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

[Bruce Hyer, NDP, Thunder Bay—Superior North, ON]

Mr. Speaker, I will make a statement first and then ask the hon. member from the Bloc to comment.

Under NAFTA, Canada has paid out hundreds of millions of dollars in legal fees and compensation to U.S. investors who felt aggrieved by Canadian decisions. Let us say that after the Canada-Panama trade deal is ratified, Panama continues to be problematic on the tax shelter front and Parliament puts in place legislation to give Panama a deadline to clean up its act or face sanctions. Canadians banks could be restricted from transferring their money to Panamanian affiliates, for example. Article 9.10 of the Canada-Panama trade act says:

Each Party shall permit transfers relating to a covered investment to be made freely and without delay, into and out of its territory.

Moreover, article 10.6 says that Canada will always allow Canadians to purchase financial services from banks operating in Panama.

Does the hon. member from the Bloc share my concerns in this regard?

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

Some aspects of this agreement are still flawed, including the one the hon. member just mentioned. It is all well and fine to ratify agreements very quickly, but we have to make sure the agreements are not missing anything before we open the floodgates.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, this is a pretty minor treaty. It is not a large bill by any means. The trade between Canada and Panama is fairly limited, some might even say “insignificant“. Certainly when compared with the daily trade between Canada and the U.S., it is not significant at all.

However, as a proposition, these treaties are important because they establish a legal framework, particularly with the reduction of tariffs and the freeing-up of trade. They are the beginning of the establishment of a legal framework for contractual relationships between countries and between corporations and persons. They are a small step in international law. However microscopic the steps might be, as a general proposition, it is a good idea to enter into these trade agreements. Members of the Bloc, my party and the NDP have rightly criticized the modesty of the agreement. That is what I wish to talk about while I have time in the House.

The side agreements with respect to labour and the environment are at least a step in the right direction. They are rather modest, hardly robust, but a step toward developing a legal framework between the two nations.

Last Wednesday I had the good fortune of listening to a lecture by Mr. Justice Ian Binnie at the University of Ottawa law school. His starting point was that if there is going to be an international economy, as there is, as nations trade more with each other and if they are to have economic relationships with each other, we must have and continue to develop our legal relationships with each other. In other words, at some point, somehow, somewhere, people who have grievances need to be able to redress them in some fashion or other, regardless of the merits. Frankly, I agree with Mr. Justice Ian Binnie, as I am sure you would, Mr. Speaker, that there is quite a gap between the development of economic relationships and the development of legal relationships.

A treaty is a modest step. As members may know, I was the sponsor of Bill C-300, which was a modest attempt to bring to Canadian corporations a degree of accountability with respect to their funding received from the government and the people of Canada.

It was ironic to me that the proponents of this Panama treaty were simultaneously very vigorously opposed to Bill C-300, when in fact all of this is the creation of a larger legal environment so that relations between people and corporations might be properly regulated. Had the government embraced Bill C-300 and, possibly, other forms of engendering corporate social responsibility, a treaty such as this might actually have been an easier pill to swallow for those who are opposed to treaties as a general proposition.

I want to quote Justice Binnie. He stated:

It is beyond question that companies have the ability to significantly influence human rights around the world for good or for ill. Sometimes influence implies obligation. In light of mounting evidence of “corporate complicity” in human rights abuses, there is, at the very least, an obligation upon the legal community—

—and I would add, upon the parliamentary community—

—to clarify the obligations of transnational companies as a matter of national and international civil and criminal law.

He then favourably cited John Ruggie and the work that he has been doing at the United Nations.

The big issue is access to justice. I do not profess to be an expert on Panamanian law, but as a general proposition I can say that the access to justice and the satisfaction one might receive from a court in a developing country is somewhat less than satisfactory.

It is quite clear that a lot of these courts are not robust, that corruption is rife, and that people seeking redress for very legitimate claims, be they regarding human rights abuses or forms of civil remedy, be they regarding environmental degradation or expropriation, do not receive satisfaction. From time to time it is Canadian corporations that are involved in these human rights abuses and there is no place for the individual to go.

If a Panamanian had a complaint with a Canadian company and wished to sue in a Canadian court, that individual would be precluded from doing so by the rule called forum non conveniens. It is a simple concept. Regardless of the merits of the individual's claim, regardless of how aggrieved the individual might be, regardless of the quantum of the individual's damages, that individual is cut off from access to Canadian courts by virtue of the fact that Canadian courts will say they are not the place in which the individual can sue for that particular grievance.

