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 bill was last introduced in the 40th Parliament, 3rd Session, which ended in March 2011.

Sponsor

Peter Van Loan  Conservative

Status

Third reading (House), as of Feb. 7, 2011
(This bill did not become law.)

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

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.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.

Votes

Feb. 7, 2011 Passed That Bill C-46, An Act to implement the Free Trade Agreement between Canada and the Republic of Panama, the Agreement on the Environment between Canada and the Republic of Panama and the Agreement on Labour Cooperation between Canada and the Republic of Panama, be concurred in at report stage.
Feb. 7, 2011 Failed That Bill C-46 be amended by deleting Clause 63.
Feb. 7, 2011 Failed That Bill C-46 be amended by deleting Clause 12.
Feb. 7, 2011 Failed That Bill C-46 be amended by deleting Clause 10.
Feb. 7, 2011 Failed That Bill C-46 be amended by deleting Clause 7.
Oct. 26, 2010 Passed That the Bill be now read a second time and referred to the Standing Committee on International Trade.
Oct. 26, 2010 Passed That this question be now put.
Oct. 20, 2010 Failed That the motion be amended by deleting all the words after the word "That" and substituting the following: “Bill C-46, An Act to implement the Free Trade Agreement between Canada and the Republic of Panama, the Agreement on the Environment between Canada and the Republic of Panama and the Agreement on Labour Cooperation between Canada and the Republic of Panama, be not now read a second time but that it be read a second time this day six months hence.”.

November 29th, 2010 / 5:05 p.m.
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President, Canadian Association of Importers and Exporters

Joy Nott

Let me start off by saying that I, personally, am not an income tax expert. As an association, we advocate on behalf of our members with respect to international trade topics that are more in line with the actual trading of commodities and services as opposed to income tax.

I don't know. I haven't read all the minutes from previous witnesses. But I'm sure there could be other associations that could more appropriately answer the specific tax question.

On the trading of commodities and services question, and putting the tax question aside, the tax information exchange agreement I was talking about is currently being discussed between the United States and Panama, not Canada and Panama, that I'm aware of.

Again, at this conference I was at, Secretary Locke seemed to feel it was an important step forward. He publicly stated that they were interested in looking at a free trade agreement. That is the context in which I put forward those comments, as opposed to any income tax.

Relative to the position our association takes on behalf of our members, we don't look at income tax issues. Based on the free trade of commodities and services, and strictly within that forum, we do support Bill C-46.

November 29th, 2010 / 4:45 p.m.
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Carlo Dade Executive Director, Canadian Foundation for the Americas (FOCAL)

Thank you, Mr. Chairman.

It's a pleasure to be here again before the members of this committee. This time, I'm here with two FOCAL researchers.

We will all be happy to answer questions about our brief, which we have prepared and sent to you, in support of Bill C-46.

Just let me note that our presentation will be a little bit different from some of the others you've seen. You've had a great deal of information on specifics of the agreement. We'd like to step back and look at context for the agreement, where it fits in, and why it's important for Canada.

As you know, we've engaged in this country in a process of--

November 29th, 2010 / 4:40 p.m.
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Joy Nott President, Canadian Association of Importers and Exporters

Thank you very much, Mr. Chair and members of the committee.

My name is Joy Nott, and I'm the president of I.E.Canada, the Canadian Association of Importers and Exporters. With me today is Carol Osmond, our vice-president of policy. We'd like to thank you for the opportunity to appear here today to express our support for Bill C-46, the Canada-Panama free trade agreement.

With respect to who we are, I.E.Canada has been a leading voice in the trade community since 1932. Our members consist of small, medium, and large enterprises from across Canada. Our membership is made up of manufacturers, importers, exporters, wholesalers, distributors, and service providers to the trade community in a broad range of industry sectors, including professional services firms, such as legal and accounting firms, customs brokers, and transportation companies.

I.E.Canada was formed as the Canadian Importers and Traders Association, in 1932, in the face of a resurgence in tariff barriers and protectionism at that time. While a significant percentage of our members continue to describe themselves primarily as importers, an even larger percentage are both importers and exporters. Our current membership is reflective of today's reality.

