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.

Notice of Time Allocation Motion

[John Baird, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, an agreement could not be reached under the provisions of Standing Order 78(1) or 78(2) with respect to the second reading stage 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.

Under provisions of Standing Order 78(3), I give notice that a minister of the Crown will propose at the next sitting a motion to allot a specific number of days or hours for consideration and disposal of proceedings at the said stage.

Canada-Panama Free Trade Act

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, it gives me a great deal of pleasure to speak to Bill C-46, the Canada-Panama bilateral free trade agreement.

We all know that in August 2009, the present government concluded negotiations with the Republic of Panama for a comprehensive free trade agreement designed to augment a previous agreement, the foreign investment promotion and protection agreement, called FIPA, that was signed between the previous Chrétien Liberal government and the Panamanian government in 1998.

The agreement before the House for debate includes service trade liberalization, principles and government procurement provisions, as well as one of the government's favourite processes, which is to sign side agreements on labour co-operation and the environment. I will say that we New Democrats are proud to say that those two things ought to be in the main text of any agreement, not in a side part of any agreement.

On September 23 of this year, the minister tabled the implementing legislation, Bill C-46. It behooves us to review the four main components of this, which include: free market access in goods and services, and that includes government procurement; investment protection provisions; labour agreement sections; and then an agreement on the environment.

I hasten to point out that we in the New Democratic Party are all eager to support trade agreements that benefit a majority of Canadian workers, farmers, small businesses and consumers. We all want trade agreements that work to achieve the larger societal goals of economic justice, poverty alleviation, healthier communities, pollution reduction, human rights and a healthy environment.

Unfortunately, my review of this documentation and the facts that surround it lead me to conclude that the Panama free trade agreement does not meet these goals.

I will review a couple of general thoughts before I go into some of the details.

First, it is important to point out that this deal is not about trade. I hear many members on the other side of the House comment that if one opposes this deal, one must therefore be opposed to trade. That is simply a red herring and it is a strawman argument. That is not the case at all and anybody who has any intellectual honesty will recognize that at once.

Canada trades with many countries of the world. We trade all the time. We trade with Panama and have been for a long time. The statistics that we have covered many times in this House show that we have an annual trade allotment of about $140 million a year with Panama. That is a small amount, of course, but it shows that trade is going on between the two countries.

Trade goes on between Canada and many countries.

The issue before this House is one of to whom we should advance the preferential concept of free trade. Let us pause and just reflect for a moment about what free trade really means. Free trade means the mutual elimination of tariffs on goods and services between the two countries. It allows goods and services to flow across the border into each other's country with no duties whatsoever attached to them.

In my view and in the view of the New Democratic Party, we have to take a very considered and judicious approach when we consider to whom we should advance such a powerful and preferential concept as free trade. We should decide very carefully with whom we will have this relationship because, of course, these agreements do not operate in a vacuum. They do not operate in theory. They have tangible, practical effects that would actually affect the lives of Canadian businesses and consumers.

I want to talk a bit about why I personally oppose this agreement.

First, there is the concept of understanding Panama's current labour situation. This past July there were reports of a new wave of anti-union repression in Panama. This resulted in several workers killed, over 100 injured and over 300 trade unionists arrested, including leaders of the SUNTRACS and CONATO trade unions.

This followed the government of Panama's reaction to protests against new legislation that restricted the right to strike and freedom of association, and that sought to enact provisions that would lead to jail for up to two years for any workers who took their protests to the streets. I am going to pause here. That is a country which, this past summer, enacted legislation that said it would jail its own citizens if they protested a governmental action peacefully in its streets.

I have heard some talk about how Panama is an emerging democracy. I have not heard any member of the opposite side explain how a government that is pursuing legislation that jails its citizens for expressing their views in their communities is a country with which we should hasten to do business.

The fact that that happened while this negotiation was going on, I would argue, does not bode well toward thinking that any labour protection that is in this agreement would provide any real protection of labour rights in Panama, as it lacks any effective mechanism for enforcement and the Panamanian government, quite clearly, intends to ignore it. Despite what it may have said or paid lip service to, its actions this past summer certainly cause one to think that its actions may not be consistent with its words.

According to the OECD, Panama is an offshore banking centre and is considered one of the most notorious tax havens in the world. Nothing in this agreement deals with the tax haven or the lack of transparency issue. A NAFTA-style free trade agreement would broaden the effects of FIPA and increase the corporate incentive for tax evasion. It would also provide multinationals with additional tools and incentives to challenge Canadian regulations.

I am going to talk for a minute about why that might be important to us on a societal level as opposed to on a financial level.

I am the New Democrat critic for public safety. I am engaged in many discussions with all members of this House, but particularly with my hon. colleagues on the government's side, about the need to have safe communities. I have done a bit of research on this issue. I would like to share that with my colleagues in the House and I hope they will pay attention to what I am about to say.

I did some research through the Library of Parliament and found out that a study was done and it was published this year by Cornell University, not by a trade union group or a left-wing think tank. This is an academic study that was published by Cornell University. It quotes research which says that some 75% of all sophisticated drug trafficking operations use offshore secrecy havens. The studies also show that drug money, and not the Euro market, was the principal cause for the phenomenal growth of the Caribbean havens in the 1970s and 1980s.

The study says that it is evident to all who have studied the offshore banking business that the growth has been fueled by the phenomenal increase in cash from the U.S. drug trade. Of the criminal cases identified by IRS investigations, that is the Internal Revenue Service in the United States, from 1978 to 1983 that occurred in the Caribbean, where, I would point out, Panama is located, 45% involved illegal transactions derived from legal income, that is tax evasion and otherwise legitimate trade. In the other 55%, illegal income was involved and 161 cases dealt with drug traffic. Of those, 29% involved the Cayman Islands and 28% involved Panama.

The government, stands in this House every day and lectures everybody sanctimoniously about caring for communities and cracking down on drug trafficking, just proposed in this House a free trade agreement with a country that is the number two launderer of drug money in the Caribbean. I have not heard any member say anything about that. The government wants free trade with drug traffickers. Of course, anybody who reads the paper would have known that, because Manuel Noriega, the ex-president of that country, is still serving time in jail after being convicted of massive narco-crimes.

That is the country with which the government wants to hasten to sign a free trade agreement and says that we are just opposed to trade. No, we are not. I am opposed to trade with drug havens and tax evaders, where drug money from drugs sold on the streets of the United States and Canada ends up in Panama, gets laundered and sent back here, and the government wants to make it easier.

I read something else that I want to share with my hon. colleagues. I read what this agreement does. Under the investment transfer provisions of this free trade agreement, it specifically says that nothing should impede the transfer of funds, either into or out of each country, from investments covered by this agreement.

Therefore, money between Panama and Canada under this agreement would actually flow without any controls whatsoever. Has anybody considered that if we sign this agreement, we will be making it easier for drug money to flow between these two countries? Are there any facts I have stated that any member in the House would dispute? Do they dispute that Panama is a known tax haven? No. Do they dispute that drug and narco-traffic occurs in Panama and it is one of the major sources for that in the Caribbean? No, I do not hear that. Do they dispute Cornell University academic research? I would be interested to hear their arguments about that.

I also want to talk a little bit about agriculture because I heard some members opposite talk about how this agreement would be good for farmers. When I read this agreement, it states that Canada would not eliminate over-quota tariffs on supply managed goods such as dairy, poultry and eggs. Additionally, Canada would not eliminate its tariffs on certain sugar products. Therefore, when it comes to dairy, poultry and eggs, this agreement does not even deal with that issue.

Nothing in this agreement will affect tariffs between the two countries on those issues at all. It is a complete red herring to mention that this agreement has anything to do with increasing or improving the lives of farmers because the agreement does not cover it. It retains the tariffs. If members want to sign an agreement that removes tariffs, they can do that, but this one does not.

[Malcolm Allen, NDP, Welland, ON]

Mr. Speaker, I am pleased to join in this debate. I see my friend the parliamentary secretary is here today and participating in the debate. I appreciate that. The member fromCrowfoot has been here all day.

Let me acknowledge to both my colleagues, who have said that we in the NDP oppose only the trade deals that the government brings forward, that they are right.

Let me tell the House why. First, we are not debating trade policy. Bill C-46 is “An Act to implement the Free Trade Agreement between Canada and the Republic of Panama”. It goes on to talk about environmental and labour side-agreements. We are not talking about debating trade policy from the perspective of what we want to see in that policy. We are talking about how to implement trade policy, how to nip around the edges and tinker with this piece or that piece, adding a word here and deleting a sentence there. Fundamentally, what we are looking at is free trade, full stop.

I would say to my colleagues that if they truly want to debate trade policy with New Democrats, or with me, a member who attends the trade committee 80% of the time, then I would suggest that we debate trade policy. Let us not debate implementation of free trade, which is a fait accompli. The government is not interested in talking about trade. It is interested only in talking about free trade. Free trade is one of the many aspects of trade policy: whether it is called fair trade, which I would suggest is significantly different from free trade; whether it means trade agreements like those we see in the Mercosur that Brazil has with its neighbours; or whether it is EU trade through the EU trade division. There are a great number of agreements across this globe that we have neglected to look at because are fixated on free trade.

Why we are fixated on only one aspect is beyond the comprehension of this member. Ultimately, when we look at the stats for those who are trying to work in this country, we see the poor staying as poor as they were, getting no further ahead.

Brian Mulroney said that this country would never be recognized again if we implemented free trade. So he did. He was right. We do not recognize this country.