We do not have to reinvent the wheel. We could quite easily insert into a treaty such as this one the ability to modify in certain circumstances this rule of common law so that Panamanians in this particular instance would have access to Canadian courts so that they too could receive justice and redress from Canadian corporations.

I refer again to Mr. Justice Ian Binnie who said that a very practical level, domestic law reform is needed if domestic courts are to play a useful role in remedying international human rights abuses. He said:

For example, statutes of limitation are often unduly strict on their face or as interpreted and applied; statutory and common law obstacles to corporate veil-piercing exist and these may inappropriately shield parent companies from liability in respect of subsidiaries. There can be inordinate difficulty establishing...jurisdiction (especially where liberal use is made of the doctrine of forum non conveniens).

Justice Binnie said that in some cases there will be a good reason to limit or deny the possibility of civil recovery. However, as a general matter the state duty to protect means that a concerted effort be made to eliminate barriers to recovery that are unnecessary or arbitrary in their operation.

It is a pity that the government did not take this opportunity to open up a justice system on both sides which would allow Panamanians and Canadians access to a justice system which has some opportunity of receiving redress not only for states but for individuals and for corporations. The reason this is important is that not only does it affect the individual potential litigants, those who have been on the receiving end of human rights abuses, but it also affects us as Canadians and our reputation abroad.

I regret to say that our reputation in the last number of years has not been enhanced by the activities of some Canadian mining companies. I can literally take members on a world tour, from Mexico to Guatemala to Honduras to Peru to Venezuela to Colombia, over to various African countries, et cetera. In all of these instances people in those countries are alleged to have had some grievance with Canadian companies. There is no effective remedy for those grievances. For better or for worse, the Conservative government has cut those folks off from having access.

This could have been an opportunity to open up a legal system that is fair and just and one where there would be an opportunity for people to receive redress. Regrettably, the government chose not to do that and that is to our detriment and ultimately to the detriment of our national reputation which has been suffering around the world.

In conclusion, I see this as a minor treaty, but I also see it as an opportunity lost.

[Dean Del Mastro, Conservative, Parliamentary Secretary to the Minister of Canadian Heritage]

Mr. Speaker, it is disappointing when we talk about establishing bilateral trade agreements that are so important for a trading nation like Canada that we have to descend into a discussion that once again impugns the good name of Canadian mining companies, companies like SGS operating in Lakefield in my riding, which work with mines around the world.

The member continues to talk about Bill C-300 which specifically targeted jobs not in other countries, but jobs in this country. He impugns the good name of Canadian mining companies and would limit their ability to compete around the world. Mining is one of the most important sectors in this entire country.

It is terrible that we cannot talk about a bilateral agreement, something important to Canada, without having a member stand up and impugn the good name of Canadian mining companies. I am disappointed.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, it is a pity that even at this stage, after two years of debate on Bill C-300, the hon. member has not read or does not understand the implications of the bill.

Contrary to what he says, this actually would have been an opportunity for any company that he cited to have a full and fair grievance resolution process. However, he would rather take along with the mining companies their chances in the public media, and so our reputation continues to be degraded.

We continue to have to deal with this in a fashion that we bear the price. It has come to the point in some countries that it is not a good idea to identify oneself as Canadian. That has happened under the watch of this government and it is regrettable to the extreme.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, I find it grievous as well that the member continues to impugn the names of Canadian mining companies. If the member were honest with himself and accepted factual evidence, he would find that Canadian mining companies that operate abroad operate under a much higher standard of environmental concern than any other mining company from any other country in the world. I am almost embarrassed that he would continually impugn the name of our Canadian mining companies when we set worldwide such a tremendous example for other companies from other countries to follow.

He should be ashamed of himself. The member should reflect on the fact that his own leader did not stick around to vote on his bill. Perhaps he had misgivings about it himself.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, I am embarrassed by the member's level of ignorance about what is going on in the world. Does he want the world tour? Does he think it is a great idea that our own Governor General is embarrassed in Mexico with Mexicans saying, “Canada go home”? Does he think that it is a great idea that Canadian mining companies have difficulties in Guatemala and Honduras?

I agree with the general point that many Canadian mining companies try to operate at the highest level, but some do not. This was a very modest attempt to bring those that do not into some level of compliance with internationally recognized human rights standards.

