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

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

Madam Speaker, I appreciate the comments from my colleague.

One of the issues I have is that history has proven that as countries become more prosperous, average family income goes up, life expectancy goes up, as does the amount of freedom in a country. If my colleague went online to a YouTube video called “200 Countries, 200 Years”, she would find those facts recorded there.

Why would the member be against a free trade agreement with Panama that is going to increase not only those people's place in life as far their family income is concerned, but also their life expectancy and freedoms in their country? Would the member not support the agreement just on those grounds?

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

Madam Speaker, I tried to be very specific in my response to this proposed treaty, specifically the investor-state provisions.

It is true that when a country is not prevented from selling its goods by tariff barriers, there is a trend toward improved incomes. I will not deny that for one minute, but the member should to ask the people of San Luis Potosi whether they feel that the NAFTA agreement advantaged them.

There are consequences to these trade deals that we should now be able to examine forensically. We should now be able to ask where our good intentions went wrong and how can we improve on the model. Trade agreements in other regions have not included investor-state provisions, and I mentioned the European Union as one example, and the trade bloc in Latin America is another. Investor-state provisions are not a necessary ingredient to improving one's trade relationships. In fact, they are a poison pill.

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

Madam Speaker, as is often the case, the hon. member for Saanich—Gulf Islands has done her homework exhaustively and remembers most of it without a note. She has provided us with quite the shopping list of incredible reasons why this is flawed legislation and a bad idea.

My question for the hon. member is whether or not she believes this bill is hopeless given the huge list of flaws she has identified. Is there some hope that with amendments she could actually be in favour of this bill? If so, what are the key elements that would cause her to consider changing her mind?

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

Madam Speaker, I do not think any piece of legislation before this House is hopeless. With sufficient amendments, even the worst bill can be remedied. Sometimes that may mean deleting most of it and starting over.

However, in this case, I think there are some very specific areas. As I mentioned, if we included the United Nations Framework Convention on Climate Change in chapter 1 of the trade deal at annex 1.06, it would certainly improve the bill.

I would strip out all of chapter 9. I do not think there is anything that could be saved in chapter 9. The whole notion of investor-state provisions is unworkable.

For the rest of it, if we were to replace chapter 9, we could replace it with firm commitments from Panama to provide full banking information so that its banks could no longer function as tax havens, and further firm commitments to work with Canada and other countries to eliminate its narcotics traffic.

There are other elements to protect labour and environmental rights that could be inserted, but I imagine my time to answer this question has expired.

[The Deputy Speaker, Denise Savoie]

The hon. member for Brossard—La Prairie for a very quick question.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Madam Speaker, I thank my colleague for her presentation.

With respect to this bill, does my colleague have any recommendations concerning the environment?

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

Madam Speaker, I thank the hon. member for Brossard—La Prairie for the question.

A completely different approach is needed. The European Union has regulations that compel member countries to use the highest standards to protect the environment in their trade transactions.

If we did the same thing here, we would say that Panama must improve its environmental standards to be at least equal to Canada's, and that Canada will provide trade assistance to make sure it is able to do that.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Madam Speaker, I am pleased to rise here today to speak to Bill C-24 to implement the free trade agreement between Canada and the Republic of Panama—and there is something else after that title.

At present, we have time to discuss and debate. I would like to point out that the NDP supports free trade agreements. We agree that Canada must trade with other countries. We realize that the Canadian economy relies on trade. So we have no problem with that. However, in this case, we believe that the government is not showing any leadership. Yes, it negotiated this agreement with another country, but why did it take such a narrow-minded approach? Why not look at more countries, in order to really establish better criteria?

I am not sure if any of my Conservative colleagues have read it, but I highly recommend the book Fair Trade for All by Joseph Stiglitz, a Nobel Prize winner in economics. The book looks at sustainable development—which we are trying to promote—and global fair trade. It also talks about strengthening ties in order to fight poverty and the problems of inequity. I would like to give my colleagues across the floor a little wake-up call: Canada and many other countries have a huge problem with inequity.

According to the OECD and the Conference Board, there is a huge and ever-increasing gap between the rich and the poor. And it is growing faster in Canada than it is in the United States. The OECD can prove it. So we have some problems in that regard.

I would now like to discuss more specifically this bill dealing with the free trade agreement with Panama, which poses two problems. First of all, Panama is a known tax haven. That presents a problem when it comes to doing business and negotiating with a country. Certain clauses must be taken into account, especially regarding tax evasion. The Quebec branch of the Association for the Taxation of Financial Transactions and for Citizens' Action recently prepared a submission on Panama and concluded that such an agreement would be tantamount to legitimizing a tax haven.

