Bill C-24 (Historical)

Canada–Panama Economic Growth and Prosperity Act

An Act to implement the Free Trade Agreement between Canada and the Republic of Panama, the Agreement on the Environment between Canada and the Republic of Panama and the Agreement on Labour Cooperation between Canada and the Republic of Panama

This enactment implements the Free Trade Agreement and the related agreements on the environment and labour cooperation entered into between Canada and the Republic of Panama and done at Ottawa on May 13 and 14, 2010.
The general provisions of the enactment specify that no recourse may be taken on the basis of the provisions of Part 1 of the enactment or any order made under that Part, or the provisions of the Free Trade Agreement or the related agreements themselves, without the consent of the Attorney General of Canada.
Part 1 of the enactment approves the Free Trade Agreement and the related agreements and provides for the payment by Canada of its share of the expenditures associated with the operation of the institutional aspects of the agreements and the power of the Governor in Council to make orders for carrying out the provisions of the enactment.
Part 2 of the enactment amends existing laws in order to bring them into conformity with Canada’s obligations under the Free Trade Agreement and the related agreement on labour cooperation.
Part 3 of the enactment contains coordinating amendments and the coming into force provision.

Canada-Panama Economic Growth and Prosperity Act

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, I appreciate the member's candour and boldness in proclaiming that she will not be voting in favour of this particular free trade agreement. I would be interested if she would tell us how she will be voting on the free trade agreement with Jordan. I know there was some concern. I understand that New Democrats voted to send it to committee. Does that mean they support the Canada-Jordan free trade agreement? I am not sure about that.

Furthermore, given her beliefs, to what degree does she think that Canada as a nation should punish countries that we trade with but who have human rights issues? An example of a country of that nature might be China, which the NDP and others have expressed concern about in regard to its human rights practices. Would she try to limit trade with that country in any way?

[Chris Charlton, NDP, Hamilton Mountain, ON]

Madam Speaker, I really do appreciate the question with respect to the Canada-Jordan free trade agreement. Of course, that bill was debated in the House and we have already voted on it, so I am a bit surprised that the member would not know what the NDP position has been on that.

With respect to his second question, I believe that any trade agreement must put human rights, environmental rights and labour rights front and centre in the negotiations. That clearly has not happened in the trade agreement before us today and that is why I have been absolutely clear that I will not be supporting this trade agreement when it comes time to vote on it in this House.

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Madam Speaker, I am very pleased to have the opportunity to speak about Bill C-24, as many of my colleagues have done before me. First, I would like to thank the hon. members for Burnaby—New Westminster and Windsor West, who worked so hard on this file.

I would like to clarify the position of the government, which seems to believe that everything is black or white. From the outset, I think it is very important to point out that, often, what we hear in debate is that the NDP is against all trade and against any measure that would help our Canadian industries to grow. That is not entirely true, and these comments need some clarification. The NDP is in favour of trade, but not at any price or for any reason. As the hon. member who just spoke pointed out so eloquently, we must be sure to consider certain important factors, such as workers' rights and sustainable development, when signing free trade agreements.

I think that the best way to say it is that we want free trade agreements that are equitable and fair and that truly take into account social justice and the other factors that I just mentioned.

To this end, there is one more thing we need to consider when examining the bill before us to implement a free trade agreement between Canada and Panama. The people of Chambly—Borduas have often shared with me their fears and worries about Canada's standing and reputation. The way our native country is perceived and the way we work with other countries in the world politically or economically may not seem important when we are talking about travelling to another country. And yet it is very important because we have a responsibility as a privileged and developed country to share these values.

When we sign free trade or other agreements with different countries, it is our responsibility to share those values and to behave in a way that will lead to economic growth and enhance rights in general, workers' rights and sustainable development. This must be done not only in Canada but throughout the world. The government often neglects this responsibility, particularly when it comes to bilateral free trade agreements, which are inadequate.

I listened with interest to an earlier question put to the member for Hamilton Mountain, who was speaking about the fact that the bill and the free trade agreement could support workers' rights. However, I am finding it very difficult to understand, as she pointed out, why the Conservatives voted against the well-reasoned amendments suggested by the member for Burnaby—New Westminster in committee if this is a truly an important issue to them. If the government were truly concerned, it would have taken the time to consider the very reasonable amendments moved.

