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

[David Anderson, Conservative, Parliamentary Secretary to the Minister of Natural Resources and for the Canadian Wheat Board]

Mr. Speaker, I want to ask the member opposite what his thinking is about Canada's responsibility to other nations around the world. We have been blessed in many ways in this country with the history of our institutions and the strength of those institutions that many other countries do not experience.

I am wondering how he sees the principles of freedom, democracy and the strength of our institutions tying into our responsibility around the world. I would ask him to tie them to our trade agreements and the kinds of agreements that we have made around the world with various nations.

[Alan Tonks, Liberal, York South—Weston, ON]

It is a good question, Mr. Speaker, and it gives me an opportunity to applaud the outreach of some of our former parliamentary colleagues.

We all know about corruption and the implications of corruption in other countries from a perspective of what we can do with respect to sharing what the member has described as our growth in democratic and humanitarian terms. We have colleagues who as part of an organization travel throughout the world and talk to activist groups, non-governmental organizations, government and parliamentary associations in other countries, sometimes at great risk to themselves. They attempt to graft onto those political situations the kind of institutions and institutional experience we have had over the growth of our parliamentary traditions. I laud those members. They come from all sides of the House.

That is a role Canada can play not only in a governmental sense but in a non-governmental sense. We can have a pervasive impact on developing respect for fundamental human rights and mirroring that in democratic institutions. Those efforts will make that kind of outreach more than cosmetic. They will be deep instruments of progress and a better legacy for Canada internationally.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Mr. Speaker, I believe we should carefully and constructively study what the Canada-Panama free trade agreement says.

I believe we should discuss the questions already raised about human rights and tax havens. They should not be set aside. For example, we know that last July there was a new wave of union repression in Panama that resulted in the death of several workers, more than 100 injured workers and more than 300 arrests, including the arrests of the leaders of two unions, SUNTRACS and CONATO. That was the brutal response of the Panamanian government to protests against a new law restricting the right to strike and freedom of association and providing for prison sentences of up to two years for any worker who protests in the street. This simply shows that the agreement on labour co-operation will not really protect the rights of workers in Panama because it does not contain any real enforcement mechanism and the Panamanian government clearly intends to ignore it.

According to the OECD, Panama is an offshore banking centre and a tax haven. We have already discussed the issue of tax havens. This agreement does not address tax havens and the lack of financial transparency. A free trade agreement modelled after NAFTA would broaden the scope of the foreign investment promotion and protection agreement and would further encourage corporations to commit tax evasion. It would give multinationals other tools and reasons to challenge Canadian regulations.

[The Acting Speaker, Barry Devolin]

I must interrupt at this time. When the House returns to this matter, the hon. member for British Columbia Southern Interior will have seven minutes remaining.

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 at 12 p.m.)

The House resumed from February 4 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.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Mr. Speaker, I will continue what I started the other day. The free trade agreement between Canada and Panama is in line with the Canada-U.S. strategy of signing a series of bilateral agreements.

I will continue to talk about the testimony we heard at the Standing Committee on International Trade, in particular the testimony of Todd Tucker, who appeared before the committee on November 17, 2010. He said this:

I have two central points. First, Panama is one of the world's worst tax havens. It is home to an estimated 400,000 corporations, including offshore corporations and multinational subsidiaries. This is almost four times the number of corporations registered in Canada.

Second, the Canada-Panama trade agreement should not be thought of primarily in the traditional terms, or solely in the traditional terms, of cutting tariffs. Instead, it should be seen for what it is, which is hundreds of pages of text that commit Canada and Panama to follow certain domestic policies. The pact would give new rights to the Government of Panama, and to the hundreds of thousands of offshore corporations located there, to challenge Canadian anti-tax-haven initiatives outside of the Canadian judicial system.

...What makes Panama a particularly attractive location for tax dodgers and offshore corporations? Well, for decades, the Panamanian government has pursued an intentional tax haven strategy. It offers foreign banks and firms a special offshore licence to conduct business there. Not only are these businesses not taxed, but they're subject to little to no reporting requirements or regulations.