It is incontrovertible that Canadian mining companies and large international corporations have a huge impact on human rights. The sooner the member and his party wake up to that reality, the sooner we will get on to developing a legal framework which will give fair redress to those aggrieved.

I feel bad for the hon. member. He has been in the chamber for many years, but he seems to continue to fail to get that point.

The House resumed consideration of Bill C-46, An Act to implement the Free Trade Agreement between Canada and the Republic of Panama, the Agreement on the Environment between Canada and the Republic of Panama and the Agreement on Labour Cooperation between Canada and the Republic of Panama, as reported (without amendment) from the committee; and of the motions in Group No. 1.

[Nicole Demers, Bloc, Laval, QC]

Mr. Speaker, while I am pleased to rise in the House to debate Bill C-46, I feel somewhat strange doing so. This past Tuesday, February 1, was groundhog day. In the United States, in Philadelphia, Phil came out of his hole and realized that he could not see his shadow. This apparently means we will have an early spring, which I am quite happy about.

Knowing that I would be debating this bill here today, it felt a little like groundhog day. We debated a very similar bill last fall, a bill that had to do with a free trade agreement between Colombia and Canada, which we did not agree with either, but which was passed in this House thanks to the Liberal and Conservative members.

When we explained why we did not agree with that bill, our reasons were very similar to our reasons for disagreeing with this bill. Of course, the current situation in Panama is a little different from what was going on in Colombia and is still going on there today. We did not agree with what was happening in Colombia last fall. The Conservatives and the Liberals voted in favour of the free trade agreement between Canada and Colombia, and the situation in that country has not changed much.

Atrocities are still being committed against people who simply want to defend their labour rights. Workers there have no more rights than they did before and the mining companies do not respect their rights any more than they did. The government is just as corrupt as it was before and very little effort has been made to change anything. Yet in the fall, we were told that the deal would bring considerable change and that discussions were already under way in that regard.

The government is talking about a free trade agreement with the Republic of Panama. It is not that the Bloc Québécois does not believe in free trade. On the contrary, we believe in it and are in favour of it, but we think that we should focus on multilateral approaches instead, which are much more effective in developing fairer trade that respects the interests of all nations.

However, the Conservative government seems to focus more on bilateral agreements, which do not benefit all nations and, more specifically, do not benefit the people who live in the countries involved in the agreements. These bilateral agreements are not beneficial to Quebec or Canada.

In the summer of 2010, the right-wing government in Panama passed a law prohibiting unionized workers from defending their rights and making it a crime to demonstrate to defend their rights. Of course, they say that this law is currently being reviewed, that it will be repealed and completely reworked, but what guarantees do we have?

We were told that Colombian workers would no longer be killed and that they would be heard, but they were not. They can make all the promises they want, but until we have proof and guarantees that men and women will be treated with respect, the problem will persist. One of the problems in Panama right now is that women and children are not treated with respect. Because there are loopholes in the labour laws, children continue to work and women are not treated equally and do not have the respect they deserve.

Naturally, the Bloc Québécois is not in favour of this bill. It is opposed to any bill that would not guarantee that a country's people would have their rights respected. It is also opposed to any bill that would not guarantee, here in Canada, that our banking regulations would be respected.

Unfortunately, Panama does not respect tax regulations and there is tax evasion there. We do not have any assurances right now that this problem will be resolved. The government has not signed any agreements or treaties with Panama to ensure that these regulations would be respected that we would not have to worry in the future if the bill were passed.

I think there are already so many tax havens, and so many businesses, companies and people evading taxes, that our huge deficits keep growing. In my opinion, the people who earn the most money should pay their share, as all citizens must, including the entire middle class who pays the most tax in Quebec and Canada.

I am sure people in the middle class would like companies and individuals who evade taxes to be required to pay their fair share to the Canadian treasury. If they did, our programs could be improved and we would have better programs, not just for women and children, but also for seniors.

The government says that it currently cannot invest more money in programs for seniors and children because of our significant debt. If we went after the money in the countries where tax evasion has been occurring for a very long time now, I am sure we would manage to quickly eliminate our debt. If we just conclude free trade agreements with countries without worrying about resolving this problem, then people who are benefiting from tax evasion and agreements with these countries will continue to evade taxes and put their money wherever they can, without worrying about paying their fair share. That is wrong. Everyone should pay their fair share because everyone benefits from programs.