Members can come down to Welland and take a look at where this policy, with its promise of the return of manufacturing and replacement jobs, has now taken my town. In 13 years, in terms of earnings per worker in Ontario, it has gone from third highest to almost the lowest, courtesy of free trade.

Of course, the government and the Liberals would have us believe that we were winners under the free trade model. What do we see for middle-income workers? Their income has come down 5% over the last 15 years.

I am not sure how mathematicians make minus five a plus. I know in the old days minus five and minus five gave plus 10. All I know is that when a person has a job that used to pay $22 an hour and now that person is working for $14 and the person's mortgage is still the same, that person is not better off, but worse off. If that is the minus 5%, then workers in my riding did not benefit from free trade. Yet we insist on talking about it.

The Liberals insist that we are in the way and will always vote against it. Of course we will, because it does not help workers. It does not help average Canadians. It does not help the middle class. It only helps 1% of the richest folks in this country, who are getting richer and richer by the day.

The government and the Liberals seem to have a red-blue alliance. We might call it a coalition, but they have not formalized it yet. I would encourage both parties to bring forward an open trade debate, so that we can talk about different trade policies. Let's see if we cannot find a way to make Parliament work. Let's see if we can compromise and find a trade policy that works for everyone across this country.

Ultimately, it is not about building trade policies for Panama, Colombia, Jordan, or anywhere else in this world. It is supposed to be about Canadians. We are supposed to develop trade policy that benefits Canadians. That is who we represent. We do not represent Panamanians, or Jordanians, or Colombians. Our role is to protect our citizens, and part of that protection is the viability of the economy. Canadians need work. When folks are not working, they are either unemployed, on social assistance, or out on the street somewhere. Our responsibility is to ensure that this does not happen to them.

I would encourage the blue-red alliance to come forward with a debate about trade policy. Then we can move away from this fixation of one-size-fits-all. We are told that we are all doing well. But we are not doing well at all.

The rebuttal will be that this is not true. I invite members to look at the StatsCan reports and read the quintiles, as it calls them. They show where folks are in the economic scheme of things. It is ironic that when the Minister of International Trade spoke at an event organized by the Fraser Institute, the Vancouver Sun said that the trade minister “appeared amused at the diplomatic necessity of avoiding the term “free trade” when negotiating with the Europeans”. This from a government that comes in the House and waves the flag of free trade and says all is wonderful. Yet when the minister goes to Europe, we have to call it a “comprehensive economic trade agreement”. Why is that?

If the government is certain that free trade is the be-all and end-all, then why can't the minister go to Europe and say that, although it might not translate well into French, German, or Belgian, the bottom line is that free trade is wonderful and we should simply call it what it is. Maybe it is because the Europeans do not agree that free trade is the be-all and end-all, and they want to talk about something else instead. This raises an interesting question. If this is the case for the bigger group, why not for those elsewhere?

As we look at the free trade policy, we see, starting in 1995, the gutting of manufacturing in the heartland of this country. Anyone who does not believe it should come to the auto sector today. St. Catharines had 11,000 workers in 1993; now it has 1,800. Where did those jobs go? The vast majority went to Mexico. In 1990, General Motors employed about 2,500 workers in Mexico. By the late nineties, there were some 40,000. There were less than 20,000 in Canada. It used to be the reverse.

When we opened up free trade in the North American Free Trade Agreement, we saw an outpouring of manufacturing jobs by multinationals in Ontario and Quebec. Those of us who live there, who represented workers, and who represent workers today have continued to see it. Whether it is the manufacturing of automobiles, steel, or chemicals, that is the way free trade has been for workers. If they have kept their jobs, they have seen their wages decline. They are told they must compete with Colombians, Panamanians, Mexicans, and everywhere else that fell under free trade. Companies told workers that if they could not compete with them, their jobs would be moved.

In 2008, just prior to the last federal election, a John Deere subsidiary went to workers during bargaining and said they had to deal with free trade. I know this to be true, because it is my union that represents those workers.

The company told those workers that they needed to understand that it could be moved to the States or Mexico. The subsidiary told the workers that they had to bargain a collective agreement that showed an understanding of free trade.

The Canadian Auto Workers is a responsible union. My brother from Quebec knows this; he is a Quebec director. He knows how responsible that union is.

In 2007, we bargained a responsible agreement with John Deere that said we would protect those workers. We would make sure they were not affected by free trade and that they had offsets for the company.

What did the company do in 2008? The company closed the plant, moved to the United States and Mexico, and destroyed 800 families. What did the company get in that one year period? It managed to pay lower wages, lower pensions, lower benefits. They got a cut rate for a year and then they deserted the community and the workers.

We saw the same thing at Atlas. We saw the same thing when it came to UCAR. We saw it right across the manufacturing heartland of this country.

Free trade does not work for workers, period. It does work for some folks who bleed workers dry and then discard them.

The most recent example of how free trade works is J.M. Smucker's, a big multinational company out of the United States. It just closed.

Those who like Bick's Pickles should know that as of next year a Canadian-made Bick's pickle will not be available. The plant will be closed in 2011. What will that mean for 150 workers at Bick's? It means they will have no job. What will this mean to the hundreds of farmers in southern Ontario who supply the ingredients for these pickles: the cucumbers, the tomatoes, the onions, the cauliflower? It means they will have no market for their goods. What will they do? I guess my friends on the other side will tell them that it was free trade and it was good for them.

As we move products to free trade regimes that do not have the same food inspection standards, will we know what we are buying? The CFIA's audit says we will not know what we are getting, because there is no common standard of inspection from country to country. We have equivalency inspections with a few countries in four significant areas, but pickles is not one of them.

For those who enjoy the Bick's Pickle brand, after November 2011, I would suggest they check the label. The ingredients will not be Canadian. I would suggest checking where they come from, because they might not have gone through the same inspection equivalency. That is shameful, but that is what free trade gives us.

Is that really what Canadians are asking for? In my constituency, the answer is a resounding no.

Workers get the message on free trade. They are either working for less than they did before or they do not have a job at all.

The Conservatives keep foisting this red-blue alliance on the workers of this country. The whole thrust is that free trade is good for them, when the evidence clearly demonstrates that it is not. They are worse off than they were in 1995. It is an abomination. I do not understand how anyone can stand up and try to tell us that things are better, when those of us who represent workers know that it is not true.

Why do we do this? I am not sure. I have sat on the international trade committee for the best part of a year, and I have yet to hear a compelling argument, unless we are talking about protecting the wealthiest folks in this country and allowing big corporations to do whatever they want. If that is the argument, fine. I understand that, because it works for them.

Free trade clearly works for large multinational corporations. It works for those who service them, like trade lawyers and accountants. Large corporations need a support system to keep them alive. Ultimately, those businesses are doing okay. But the workers inside those businesses are not doing well.

So in this whole sense of keeping on doing the same old, same old, one would have thought that after we got beat up on chapter 11 from a number of places we would want to strike that out. But, no, we keep leaving it in there, the old chapter 11 under NAFTA, not chapter 11 necessarily in this agreement, not the same chapter but basically the same deal. So we can have a company such as AbitibiBowater that sues us for 130 million bucks and we give it to them. Ultimately, that is what we end up with.

Let me just give folks some background about how I used to bargain agreements and what it means when we have a side deal. When the employer and the bargaining unit sit down, the reason they do a side deal is that they actually do not want folks to find it well. That is really what it is about. That is why we do a side deal, because if we were really serious about making sure it was important to us, it would be in the main body of the agreement. That is where the important stuff is, between the first page and the last page, not stuck on the back or stuck off to the side.

Yet, again, even though we had this debate with the free trade agreement between Colombia and Canada on the importance of these international agreements for the environment and with the international labour organizations about labour, as much as our entreaty to the government was that these were hugely important and they should be back in the centre of the agreement, what happened this time? They were off to the side again, with no sense that maybe it was really important and it could be put inside the agreement, built inside. Clearly they do not believe that they are important enough to include in the agreement.

I know some folks will say that it does not really matter because they are there. It does matter. That is why we do the things we do, that is why we include things in a certain order, that is why we have definitions, that is why we have collective bargaining, that is why we do collective agreements, or that is why we do contracts. Lawyers who do them will tell us that it is important where we place them.

What do we see inside the labour agreement? We actually see the ability of the corporation to get arbitration through the Patent Act. However, through the labour agreement, which is a side deal, if workers in Panama want to go to arbitration, they cannot. Think about that. As a worker in Panama, if one cannot get to arbitration, why not? It is a fundamental right, it seems. That is something that we ought to do. Yet we are still not encouraging them to follow through so workers can actually get to a place where they can perhaps seek some form of redress, some form of justice.

If that is the case, why would we not make sure that those side agreements on the environment and on labour are struck right in the middle? Fundamentally, why do we not just simply have a debate about trade? Maybe if we did that we might find some sort of an agreement, not just with the red-blue alliance but perhaps all the way through with a multicoloured approach.

[Mario Silva, Liberal, Davenport, ON]

Mr. Speaker, as a member of the international trade committee, I am pleased to speak on behalf of Bill C-46, the Canada-Panama free trade agreement. As we will be studying the bill in committee, I think it is very important to listen to the debate and the concerns of members in the House. However, it is also important to get the bill to the committee so that we can hear from our constituents, from the communities that are concerned, and from different stakeholders. I think the appropriate way to deal with issues of concern in the House is to have the committee study, consult, meet with our stakeholders, and have a full discussion. That is why I am supportive of the bill, but there are also many things I believe very strongly we should be pursuing as we move forward with this particular agreement, which Canada entered on May 14, 2010.