It is important to also highlight another one of our international responsibilities. Panama is considered a tax haven. And this is an economic free trade agreement. Thus, I find it very difficult to consider that we will be dealing with a country that allows money laundering and tax evasion.

As I said, my colleague has worked very hard on this, and I would like to commend him. In fact, the NDP member for Burnaby—New Westminster moved an amendment that would resolve the issue of fiscal transparency. We could implement measures that would require Panama to exchange tax information with Canada. This would lessen the risk of illegal money laundering activities and so forth. I have already talked about these measures.

Once again, both the Conservatives and the Liberals rejected this amendment because they believe that Panama has a satisfactory double taxation agreement. I would like to point out that this is not a very good argument because the double taxation agreement pertains to fiscal transparency for legal revenue such as taxes, and we already know the source of such revenue. This measure does not at all deal with illegal revenue, but it could if the Panama agreement included my colleague's amendment, which seeks to bring about complete fiscal transparency.

The other aspect I would like to discuss is key to our argument. Several of my colleagues and I mentioned it earlier. I am referring to the rights of workers in the manufacturing sector. These rights are at the heart of a free trade agreement such as this one.

I can already hear the counter-argument that the NDP bows down to the unions. That argument is totally ridiculous in this case, because we are talking about developing countries that are still in the process of adapting their regulations and creating a culture of labour rights and human rights, which are fundamental rights. It is important to note that, while very competent people at the Canadian Labour Congress—Ms. Healy, as my colleague mentioned—have done research, we are not talking about a simple union matter here, or the will of a union. We are truly talking about important issues regarding labour rights. It is not complicated. We are talking about the people who will be making the products that are subject to this trade agreement. Human resources are at the core of this trade agreement. They are the foundation of the transactions that will take place. The jobs are more important than the profits that will be made.

The government likes to talk a lot about the jobs that these free trade agreements will help create. If we are going to talk about job growth, let us also talk about the quality of those jobs, here in Canada and in Panama. The government should focus on creating high-quality jobs for the people of Canada and of Panama. The government says that Canadians want economic growth, but as I was saying earlier, that growth should not come at all costs. I think our constituents, the people we represent, would agree. Here and around the world, we have built a reputation, a culture of defending labour rights and creating high-quality jobs. I think we would want the same thing for another country, Panama in this case.

That is a problem that comes up quite often, not just in this free trade agreement, but in a number of others. The government blindly applies the same negotiation strategies and the same conditions as the ones used for the North American Free Trade Agreement in the 1980s and 1990s. That was another time, but the government is trying to apply the same conditions today. Not only are we dealing with a country where the situation is very different from that of our neighbours to the south—the United States and Mexico—but the times are different as well. This is 2012, and the reality for workers has changed. For example, in the manufacturing sector, the tools available for workers are different. Accordingly, working conditions have changed. I think that we have to adapt to that vision going forward.

I will conclude by reiterating that the NDP opposes this bill not because we are against trade, industry and economic growth, but because we are against trade at all costs at the expense of justice and fairness. We want fair trade that is consistent with our fundamental values as they relate to human rights. Those rights are essential when we talk about trade in economic terms, because that also involves cultural exchanges with another country. We must be faithful to our reputation and our values in any agreement we sign, especially at the international level.

[Lois Brown, Conservative, Parliamentary Secretary to the Minister of International Cooperation]

Madam Speaker, I would refer my colleague to the front page of the bill on the agreement with Panama. It includes an agreement on labour co-operation between Canada and the Republic of Panama. I will not read it all, but I suggest he take a look at article 18.03, which refers to the obligations between Canada and Panama and our encouragement for Panama to develop good labour laws.

The NDP members have indicated they will support the Canada-Jordan free trade agreement. Many people have argued that this agreement is a lesser agreement than the Canada-Panama agreement. Could the member comment on why the NDP members refuse to support this agreement, which would give people in Panama the opportunity for hope and a better life?