Global business has become ever more integrated as companies around the world strive to remain competitive and productive. Traders at home and abroad are constantly seeking new, cost-effective sources of supply, whether it be finished goods for sale to consumers or parts and components for their manufacturing operations.

Canadian consumers benefit from greater choice of products and lower prices, while our manufacturers are able to remain competitive as they search for new and emerging markets for their products. As an association representing both importers and exporters, I.E.Canada is an advocate for liberalized trade as well as trade facilitation. We also aim to provide businesses with information and tools they need to remain competitive internationally.

I.E.Canada and its members support the Canada-Panama free trade agreement and the speedy passage of Bill C-46. While Panama is a relatively small market overall for Canadian exports, as others have testified before this committee, for individual companies or sectors, Panama is a significant market and promises to be an even more important one with the implementation of this free trade agreement.

Panama's economy is primarily service-driven. It is also one of the fastest growing economies in Latin America. As such, it presents opportunities for Canadian exporters. For example, with the current construction boom in Canada, the Canada Mortgage and Housing Corporation and Export Development Canada are both bullish about opportunities for Canadian suppliers of building products. Large infrastructure projects, such as the Panama Canal expansion project, investments in the Panama-Pacific special economic area at the former Howard air force base and in tourism projects, and the demand for residential housing, fueled by rising incomes, creates demand for a broad range of quality building products, most of which will be imported.

As you know, SNC Lavalin and its partners were recently awarded a major engineering contract by the Minera Panama S.A., a wholly owned subsidiary of Inmet Mining Corp. of Canada, for the development of a copper mining project in Panama. This project will also provide opportunities for Canadian exporters of building materials as well as mining equipment.

Of course, the Canada-Panama free trade agreement is but one element of a broader strategy to promote trade between Canada and Latin America and to diversify Canada's export markets. We were pleased to see, for example, the passage of legislation to implement the Canada-Peru Free Trade Agreement during the last session of Parliament and the Canada-Columbia Free Trade Agreement during this session. Given Panama's strategic location, it can serve as a jumping off point for Canadian companies wishing to access markets throughout Latin America.

Recent economic events in the United States have served to remind us, in a dramatic fashion, of the need to diversify our export markets in Latin America and elsewhere and that we need to reduce our economic dependence on our neighbour to the south. By implementing a free trade agreement with Panama in advance of the United States, we also have the opportunity to give Canadians a head start to possibly capture market share from their U.S. competitors. However, that window of opportunity may be closing. It was recently reported that the United States and Panama are about to sign a tax information exchange agreement that could pave the way for congressional approval for the U.S.-Panama free trade agreement in the United States.

The signing of a free trade agreement is not simply about reducing duties and lowering trade barriers. It immediately raises the profile of each party to the agreement of the other's country. It also fosters closer ties between the governments and between their respective business communities and citizens. At the same time, signing the agreement and passing the necessary implementing legislation by itself is not enough. To ensure that Canadians fully benefit from this and similar agreements, the government, working with the private sector, must promote opportunities to Canadian companies through information and outreach sessions, trade missions, and other similar activities. We view the recent opening of an office in Panama by Export Development Canada as an important step in that direction.

In summary, I.E.Canada and its members support the Canada-Panama free trade agreement, and we urge members of Parliament to proceed quickly with the passage of Bill C-46.

On behalf of the members of I.E. Canada, we would also like to thank you for the opportunity to appear here today, and we would be pleased to respond to your questions when appropriate.

Thank you.

November 29th, 2010 / 4:40 p.m.
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Conservative

The Chair Conservative Lee Richardson

Ladies and gentlemen, we will resume our discussion 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 our next witnesses we have two groups, and I'm sorry we don't have more time, but we will get to them immediately.

From the Canadian Association of Importers and Exporters, Joy Nott is the president--welcome--and Carol Osmond is the vice-president of policy.