As we are all aware, Canada is a trade dependent nation. Although 70% of our trade is with the U.S., there is a growing need for us to diversify our trade with our partners throughout the world. The Americas are a growing market. They are our neighbours, and it is an area we have to focus on. We have, over the last few years, been focusing on the Americas.

Mr. Speaker, 80% of our economy depends on access to foreign markets for Canada's exports. I support this initiative, because I think it will improve Canadian businesses' access to these different markets.

In 2009, we exported about $90 million in goods to Panama, and we imported about $40.7 million. Bilateral trade in total was about $132 million. It is small. Panama is a country of a little over 3.3 million people, and it has a relatively small GDP of about $38 billion. However, it is an important country in that region, and not just because of the strategic importance of the Panama Canal and the investment that has been made in the Panama Canal. It is also a hub for business in commerce. It is a stable country and is a partner with Canada.

We have to recognize the fact that Panama, given its long, turbulent history, has become, over the years, a very stable and progressive economy, and it is looking for partners throughout the world. Certainly other countries have made inroads into Panama. It is only fitting that Canada, as well, would want to be a partner in that economic growth.

I would say that the growth in Panama has been nothing but phenomenal. The GDP grew by about 10.7% in 2008. That was one of the highest in the Americas. The projected rate of increase for the GDP this year is about 5.6%. These are impressive numbers given what has happened globally during the incredible economic crisis facing the world. We see a country that has really withstood the recession and the economic crisis and has moved beyond and exceeded most developed countries. We are very pleased to see that a country like Panama, in which we have taken an interest, is doing extremely well. It bodes well for the future of Panama and for our trade agreement, which can grow and provide our businesses in Canada with access to Panama.

I just want to focus on some of the issues that will be of concern and that need to be raised, particularly in terms of the issues that will be affected by this particular trade. The primary Canadian merchandise exports to Panama include machinery, vehicles, electronic equipment, pharmaceutical equipment, pulses, and frozen potato products. Canadian service exports include financial services, engineering, and information and communication technology services. Merchandise imports from Panama include precious stones and metals, mainly gold; fruits and nuts; and fish and seafood products.

There are a variety of different products we would engage with. As I said, it is a relatively small economy, but it is one that is growing. We need to ensure that we are part of that growth and that Canadian businesses share in the profit from that growth.

The Panama Canal is at the moment going through a major investment. It is a passageway for thousands of vehicles each year and plays a tremendous role in international commerce and the world economy. It is a vital, strategic canal that is expanding. It is slated to be completed in 2014. That project alone is an $5.3 billion expansion.

It is expected to generate opportunities for Canadian companies in construction, environmental engineering, and consulting services for capital projects. We have a great opportunity to play a major role in the expansion of the canal. Canadian companies can have a stake and would profit from this particular expansion.

Some of the issues that will be covered by this free trade agreement with the Republic of Panama include market access to goods and cross-border trade in services, telecommunications, investment, financial services, and government procurement. These are some of the basic issues we will be dealing with.

The deal will have the added benefit of eliminating about 99% of tariffs on current imports from Panama. It will also address non-tariff barriers by adopting measures to ensure non-discriminatory treatment of imported goods and the promotion of good regulatory practices, transparency, and international standards.

As several members in the House have stated, there are also side agreements on both labour and the environment. These agreements would be signed with the Republic of Panama. They will cover issues such as the right to freedom of association, the right to collective bargaining, the abolition of child labour, the elimination of forced or compulsory labour, and the elimination of discrimination. These provisions in the side agreements that would be signed by the two countries would in many ways ensure that both Canada and Panama have a stake in the development of human rights and labour rights in that country. We would be a partner to make sure that they were in compliance with those international obligations. Canada would not just be signing a free trade agreement with Panama. As a country, we would also have a duty and an obligation to make sure that the particular provisions that specifically deal with labour and environmental issues are, in fact, enforced. This is not just a moral obligation; it is a legal obligation on the part of Canada to ensure that if this agreement is enacted, those provisions will be looked at.

Although I support where this is going, I think we need to move forward with more robust and comprehensive free trade agreements with some of our larger partners, and not just the European Union, with which we are presently negotiating. The European Union is a very important market, and there is probably very broad support in the House to move forward with that agreement.

There are also countries that play a major role internationally. Two I would like to speak about are Brazil and India. They are important partners for Canada, and we need to move forward with some type of free trade agreements. Brazil, as we know, is a dynamic and growing economy in our hemisphere. It has a very young population and a large and growing middle class. It will also be hosting both the Olympics and the World Cup.

There is an incredible boom of investment in that country. Over the next 10 years, it will be over $100 billion. We would like to be there to ensure our construction contractors, engineering companies and different sectors of the Canadian economy play a major role with the growth in that economy. Not only stadiums and new facilities are being built, but a fast-rail link and a new metro system is as well. There is incredible opportunity for us to show Canadian know-how in a very dynamic country like Brazil.

India is the largest democracy and Canada has a very large Indian diaspora. India is growing, not just in south Asia, but across the world. It has a major influence in buying companies, certainly in the area of high technology and engineering. It is playing a major role internationally and we are very proud to see the success of that country.

India is a partner of which Canada is very proud. Yesterday the minister mentioned that he had an opportunity to meet with his Indian counterpart last Friday in Parliament. I believe he had an opportunity to discuss the possibility of some type of free trade agreement in the future. I would encourage Canada to move in that direction.

I mention those two countries because they are very large and substantial countries. We need to move forward beyond agreements with important countries but small ones. We are talking small in comparison to Brazil and India. We have signed other deals with Chile and we are now looking at Jordan. These are important countries, but nothing to the size and scale of those two superpowers of both Brazil and India.

This is where we as parliamentarians have to make a decision. I do not see what good would come out of a delay of six months to be honest. The appropriate thing to do is to move this forward to committee so that I, as a member, and other members of the committee have an opportunity to hear from stakeholders. That is the reason why I would like to support the bill and move it forward. I encourage other members to do so.

The time is now. I do not think by delaying it six months, I do not think much can be achieved. The appropriate place to raise these issues is at the committee level. There is a lot here that I have already raised and enunciated from this agreement, which merits it going forward to committee.

The House resumed consideration of the motion that Bill C-46, An Act to implement the Free Trade Agreement between Canada and the Republic of Panama, the Agreement on the Environment between Canada and the Republic of Panama and the Agreement on Labour Cooperation between Canada and the Republic of Panama, be read the second time and referred to a committee, and of the amendment.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I am pleased to resume my remarks on Bill C-46.

I was going to provide a description of the current situation of trade between Canada and Panama. As of 2007, the two-way merchandise trade between Canada and Panama totalled a modest $149 million, including $128 million in exports from Canada to Panama, and $21 million in imports to Canada from Panama. Panama at the time was Canada's seventh largest export destination in Central America and the Caribbean and Canada's 12th largest source of imports from that region.

As for the export category, what Canada sends to Panama, the key piece in the last years has been flight simulators and parts. Next would be medications and other pharmaceutical products, then machinery and equipment and electrical/electronic products, followed by agricultural goods and food products, malt, pulses, potatoes and meat, and finally paper products and aircraft.

The imports that Canada received from Panama in 2008 were heavily concentrated in a couple of areas. The key one was crude oil and refined petroleum products. In 2008 more than one-half, 55% or $11.7 million, of Canada's imports from Panama consisted of refined heavy oil. In recent years crude oil has made up as much as 86% of Canada's imports from Panama. After crude oil and refined products imports, Canada has imported small amounts of tropical agricultural products such as bananas, melons and coffee and some silver ore. Those were the key imports from Panama to Canada.

Panama is not a major destination for Canadian direct investment abroad. Canadian direct investment in Panama totalled $111 million in 2006, falling from $143 million in 2005. Panama's modest source of direct investment in Canada with foreign direct investment stocks was $50 million in 2008. With regard to services, trade in services between Canada and Panama is negligible.

That gives us some sense of the trade situation currently between Canada and Panama. It is not a big player in terms of our export business, or imports to Canada.

There are some particular problems with the deal between Canada and Panama that we are being asked to ratify in Parliament. One of them is labour standards. We have heard a lot about that in the debate so far.

Panama's record on labour standards is not great, to put it mildly. The International Labour Organization, the ILO, has raised concerns about whether workers in Panama's export processing zones actually have the right to strike, even though unions and collective bargaining are permitted. The laws establishing and regulating these export processing zones in Panama do not include arbitration or specified procedures to resolve labour disputes. There are some problems with the existing labour laws in Panama and they need some attention.

Furthermore, there has been a record of violence against union organizers, union members and labour leaders in Panama. Labour leaders have been assassinated while demonstrating and working for workers' rights. Notably, in 2007 two members of the construction union were killed. Just this past summer anti-union repression escalated in Panama with the result that several workers were killed, over 100 were injured and 300 were arrested. There is a serious problem with anti-union and anti-worker violence in Panama.

This free trade agreement with Panama would provide a maximum government fine of $15 million for labour violations to the side agreement on labour. However, these fines are likely to be very difficult to collect and even if they are collected, they are paid to a joint commission to improve labour rights enforcement in Panama, which could also allow them to be funnelled back to the government of Panama.

A fine for the violation of labour rights in this scenario is then to be used to help the government do what it should have been doing in the first place. It does not seem like much of a punishment for the failure to respect labour laws and workers' rights to be forced to pay oneself a fine, essentially, and do what one should have been doing in the first place. This is an ineffective mechanism to enforce this side agreement on labour that is part of this agreement.