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Madam Speaker, I would like to thank my colleague for her question. I will refrain from commenting on what she seems to be saying—that a bill relating to the agreement between Canada and Jordan is of less value. As has been said, we have to explain and clarify. I hear what she is saying and it is entirely correct: the bill contains some measures, but they do not go far enough; it is not complicated. We have very serious concerns about workers’ rights. This is indeed a start, but it is not enough.

I will ask my question again: why did they oppose the amendments proposed by my colleague from Burnaby—New Westminster if they really have a clear, precise, strong position on standing up for workers’ rights? Why do they not work with the opposition to propose measures that will strengthen what is already in the bill, as she said, but that will help in tangible ways? What is provided in the bill as it stands is not sufficient and does not go far enough. There have to be much stronger and more serious commitments to improving existing working conditions.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, could the hon. member expand upon this? If one applies certain principles that he spoke about in regard to free trade agreements, would one apply those very same principles to trade in general?

For example, if his concern about worker exploitation is the reason why he would not support the free trade agreement with Panama, would he not apply those same principles when he deals with trade in general with all nations in the world? Would he abandon those principles and stick strictly with free trade agreements?

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Madam Speaker, I would like to thank my colleague for his question. I find it hard to see why I would abandon my principles, regardless of the situation. We are talking about trade, here. I will reiterate: we are not against trade, but that always has to be qualified. We will always be prepared, in whatever case it may be, to work to ensure that the measures for implementing a bill are appropriate and meet Canadians’ expectations.

We do this not for ourselves. As I said, the people also share our concerns. We have to meet people’s expectations in our transactions. Trade is essentially a matter of making deals. When we make deals with someone, we have to make sure that both parties to the deal understand its principles and terms. I am certainly not afraid to qualify every deal we make. We are entirely prepared to examine any issue and assess it case by case. We will not abandon our principles. We do an assessment and we come back with the comments that arise on an issue. That is what we are trying to say in this debate.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Madam Speaker, I am pleased to rise in the House today to debate Bill C-24 to implement the free trade agreement signed between Canada and the Republic of Panama on May 14, 2010.

Although I am in favour of free trade and I support this bill, I refuse to do so at any cost, because I think we need to take a step back and reflect on the relevance and the impact of this agreement. Unlike the NDP, which systematically opposes free trade, the Liberal Party of Canada has always believed that trade agreements can have a positive effect on our economy. As we all know, our economy is based on exports, so eliminating trade barriers is highly desirable. Personally, I do not think the agreement with Panama, per se, is problematic; rather I think the problem lies with abandoning our traditional markets.

Our current economic situation is proof of how negligent the Conservatives have been. Although we had a positive trade balance for a very long time, we now have a trade deficit, and I highly doubt that a free trade agreement with Panama will change that fact. In 2009, Canada's exports to Panama totalled only about $90 million, while our trade with the U.S. exceeds $1.4 billion every day. Approximately 75% of the goods we export go to the United States.

Even so, our trade balance with our neighbour is in deficit. Protectionist measures in the U.S. are contributing to this unfair situation, despite NAFTA. I therefore have to wonder why a new free trade agreement with another country is so urgent, when our largest trading partner refuses to honour its commitments when difficult economic times come along.

Perhaps the Canadian government should do more to defend our economic interests in Washington, rather than in Panama. We are seeing this government making more and more concessions to the Americans rather than defending Canadian interests, and our economy is paying the price.

I firmly believe that it would be in our best interest to focus our efforts on revitalizing our trade relationship with our neighbours to the south and our other major trading partners rather than spreading our resources out. Instead of doing whatever the Americans want, which is what the government did on the copyright issue, the Conservatives should work harder to protect Canadian interests.

The Conservatives have been too nonchalant. For example, even though President Obama mentioned the buy American policy several times in his speech, the Conservatives were taken completely by surprise when they found out that the U.S. government intended to go ahead with a measure that violates our free trade agreement.

Why bother signing so many other free trade agreements when the most important one is not even enforced? I think that we should find ways to make the United States respect our agreements before we sign new ones that will likely have very little impact. It is an inescapable fact that, because of our geography, our economy is heavily dependent on the United States. The government should focus its efforts on that market rather than divide its resources among less critical files.