I invite my colleagues to read a December 2010 article from Le Devoir that says that “Panama is a tax haven, and not just any tax haven: it is one of the most active, one of the least co-operative and of the most integrated with organized crime”. Those comments were made by people from the outside. If we are going to conclude an agreement with Panama, then there needs to be more leadership with regard to tax evasion.

As the national revenue critic for the official opposition, I find that the government has not done enough. We will see in today's budget, which we are anxiously awaiting. A motion was moved at the Standing Committee on Finance to continue the work done in the previous parliamentary session, but, unfortunately, the motion has been set aside. I hope that the members opposite will accept the motion, which will be debated on Tuesday. The motion proposes that we use all necessary means to address tax evasion and tax havens. I think that my colleagues can agree on that. We are talking about revenue that Canada is losing through fraudulent means. I cannot see why we would not address these problems. I should mention that the Liberals did not do much about this either.

To come back to the agreement, one of the major problems is that Panama has refused to sign a tax information exchange agreement. That is very disturbing considering that Panama is known for its money laundering activities, including money from drug trafficking.

When the committee considered the bill during the 40th Parliament, Todd Tucker, from Public Citizen's Global Trade Watch, provided a very interesting testimony.

He made a compelling case that Panama is one of the world's worst tax havens and that the Panamanian government has deliberately allowed the country to become a tax haven.

In his statement, 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 pursued an intentional tax haven strategy. It offers foreign banks and firms a special offshore licence to conduct business there. Not only are these businesses not taxed, but they're subject to little to no reporting requirements or regulations.

We believe that signing a free trade agreement that does not include a tax information exchange agreement with a country known for its lack of transparency and for being a tax haven is tantamount to promoting tax evasion. The government has to do something about that problem.

Proposals were made in committee. My colleague from Burnaby—New Westminster, the finance critic for the official opposition, worked very hard and proposed amendments that would have made it possible to support this bill. And then there are the component on workers' rights and the problems from an environmental standpoint, which I will come back to if I have time.

My colleague from Burnaby—New Westminster had proposed delaying the application or even the implementation of this agreement until Canada and Panama signed an agreement for the exchange of taxation information. Unfortunately, the Conservatives and Liberals defeated the motion, since both parties claimed to be satisfied with the double taxation component.

As we know, this does not address the issue of transparency or the fact that Panama is still considered a tax haven, nor does it fix the problem of information exchange.

I do not understand why the Conservatives and Liberals do not want to deal with tax havens and go after these funds.

Canadians are currently being asked to tighten their belts. The government is going to table an austerity budget. Yet, it is possible to generate revenue without necessarily cutting spending and jobs. It is possible to generate revenue from criminals—let us call a spade a spade—who exploit tax havens. Some do so legally, others illegally. Why not deal with that?

I was very disappointed that the Standing Committee on Finance refused to conduct this study. I hope that next time, on Tuesday, in the Standing Committee on Finance, the government will agree to undertake a more in-depth study of this.

Moreover, today and tomorrow, there is a conference on tax havens. I would invite my colleagues opposite to attend it.

This issue is very important. It is pathetic that such an incredible amount of money is being lost.

The Canada Revenue Agency has been called upon to address this issue, as has the Minister of National Revenue. We hope that certain problems will be addressed, otherwise we will be faced with a fiscal crisis, especially given the government's decision to cut corporate taxes and allow tax havens to exist unchecked. There are a lot of problems. We are realizing this, and are losing money. Unfortunately, the government is not doing anything about it.

Then there are workers' rights, another very important subject: when free trade agreements are unfair, workers—and, therefore, the public—lose money. It is a violation of their rights, including the right to bargain. It is an attack on the rights of the middle class, which supports the economy and the whole country. It only increases the gap between the rich and the poor.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, I would like to thank my colleague for his speech, which was very interesting, particularly his explanation of the flaws in this free trade bill.

He mentioned a writer, Joseph Stiglitz, who said that we can sign free trade agreements that are fairer and more just.

I would like him to elaborate a little on the recommendations made that well-known writer's book.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Speaker, I would like to thank my colleague for her question.

The author is indeed Joseph Stiglitz, a Nobel Prize winner in economics who wrote a book specifically about how to ensure that trade is fairer and more just.

His analysis was based on the agreements that have been signed. One of the things that has to be considered is fighting poverty. The time to do that is during negotiations, and that is where we are at present.