In this House in the past, when we were debating the Canada-Colombia deal, we talked about the side agreement on labour but that deal amounted to nothing more than a “kill a trade unionist and pay a fine” kind of agreement. It seems that this deal is no different as it follows the same pattern as the Canada-Colombia deal.

There are very serious problems with recognizing labour rights, respecting the rights of workers in Panama and providing any effective mechanism to uphold what has been negotiated as a side agreement. As we have pointed out many times, if labour rights and the recognition of workers' rights in Canada and Panama are important to these deals, then they should be part of the main agreement and not hived off to a separate side agreement with ineffective enforcement procedures in place.

There is also a concern about child labour in Panama. Poverty is a huge issue in Panama. Many people have very low income; a dollar a day in many cases. The United Nations radio reported that 55,000 children have dropped out of education to go to work because of extreme poverty. That report came out earlier this spring. Many children in Panama are not in school and the prime cause of that is the need for them to go to work. They leave their education and go to work at a very early age.

The Panamanian government reports that 114,168 children between the ages of 5 and 17 are working in Panama, most often in agriculture. In a country of just over 3 million people, over 114,000 children between the ages 5 and 17 working because of the poverty in which their families live is a huge number. This has increased from 2008 when 89,767 children in this age group were working.

Clearly, the efforts that the Panamanian government have agreed to undertake to make universal education available to children and to ensure that child labour is no longer an issue in Panama is not working. The efforts to get children out of the workforce and into school are not working.

We need ask whether that is the kind of country with which we want to enter into a trade deal. Is that the kind of country that we want to reward with special trade arrangements when it is not making progress on this kind of very serious child labour issue?

We have also heard a lot of serious concerns raised in the debate about entering into a free trade agreement with a country that is a notorious tax haven and a centre for money laundering. Panama is regarded as a tax haven by the Organization for Economic Co-operation and Development, the OECD, as well as several other countries, including the United States. In 2008, Panama was one of 11 countries that did not have a tax information exchange agreement signed or enforced. Panama is one of only three states, with Guatemala and Nauru, that would not share bank information for any tax information exchange purpose.

This situation led the OECD, back in 2000, to blacklist Panama as an unco-operative tax haven. In response to being blacklisted, the Republic of Panama wrote to the Secretary General of the OECD in 2002 with a commitment to meet the OECD's standards for transparency and information sharing so that it would no longer be considered a tax haven. The OECD has responded to that commitment and, I think, has bumped Panama off the blacklist and onto the so-called grey list. However, Panama has not followed through on that commitment.

Panama has not, to date, substantially implemented the internationally agreed tax standard to which it committed in 2002. That standard would have obliged Panama to share information upon the request of other countries such that those other countries could effectively implement their domestic tax laws.

Panama has gone from the blacklist to the grey list with a commitment to improve things but has done nothing about making those improvements. I have to wonder whether or it is not destined to be back on the blacklist before too long.

This has been an issue for the American Congress, which is looking at a trade agreement with Panama as well, and where that deal has also been delayed because of problems with the deal. U.S. Congressman, Michael Michaud, put it this way. He said:

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

The congressman points out a very serious problem with the legislation in Panama that allows it to be this kind of tax haven.

We need to ask whether we really want to be signing a trade agreement with a notorious tax haven and centre for money-laundering.

Again, the U.S. Department of Justice notes that Panama is a major centre for money-laundering related to the drug trade and in fact there have been very serious concerns raised about the Colon Free Zone in Panama being linked to trafficking of drugs and other illicit substances.

The International Monetary Fund notes that the Colon Free Zone is a centrally located transit area for drugs. It is a very serious accusation coming from a respected international agency and one that we should be taking into consideration as we look to negotiating a deal with this country, in a sense rewarding the country with this kind of deal. There is no doubt that the government of Panama will trumpet its success in obtaining a deal with Canada and, given the very serious problems, do we really want to make that something easy for it to do?

I think all Canadians believe that the wealthy and big corporations should not be able to avoid contributing their fair share to the development of this country. They should be paying their taxes. Should we be dealing with a country that makes it possible for them to avoid paying taxes by operating as a tax haven? I am sure that most Canadians would answer very clearly that it is wrong and that we should not be entering into an agreement with a country has not cleaned up its act on that score.

There is not a word in this agreement about the tax haven situation and not a word about correcting this failure to exchange tax information with other countries. Today in question period we heard the Prime Minister say, very clearly, that the government had no tolerance for tax havens. I have to say that we would not know it by the fact that we have this agreement before us. The government is proposing that we enter into an agreement with a well-known and notorious tax haven in the Republic of Panama and it has put this agreement forward without any mention in the agreement of dealing with that issue. It is a very serious problem.

New Democrats are not opposed to trade. We are not opposed to fair trade deals. We want to ensure that Panama meets its international commitments and that it continues to develop, but this trade deal is not the mechanism to ensure that. We are not talking about ending our relationship with Panama. We are not talking about ending the trade that exists there or looking for other opportunities to expand that trade. We are not talking about ending diplomatic relations with Panama. However, what we are saying very clearly is that this deal does not meet the kinds of standards that Canadians would want us to uphold. Canadians would want to ensure that it was a fair agreement for Canadians and for Panamanians. Unfortunately, this agreement does not meet the test and, therefore, we cannot support it.

The House resumed consideration of the motion that Bill C-46, An Act to implement the Free Trade Agreement between Canada and the Republic of Panama, the Agreement on the Environment between Canada and the Republic of Panama and the Agreement on Labour Cooperation between Canada and the Republic of Panama, be read the second time and referred to a committee, and of the amendment.

Business of the House

[John Baird, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, I want to tell you that when the leader of the Liberal Party named the member for Ottawa South as the House leader of the Liberal Party I was asked many times, “How do you feel about this? Are you looking forward to working with him?” I said to each and every one of them that I was every bit as looking forward to working with the member for Ottawa South as I am sure he was looking forward to working with me.

In all seriousness I can report that the Liberal House leader and I are working well together. I am even working well with the Bloc House leader and with the House leader of the New Democratic Party.

We are all working hard to make Parliament work.

Today I can tell the House that we will be continuing debate on Bill C-46, the Canada-Panama free trade agreement, another key economic initiative as part of Canada's economic action plan, a plan to create jobs, build growth and opportunity for all Canadians across the country.

It is, though, with deep regret that yesterday I learned the NDP moved a six-month hoist motion on the Canada-Panama free trade agreement. As the House knows, the only purpose of moving such an amendment is to obstruct and delay the progress of important legislation.

On Friday, my good friends in the NDP moved a concurrence motion obstructing and delaying the passage of Bill C-22, protecting children from online sexual exploitation, another key part of our government's tough on crime agenda.

I say to my NDP friends, let us work together and make Parliament work. I hope we will not see any more of this.

Tomorrow, as the member opposite has said, we will be having question period and leaving early for the installation of the new Governor General in the Senate chamber.

On Monday, Tuesday and Wednesday of next week, the government will call the following bills for debate: Bill C-22, protecting children from online sexual exploitation; Bill C-21, standing up for victims of white-collar crime; Bill C-30, the response to the Supreme Court of Canada decision in R. v. Shoker; Bill C-39, ending early release for criminals and increasing offender accountability; Bill S-6, serious time for the most serious crime; and Bill S-9, tackling auto theft and property crime.

On Thursday, it is the government's intention to begin debate on the second budget bill, sustaining Canada's economic recovery act, just one more key economic action plan legislative initiative.

Canadians have told us they want us to focus on creating jobs, building growth and opportunity. They have told us that they want their government to have a robust legislative agenda, to get tough on crime, and that is exactly what we are delivering.

Canada-Panama Free Trade Act

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Madam Speaker, I am pleased to have this opportunity to speak in the debate on 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.

We are debating a motion that was proposed and moved by the member for Hamilton Mountain, the NDP labour critic, to delay consideration of the bill for six months, given the serious problems with it that she outlined in her speech yesterday. We usually call it a hoist motion, and if there has ever been a piece of legislation before the House that deserves to be hoisted off the agenda, it is this bill to implement the trade agreement between Canada and Panama.

Once again, we have before us a bilateral trade agreement that was presented to the House and Canadians with all kinds of claims about how good this will be for Canada and the Canadian people. Sadly, the reality is that in the past these free trade agreements have not done much for either Canadians or for trade.

There is a debate going on about the efficacy of these agreements. Studies are showing that more often than not trade actually declines between countries after bilateral free trade agreements have been signed. This has been shown to be the situation in the United States, with the agreements that it has signed. As champions of this method of improving trade around the world, the Americans will really have to struggle with that research.

The NDP international trade critic explained earlier today that, when we look at the value of Canadian trade in real dollars, factoring in changes in the value of the dollar, this lessening of trade is in many cases true for Canada as well, perhaps with the exception of NAFTA. Canadian trade exports to countries with which we have signed bilateral trade agreements have actually gone down after the agreements have come into effect. Costa Rica is a good example. And generally, there is no clear correlation between increases in exports and these so-called free trade agreements.

In addition, some people are arguing that our trade exports with the United States would have gone up regardless of the NAFTA agreement. Even with NAFTA, the grandpappy of all these agreements, there is some question about how well it did all the things that it promised to do. The benefits of these deals are highly overrated and oversold by the governments that have put them forward to the Canadian people and the House.