We also have a number of other major trading partners, including South Korea, China and the United Kingdom. The government should make it a priority to recapture those markets. Despite its strong economic growth, Panama will never be more than a relatively small market for us. The impact of this agreement will therefore be small, as I have said several times already.

Of course, diversifying our trading partners is a good thing and makes us less vulnerable to the ups and downs of certain markets. Despite its relatively small economy, Panama is important. It has been experiencing significant economic growth and is one of Canada's major trading partners in Latin America.

The country has also been making significant progress in matters of governance and democracy. In a way, a free trade agreement would recognize that progress. It is also worth noting that the new Panama Canal will be of critical importance to global trade. The region will probably continue to experience strong economic growth and will become an even larger commercial hub once the new canal opens. Strengthening our relationship with Panama is no doubt a good move.

However, we cannot ignore the issues of tax evasion and money laundering. Canada loses millions of dollars every year because of such illegal activities. With a free trade agreement in place, we will be entitled to ask for greater fiscal transparency to combat tax fraud.

In addition, certain environmental and humanitarian issues need to be raised with the Panamanian government. The working conditions in Panama do not even come close to those of our workers. Salaries are extremely low and working conditions are far from good for everyone. This free trade agreement will open our market to Panamanian companies. We are within our rights to ask Panama to improve its working conditions. Clearly, a company that underpays its employees and makes them work 12 or even 16 hours a day does not deserve to be able to sell its products in Canada and compete with equivalent products that, of course, cost more to produce here.

The government must also require certain environmental guarantees. But, of course, I am not holding my breath in that regard. This government is not doing anything for Canada's environment and so I doubt it will do anything for Panama's. Coming from this government, such demands would have no credibility.

In closing, I would like to reiterate my support for free trade with Panama. However, I believe that we should sign a tax information exchange agreement with this country. This would help us to increase transparency and would give us more tools to combat tax evasion and money laundering in Panama.

Nevertheless, we should first put all our energy into recapturing our core markets. Canada must speak up. Canadians expect this government to protect their economic interests on the international stage. The Conservatives should focus more on our economic relationship with the United States and try to make it honour the free trade agreement because, as I mentioned in my speech, our economy depends heavily on the United States. Panama has only a very small influence on our economic health.

I am therefore asking the Conservatives to focus all their energy on the relationships with our largest trading partners. Given the fragility of the current economic situation, we simply do not have the luxury of ignoring our core markets, nor do we have the flexibility to do so.

[Paulina Ayala, NDP, Honoré-Mercier, QC]

Madam Speaker, I believe that negotiating free trade agreements country by country shows a lack of ambition because there is no broad, regional vision. I have a question for my colleague about that.

If we examine European agreements, we see that the discourse in the European Union is such that free trade agreements establish winning conditions for long-term co-operation in order to achieve respectful and successful trade relations.

Do you believe that Canada relies simply on an economic criterion when developing its free trade agreements and that we do not have a regional vision for the Americas?

[The Deputy Speaker, Denise Savoie]

The hon. member for Saint-Léonard—Saint-Michel has the floor, but I would once again remind all members to address their questions to the Speaker.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Madam Speaker, I would like to thank the new member for the question. Her riding is next to mine.

If I have understood her question, free trade agreements should be bilateral and multilateral at the regional level. I believe she mentioned Europe. Trade agreements with just the United Kingdom or a single country are no longer acceptable today. We must sign free trade agreements with all of Europe.

In principle, we should do the same thing with South America. I believe that this government is trying to sign agreements with Asia. However, Asia is not just one country. Some countries have problems with democracy. I believe we should move slowly and ensure that Canadian interests are protected in any free trade agreement that we sign.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, in reference to the U.S., my colleague made a valid point. Hundreds of thousands of jobs across Canada are very dependent on what is happening in the United States. There is an agreement between Canada and the United States. It is important for the government to put more of a priority on that agreement and try to protect Canadian jobs by ensuring that we have access to the American market. That should be the priority. It is not necessarily to take away from other free trade agreements. Rather, the government should recognize an important priority to all Canadians is to ensure that we have that secure market with our neighbour to the south, the United States.