From the Canadian Foundation for the Americas, FOCAL, we have with us again Carlo Dade, the executive director--it's a pleasure to have you back--and researchers Marina Connors and Mark Richards joining Mr. Dade.

I'm sure you're all well aware of the format, so I'm going to let you begin.

I'm going to start with Ms. Nott, if you'd like to have an opening statement.

November 17th, 2010 / 4:50 p.m.
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Richard Montroy Deputy Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency

Thank you for inviting the Canada Revenue Agency to appear before this committee on the subject of Bill C-46.

My name is Richard Montroy. I am the deputy assistant commissioner for the compliance programs branch in the Canada Revenue Agency. With me today are Mr. Brian McCauley, the assistant commissioner of the legislative policy and regulatory affairs branch, and Monsieur François Ranger, acting director general of the international tax directorate in my branch.

In the interest of time, I will keep my opening remarks very brief.

On the legislation that is before you for consideration, the role of the Canada Revenue Agency is to administer the policy and legal framework established by the Department of Finance. We do this by employing a balanced approach to compliance that includes service, outreach, and enforcement activities.

We undertake examinations, audits, and investigations at the domestic and international level. We also administer the provisions of international tax agreements. The CRA collaborates with other tax administrations to address areas of common interest.

We work with the Organisation for Economic Co-operation and Development and Canada's tax treaty partners to advance common understanding and approach to tax issues. The exchange of information through tax treaties or tax information exchange agreements is paramount in detecting and deterring international tax evasion and avoidance.

My colleagues and I will be pleased to answer any questions you have today.

Thank you.

November 17th, 2010 / 4:30 p.m.
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Conservative

The Chair Conservative Lee Richardson

We shall resume.

Thank you, ladies and gentlemen.

We're continuing our 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.

To that end we are welcoming witnesses today from the Canada Revenue Agency. Brian McCauley is assistant commissioner, legislative policy and regulatory affairs branch. Richard Montroy is deputy assistant commissioner, compliance programs branch. François Ranger is acting director general, international and large business directorate, compliance programs branch.

From the Public Citizen's Global Trade Watch, we have Todd Tucker, research director.

I'm pleased that Canada Pork International is meeting in Ottawa today. We have the president, Edouard Asnong, with us, and speaking to us today is the assistant executive director, Martin Lavoie.

We'll begin with Monsieur Lavoie from Canada Pork International. We will hear brief opening comments from each of our witnesses and then proceed to questions.

Monsieur Lavoie.

November 17th, 2010 / 3:35 p.m.
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Conservative

The Chair Conservative Lee Richardson

With quorum, we're going to begin.

I have a couple of quick housekeeping items to take care of before we begin. I'll beg the indulgence of our witnesses. They're both used to this, in this case, so that's good.

First, I will ask the committee to consider an operational budget request. This would be for Bill C-46, an act to amend the free trade agreement between Canada and Panama. In the event we have witnesses from across the country, there will be requests for recovery of expenses. I think the clerk has circulated a budget that will contain any need for financing, so we don't have to go back each time.

May I ask someone to move that motion?

Mr. Cannis moves that the committee adopt the motion to provide expenses for witnesses on Bill C-46 to the tune of about $33,000.

(Motion agreed to)

Thank you.

The other one is a quick one. I need authorization for the clerk to purchase gifts for those we will visit in Europe. That is:

That the Standing Committee on International Trade be authorized to purchase up to $600 in gifts to be presented to foreign hosts during the trip to London, United Kingdom; Strasbourg, France; Budapest, Hungary; and Rome, Italy.

Mr. Cannis.

November 3rd, 2010 / 3:40 p.m.
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Conservative

The Chair Conservative Lee Richardson

Welcome.

We will commence. This is meeting 33 of the Standing Committee on International Trade.

Today we are going to start, pursuant to the order of reference, with 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. This is the next bill we have to deal with on the order of business. It has been referred from the House to this committee.

We are going to start the review with a briefing from the department. We have a number of officials here who are prepared to respond to any questions members have.

