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

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

Mr. Speaker, I want to thank my hon. friend from Dartmouth—Cole Harbour for his speech related to comments on investor-state provisions.

I wonder if the member wants to share any reflections on the irony that our Prime Minister is currently in India, where the Indian Parliament has refused to ratify the investor-state agreement with Canada because of the very concerns that members of the opposition benches in this House have. India is apparently allowing their parliamentarians to vote; whereas in Canada we are not to see Parliament have a chance to speak to this issue before ratification. I am speaking of the Canada-China investment treaty.

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

Mr. Speaker, my colleague raised this issue earlier about the concerns around the investor-state provision, which I followed up on in my intervention.

The irony of the way the government deals with issues like foreign investment is truly incredible. We expect the government to get an agreement on tax information exchange transparency when it will not even be transparent on an important deal with China that is going to lock us in for 31 years.

As has been suggested in the question that was just asked, India has refused to sign on to the investor-state provision with Canada without having this matter come before their Parliament. I bet Canadians who are listening to this debate, and I am sure there are five or six, as well as the ones who will be reviewing Hansard later, will also recognize the huge irony in the position of the government.

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

Mr. Speaker, I thank my esteemed colleague for his speech.

There is one thing that strikes me about free trade agreements. I find that, on our continent, Canada lacks vision and its agreements are not very ambitious. They focus solely on trade and the benefits to certain major companies. That is all.

There does not seem to be a regional vision for integrating the other countries. We would all do better if certain basic conditions were met.

I would like my colleague to talk a bit more about that.

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

Mr. Speaker, I very much appreciate that question. That is what I was talking about in terms of establishing principles. It is about promoting multilateral trade with principles whereby our country and the people of our country and the country we want to do business with are all lifted higher, and we make sure that their rights and our rights are equally protected.

The House resumed from November 6 consideration of the motion that Bill C-24, 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 third time and passed.

[Rob Merrifield, Conservative, Yellowhead, AB]

Mr. Speaker, it is a privilege for me to share my comments on a bill that should have been passed two and a half years ago. We are in the eleventh hour of debate on this bill, which is certainly not being rammed through. It should have been passed long ago.

We are a trading nation, as most members of the House and Canadians know. It is something to see the magnitude of trade that we do in Canada as we look at what has happened over our history. Eighty-five per cent of our trade has been with our southern neighbour, the United States.

Here I want to take the opportunity to congratulate President Obama for his win last evening and the people of Michigan for their decision to allow the new bridge to be built between Windsor and Detroit. The existing bridge is the largest trading bridge anywhere in the world. At times there is $2 billion a day in trade going across that bridge, so it is very important that a new bridge be built.

As I said, about 85% of our international trade has been with the United States, whereas last year it was about 73%. We are becoming less dependent on the United States and more dependent on other markets, such as the one we are debating under this piece of legislation, Panama's.

It is impressive to see the number of jobs created because of our international trade. One in every five Canadian jobs is generated through exports and 63% of our country's annual GDP is created because of international trade. Therefore, it is very important that we get this piece of legislation through. Panama is the hub of the Americas and a very important logistical platform for us to trade with in Central America.

This is a continuation of an agenda that our government has had since coming into office. We have signed nine different free trade agreements, including with countries such as Colombia, Jordan, Peru and Honduras; and with the European Free Trade Association, including Iceland, Liechtenstein, Norway and Switzerland. This is long overdue. We are very aggressively pursuing other countries with regard to free trade agreements, seen in the Canada-European Union free trade agreement, for example. We look forward to the final text perhaps being out before year end.

I was with the trade committee in Japan last week and was very encouraged by what we heard regarding a bilateral trade agreement with Japan, the world's third largest economy.

When we add all of these up and see exactly what we are doing, the possibilities of moving forward on our trade agenda are very encouraging.

Just to look at what we have done with NAFTA and the United States, since NAFTA was signed some 18 or so years ago, that agreement has created about 40 million jobs. The GDP of the three countries was a little over $7 trillion at the time of signing and is now over $17 trillion now. Between the three countries, we are now trading almost $1 trillion a year. It is very significant.

Canadians realize the importance of a trade agenda. What I cannot understand is where the opposition is at with regard to our trade agenda. Even today, opposition members say that they do not like and would get rid of the NAFTA agreement. They say they would never support it and never have supported it. It does not matter what kind of logic we use or what kind of math we put in front of them to show them the benefits of it, they disagree with it. This is something that I absolutely do not understand.