We are against this bill. It is important for members of the House to understand, yet again, that this type of bill should not be passed. I hope this time we will make sure it is not.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Mr. Speaker, I listened to the member's comments about not supporting this bill. I am not sure of the makeup of her riding, but in my riding there are a number of agricultural producers who would benefit greatly from this bill.

This bill would eliminate 94% of the agricultural tariffs that are currently in place with respect to Panama. Products such as beef, pork, potatoes, pulses, malt, oilseeds, maple syrup and Christmas trees would qualify immediately for exempt status.

Does the member think that this bill would be a negative for farmers, or would it help farmers across Quebec gain access to markets that are so crucial, especially now when farmers are facing very difficult times?

[Nicole Demers, Bloc, Laval, QC]

Mr. Speaker, it is true that farmers are facing challenges and that a more effective agricultural and product-naming policy is needed. When that happens, I am sure that they will be able to sell their products more easily. We also need to keep all the services to which farmers already have access and all existing mechanisms in place, so that their products remain the products that we have in Quebec. I know that they will be happy about this.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, I understand the Conservative Party recognizes the scourge of drugs in nations around the world. Quite clearly, Panama accounts for about 85% of the transactions in illegal income and about 55% of those cases are directly related to money laundering from the drug industry.

What does my colleague think about this situation where the Conservative government, with its high-sounding talk about putting Canadians in jail for every little drug crime, is now jumping into bed with a country that has the worst record in the world for laundering drug money?

[Nicole Demers, Bloc, Laval, QC]

Mr. Speaker, it seems to me that money has no smell for the Conservatives no matter where it comes from.

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

Mr. Speaker, I rise to join in the debate on Bill C-46. The bill has been debated in the House for quite some time and quite a few members have spoken to it. There seems to be a theme developing.

I would like to say that having a lengthy debate on a trade agreement like this is largely symbolic. The reason we are having such a debate on a trade issue in this House is that Canada is undergoing a change as an international trading entity. Canada is experiencing its first trade deficit in 30 years. Those who do not understand or study history are doomed to repeat it. There were years well after Confederation when, at various times, various governments attempted to isolate Canada from its natural trading partners and potential trading partners. We saw a period of Conservative isolationism under Prime Minister Diefenbaker, and it was not good for Canada.

What we are seeing here is a government that may talk about free open trade, may talk about improving Canada's international trade situation, may talk about Canada's international reputation as being the foot in the door toward trade negotiations, but that talk has not been followed through with achievement. Let us look at some recent facts.

Canada being denied its seat at the United Nations Security Council was a direct result of a lack of campaigning by the Conservative government for that seat. What campaign there was came all too late and was all too little. I would have thought that, of all people, those Conservatives would know something about campaigning. We will give them some credit. They use government money to campaign domestically. However, when they should have campaigned for the seat on the United Nations Security Council, they did not. We lost that international prestige. Being a member of the Security Council might have opened some doors toward further trade negotiations. It diminished Canada's role and reputation internationally.

Let us look at the second item that has blurred the otherwise glossy image of Canada on the international stage. That is the whole imbroglio around the UAE, losing the back entry, theatre entry, for our forces in Afghanistan over a petty, negligent negotiation over domestic air rights. What a shame to have this squabble on the international scene, which further diminishes Canada's image internationally.

We can start with how the Prime Minister has made statements and has spoken to Americans about how he views Canada. I particularly remember, and will never forget, his comments made about Canada to an American assembly of right-wing conservatives in Canada. He made these comments and they shall never leave my brain as long as I am able to remember them. There is a whole posse of statements.

One of them is, “In Atlantic Canada, they have a culture of defeat”. I am from Atlantic Canada. I found that offensive.

He also talked about bilingualism, one of the founding principles of our nation. The Québécois and the people who speak French in communities outside Quebec have a birthright to speak French and understand their government's services in the French language. It is something which, as a proud Acadian by marriage, I believe in very firmly. It is an entrenched principle in law in Canada, by statute in New Brunswick. I might add that in Canada's first officially bilingual city, the city of Moncton, it is not just law, it is a way of life.

However, the Prime Minister once said, “bilingualism is the god that failed”. That is what the Prime Minister said.

This bill is not about bilingualism. It is about how he perceives our country and how he sells our country to other nations. It is not a real selling pitch to say, “I live there, but in Atlantic Canada they have a culture of defeat. And our official languages policy, well, that is the god that failed”.

Also, he is the person who said that we are a failed northern European welfare state, or something along those lines.

I do not want to get used to quoting the Prime Minister verbatim because there are so many faux pas that diminish our role and reputation as an international leader.