I would ask my colleague to comment on the importance to Canadians across the country that the Government of Canada advocate for those healthy jobs that are here today because we export so much to the United States.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Madam Speaker, the Liberals always ask the toughest questions. I will try to answer that one.

I did not focus on the U.S. aspect in the sense of the problems we have had in the past. Since the Conservative government has come to power, it has been able to mess up the free trade agreement by giving up on the softwood lumber issue and paying all kinds of money. The lumber and pulp and paper industries in the U.S. have become much stronger by using our money. The Conservative government failed to negotiate with the Americans' on their buy American policy. We could not contribute there.

With any free trade agreement there is good faith and both countries expect to benefit from it. Both countries should benefit from it because there is economic activity that was not there before. The way to benefit is through trade, the exchange of goods and services. The services would include labour, which means that people in both countries would work. If we are unable to have the Americans uphold our free trade agreement with the U.S., I am not sure how successful we would be with respect to other trade opportunities.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Madam Speaker, I am pleased to rise today to speak to Bill C-24, the Canada–Panama economic growth and prosperity act.

Others in this House might not have been thinking throughout this debate of the famous palindrome: “A man, a plan, a canal--Panama”. As members know, a palindrome is something that reads the same forward and backward. Unfortunately, I cannot read this trade deal as anything but backward. When the “man” is the Prime Minister and the plan is this free trade agreement, we do not get anything very progressive. We do not get “a cana”l; we get a ditch.

We have a very small level of trade with Panama. While we see the Conservatives trying their best to gather up as many small trade agreements as possible, such as the one we passed with Jordan and this one with Panama, it is worth bearing in mind the level of trade that is currently at stake.

In 2010, there was just under $214 million in trade in goods between Canada and Panama. We do not expect this to go up very much even with a free trade agreement. If we look at previous free trade agreements with countries like Costa Rica and other small bilateral free trade agreements, we find that in a number of cases our trade has declined after signing the agreements.

We have a global trading framework already which includes the General Agreement on Tariffs and Trade, and under the Uruguay round the creation of the World Trade Organization. We are not labouring any longer as a global society of nations under high tariffs and protectionist measures. They have been mostly slashed.

What would one want in trading and approving a trade agreement with Panama?

We have heard much in this House of the need to improve labour rights within Panama. We have heard that Panama continues to be a nation that traffics heavily in narcotics and drugs, and the rest of the world would like to stem their flow. We also know that Panama is a country that has extensive money laundering problems. This agreement does nothing to address these issues.

When we look at the ways in which Panama has operated as a tax haven, according to the Organisation for Economic Co-operation and Development, Panama is one of 26 jurisdictions in the world that have not yet fulfilled their promise as of 2002 to provide tax sharing information. That would provide a greater understanding of when a country is operating unfairly and illegally to harbour revenue and wealth so that the country of origin cannot tax it properly.

The trade agreement with Panama unfortunately does not deal with any of these issues. It does not deal with narcotics trading. It does not deal with the tax haven problem. It does not deal with money laundering. It does have a side agreement to deal with labour, but we can already measure from previous efforts with such side agreements that they have no real effect on improving labour conditions in a country.

Through the 1990s there was a great increase in trade agreements and a great wave of globalization. Its triumphalism was the creation of the World Trade Organization, but things have slightly stalled since Doha and there is a little less triumphalism. Some people feel that trade, trade liberalization and greater economic activity, particularly greater strength and power to corporations, will raise all boats. Gus Speth, the former head of the United Nations Development Programme, famously said, “This kind of trade raises all yachts”, but it does not do much for the poor. It certainly does nothing to improve labour conditions. If we negotiate a trade agreement while turning a blind eye to the things about our trading partner that worry us, things like drug trafficking, money laundering, human rights abuses, tax havens and places to shelter income that should be taxed under public revenue elsewhere, it is unlikely we would be able to fix them later.