According to the OECD, the Panamanian government has little to no legal authority to ascertain key information about these offshore corporations, such as their ownership. Panama's financial secrecy practices also make it a major site for money laundering from places throughout the world. According to the U.S. State Department, major Colombian and Mexican drug cartels, as well as Colombian illegal armed groups, use Panama for drug trafficking and money laundering purposes. The funds generated from illegal activity are susceptible to being laundered through Panamanian banks, real estate developments, and more.

Panama's domestic legal regime is supplemented by a steadfast refusal, thus far, to engage in far-reaching tax information exchange agreements with its key trading partners. Up until last year, Panama had no international tax treaties of any kind. Now it is on track to have up to a dozen or more double-taxation treaties signed this year.

...The Canada-Panama trade deal would worsen the tax haven problem. As the OECD has noted, having a trade agreement without first tackling Panama's financial secrecy practices could incentivize even more offshore tax dodging. But there's a reason to believe that the trade deal will not only increase tax haven abuses but will also make fighting them that much harder.

I would like to take a few minutes, as we talk about this free trade agreement, to talk a little bit about free trade agreements in general.

What we hear on this side, and what I have been saying, is that we need to have fair trade as opposed to corporate free trade. Many of these agreements that our country or other countries have signed tend to emphasize giving more rights to the corporations, as evidenced by the agreement we signed with some European countries that has affected our shipbuilding industry by allowing more Norwegian ships to come in tariff-free.

Canada has always been a trading nation. Free trade has not been, in many instances, that positive, although there have been beneficial effects. There is some evidence, and I have been reading through some information on this, that when the Canada-U.S. Free Trade Agreement was signed in the 1980s under the Mulroney government, there were some facts that were presented to provinces that were not quite the same documents circulated at the federal level. In other words, there is some question as to whether or not the provinces received enough information about the agreement. I will be studying that document further, just to see how it relates to what we are experiencing today.

We know that since our free trade agreements were signed, we have lost something like 300,000 manufacturing jobs in Canada. Just as an aside, it is shame that I cannot go into a store and buy a pair of shoes made in Canada. It is with difficulty that I found a jacket and winter boots made in Canada. Thank goodness we have a couple of companies in Montreal, Quebec that still manufacture winter boots.

We have seen the softwood lumber sellout. We have seen the hardship that has caused in our communities. We have seen cheap energy continuing to flow to the United States, knowing that we cannot cut back on that without cutting back on our own domestic consumption, thanks to NAFTA. We see in this time of instability in the world that east of Ottawa we have to import 90% of our oil. In fact, we are exporting our oil south from the west.

Chapter 11 of NAFTA allows corporations to sue Canadian governments, and millions of dollars of our taxpayers' money have gone to defending our provincial and federal governments as a result of these ludicrous lawsuits.

I would just like to conclude by saying that we really need to take a good look at these agreements so that they are in the best interests of the people of both countries.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Mr. Speaker, I know the hon. member is one of the New Democrat members most interested in agricultural issues. I was very interested to note that he did not address agricultural issues, at least in the portion of his speech that I heard. Maybe he did in the earlier portion.

I was wondering if the member would respond to that, because one of the things we heard in committee as we discussed the Canada-Panama trade agreement, as with most of them, is that the agreement would have marked benefits for our agricultural producers. We produce very different crops from what they do in Panama. Canada is not known for growing a lot of bananas. So we will not be competing with Panama in that way. However, be they our wheats, pulses, or processed foods, there are very good openings in Panama.

I am wondering why the hon. member has not talked about the advantages that the Canada-Panama trade agreement will have for our agriculture industry.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Mr. Speaker, the member asks a logical question.

My understanding is that we do trade with Panama at the current time. We trade with many other countries. In any trade agreement we have to look at the positive and the negative aspects.