We are facing a trade deficit, the first in 30 years. The Conservative government has diminished our image internationally, yet it wants a deal with Panama so it can say that it is great champion of international trade, that Canada's image will be completely resurrected like Lazarus because it has a deal with Panama.

There are many problems with the state in Panama. There is no question that the NDP would go on ad infinitum about all the problems with Panama. We agree, from a corporate social responsibility point of view, that there are definitely domestic problems in Panama.

There is another sovereign principle though, and that is that we cannot get involved in the affairs of foreign nations directly. What we can do is, by moral suasion, bring countries into the fold by virtue of trading partnerships and show them a better way to treat their people, to achieve internationally accepted standards of corporate social responsibility, social justice at home, et cetera. For this reason this deal is should be supported.

On this side, we see it as a symptom of how little the Conservative government has on the shelf to show for five years of governing and directing Canada through the waters of international trade, international diplomacy and our stature generally.

By definition, we are a trading nation. Our internal market is only 33 million consumers. We also happen to have massive reserves in natural resources. We need to export and import. We need trading partners. We need to cultivate positive relationships with our trading partners. How did we come to lose our trading surplus? Why did the government do this to us when we have a rising dollar and oil reserves that are the envy of most countries in the world?

The Conservative government should have been contemplating the development of new trading partnerships years ago. We knew it was risky to rely so much on our number one trading partner, the United States. The government has been lax in exploring new markets. Whenever we denigrate other countries, it does not help.

If the U.S. economy experience is something similar to Japan's lost decade, and let us hope that is not the case, we stand to keep our negative trade balance for at least a decade if we do not diversify our trading partners.

The government needs to do more to protect us from American protectionism. It is an automatic reaction in down times for some American politicians to close the tent and say that they have to protect their people. I am not debating whether they are mean-spirited or not. In the famous words of an Irish-American politician, Tip O'Neill, all politics is local. That is how protectionist measures evolved in the United States. When we have someone as eminent as Joe Lieberman and other sainted and long serving members of the House and Senate, from both parties, saying that they need to watch and tighten the borders, the economy and get America on its feet first, I believe this is not an intended but inadvertent danger posed by Americans toward our economy.

The government needs to do more to develop new trading partnerships in Europe and in the BRIC countries, Brazil, Russia, India and China. Let us talk about China for a second.

The government is very slow to move to the realization that China is a behemoth. It is the power of the future. We must make our concerns known about human rights. We all believe in human rights enforcement and upholding human rights internationally. However, we must talk to them. There is no way we can change the heart or the mind of a nation or a people without talking to them. The government did not do that for years.

As I mentioned briefly, we have concerns with the issues of tax havens and labour rights. However, let us look at the conclusion of this.

The famed Panama Canal underwent a $5.7 billion expansion recently. It opens up new opportunities in Central America and Canada and we need to be part of this progress. There is too little that prevents us from entering this agreement. There is so much to win. We are talking about a $90 million economy in Panama. It is not the biggest deal that could be brought to the table, but we support it. We just wish the government would take better care and be a better steward of our international reputation in diplomacy, in trading and in stature.

[Bruce Hyer, NDP, Thunder Bay—Superior North, ON]

Mr. Speaker, I have spoken to Bill C-46 before, but it is an important issue that deserves full consideration.

Many of my colleagues in the New Democratic Party have mentioned the many problems in the trade agreement with Panama, none more so than our member for Burnaby—New Westminster who has worked tirelessly on this file. He has single-handedly orchestrated the only truly effective opposition to this very flawed trade deal.

However, I was very disappointed to hear about what has been happening in committee consideration of Bill C-46, with the Liberals siding time and time again with the Conservatives to defeat the amendments put forward by the hon. member for Burnaby—New Westminster. His amendments were excellent and they would have been helpful.

Amendments that would have improved the legislation include one that promotes sustainable development. That was defeated when the Liberals joined with the Conservatives. One to promote sustainable investment was also defeated by the Liberals in committee in the same way. One to require taxation transparency was defeated by the Liberals. One to ensure the protection of labour rights, including the right to collective bargaining, was defeated by the Liberals. The key motion, to hold off on this deal until Panama agreed to sign a tax information exchange agreement, again was defeated by the Liberals.

Often, it is getting really hard to tell the difference between the Liberals and the Conservatives. The way the so-called official opposition has rolled over on opposing this problematic trade deal, and other deals, has only blurred the line between these two parties so people wonder if there really is a difference at all anymore.