The opposition members have disagreed with all of the nine free trade agreements our government has signed, except maybe the one with Jordan, which they could not come to a decision on. They had to sit on their hands because they did not want to show that they were somewhat supportive of that agreement. When we look at the Canada-Panama free trade agreement, I would suggest that it is much more beneficial even than the agreement with Jordan. Yet the opposition filibusters and accuses the government of trying to ram it through.

There has been a lot of debate on the Canada-Panama free trade agreement, and it is amazing what is in that piece of legislation and what it will do for our agriculture sector. Agriculture is near and dear to my heart, as we farm about 3,000 acres of canola and wheat. It is important for us to understand the size of agriculture in Canada. The agrifood sector actually generates 8% of our GDP. It creates one in eight jobs in this country. That is 2.2 million jobs in Canada created because of agriculture. There is some $41 billion created because of trade in our agricultural products in international markets. Almost half of our total agricultural production in this country goes to international trade. Indeed, we are sixth largest exporter of agricultural products in the world.

It is very important that we make sure that we capture as many possible markets as we can for our agricultural products. Panama is the second largest market for agricultural products in Central America. This piece of legislation would allow agriculture not only to be enhanced but also for it to be done in a tariff-free way. How many tariffs are there? On the signing and implementation of this piece of legislation, 78% of Canadian agricultural exports to Panama would be tariff-free .

What are those products? The 20% tariff on frozen french fries, which help Prince Edward Island and Atlantic Canadians, would be eliminated. How about the pulse crops of the Prairies? There is a 15% tariff on those that would be eliminated immediately upon signing of this agreement. How about malt exporters, the barley growers of this country? The 10% tariff applying to them would be eliminated upon signing of this agreement.

By the way, the opposition disagrees with our getting rid of these tariffs and has fought this for two and a half years in the House. That is absolutely ridiculous when we see the benefits to these areas.

How about our beef sector, which has been plagued by the BSE crisis and all kinds of problems, including its exports to different countries around the world being shut down as a result? The producers have gone through a very difficult time. The tariff they face in the Panamanian region is 25% to 30%. That would be eliminated.

I was in Japan last week with the trade committee, where we were excited about the opening up of the export of our beef, from beef aged 21 months to beef aged 30 months now. However, Japan is another market that has been hurt because of the delays by the opposition with regard to this piece of legislation.

The tariff that really bothers me the most is the 60% to 70% tariff on our hog industry. It is amazing to see that kind of tariff placed on our hogs. That so important to us because our largest competitor in that market is the United States, which signed a free trade agreement with Panama on October 31. If we do not get our free trade agreement with Panama through the House, we will lose our competitive edge and never get it back. It is absolutely critical that we make sure that we stop playing around in the House and start doing what is right for Canadians. The opposition should get onboard.

There has been two and half years of filibustering in the House, two and a half years of wasted time and opportunity for us to be able to capitalize on the great infrastructure of the Panama Canal, as well as the opportunities for our agriculture sector and many others. The opposition says we are fast-tracking this by bringing in time allocation. I understand the NDP, because that is just their ideological bent and where they are at. They are what they are. However, two days ago we had the Liberals opposing our closure motion on this legislation. I find that really hard to understand.

Not only has the United States signed an agreement with Panama, but the European Union is also expected to sign an agreement, perhaps by the end of this year. Then we will lose a competitive edge with Europe as well.

It is absolutely amazing when we see what the opposition is doing with regard to this piece of legislation and the free trade agreements we have reached with nine different countries around the world and have been promoting. I just do not understand it.

I will quote the member for Dartmouth—Cole Harbour, who was the vice-chair of the trade committee at one time. He said that when it comes to trade agreements, they are “job-destroying”. I do not understand where he gets that math. How can he possibly get there?

There is only one thing that we heard with regard to trade in the NDP's platform and that was a $21 billion cap and trade carbon tax. That is what the opposition is promoting, instead of the positive trade we will experience when we pass this piece of legislation. I encourage the House to get on with this. The next two hours cannot go fast enough.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, it was quite a treat to listen to the combination of myths, fantasy and distortion from my hon. colleague opposite.

I would like a factual answer to a serious question. The hon. member sits on the trade committee with me and he heard the evidence we heard, that Panama is one of the top two tax havens in the world, that it launders an incredible amount of drug money, and that it would be prudent to have a tax information exchange agreement in place so we would have transparency to assure Canadians that laundered money and tax-protected money is not making its way into this country. We heard that the U.S. Congress insisted that an exchange agreement be in place before it signed a free trade agreement, and I put a motion before the committee to ask the committee to ensure such an agreement is in place before we give preferential trade status to Panama.