The fact this country is or harbours a paradis fiscal , a tax haven that is sucking millions of dollars, and also that it should not be supporting the drug trade, I think overrules the fact that we may gain a few small markets in this country.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, first I must inform you that I will be splitting my time with my hon. colleague from Don Valley East.

I am pleased to have the opportunity to speak to Bill C-46, the free trade bill between Canada and Panama. This bill seeks to implement the Canada-Panama free trade agreement, the Canada-Panama agreement on labour co-operation and the Canada-Panama agreement on the environment. It is a bit of a mouthful.

I will also be—

[The Acting Speaker, Barry Devolin]

Order, please. I need to interrupt to tell the member that we are on 10-minute speeches now, so the hon. member for Halifax West has time allotted for a 10-minute speech with five minutes of questions and answers as opposed to splitting his time.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you, Mr. Speaker, for that clarification.

I want to say a few words about the bill in the context of the reality of the government's trade policy and foreign policy generally.

Panama is a relatively small economy, but it is an important player in the Americas and an important market for Canada. In fact, it is a stable country which has made significant progress in recent years in terms of development and democracy, which Canada can play an important role in encouraging.

I had the experience four years ago of being part of a delegation led by the Speaker to three francophone countries in Africa, Benin, Burkina Faso and Mali, with the purpose of encouraging democratic development by holding conferences and discussing how our system works as opposed to theirs. That was an important process.

We talked, for example, about the role of an official opposition and how important it was to have one. Even if my colleagues opposite may not always enjoy that experience, they know it is important to have one. That was actually a novel concept for some of the parliamentarians we were talking to. We could see how the discussion was getting them thinking about ways they might want to see change in their own country. There are things that we as a country can do to encourage democratic development.

Of course, Canada is a trade-dependent nation. Eighty per cent of our economy depends on access to foreign markets for Canadian exports. Imagine that. That is incredible. Eighty per cent of our economy depends on access to foreign markets.

It used to be, 20 years ago, that 90% of our exports went to one country, the U.S., and these days it is about 80%. That has been a change, but is still a huge proportion of our exports and economy that is dependent upon one trading partner, the United States, a very important partner and good friend. It is a good sign that there has been some progress in increasing our trade elsewhere and we should keep trying to do so.

That is one of the reasons the Liberal Party supports the principle of free trade, because Canada is an exporting country. If we cannot get access to other markets, we have real problems. That is why the negotiations that led to the Canada-U.S. Free Trade Agreement were started under the Trudeau government. I have some knowledge of that because my dad was the minister of international trade at the time. Interestingly, the secretary of trade for the U.S. had the same last name. His name was Donald Regan as opposed to Gerald Regan, who was my dad.

[Scott Brison, Liberal, Kings—Hants, NS]

And then there was Ronald Reagan.

[Geoff Regan, Liberal, Halifax West, NS]

Ronald Reagan was the president, but that is Reagan not Regan. Let us make that clear. He had an extra “a” in his name.

There are many benefits of trade and we have seen over the past 50 or 60 years, with increasing trade liberalization, an improvement in the standard of living for millions and billions of people. Clearly, there is a long way to go for lots of folks around the planet and we still want to see better lives for people in many countries, but trade can play a positive role in improving people's lives by giving them access to markets.

I mentioned Africa. One of the problems it has is getting access to markets in the U.S. and Europe for its cotton and textiles. It has beautiful cotton fabrics that were made into dresses and shirts. It had trouble getting access to those markets because of subsidies and tariffs, and so forth. These issues are real from both points of view.

The Conservative government's mismanagement of our trading relations has resulted in trade deficits for the first time in 30 years. That is alarming for Canada and should be alarming for Canadians. For the first time in 30 years, under this regime, we are falling behind our competitors in emerging markets like China and India.

We suffered the embarrassment of not gaining a seat on the UN Security Council. Speaking of China, the government's clumsy approach in its attitude toward China was very much an element of that, one of the factors involved, as well as its decision to cut aid to many African nations. It certainly offended those nations and many Middle Eastern countries were unhappy with the government's approach on a variety of things.