Earlier, we heard the Liberals saying it was better to sign right away and fix the problem later. I think that would mean missing a good opportunity. When you are negotiating, you really have to think about sustainable development, the environment, and some kind of balance when it comes to social justice. That can be done. We are living in a period of globalization and trade is on the rise. Canada is part of that world, and so trade is important. In negotiations, we must consider not only the interests of the multinationals, as is the problem now, but also sustainable development and making everything fairer.

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

Mr. Speaker, it is good to have another Speaker here because I can start reading from the agreement. The last Speaker was a little disturbed that I was maybe reading a little too much.

I have read Joseph Stiglitz, and he does promote some interesting ideas.

The bill we are discussing today would implement the free trade agreement, an agreement that is rather lengthy and has quite a number of things set out in it that we would work on together. I refer him to article 20.06 which talks about co-operation to promote increased transparency. Under that, it has a number of definitions and anti-corruption measures.

Could he tell me if he has read those and why does he oppose them?

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Speaker, I would like to thank my colleague for her questions.

Yes, I have read them and I am aware of them. These amendments clearly propose that we sign a genuine free trade agreement. We are now talking about co-operation. We want action; we want something concrete. Unfortunately, the problem is that the government still has a very narrow vision.

Has an agreement to exchange tax information been signed? No. That is what we are saying.

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

Mr. Speaker, the question I would like to ask my colleague from Brossard—La Prairie relates to the process associated with trade agreements and free trade agreements.

All negotiations with other countries are over before the bills get here. The Prime Minister is making announcements about a free trade agreement with China, and another one with Japan.

What does he think the role of members is when free trade agreements are signed before they can be debated here?

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Speaker, I would like to thank the leader of the Green Party for her question.

I agree with her that this government is not entirely transparent and often presents us with a fait accompli. We see this in virtually every regard.

When we want to debate, it gags us, and when we want to talk about something as fundamental as a free trade agreement, it presents us with a fait accompli. And when we propose amendments, it rejects them. There has been no real public debate about this. None of the groups that work to protect the environment or to protect workers’ rights have been heard.

The real role of the government and the House is to discuss and debate all the issues from various angles. Unfortunately, this government is very much lacking in transparency.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Mr. Speaker, I am pleased to rise today on Bill C–24, a bill to implement the free trade agreement between Canada and the Republic of Panama, signed in May 2010, and the related agreements on labour co-operation and the environment.

I remind members that the predecessor to this bill, Bill C–46, died on the order paper when the 40th Parliament was dissolved, because the Conservative minority government was unable to get the bill passed by a parliamentary majority. Today, emboldened by its parliamentary majority, the government is trying to foist this bill on Canadians despite the fact that 60% of Canadians voted against this government.

Allow me to briefly remind members why this agreement is at the root of so much controversy.

To begin with, there is the issue of tax evasion. Panama is known as a tax haven because it offers taxation advantages to non-resident investors. It provides foreign banks and companies with extraterritorial licenses that allow them to conduct business in Panama. Not only are these companies not taxed, they are subject to very few, if any, obligations.

The local authority's soft line on taxation, banking and legal matters has enabled this country of three million inhabitants to become the financial centre of Central America, with the second largest naval fleet in the world due to ships flying flags of convenience. Shipowners choose this flag because of how unrestrictive it is in terms of taxation, safety and crew labour rights.

As everybody knows, the Republic of Panama has refused to sign a tax information exchange agreement with Canada. That is very worrying given the high volume of money laundering activities in Panama, especially money from drug trafficking. There is no fiscal transparency in Panama, which in the past has led to the OECD and G20 labelling Panama a tax haven.

In the opinion of Alain Deneault and Claude Vaillancourt, from Attac-Québec—a group that combats tax havens and fights in favour of taxing financial transactions—Panama is certainly one of the tax havens that is the most active, the least co-operative, and the most closely tied to organized crime. I quote:

Panama's bad reputation is certainly well-deserved. This country's main economic activity is to provide financial services to drug traffickers and multinationals.

Moreover, Patrice Meysonnier of France's judicial police has no hesitation calling Panama a narco-state that is responsible for laundering a large share of the planet's dirty money.

Closer to home, we know that certain Hells Angels leaders in Quebec, who have been on a wanted list since the beginning of Opération SharQc, have taken refuge in Panama. They moved to Panama because they have been able to launder large sums of money there and they hope that the local authorities will not unduly harass them.