The reality is that the situation of Canadians has not improved with the signing of these free trade agreements, starting with NAFTA. Where is the prosperity that was promised every time we heard about one of these agreements? The incomes of the wealthiest 10% of Canadians have increased dramatically since the implementation of the NAFTA agreement, but every other income category in Canada has either stagnated or declined. These deals have not been good for middle-class Canadians. They have been a disaster for low-income and working Canadians.

There is a real problem with bilateral trade agreements, with seeking out specific trade agreements with specific partners around the world. There is also a serious problem with the effect these agreements have on Canadian sovereignty.

We have all heard about chapter 11 of the NAFTA agreement, which allows for the override of the democratic will of Parliament by corporate interests. We know that the same kind of provision is included in the deal we are discussing today. It has been included in other trade deals that have been brought forward since NAFTA, and we know that such a clause amounts to a serious diminution of the sovereignty of Canada. We have to protect our ability to make the laws that we need in order to ensure prosperity and success in our own country.

It would be great if the Conservative government spent as much time and effort promoting Canadian trade as it does in negotiating these questionable free trade agreements. It is remarkable to consider how little Canada spends on promoting Canadian exports around the world, compared with Australia or the European Union. There is probably more bang for our buck in trade promotion than in pursuing these kinds of deals.

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

Madam Speaker, I am not an expert in foreign trade, although I am a person with a small business and I do some foreign trading in a variety of forums. I am a forester and a biologist, and I am still listening and learning in this debate.

However, I am alarmed about what I hear about Bill C-46. Despite popular mythology, the NDP is not protectionist. The NDP believes in trade and the jobs that are created by trade, but we believe in fair trade, trade that is fair to all parties, all Canadians, not just large multinationals but fair to average Canadian citizens, to our middle class, our working people, people with small businesses, trade that is fair to workers and fair in the area of women's equity.

Forget about Latin American countries, where they have far to go. Canada still has huge gaps in pay equity, which is shameful. We believe in trade that is fair to farmers, especially farmers of small and medium size farms across Canada.

My area of expertise is in the environment and I am concerned about fairness to the environment, not only the Canadian environment but also the global environment.

Fair trade would be fair in the areas of clean water, water quality, surface water, ground water and especially drinking water, which should be a basic human right and not traded away in trade agreements anywhere. I believe in trade that is fair to air quality, which we now realize is a global concern and not just an urban concern. I believe in trade that is fair to biodiversity. We have important biodiversity in Canada, but in Panama it is amazing. It has over 10,000 documented species in Panama, but almost 1,300 of those are found nowhere else in the world. I am concerned that in our rush to promote multinationals, in promoting quick development in Panama, that we will put many of these species and rare diverse ecosystems, forested ecosystems at risk.

Canada has its own endangered species and biodiversity problems. Some of them are very small and very little known and some of them are quite well known, like grizzlies, wolverines and polar bears.

Speaking of polar bears, I am concerned about the entire lack in Bill C-46 and the proposed treaty to do anything about concerns of greenhouse gases and global climate change.

As many of us recognize increasingly that the Conservative government is more interested in protecting the rights and benefits for large multinationals, especially big banks and big oil companies.

In the name of big oil and the Conservatives attachment to it, several decades ago they brought us NAFTA. As we know, the Liberals won a majority election by promising to scrap NAFTA, but they did not keep their word.

Now the Conservatives, through a series of serial bilateral NAFTA-style agreements, are pandering to the aspirations of those large multinationals with which they seem to see as their main client base.

This template is well documented and forecasted in Naomi Klein's book, The Shock Doctrine. Every Canadian who can read should read Naomi Klein's book. It is alarming, it is prescient and it should be required reading.

As we can see, the Bill C-46 treaty will move this agenda one step forward. It is a small step, a small country and a small portion of our trade, but it is part of a disturbing trend.

Let us talk about a few specifics.

With respect to the area of market access, an important part of this treaty, Bill C-46 would eliminate all non-agricultural tariffs in to and out of Canada. It would eliminate most agricultural tariffs either immediately or within the next five to ten years.

Let me get back to the environment and some of the wording in the proposed bill.

The bill promises not to weaken environmental regulations. As we know, environmental regulations in Canada are already disturbingly weak, but in Panama they are virtually nonexistent. Bill C-46 proposes to enforce existing regulations. In theory that sounds great, but, again, Canada is already doing little in the area of environmental enforcement. Panama has virtually no environmental enforcement.

In the area of disputes, Bill C-46 proposes to hold consultations, information exchanges. We have seen these kinds of words before in Conservative legislation and we know what kind of commitment to protecting our environment, or Panama's environment or the world's environment for that matter, would entail.

Where is this free trade agreement and other various free trade agreements that the Conservative government has been signing not fair?

Let me talk about some of the problems with so-called U.S.A.-Canada relations. Very few Canadians, and even some members of Parliament, know that the nominal tax rate for large corporations in the United States is 36%. Very few know that in Canada, under the Conservatives, it has been reduced to 18%, half of the U.S. rate.

That has been justified by those who know about it and agree with it. They claim it is an alleged stimulus to investment, but that investment has not occurred in Canada. The moneys from those huge tax breaks to big corporations has moved out of Canada into the U.S. and into various tax havens, including Panama. That investment simply has not occurred in Canada.

I can understand having slightly lower tax rates than the United States, but half the large corporate tax rate? How will we continue to pay for our health care system? How will we continue to invest in the technologies and industries of the future, such as clean energy, sustainable energy?

Let us talk about another aspect of the bad NAFTA agreement and a bad softwood lumber deal.

The U.S. has rolled over our economies in many of the areas that are covered by NAFTA, which is most of our areas. It has exported jobs from Canada. It has exported natural resources in low value-added form, in the form of minerals, trees, cereal grains and other crops and especially in the area of oil.

Under NAFTA, we can either do as we are doing now, which is giving the United States relatively low cost oil, but we have to charge ourselves the same for that oil. We cannot take advantage of our natural asset, sell it at the world price and sell it to ourselves at a reasonable cost that Canadians can afford to foster economic development in Canada.

Canada could choose to be 100% self-reliant on oil and energy, but we export about half of it to the United States and import roughly the same amount from places like Saudi Arabia and Venezuela. Most of the oil that runs our cars and heats our homes in eastern Canada comes from those places. It does not come from our west at an affordable price with a guaranteed supply for the future. Rather it is imported from other places so large multinational oil corporations benefit by exporting those jobs and those litres of oil to the United States.

The government does not believe in fair trade on oil. It does not believe in fair trade on energy self-sufficiency. It does not believe in fair trade on Canadian autonomy.

Let us go back to Panama and why I and my party are inclined to oppose Bill C-46.

Panama is a well-known source of drugs. It is a well-known tax haven for those wealthy multinational corporations and wealthy tax-avoiding Canadians, whose interests the Conservatives seem to be placing paramount.

It seems this is a new opportunity for the Conservatives, with the passive support of the Liberals, to export lost tax dollars, low value-added resources and hundreds of thousands of jobs: manufacturing jobs, real jobs, productive jobs, jobs that can support a family, jobs that can support the Canadian health care system.

The Conservative initiative in Bill C-46 is one more new opportunity, it seems, in a small, symbolic but worrisome way, to sabotage Canadian regulations, autonomy, health care and Canadian labour standards. The labour agreement here is not in the treaty itself; it is a side agreement. The side agreement has no effective mechanism to protect our labour rights, not to mention the labour rights in Panama.

The side agreement on the environment for this Panama treaty will unfortunately continue the degradation of the natural environment not only in Panama, but probably will help to continue the stagnation of dealing effectively with our environmental degradation. It is a side deal with no teeth.

Let us talk about tax havens. In 2000 the Organisation for Economic Co-operation and Development, the OECD, blacklisted Panama as, “An unco-operative tax haven”. In 2008 Panama was one of only 11 countries with no tax sharing information.

I would like to ask a large question, much bigger than Panama, much bigger than Bill C-46. What is happening to our Canada under this Conservative government?

In looking at the past Conservative government of Brian Mulroney, if one liked Mulroney, then one would love the current government. It is moving faster and more effectively to undercut the core of Canadian values, jobs and autonomy.

We have half the large corporate tax rate in Canada than what there is in the United States, 36% versus 18%. We have a huge growth in Canada, in a time of fiscal difficulty, of banks, big oil, their executives and a variety of speculative traders.

Canada has a huge growth in unemployment, especially in real full-time jobs. Those are not the part-time, or underground jobs. Those are not the jobs of people scrambling to survive after they have given up trying to look for real jobs, which are not even reflected in the statistical figures anymore. These are the kinds of jobs that will support families, mortgages and a university education. The quality of life that Canadians have come to expect for decades is eroding. We have a huge loss in Canada of our middle class.

The Conservatives have been doing a wonderful job of distracting Canadians, distracting the media, and distracting the House of Commons with wedge issues. There was a huge one last week. Wake up, Canadians. Wake up, parliamentarians.

As I said, Naomi Klein, in The Shock Doctrine, does a good job of documenting the blueprint for this plan. If members have not read it, I urge them to read it. It documents the right-wing agenda, which is clear. It is as clear as Das Kapital. It is as clear as what was in Mein Kampf.

I would like to recommend another book, called The Spirit Level. The Spirit Level is by Wilkinson and Pickett. Wilkinson and Pickett are epidemiologists and statisticians, and The Sprit Level is full of graphs. It does not sound very interesting, does it? However, it is fascinating.