Can my hon. friend opposite answer why he voted against ensuring we have a tax information exchange agreement with Panama in place before we sign a trade agreement, as our colleagues in the United States insisted on so prudently?

[Rob Merrifield, Conservative, Yellowhead, AB]

We have heard for two and a half years that the reason the New Democrats are saying no to this is because of a tax haven in Panama. It was on a grey list, and it has moved from a grey list to a white list. My hon. colleague knows this. We heard it in testimony at the committee. He heard from the finance department that this is working and that there is a change with Panama. Panama has come a long way.

We could take two approaches. One approach is as we did with Jordan, where we sign an agreement to try to improve the labour situation and some of the corruption we potentially see in some of these countries. Or, we could just step aside and wait until they have their house completely in order. Our approach is to go in, engage and be able to bring them into a place that is much more positive. That is exactly where Panama is. It has gone from a grey list to a white list, and it is improving.

The hon. colleague knows full well that this is going to be worked out in this legislation, and that is the fact. The hon. colleague, if he were absolutely true to himself and to this House, would admit it.

[Chris Alexander, Conservative, Parliamentary Secretary to the Minister of National Defence]

Mr. Speaker, I thank my hon. colleague for bringing the merits of this agreement so clearly to the attention of this House. Panama is both a valued partner of Canada, in and of itself, and also a hub for international trade. We on this side look forward to voting in favour of this agreement.

However, the member mentions the opposition's position on this trade deal, as on so many others. What would the opposition's anti-trade agenda mean for Canada if any government were foolish enough to implement even some of these aspects? It is against trade agreements with the nine countries with which we have negotiated, and with the scores of countries we would like to negotiate with. The opposition would instead like a $21 billion carbon tax.

The Leader of the Opposition, while mentioning the IMF today in favourable terms, does not agree with what the IMF is calling for, which is fiscal consolidation. Deficit reduction is what our government is doing, and the NDP does not want to do it. Does the member—

[The Acting Speaker, Bruce Stanton]

Order, please.

The hon. member for Yellowhead.

[Rob Merrifield, Conservative, Yellowhead, AB]

Mr. Speaker, not only would their carbon tax be an absolute blowout, estimated at $21 billion, but with their anti-trade thing, now we are getting into serious money. If we got rid of NAFTA and all trade agreements, not only would it be an unbelievable black eye and message to the international community that our agricultural products are not the best in the world, which they are—the safest in the world and coveted by most of the world, along with our energy supply and on and on—but the amount of dollars that would be compromised would actually cripple this country. Canadians are too smart to buy this nonsense.

The opposition members are driven by ideology, based mainly on unions that are a little out of touch and self-serving. This is absolutely ridiculous. We cannot build the nation under that ideology. It is unfortunate that we have an opposition that is driven by ideology rather than actual facts and the reality that we are a trading nation and we have great optimistic opportunities as we move forward. We need to enhance and accelerate trade, not hamper it.

[Annick Papillon, NDP, Québec, QC]

Mr. Speaker, as a member of the Standing Committee on International Trade, I am very pleased to speak to Bill C-24, the Canada–Panama Economic Growth and Prosperity Act.

Bill C-24 follows up on a trade agreement that we signed with Panama on August 11, 2009. This free trade agreement poses some problems in a number of areas, including with regard to workers' rights and environmental protection standards. Today, however, I will focus on the issue of tax evasion and money laundering, which is very troubling.

When Todd Tucker of Public Citizen's Global Trade Watch testified before the Standing Committee on International Trade on November 17, 2010, he said:

Panama is one of the world's worst tax havens. It is home to an estimated 400,000 corporations, including offshore corporations and multinational subsidiaries. This is almost four times the number of corporations registered in Canada. So Panama is not just any developing country.

For decades, the Panamanian government has been deliberately pursuing a tax haven strategy. It offers foreign banks and firms a special offshore licence to conduct business there. Not only are these businesses not taxed, but they are subject to few regulations. According to the OECD, the Panamanian government does not have the legal capacity to verify key tax information about these businesses. Panama's shadowy financial practices also make it a very attractive place to launder money that comes from all over the world.

The Canada-Panama trade agreement could even exacerbate the problem posed by Panama's status as a tax haven. As the OECD pointed out, signing a trade agreement without first tackling Panama's shadowy financial practices may lead to greater tax evasion. There are no restrictions on capital entering or exiting Panama. Transactions are protected by banking secrecy, and financial activity is not monitored.