Turning to the text of the agreement, in article 1.06 there are some carve outs so that the agreement would not unfairly target multilateral environmental agreements. I wish the trade negotiators for Canada had listed all the agreements that are important. They certainly have carved out the ones that were listed in NAFTA, such as CITES, the Convention on International Trade in Endangered Species, the Montreal protocol on the ozone layer, the Basel convention on the transport of hazardous materials, the Rotterdam convention on trade in hazardous goods, and the Stockholm convention on persistent organic pollutants.

A startling omission, since both Panama and Canada are parties to the United Nations Framework Convention on Climate Change, is that the framework convention on climate change is not listed as an agreement that would be protected against any incidental accidental implications from this trade agreement to climate policies. As we speak, both Canada and Panama remain parties to the Kyoto protocol, although we know that Canada has signalled its intention, quite shamefully I may add, to withdraw from its legal commitments there. I would not expect to see the Kyoto protocol in this agreement, but I certainly expected to see the framework convention on climate change, to which both countries are currently committed.

More concerning are the sections that appear in chapter 9 of the Canada-Panama free trade agreement. Chapter 9 deals with the quite devastating investor-state provisions.

It sounds like the most boring of topics, an investor-state provision. What could it be and why do we care? I want all Canadians to care. This provision is our innovation. We were the first anywhere on the planet to create this provision. It was done in NAFTA. In NAFTA, it is chapter 11. In the Canada-Panama agreement it is chapter 9, but it has the same effect.

There was an effort to make this kind of provision global. Some may remember the efforts were negotiated within the Organisation for Economic Co-operation and Development. It started within the World Trade Organization, but it stalled there. At the WTO they were called multilateral investor agreements. They regrouped and went to the OECD and called them the multilateral agreement on investment, the MAI instead of the MIA. It stalled and failed there. Thank goodness. It was the result of widespread grassroots opposition.

It is the first truly global campaign I have ever seen where grassroots groups using the Internet reached out to each other. I remember one parliamentarian saying to me at the time, “I can't imagine that any Canadian citizen is really worried about something called the multilateral agreement on investment”. He came back to me a few days later, after he had been on an MPs' study tour and said that while he was paying for gas at a station in Corner Brook, Newfoundland, he saw on a clipboard a petition to stop the MAI. It contained several pages of signatures.

Why do Canadians at the grassroots and people globally not want more investor-state provisions? I should say that once it failed at the OECD, largely thanks to France, but other countries ran to catch up, once it failed there, they abandoned it. By they I am referring to the corporate entities that are pursuing the notion that corporations should have powers superior to those of elected legislatures. The essence of an investor-state provision is that multilateral corporations should be able to trump decisions made by democratically elected parliaments and legislatures around the world and they should be able to sue a country if that country passes legislation that a corporation does not like. That is the essence of it. It is not in any traditional way an expropriation.

They have taken it from global to doing it BIT by BIT, literally the acronym BIT, bilateral investment treaty, such as this one. They are collecting up by BITs to replace what they could not do directly, a global agreement that allows corporations to sue governments when governments take action, even when that action is not in any way designed to inhibit trade. It is as such when Canada banned a toxic gasoline additive, or when Canada took steps to ban the export of PCB contaminated waste pursuant to the Basel convention I mentioned earlier, or in the very sad and tragic case of Metalclad, a U.S. corporation. Metalclad wanted to put a toxic waste site next to a little community in Mexico called San Luis Potosi. The people of San Luis Potosi said no, that it was too close to their water source and they would not let that giant U.S. corporation, Metalclad, put its toxic waste disposal facility there. Under chapter 11 of NAFTA, Metalclad sued the federal state of Mexico.

This agreement means that any corporation with a mailbox in Panama can claim to be an investor and sue Canada at the municipal, provincial or federal levels for any decision it does not like, that it feels impedes its expectation of profits.

In the case of poor little San Luis Potosi, Mexico ended up owing Metalclad just under $17 million.

I fear that my time to speak to this agreement may be coming to a close. I want to conclude by saying firmly and clearly that we must learn from what has gone wrong with chapter 11 of NAFTA and stop including investor-state provisions as an automatic, unthinking addition to every single trade agreement we negotiate.

[The Deputy Speaker, Denise Savoie]

The hon. member for Okanagan—Shuswap.