The Spirit Level documents scientifically what many of us have known for decades, which is that trickle-down economics is baloney. Wilkinson and Pickett, in The Spirit Level, have taken the figures and facts from the United Nations and other data sources for all the developed wealthy countries of the world and have shown clearly that the best countries in the world to live in are the Scandinavian countries. When it comes to health, happiness, fairness, equitableness, crime, and prisons, the United States heads the list of the worst developed country in the world in which to live.

They do a wonderful job of showing how that is highly correlated with the gap in income in those countries. Those countries that have a reasonable gap in income between the bottom 20% and the top 20% are happy, healthy countries. They are the Scandinavian countries, some of the European countries, and Japan.

On the other hand, countries such as the United States, Portugal, and others have a huge gap and a growing gap.

Where is Canada in that spectrum? Canada is right in the middle. We are halfway between the Scandinavian countries and the United States in terms of happiness, welfare, and quality of life, and we are also halfway between those countries in terms of the spread of income.

My question for this Parliament, for Canadians, is this: Do we want to drift or be driven, as is happening now, closer to the U.S. greed-based model, with its excessive gaps in income, or do we want to move back toward the Scandinavian model that has done such a good job of providing employment, wealth, happiness, and security for Scandinavians?

The last thing I would like to say is that Panama is less than one-tenth of 1% of our trade. It is pretty minuscule. In 2008, we had a trade surplus. We exported $128 million, and Panama exported $21 million to Canada. It has been going down since 2008, though. In 2009, it was $91 million and $41 million. The trend throughout Latin America has been that the balance-of-trade deficit is getting worse for us.

As we make hard decisions in this act, over how many months and years and coming elections, I hope we will give real consideration to how we get back to fair trade rather than alleged free trade and to how we get back to a Canada that has values based on a middle class and full employment.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, I am saddened to rise in the House on Bill C-46, which could be more aptly called the drug pushers, money laundering act. It is absolutely shameful what the government has brought forward.

Panama is ranked as one of the top drug pushing, money laundering, tax havens in the entire planet. The Panamanian government has done nothing to resolve that. There is absolutely nothing in Bill C-46 to deal with the drug pushing and money laundering that the Conservatives are promoting. It also would do absolutely nothing to address the tax haven status.

People who watched CBC or heard Radio-Canada last night would have seen the impact of tax havens and money laundering and how that impacted on our social programs in Canada. It impacts how we as Canadians can deal with some of the fundamental issues.

This widespread money laundering and the use of tax havens so drug pushers and folks who earn money illegally can get around existing tax laws are not small issues.

Hard-working middle-class Canadians, poor Canadians, work very hard and they pay their taxes. They do what they must do as Canadians to support our society. Yet the Conservative government is going to shamefully sign an agreement with a drug pushing, money laundering tax haven paradise without even addressing one word of it in this agreement. It is absolutely shameful. It is a symbol of what is dysfunctional about the Conservative government on trade policy. The NDP is the only national party to stand up in the House against this completely dysfunctional trade policy of the Conservatives.

We have seen the kind of bills the Conservative have brought forward. They brought forward the softwood lumber sellout. As a result, two thousand jobs were lost in my riding. Tens of thousands of jobs right across the country were lost as the Conservatives deliberately shut down the softwood lumber industry. It was appalling and incompetent. People from the industry, except the CEOs who wanted to take their operations across to the United States, told the government very clearly that it would be disastrous. The NDP was the only national party to rise in the House and say that it would be disastrous. The Conservatives rammed it through, with the support of their Liberal cohorts, and we saw the results.

We saw the results with the shipbuilding sellout. Shipbuilding workers from British Columbia, Nova Scotia, Newfoundland and Labrador and Quebec all said that this would have a negative impact on the shipbuilding industry. As a result, hundreds of jobs have been lost in the shipbuilding industry.

In the springtime, after what was an appallingly ridiculous debate, the Conservatives and the Liberals pushed through the Colombia free trade deal, essentially putting an X on Canada's reputation of standing up for human rights.

This present deal would provide a stamp of approval on the drug pushing, money laundering, tax haven paradise. This deal says that it would be okay to do this kind of activity, that it would be okay to have whomever, Hell's Angels, drug pushers, getting around Canadian income tax laws by having their money in Panama. Panama has strict rules about ensuring that Canadian authorities cannot find out a wit about the illegal money laundering taking place. The Conservatives say that is okay.

Each member of the Conservative Party, each member of Parliament who has made a great speech about cracking down on crime, is now going to stand and give his or her stamp of approval to a government that has not cracked down on fighting money laundering and drug pushing, one of the worst in the world.

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

Mr. Speaker, I will first point out that I will be splitting my time with the member for Berthier—Maskinongé.

First of all, I would like to quickly go over the Bloc Québécois position on bilateral agreements. Make no mistake, 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. Therefore, the Bloc Québécois supported the North American Free Trade Agreement, NAFTA, 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. 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.

We know very well that the lack of environmental or labour standards in trade agreements puts a great deal of pressure on our industries, particularly our traditional industries. It is very difficult for them to compete with products made with no regard for basic social rights. We support a true multilateralism policy and not shameless profiteering without regard for human conditions and the environment, which all too often is the basis for these bilateral agreements that our Conservative friends and, for some time now, our Liberal friends want to negotiate. This Bloc Québécois position was eloquently presented yesterday by the member for Saint-Maurice—Champlain, and I would like to congratulate him on his apt remarks.

That said, the Bloc Québécois, as per usual, methodically examined Bill C-46, which would implement a free trade agreement between Canada and Panama. We do not support this bill because, for the most part, it does not reflect the beliefs and values of our party and Quebeckers.

Even though the free trade agreement signed on May 14, 2010, comes with a side agreement on labour co-operation, protecting labour rights remains a serious concern. Indeed, President Ricardo Martinelli's right-wing government passed Law 30, legislation that is considered anti-union, in June 2010. Quite simply, and as my hon. colleague from Saint-Maurice—Champlain explained so well, the law criminalizes workers who demonstrate to defend their rights. That cannot be justified.

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.

I have been a farm unionist for 20 years and I think we are fortunate to live here in Quebec and in Canada, in a democracy where we are not up against legislation like Panama's Law 30, which would bully us and prevent labour groups from raising their voices to improve their conditions. This is unacceptable. We are fortunate that we do not have to deal with such legislation and governments like Panama's that pass that kind of legislation in 2010.

As a member who comes from the labour movement, I naturally believe that workers' rights are universal rights, and no trade agreement—and I mean no agreement—should be entered into without absolute assurance that workers' rights will be respected.

Considering that in the present case we do not have that assurance, it is not possible for the Bloc Québécois to speak out in favour of this agreement.

We vigorously defend this position through our actions and our decisions. It is for that reason, among others, that we were able to support the Canada-Colombia free trade agreement.

Even though on August 5, 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 away from Law 30 before we make any commitment?

Something else that bothers the Bloc Québécois greatly is the fact that Panama is still on the OECD's grey list of tax havens. It is even on France's blacklist of tax havens.

While major European corporations are leaving this 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?

Also worrisome is the fact that on the Finance Canada website on treaties and conventions there is no indication that Canada is negotiating an information sharing agreement with Panama.

We feel it is imperative that before concluding a Canada-Panama free trade agreement, the Conservative government, supported by the Liberals, sign an information sharing agreement with Panama. I hope the Liberals will support us on this. Nonetheless, this agreement must not exempt subsidiaries domiciled in the targeted jurisdictions from paying income tax.

In closing, 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, unfortunately it is not possible for the Bloc Québécois to support this bill.

We will vigorously oppose any agreement, treaty or government decision that does not respect these fundamental rights.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

Mr. Speaker, I am pleased to participate in the debate on Bill C-46, as I did the other day on Bill C-8 which dealt with another free trade agreement the government is proposing. This bill deals with a free trade agreement with Panama.

Obviously, free trade agreements are important to Canada given that we export over 80% of our goods, and obviously Canada needs to be competitive in the international community. It is disturbing that for the first time in over 30 years, we have a significant trade deficit. The government needs to look at a comprehensive approach in terms of how we deal with the issue of trade in the international community.

At the moment we have what I would call one-off agreements. There is one with Jordan and now there is this one with Panama. We also debated one involving Colombia. The difficulty is that our competitors are taking a much more aggressive approach. For example, we have no free trade agreements with any state in Asia. With markets such as Japan, China, India, the ASEAN members, this is very important, and a multilateral approach particularly with ASEAN would be beneficial.

We are still in negotiations with Korea; I believe we are in the seventh round now. With Singapore, we are in the ninth round. This is disturbing, given that the Americans have been reaching out. We see the Japanese concluding free trade agreements with countries as diverse as the Philippines and Mexico, yet at the same time, we are doing these small agreements.

The one with Panama is fine. We on this side of the House certainly support the bill going to committee. However, in terms of the big picture, there are real issues that we need to be grappling with on the issue of free trade. A multilateral approach gives us a bigger market. For example, ASEAN, with 590 million people from Vietnam, the Philippines, Indonesia, et cetera, is very important, yet we are simply chipping away at it. We do not have a coherent policy in terms of how we should tackle trade issues.

As a significant amount of our trade, some 75% or 80%, is with the United States, when there is an economic downturn in that country, as we have seen, it has an impact on our economy. We need to diversify, but diversifying with Jordan and Panama is not going to solve things in the big picture. It is not going to deal with what our competitors have been doing internationally. We need to be in the game. We have been more on the sidelines. We have to engage in these major markets. There are opportunities for us out there, but the government needs to lead. The government needs to demonstrate.