On one hand, I find it particularly ironic that this government, which calls itself tough on crime, would enter into a free trade agreement with a country that has become a shelter for criminals and their money without at least first obtaining a fiscal and banking co-operation agreement.

On the other hand, while this government prepares to table an austerity budget this afternoon, and is calling on Canadian families to tighten their belts, how can the government facilitate the erosion of the Canadian tax base by signing such an accommodating treaty?

While members of the G20 have stressed the importance of dealing with the problems caused by tax havens, once again the Conservative government is reneging on its word and doing the exact opposite by opening up a new front to facilitate tax leakage. Honestly, what a farce.

Another problem with this bill is that the Canada–Panama trade agreement has no mechanism to protect the rights of workers that have so often been flouted in the past. Allow me to provide a couple of examples from last year, 2011.

Thirty-three employees of Panama Gaming & Services were laid off for trying to start a union. The Panamanian government did nothing to help them. These layoffs constitute a blatant violation of workers' rights and, more specifically, a violation of the International Labour Organization's Convention 87, which pertains to freedom of association and the protection of the right to organize, a convention that Panama has ratified.

Here is another example.

On July 8, 2011, security forces used violence to end a union demonstration, leaving at least six dead and 700 injured. Several hundred people were also arrested. The freedom to demonstrate was clearly violated.

The government regularly uses intimidation tactics on union leaders. For example, in the summer of 2011, the under secretary general of a large construction union was arbitrarily arrested and detained for a week. And that is not to mention all the anti-union laws passed by the country's current government.

It is important to remember that the right to strike is prohibited in the Canal Zone and that the government recently passed legislation to undermine the rights and freedoms of public servants. In the public sector, the minimum number of workers required to form a union was increased to 50 in order to make it more difficult to do so.

By signing a free trade agreement with Panama without requiring the country to take concrete action to protect the right of association and the right to strike, Canada is condoning the Panamanian government's actions.

I suppose that we cannot expect any better from this Conservative government, which, even here at home, has taken action that violates workers' rights. We need only think about the special bill that the government recently passed to suspend the right to strike of 3,000 pilots and 8,600 mechanics, baggage handlers and cargo agents who work for Air Canada. Bill C-33 was a fundamental attack on the right to freely negotiate a collective agreement.

One of the most worrisome aspects of the agreement is found in the chapter on investment. In fact, chapter 9 is modelled on chapter 11 of NAFTA, which allows a corporation to sue a government for creating barriers to trade by implementing a regulation.

According to Todd Tucker of Public Citizen, who appeared before the Standing Committee on International Trade on November 17, 2010.

....hundreds of thousands of U.S., Chinese, Cayman, and even Canadian corporations that can attack Canadian regulations by using aggressive nationality planning through their Panamanian subsidiaries.

I am very concerned that major foreign multinationals will be able to have trade tribunals challenge and perhaps even invalidate a decision made by a democratically elected government or parliament in order to protect public health or the environment, for example.

In the previous Parliament, the NDP presented a series of amendments in an attempt to address these shortcomings. Our colleague for Burnaby—New Westminster suggested adding provisions on sustainable investment, a requirement for fiscal transparency and provisions to incorporate workers' rights, especially the right to collective bargaining, into the bill. All these amendments were voted down by the Conservatives, with the support of the Liberals. This time we hope that the government will look more favourably on our amendments. I would like to recognize the work of my colleague from Burnaby—New Westminster in this matter.

Unlike the Conservative government, which has its sights set only on trade and profits, the NDP is proposing a trade policy that is fair and based on social justice and sustainable development. We want everyone, and not just big corporations, to benefit from economic development.

We believe that Canada's trade policy should be based on the principles of fair, sustainable and equitable trade, trade that builds partnerships with other countries that support the principles of social justice and human rights without ignoring the need to develop trade opportunities.

I know that I have just one minute remaining and I will close by speaking of the five pillars of the NDP's fair trade strategy.

First, we are proposing that an impact analysis of all international trade agreements be carried out in order to determine whether or not trade agreements negotiated by Canada benefit Canadian families, workers and industries.

Second, we are proposing that there be a guarantee that trade agreements negotiated by Canada strengthen Canada's sovereignty and its freedom to establish its own policy.

Third is the fundamental principle that all trade agreements must protect and promote human rights, which Canadians deem essential.

All trade agreements should also respect sustainable development and the integrity of all ecosystems. Last, any time the Government of Canada signs a free trade agreement, the decision to proceed with enabling legislation must be voted on in the House of Commons.

I will take questions now.