country is in the process of modernizing. It is strategically located. I am not going to suggest that everything is perfect, but it is moving in the right direction. This agreement will be beneficial for Canada and for the people living in Panama.