A few years ago, the Canadian Chamber of Commerce wrote a very compelling paper about China. It clearly indicated that there was no policy of the government in terms of how to engage that market. For example, Canada is a world leader in the area of environmental technology, particularly with respect to clean air, clean water and contaminated sites. This is very important work and certainly is useful for China. We need to be part of that, but we are not seeing the kind of leadership needed in order to go forward.

From that standpoint, the agreements the government has been putting forward simply focus on a very small niche. They do not deal with the kinds of issues they should be dealing with.

We are seeing an increase in protectionism in the United States. That is of concern, particularly in the area of agriculture. It means difficulties for our farmers. It is a difficulty in terms of our being able to compete in the international arena. The United States' protectionist policies are having an effect here. With respect to the America first policy, the government had discussions with the United States and changes were made in terms of Canadian companies being able to compete, but that only affected 37 of the 50 states in the U.S. It is important that we be there.

The Conservative government has not shown the kind of leadership that is needed on the multilateral side, in terms of being much more visible in the United States. Policy in the United States is not done in Washington; it is done in districts and states across the U.S. That is where we need to be focusing our efforts.

Canadian businesses can compete with anyone in the world if there is a level playing field. When there is not a level playing field, obviously we often face difficulties.

Although my party supports this bill going to committee, the fact is that we would like to see a clear strategy, particularly for the emerging key markets, such as Brazil, India, China, and Japan. We have watched and continually see the United States, Australia, and others being very aggressive, particularly in their talk about a big Asia Pacific free trade zone. If they are in first, we obviously will pick up the pieces.

I think Canadian businesses deserve more than picking up the pieces. They deserve the opportunity. Again, we have to be aggressive. We can talk free trade, but we really have to demonstrate it. The only way to demonstrate it is to show leadership.

Currently, penetrating the Korean market is an issue, particularly in the automotive sector, and the Japanese are carefully watching our discussions. If, and it is a big if, a free trade agreement were to occur between Canada and Korea, the Japanese would be particularly anxious to come to the table. At the moment, the Americans are talking to them about possible free trade.

Some people say that we could never get a free trade agreement with Japan because of agriculture. I do not know of too many people in this House who represent ridings that have a lot of rice. Rice is always the one issue the Japanese deal with. Even then, Japan was able to conclude a successful agreement with the Philippines, for example.

The issue in this agreement, and we are supportive of sending it to committee, is the Canadian merchandise we export to Panama: machinery, electronic equipment, pharmaceutical equipment, et cetera. It is a relatively small market. It is also important that we look at some of the other free trade zones in Latin America.

Latin America has developed, along with states such as Argentina, Uruguay, and Chile, zones in which there is a free flow of goods and where tariffs have been dropped so that businesses can compete. As a country, we need to send out a very clear message that we are prepared to enter into agreements where it is in our national interest.

Obviously, we have to look at environmental issues. This country has traditionally been a leader on climate change, clean water, and clean air issues. Countries really need that expertise.

Not only are Canadians very cost effective in terms of what they are able to produce and export, we can do it in two official languages, which is very helpful. Again, if we are not at the table, that is a problem.

We also have to look at the issue of labour co-operation. I notice in this agreement that there is a side agreement on labour co-operation. Obviously we have to expect that what we are asking is what we would demand at home, including the right to association, the right to collective bargaining, and the abolition of child labour. These are standards we have, and we would expect the same in dealing with other countries.

I know that some colleagues have concerns on the labour end of it. When it goes to committee and we have the appropriate witnesses, we can have those kinds of discussions and strengthen, if need be, those provisions. I think that is important. No piece of legislation I have seen in 14 years here has ever been perfect. That is why we send it to committee, where colleagues have an opportunity to look very carefully at legislation, hear from witnesses, and move forward.

My understanding, in terms of the major stakeholders on this particular bill with Panama, is that there are no major objections. On the whole, it is a fairly straightforward agreement. Again, it will give us some access, but we have to build on that, particularly in the Central American region in countries such as Nicaragua, Guatemala, and Costa Rica. Those countries are also looking at better co-operation. As a balance to the United States, I think Canada could play an important role.

Again, it is the whole issue of having a level playing field with access to markets. We need to be able to at least secure that. When we are looking at new partnerships, we must be able to tell our business community to go forward with the opportunity.

There were reservations about the free trade agreement with the United States and whether we could compete. Obviously, we can compete extremely well when a level playing field is available.

Canada's total exports to this particular country amount to 12.6%. Imports amount to about 17.3%. Over 80% of Canada's economy depends on trade. To keep that, we need to have as much access to markets as we can.

Former Prime Minister Trudeau, in the seventies, talked about a third option, and that third option was to diversify. If we had diversified in the seventies and eighties, maybe we would be in better shape than we are now.

Tariffs are the worst thing that can happen to a trading nation. Obviously, I am not old enough to remember the Great Depression in the 1930s, but some of my colleagues on the other side might. The first thing that happened was that major tariff barriers went up, and protectionism became rampant. That is not something we want to do. That was not good. We need to make sure that we have protection.

We also need to demonstrate leadership when it comes to issues such as climate change and the environment. The Conference of the Parties will soon meet in Mexico, and that will be an opportunity to strengthen international regimes.

Canada is traditionally well known for its international leadership, particularly in areas of multilateralism. The International Criminal Court is an example.

The 11th Conference of the Parties, in 2005, was the most successful COP ever to deal with developing a clear climate change regime internationally. That was important. The former Liberal government got a lot of accolades because of that. Again, it was because of the fact that we demonstrated leadership. We need to continue to do that. We need to continue to say to our allies and others that if protectionism is wrong, this is what we are prepared to do to focus forward.

The European Union has some very stringent policies, particularly when it comes to foodstuffs, even in terms of colouring food. We have to be able to talk about these issues with colleagues. We have seen other countries react to issues in this country, and we need to have a strong voice on those issues. Some of my colleagues, particularly those from Newfoundland and Labrador, are well aware of the issue with regard to the seal hunt.

What are we doing to educate? What are we doing to get our message out on some of these issues so that these sudden trade barriers will not come forward and harm the interests of Canadian farmers and producers, whoever they happen to be?

It is instructive to look at what went forward when we made an agreement with Israel in 1997. That was an opportunity to start further negotiations in other areas of the Middle East. Bill C-8, the Jordan agreement, will build on that. The gulf trading area, a Middle East trading area, is important all the way from the United Arab Emirates to Algeria. That is another market we could penetrate.

In other words, what is the strategy? What is going to be the policy in order for us to move forward? We on this side of the House are quite willing to work with the government to develop a strategy, because it is in our nation's interest. If we do these kinds of things, we will serve our citizens well.

Non-agricultural products, particularly fish and seafood, would be helpful for our markets, but that is only one part of the puzzle. It would be nice to see a really strong policy that the government, members of the opposition, and members of key sectors that deal with international trade really hammer out together. It would be the kind the policy and the kinds of tools we need to be much more aggressive.

The Americans certainly have not been sitting idly by. The Australians, in particular, have been very aggressive in Asia and have reaped a number of benefits. ASEAN, of course, which was getting closer on trade issues with China, now realizes that they cannot put all their eggs in one basket. They are wondering where Canada is on the international stage. They see where the Australians and the Americans are, and they are saying that we need to be there.

Some people do not know that in Indonesia, for example, we are the fifth largest investor, particularly in the area of mining, but our approach is not necessarily coherent. It is not necessarily a policy to say, “Go out there and good luck”. That is not the way to build good trade relations.

Obviously, we support the faster elimination of tariff barriers, particularly in those areas that are important to Canadian industry. In this agreement, Panama will see the elimination of at least 90% of current barriers on goods coming from Canada, which is obviously a positive, but where are those big deals we need to hear about in the House? Where are those big negotiations going on?

On this side, we are watching very carefully the issue of Korea. That is very important because of the nature of that market. We need to be able to say to our businesses that there are tremendous opportunities out there. We do not want to be dealing just with our American friends, which is great, but given policy there, we need to make sure that we are at the forefront.

We were one of the first major countries in China. We had a tremendous opportunity there. Mr. Chrétien led a number of Team Canada missions there in the 1990s. We were leaders. Unfortunately, relations with China changed with the current government, and we lost a lot of ground.

We have to continue to have a consistent policy on how to deal with our trading partners. We cannot be all things to all people. We have to have a particular niche. For example, on the environment, we could have a whole Team Canada just dealing with environmental issues in the Pearl River Delta. There are days when the smog is so thick it rolls into Hong Kong and one cannot see across the harbour. We need to take advantage of those things.

People cry out and say that they need to see Canada there. It would be very helpful if we would do that. Although we will support the bill going to committee, we want to look at the issue of labour to make sure that the guarantees are there. We want to make sure that if these things can be strengthened, that will be done. We welcome the opportunity, but we want to see the bigger picture. We want to see more emphasis on multilateralism, and if that goes forward, it will benefit Canada in our future trading relationships around the world.

The House resumed from September 29 consideration of the motion that Bill C-46, An Act to implement the Free Trade Agreement between Canada and the Republic of Panama, the Agreement on the Environment between Canada and the Republic of Panama and the Agreement on Labour Cooperation between Canada and the Republic of Panama, be read the second time and referred to a committee, and of the amendment.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Madam Speaker, I am pleased to speak on behalf of the Bloc Québécois to Bill C-46 to implement the agreement negotiated by representatives of the Department of Foreign Affairs and International Trade with the Government of Panama. We oppose this free trade agreement. It is not that the Bloc Québécois is against free trade and free trade agreements, but in this case, there are strong reasons that justify our opposition.