One of the many problems with this trade deal is the lack of measures to ensure proper conservation, particularly regarding biodiversity. I know this all too well, being a biologist myself. We know that the Isthmus of Panama has a rich ecosystem with over 10,000 species of plants. Of these, 1,250 are known to exist only in Panamanian rainforests. There is nothing on climate change or greenhouse gas pollution in either this trade agreement or in the environmental side agreement. These words do not even appear in the agreement.

Both countries signed the Kyoto accord, but as we can tell from the actions of the Conservative government and the Liberal government before it, merely signing an international agreement does not mean Canadians will respect our obligations in these agreements.

Panama's environment has a wealth of biodiversity and its diverse and rich ecosystems are now threatened by many development projects under way without regard for the possible effects on the environment. This agreement does not deal with that at all, or with any of the key environmental issues in Panama today, such as water pollution from agricultural run-off, threats to fishery resources, endangerment of wildlife habitats and therefore to wildlife as well, deforestation, land degradation, wetland destruction and soil erosion. Of particular concern are the endangerment of wildlife habitat and the depletion of fisheries as a result of projects such as the construction of commercial shrimp ponds and recreational facilities in the coastlines.

This headlong development is contributing to a level of deforestation of the Panamanian tropical rainforest and wetland destination that was only matched previously when the Panama Canal was originally bulldozed through the jungle. Together, these are contributing to major soil erosion problems in the unique geography of this isthmus country.

We cannot have a complete consideration of this trade deal with Panama without mentioning serious omissions regarding labour rights. Panama has had a poor record in respecting the rights of workers. In fact, just last year many people were killed there when workers protested draconian changes to labour laws by the Panamanian government.

The changes were typical Conservative, union-busting techniques to let companies fire and replace striking workers with impunity, to criminalize the right to demonstrate, to give police immunity from prosecution afterward and to ban the collection of dues. When they objected to all this, hundreds of labour leaders were rounded up and thrown in jail.

With a regime like this in Panama, we would think that basic labour rights would be a consideration in any trade deal, but things like the protecting of basic right to organize are not in this deal at all.

During second reading debate, some members talked about the serious problems with Panama being a tax haven. I mentioned that the Organisation for Economic Co-operation and Development, OECD, blacklisted Panama as an uncooperative tax haven in 2008. It was one of only 11 countries with no sharing of tax information.

I would like to examine the serious implications of the tax issues with this trade deal in Panama more today. The government of Panama has refused to sign a tax information exchange agreement. Why? It is because it has pursued a deliberate course away from information sharing and toward becoming a deliberate, planned tax haven. It has succeeded. There are an estimated 400,000 corporations, including offshore corporations, in this tiny country, more than quadruple the number registered in Canada.

Billions of dollars in money laundering is performed in Panama each year, including money from drug trafficking from places like Mexico and Colombia. Now it is one of the world's worst tax havens on top of that.

One of the reasons the U.S. Congress has held off on a risky trade deal with Panama is because of tax shelter issues and concerns over money laundering. For example, a 2009 report by the United States state department red flagged Panama for these issues things like: laundering drug money and being an illegal tax haven; adopting the U.S. dollar; lots of offshore banks and shell companies; the world's second largest free trade zone; and its location between Colombia and Mexico. The U.S. state department also noted that Panamanian banks were already favoured by global criminal organizations for money laundering.

It is no wonder criminal organizations like Panama. The financial system is famous for its secrecy. The government there does not even have the legal authority to learn crucial information about offshore corporations set up there, even who owns them.

The International Narcotics Control Strategy Report, again by the U.S. state department, said:

The funds generated from illegal activity are susceptible to being laundered through a wide variety of methods, including the Panamanian banking system, Panamanian casinos, bulk cash shipments, pre-paid telephone cards, debit cards, insurance companies, real estate projects and agents, and merchandise. Panama’s vulnerability to money laundering is exacerbated by the government’s lack of adequate enforcement, personnel, and resources devoted to anti-money laundering and combating the financing of terrorism... as well as the sheer volume of economic transactions, a significant portion of which is in cash.

We are talking about U.S. cash.

Lawmakers in the U.S. want Panama to take steps to increase transparency to share tax information for a U.S.-Panama trade.

Alarm bells should be going off. We are signing a comprehensive trade deal, one that ties the hands of anyone wanting to combat tax evasion and money laundering.