We will have an opening statement from David Plunkett, chief trade negotiator, bilateral and regional, Department of Foreign Affairs and International Trade. Before you start, Mr. Plunkett, I would like to introduce those who are with you today.

From the Department of Foreign Affairs and International Trade we have Jean-Benoit Leblanc, director of trade negotiations, 2 division; and Robert Brookfield, deputy director of market access and trade remedies law division.

Pierre Bouchard is back with us again. He is with the Department of Human Resources and Skills Development. He likes to answer Mr. Julian's questions.

From the Department of Finance we have Alain Castonguay, senior chief, tax treaties, tax policy branch.

Mr. Plunkett, maybe you can provide us with an initial background and opening statement. From there we'll take questions from the members.

Canada-Panama Free Trade ActGovernment Orders

October 26th, 2010 / 6:10 p.m.
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Liberal

The Speaker Liberal Peter Milliken

The House will now proceed to the taking of the deferred recorded division on the previous question at the second reading stage of Bill C-46.

Canada-Panama Free Trade ActGovernment Orders

October 26th, 2010 / 11:20 a.m.
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NDP

Niki Ashton NDP Churchill, MB

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Canada-Panama Free Trade ActGovernment Orders

October 26th, 2010 / 11:05 a.m.
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Bloc

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

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

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

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

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

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

We are well aware that the absence of environmental or labour standards in trade agreements puts a great deal of pressure on our industries, especially our traditional industries. It is very difficult for them to compete with products made with no regard for basic social rights. We are in favour of a real policy of multilateralism, not the shameless pursuit of profit at the expense of people's living conditions and the environment, which is all too often the case with the bilateral agreements that the government wants to sign.

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

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

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

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

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

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

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

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

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

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

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

Canada-Panama Free Trade ActGovernment Orders

October 22nd, 2010 / 12:45 p.m.
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NDP

Paul Dewar NDP Ottawa Centre, ON

Mr. Speaker, I rise today to speak to a bill concerning a bilateral free trade agreement with Panama, Bill C-46.

I rise today to hopefully take a look at Canada's track record regarding trade and particularly the direction that the government has taken when it comes to trade agreements. When it comes to the Panama free trade agreement, it is actually part of the cookie-cutter approach that the government has of looking at free trade as a one-off kind of thing that can be done with different countries, and by the same token, ignoring where I think we should be spending our time and effort, which is looking at the multilateral forums.

Many who are involved in trade agreements and in diplomacy are very concerned about the fact that we were not able to find success in the Doha Round. The government will say that since Doha has collapsed, the World Trade Organization talks on multilateralism have collapsed, in effect what we should be doing is just having bilateral trade agreements.

That sounds reasonable if we consider that there does not seem to be any initiative that is worthwhile to get multilateral trade agreements going on or the Doha Round going again, except for the fact that when we look at what Canada's role in trade has been historically from the beginning of Confederation, we need to ensure that we do have fair trade opportunities, that we are not going to be susceptible to larger economies taking advantage of our goods and services and resources. By the same token, we have to have access to markets.

Essentially, in a sentence or two, that is what the equation is. It is making sure we have access, while protecting our economy.

When it comes to these bilateral trade agreements, the concern here is that when we compound them and stack them up, we have to really look at what is in the interests of Canada. There have been some interesting suppositions put forward on these small bilateral trade agreements. Let us be honest here: most Canadians do not wake up in the morning and say, “By golly, we need to get access to the market in Lichtenstein, or Jordan, or Panama”.

We do want to make sure that we are not selling off our natural resources without value added, that we are not opening our markets up to the vagaries of what we have seen lately, which is very significant multinational corporations coming in and taking over our companies, dispensing with the parts of the company that they do not find profitable, and making away with the profits. That is the major concern of Canadians, not about free trade with Panama or Lichtenstein or Jordan.

Canadians are very concerned about what happens when these bilateral trade agreements compound and what is the benefit for Canada. In the last couple of weeks, there has been an interesting discussion around potash. Potash has been a real cornerstone for the economy in Saskatchewan. As we know, it was something that was a net benefit for everyone in Saskatchewan because it was a crown corporation.