Panama has one of the most well-developed economies in Central America. However, the Bloc Québécois does not believe we should ratify a free trade agreement with Panama when it is still on the OECD's grey list of tax havens. Every country turns to that organization for that list; it is used as a reference. People at the OECD evaluate different criteria with regard to tax havens, which I will say more about later.

We asked departmental representatives a few questions. They said that Canada is currently negotiating a tax treaty with Panama in order to tighten the rules on banking transparency to better combat tax evasion. However, there is no mention anywhere of such a treaty with Panama in the Department of Finance's register of tax treaties currently in effect or under negotiation.

It is clear to us that Panama is still on the OECD grey list and France's blacklist of countries that promote tax evasion. That is the major reason we oppose such an agreement.

The other reason we object to implementing this free trade agreement is that we do not get the impression that workers' rights are very well protected in Panama. In June 2010, the right-wing government of Ricardo Martinelli passed Law 30, which is considered to be anti-union. This law is said to include labour code reform that is seen as repressive since it would criminalize workers who demonstrate to defend their rights.

On August 5, the Panamanian government agreed to review this law, but we have every reason to be concerned about the desire of the Martinelli government to respect the conventions of the International Labour Organization integrated into the side agreement on labour standards.

For these two major reasons—which we will look at again in more detail—we believe that we should delay the ratification of the free trade agreement, in light of the adoption of Law 30, with which the Panamanian government has taken a real step backwards.

Although two days ago we were talking about the Canada-Jordan free trade agreement—Bill C-8—which we were in favour of, we do not agree with the Conservative government's strategy of focusing on bilateral agreements instead of multilateral ones, which are preferred by the Bloc, as we said yesterday.

The Bloc Québécois believes that a multilateral approach is more effective for the development of more equitable trade that protects the interests of all nations.

I would like to come back to the issue of respect for human and labour rights in Panama. Human rights are guaranteed by the Constitution, and in general, they are respected. That is a fact. However, the judicial system still has a number of problems in Panama, including the conditions of imprisonment, the length of preventive detention, corruption, and the lack of independence of the judicial system. In rural areas, there are problems with child labour and with indigenous communities and marginalized ethnic minorities, as well as discrimination against women.

In recent months, Panama has seen a wave of what is considered to be anti-union repression. Sources estimate that between two and six people died, and about a hundred were injured during violent protests that followed the June 2010 adoption of Law 30, known as the “sausage bill”, because it contains all kinds of reforms, such as reforms to the labour code and to environmental legislation.

The reform of the labour code is seen as repressive, because it would make it a crime for workers to demonstrate to defend their rights.

Some of the country's environmental groups submitted an application for support to the UN environment program to convince the Panamanian government to review changes that will diminish the state's ability to preserve its natural resources.

Unions have asked for support from the international labour federations while the Inter-American Commission on Human Rights is asking for an investigation of police brutality during protests against Law 30 in July 2010. According to our sources, the Panamanian government is conducting its own investigation.

On July 14, 2010, the International Trade Union Confederation, together with its affiliated organizations in Panama, firmly condemned violent repression of the strike movement by workers and demanded the immediate repeal of “the controversial Law 30, which has become a licence to kill for the police, creating a climate of extreme violence” among the people. I am quoting from the article entitled “New Panamanian Law Threatens Environment and Human Rights.”

On August 5, the Panamanian government agreed to review the law. We should monitor this issue before going any further. Otherwise, after signing the agreement, Canadian corporations may find that they are damaging the environment or contravening the International Labour Organization's core convention, C87. That is rather important.

I will now return to the issue of Panama being a tax haven on France's blacklist and the OECD grey list. The latter lists countries that have committed to exchanging tax information but that have not substantially implemented the rules.

Section 26 of the OECD model tax convention provides the most generally accepted standard for the bilateral exchange of tax information.

There is no indication, on the Department of Finance web site of treaties and conventions, that an information exchange agreement is being negotiated with Panama.

Before entering into the Canada-Panama free trade agreement, the Conservative government absolutely must sign a tax information exchange agreement with Panama and this agreement must not allow subsidiaries located in the targeted jurisdictions to be tax exempt.

Obviously, it is important that this agreement be concluded, negotiated, drafted and signed before finalizing the free trade agreement. It is also clear that, under such an agreement, corporations cannot use their presence in Panama to justify tax evasion. For the Bloc Québécois, it is entirely inconceivable that we would be associated with such a practice.

With this free trade agreement, we will likely see more trade and a significant increase in Canadian investment in Panama. We will see more taxpayers, both individuals and businesses, earning income in both Canada and in Panama. That is why it is essential for the Government of Canada and Panama to sign the type of information exchange agreements I was talking about earlier.

Since Panama is a tax haven, such a free trade agreement would become an invitation to evade taxes, or use loopholes in the law to help a taxpayer avoid paying a tax he or she normally should.

At the end of the day, should a free trade agreement promote tax evasion? It is a very serious question because we would not want Canada to inadvertently promote investments that encourage tax evasion under the pretext of concluding more trade agreements and lowering taxes. That makes absolutely no sense.

For example, a company whose income would be legally taxed according to the rate in effect in Panama would be tempted to set up a business structure to take advantage of this near-zero tax rate.

The Conservative government is already signing tax treaties with tax havens and we all know it. The Bloc Québécois absolutely believes that we need to be vigilant because in June 2010 the government signed tax information exchange agreements based on the OECD model with eight jurisdictions: Bahamas, Bermuda, Dominica, the Cayman Islands, Turks and Caicos, St. Lucia, St. Kitts and Nevis, and St. Vincent and the Grenadines.

This information tells us that we absolutely must be careful; the Conservative government absolutely must avoid putting Canada in a position, once again, of promoting tax evasion, when there are plenty of workers in Quebec and Canada who can barely manage because they have to pay their taxes.

In La Presse on July 6, 2010, we read:

In return for these agreements, Canada seems to have given these jurisdictions an advantage. Subsidiaries of active Canadian companies domiciled in these islands can effectively repatriate their foreign profits to Canada tax free.

Bermuda, Bahamas and the other islands will thereby have a similar status to Barbados, which has been the only tax haven to have this privilege.

It is high time we gave ourselves a real policy of multilateralism.

The current course of globalization, a phenomenon bearing both great hope and great injustice, must be redirected. Disparity between rich and poor, the failure to respect rights and freedoms and the lack of regulations on the environment and labour give rise more to despair than to hope.

Openness to trade and the establishment of international regulations to counter protectionism and protect investment are good things that the Bloc supports. That does not mean that trade rules should have precedence over the common good and the ability of governments to redistribute wealth, to protect their environment and culture and to offer their citizens basic public services such as health care and education. These fundamental elements must always take precedence over any trade that we establish in order to increase our exports. These basic criteria must guide our negotiations and intentions to sign free trade agreements with other countries.

Quebec is a trading nation. Our companies, and especially our cutting-edge companies, could not survive on just the domestic market. International exports account for one-third of Quebec's GDP. If interprovincial trade is added, exports represented 52% of Quebec's GDP in 2005.

Protectionism is not in our interests, and that is why Quebec, and Quebec sovereignists in particular, massively supported the free trade agreement with the United States and then NAFTA.

That is also why the Bloc Québécois was the first party in the House of Commons to call for a free trade agreement with the EU.

Then again, it would be naive and false to claim that everything is just fine, in the best of all possible worlds. While freer trade has led to greater wealth overall, it has also produced its share of losers. And that is unfortunate.

The trade environment has worsened considerably over the last few years, and we must take that factor into account. Between 2003 and 2007, Quebec went from a large trade surplus to a $13 billion deficit. In 2006, every Quebecker therefore consumed $2,000 more than he or she produced. And this only covers our international trade balance; another $5 billion deficit must be added in interprovincial trade, which also made us considerably poorer.

The result of this trade deficit is that our manufacturing sector has become dangerously weak. Between 2003 and 2007, it lost nearly 150,000 jobs, which was nearly all the jobs lost in this sector in Canada, including 65,000 lost since the Conservatives came to power, mainly because of foreign competition and a strong Canadian dollar. Trade liberalization can only be profitable if it is guided by certain rules; otherwise, it is a race to the bottom.

For a long time, Canada's trade policy was simply to improve access to foreign markets. From that perspective, it has been very successful. Today a majority of products, over 80% of world trade, flow freely.

However, we are now beginning to see the downside of unbridled liberalization: heavy pressure on our industry, offshoring and trade agreements that amount to a licence to exploit people and the environment in developing countries. The trade environment has changed in recent years and as far as Quebec is concerned, it is not for the better.

Joseph Stiglitz, Nobel Prize winner in economics and former vice-president of the World Bank, had this to say when he received his honorary doctorate from Université de Louvain on February 3, 2003:

As our interdependence has increased, we have discovered that we need rules to govern the process of globalization and to create institutions to help it function. Unfortunately, these rules are too often established by the rich countries to serve their own interests and especially individual interests within these countries.

The Bloc Québécois is proposing a change in Canada's trade priorities. Canada should now shift its focus from trade liberalization to creating a more level playing field. The Bloc Québécois believes that our trade policy must focus on fair globalization, not the shameless pursuit of profit at the expense of people and the environment.

That is the Bloc Québécois' position on Bill C-46.