It surprised me that the government actually decided to campaign for a seat on the UN Security Council when it ought to have been fairly obvious that with all the things it had done in recent years, it was unlikely to gain that seat and how badly it misjudged the number of votes it would have. For a Prime Minister who is often talked of as a political strategist, it is surprising that he would not see the dangers of that move.

However, the current government is also falling down on protecting Canadian interests vis-à-vis our largest trading partner, the U.S, not only on things like softwood lumber and other agricultural products, et cetera, but in relation to the current talks on the common perimeter where the government does not want to share with Canadians what it is planning to do and what it has in mind. It has not set out to the House or to Canadians what its approach is, what its attitude is, what its vision is for border issues and therefore, for issues such as immigration. We ought to have control over what happens with our immigration and refugee policies. Canadians are concerned that the government wants to surrender our sovereignty. We do not agree with surrendering any of that.

Recently we saw its approach to the situation in Egypt. The government has been slow to respond and very hesitant. We have been less forthcoming, in terms of supporting the protest, in terms of supporting principles like human rights and political freedoms, than the U.S. has been. That is disappointing. We need to have a long-term view and recognize that if we support regimes which do not allow those kinds of freedoms, in the long term, the effects would be negative for us. If we look at the history of many countries, we can see that.

Meanwhile, the U.S. is engaging in increasing protectionism which already has hurt Canadian business, yet the Conservative government is doing virtually nothing about it.

I could go on about other countries and the policies of the government in respect to them, but let us focus on Bill C-46 and Panama.

In spite of the global economic downturn, Panama's GDP actually grew at 10.7% in 2008. That is one of the highest in the Americas. It is forecast at 5.6% for 2010, which would put it well ahead of most other countries, including Canada, in terms of our growth last year.

In 2009, bilateral trade between the countries totalled $132.1 million, with Canadian exports making up $91.4 million and imports of $40.7 million.

Primary Canadian merchandise exports to Panama include, and these are some of the major things that we sell to Panama: machinery; vehicles; electronic equipment; pharmaceutical equipment; frozen potato products; pulses, which are beans and lentils, important sources of protein; financial services; engineering; information and communications technology services. These are all important areas where we currently export and there is room for us to increase our exports to Panama, particularly in relation to agricultural products and things like fish, as we referred to earlier in the debate.

The existing Panama Canal is vital for the international trading system. It is being expanded with completion slated for 2014. That expansion, worth $5.3 billion, is expected to generate opportunities for Canadian businesses in construction, environmental engineering and consulting services, capital projects, and more. There are many opportunities that we can see. There are no guarantees at all, but opening trade with Panama, in spite of some concerns we have, is a positive move.

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

Mr. Speaker, I listened attentively to the speech of the hon. member for Halifax West. I appreciate his support for Panama. I cannot say that I agree with everything he said in his speech, but it is nice to see the Liberals on board with our free trade agenda, especially in the Americas and on Panama.

Will we continue to see the Liberal Party support free trade agreements which are good for Canadian business and opportunities for Canadian workers, rather than as we saw in the 1993 election when the hon. member ran on a ballot against free trade?

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, I favour free trade. I have indicated that many times in the past. I do not recall personally having debated that issue in 1993. We had many other issues to talk about then and since. However, it was certainly an interesting election campaign, as my hon. colleague recalls. I believe he was involved in the campaign but not as a candidate at that stage. That came later.

We as a party do support the principle of free trade, but it is important to examine each agreement by itself and bargain from the point of view of strength.

My main concern regarding the Canada-U.S. Free Trade Agreement is that Canada entered into its negotiations under the notion that this would be the economic policy as a government. The government of the day, under Mr. Mulroney, basically based its whole economic platform on establishing an agreement.

In that type of a situation the U.S. would expect to have good concessions or basically get whatever it wants. It would recognize it was in a strong position if Canada needed to have an agreement. I did not feel that was helpful, but in other respects there were many benefits which came from that agreement.