Sadly, we saw it sold off, and we say this respectfully to the party in Saskatchewan or what used to be the Conservative party that exists no more. They sold it off. We now have Mr. Wall in a position where he is having to sound like a New Democrat, saying that because of the concerns of international investors, he is going to actually stand up for Saskatchewan and not let Potash Corporation be further undermined. We welcome that.

Mr. Wall has now listened to what New Democrats have said: “Do not sell it off. Do not let the Prime Minister have his way.” When we are talking about international trade, we are talking about protecting Canadian industry. I know some of the Conservatives are looking as though they are doing a pretzel dance, but that is kind of how they are dealing with the potash file. I guess they represent exactly what is happening with their position on trade, protecting, on the one hand, Canadian industries, and on the other hand, ensuring that we have markets abroad.

Make no mistake, if Potash Corporation is sold off to another country, which is essentially what is happening, the effects will be not just to Saskatchewan. The ripple effect will be felt throughout Canada. That is what we have to consider when we are looking at trade agreements. How is Canada going to benefit? The provisions in this bill, in this offering from government, are in terms of investment protection and free market access in goods and services, including government procurement, but then we get into what we have seen in previous trade agreements: a labour protection agreement and an agreement on the environment.

Unless absolute clarity on what we are agreeing to in terms of labour standards and environmental standards is embedded in trade agreements, they are not worth the paper they are written on. They can be ignored. If there are labour standards, for instance, such the ones in Panama, which are not as strong as those in Canada, essentially we are putting our workers in unfair competition with workers from Panama. Not only that, but in talking to people from Panama, as our party has, their concern is that it is in fact putting a rubber stamp on labour practices in Panama and saying that all is well and good.

I have heard the government say, time and time again, this will lift all boats up and by us signing a free trade agreement with Panama, all of a sudden it is going to have fair labour standards and fair environmental standards. We know we do not even have the capacity to have oversight on the potash deal in this country. Are we really going to have enough people to have oversight on the environmental and labour standards in Panama? I doubt it. In fact, the agreement does not have it embedded. It is a side agreement and it is a sideshow at the end of the day.

When we look at the totality of this bilateral trade agreement, it is like what we have seen in the past. There is no guarantee that we are going to have equity in terms of access to markets and protecting labour and environmental standards for those we trade with. We do not know and have actual numbers to convince any of us that this will be a benefit to Canadians, be it workers or investors. We do not know what the follow-up will be, because when we are talking about trade agreements, each of these agreements needs to be monitored. Once we sign off and say, “Here is access to our markets”, some people will take advantage of that and will have access to cheaper labour, perhaps, and able to have environmental standards that are not as strong as Canada's, but we will have to make sure that there are benefits to Canada. Who is going to monitor that?

Right now, as I said before in terms of looking at the potential sale of PotashCorp, we do not even have enough people monitoring that. For each of these bilateral agreements, we are going to need people to monitor these trade agreements. That is why it is so important to focus on the multilateral approach.

With a multilateral trade system, which used to be the General Agreement on Tariffs and Trade, we would have discussions and debates in Brussels and we would have some of our bureaucrats in Brussels on a regular basis ensuring that the GATT rules were being followed. We will need the same kind of thing for each of these bilateral agreements.

We should be entering into multilateral agreements. It makes sense and it is fairer. This is not the way to go. Clearly this is going to be another example of the government ignoring multilateral, going into bilateral, and at the end of the day, Canadians will not be better off.

Canada-Panama Free Trade ActGovernment Orders

October 22nd, 2010 / 12:30 p.m.
See context

Bloc

Diane Bourgeois Bloc Terrebonne—Blainville, QC

Mr. Speaker, today we are debating Bill C-46, An Act to implement the Free Trade Agreement between Canada and the Republic of Panama, the Agreement on the Environment between Canada and the Republic of Panama and the Agreement on Labour Cooperation between Canada and the Republic of Panama.

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

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

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

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

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

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

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

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

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

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

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

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

Is my time already up, Mr. Speaker?