In March 2012, Canada and Panama entered into negotiations for a tax information exchange agreement. However, this agreement has not yet been concluded or signed. This is very troubling, considering the large amount of money laundering in Panama, including money from drug trafficking.

Furthermore, the issue of disclosing taxes has not been adequately addressed, even though the Panamanian government and the Conservative government claim that it has. Without a real political will, these agreements generally do nothing to eliminate legal tax evasion and do little to discourage individuals from illegally evading taxes. In general, tax information exchange agreements do not contain provisions on the automatic exchange of information. Individual requests must be made.

Members should listen carefully to what I am about to say, because it is the key part of my speech. The U.S. Congress refused to ratify a free trade agreement with Panama before it signed a tax information exchange agreement. According to tax evasion experts, the agreement with Panama enables it to sidestep the transparency provisions if they are contrary to Panamanian public policy.

As the opposition, we have made suggestions in the past to improve this agreement. During the clause-by-clause review, we proposed several amendments that would have made notable changes to the bill. These included the addition of crucial concepts of sustainable development and investment and, most importantly, we proposed a requirement for taxation transparency.

Before the clause-by-clause review of Bill C-24, the NDP moved a motion in the Standing Committee on International Trade to postpone the implementation of the Canada-Panama trade agreement until Panama agreed to sign an information exchange agreement. This motion was voted down by the Conservatives and the Liberals. That shows where those two dinosaur parties stand on proper, responsible tax policy.

Considering Panama's history and reputation in such matters, it is easy to see why such an agreement is necessary before we sign a trade deal. The U.S. Congress did not want to ratify the American free trade agreement with Panama until a tax information exchange agreement was signed. It is important to remember this because it is the crux of the matter. It is for this reason that the NDP has serious concerns, which I believe are shared by all Canadians.

Contrary to what the Conservatives would have Canadians believe, the NDP supports trade. We are in favour of developing Canadian exports by reducing trade barriers. We are in favour of developing an industry that exports value-added products. We are in favour of creating jobs in Canada by expanding access for Canadian products to foreign markets. We are in favour of increasing productivity by encouraging new investment. And, we are in favour of diversifying our exports.

The NDP has a trade strategy. We want to help Canadian businesses to be leaders in the global economy. We are going to improve the protection of human rights and the environment, and we will defend public resources and services that are essential to Canadians.

Finally, we are going to help lower Canada's trade deficit since, under the Conservative government, Canada has gone from having a trade surplus of $26 billion to having a trade deficit of $50 billion. Yes, I said “$50 billion”. It is shameful.

Since the Conservatives took office, the manufacturing trade deficit has increased sixfold to $90 billion. We are exporting $30 billion more in raw materials but $35 billion less in value-added products.

The Conservatives' track record shows that their trade approach is not working. That is understandable, because they are very bad managers. They are not going to become good managers by repeating the words “growth” and “economy”. Not at all. We know that, and so do Canadians.

The Conservatives are negotiating trade deals using an extreme, ideological strategy instead of making the interests of Canadians their priority. The Conservative government is completely dysfunctional and so is its trade strategy.

The NDP prefers a multilateral approach based on a sustainable trade model. In fact, bilateral trade deals are really just protectionist trade deals, since they give preferential treatment to a few partners and exclude the rest. This puts weaker countries in a position of inferiority vis-à-vis the larger partners. A sustainable multilateral trade model would avoid these issues while protecting human rights and the environment.

If the Conservative members have been listening to what I have tried to explain here, they will have understood that we do not oppose this agreement and that we want to give it a chance. All we are asking for is greater transparency. We do not want to be associated with tax evasion, and we especially do not want Canadian businesses to be associated with that, either.

I care about this country's businesses and their reputation. That is the difference between us and the Conservative government, which claims to be a good manager, to take care of Canadian interests and to be competent when it comes to the economy. This government is about to sign yet another free trade agreement—it is on quite a roll with these agreements—but it is not thinking carefully about its trade partners.

I am more than happy to do business, but not under just any conditions and to the detriment of Canadian businesses.

We in the NDP have ethics, and it would be nice if the government followed our lead.

What I wanted to say here today regarding the free trade agreement between Canada and Panama is simply that we support trade, but we believe that it must be carried out in a responsible and more serious manner for Canadians.

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

Mr. Speaker, I have sat in the House now for the last two days and I have heard many NDP members get up and say they are in favour of trade. I have heard it dozens of times.

[An hon. member]

They vote against every deal.

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

Mr. Speaker, all I would ask is that they follow their applause with some concrete evidence and list the number of trade agreements they have voted for over the last 20 years in the House.