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

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I thank the hon. member for Vancouver East for laying out some of the NDP's sincere and legitimate concerns about this bill and the points we have been trying to make. We have been urging the government to take into consideration and accommodate some of the reasonable concerns we have had about this.

I would like to focus on one comment my colleague made. Essentially the hon. member for Vancouver East was making the point that a free trade agreement with Canada is not a right; it is more a privilege.

In fact, if one wants to become a member of the community of free trading nations, one should be agreeing to a set of standards and rules that in fact stipulate that the standards of wages and living conditions in one's home country be elevated, complementing those high standards of wages and living conditions in the trading partner, in this case Canada. In other words, we should be raising up the conditions of these countries to our level and not allowing our standards to be pulled down to their level. It seems like a very straightforward notion, to my mind.

Is that in fact the basis of her objections to this agreement as it stands?

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I would like to thank the hon. member for Winnipeg Centre for his very thoughtful comments.

Where is the freedom in this whole notion of free trade? Really, it is the freedom to move capital wherever one wants, without any rules and restrictions, in disregard for labour standards, jobs, human rights, the environment and social questions.

I think the hon. member is entirely correct when he says that the fundamental principles should be about upholding those rights as we know them in Canada. However, let us remember that those rights are also based on international standards as laid out by the International Labour Organization, such as the right to collective bargaining, the right to speech, the right to strike. There are a number of conventions that, regrettably, even Canada is not a signatory to. However, there are conventions that lay out these very important foundational principles.

I entirely agree that trade agreements have to be negotiated within the context of those and not in isolation and removed from them.

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

Mr. Speaker, I would like to ask my colleague what she thinks about the government's vision regarding free trade agreements.

Do we find, in these agreements, the sincere ambition of a government to contribute to enhancing the quality of life of our economic partners? Do we find, in these agreements, Canada's undertaking to support these countries to improve social conditions, while honouring individual and collective rights, labour standards, and environmental and other standards?

In other words, is the government trying to capitalize on the weaknesses of certain countries in these areas?

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, one of the objections we have had is that this particular agreement is seeking to continue what we call the NAFTA model. Of course, NAFTA was the first big agreement that happened.

There was the failure of the free trade area of the Americas agreement, the FTAA. I know many of us were in Quebec City a number of years ago, protesting against that. It was shot down. Since its failure, now we see the Canadian government seeking to have bilateral agreements, but these are still based on the NAFTA model.

Therefore, I entirely agree with the hon. member's correct assessment of that model. It is a very narrow corporate model based on the flow of capital. It does not take into consideration labour rights, social rights, human rights, the environment and other social questions. That is why it must be rejected.

We are always told that we are against trade. Who could be against trade? We are not against trade; we are in favour of fair trade that is based on important international principles. Then we could advance good agreements that would actually benefit both countries and their workers.

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

Mr. Speaker, as we know, Panama is an important partner to us in this hemisphere. Having visited this country a few years ago and having worked with Panamanian counterparts in various contexts, I believe that it is truly a country with which we should have closer ties. However, these ties must be based on sustainable and fair principles that benefit both countries. Yet the free trade agreement that is before us today really does not meet these criteria. In fact, this agreement is problematic in a number of ways. I will not hide the fact that many of these problems are common to a number of our free trade agreements. Despite this, I would like to revisit some of these problems, as some of my colleagues have done.

To begin with, it should be noted that there are problems when it comes to environmental protection. I will not elaborate on these problems today, because many of my colleagues have described them at length and, in any case, my time is short. There are also problems as far as protecting workers is concerned. For example, under the system we will end up with, investors will have the right to request compulsory arbitration that they can conduct independently, however a union can only file a complaint and it will be up to governments to seek and obtain remedies. Why this double standard? This is once again a whittling away of workers’ rights. This is not good for Panamanian or Canadian workers. When you start chipping away at the rights of workers in another country, what happens? We have seen this in the past. Companies relocate jobs to these countries and we lose manufacturing jobs left, right and centre, as we have seen in recent years. In short, that creates a system where nobody benefits.

There is also a somewhat more specific problem in this case, and that is the absence of a tax information exchange agreement. This is a major problem. We know that, at best, Panama is in a grey area when it comes to its tax haven status. We believe that Canada must help Panama and encourage it to be more fiscally transparent. The negotiation of a free trade agreement is an opportunity to do just that. We want to work with Panama to help stop the money laundering that is, unfortunately, happening in the country, and to help stop the funding of drug trafficking. This is a problem that affects the entire hemisphere and that has tragic consequences for Panama, the hemisphere and Canada.

I think that we should really require Panama to sign a tax information exchange agreement. Some say that the double taxation agreement will be enough. If double taxation agreements were enough, tax information exchange agreements would never have been invented. Double taxation agreements apply to legitimate and official earnings, but the problem is all the other revenue.

We are being told that the double taxation agreement covers some ground, but my fundamental question is this: why not have a tax information exchange agreement? Why not?

Who stands to lose if such an agreement were signed? It would certainly not be Canada, and I do not imagine that Panama would either. In fact, such an agreement would help put Panama in a position to better meet international standards, for example, its obligations under the OECD.

What we proposed was very simple: suspend the free trade agreement until a system is in place for exchanging tax information. The Conservatives rejected this proposal. Why did they reject it? What is the rush? Are they going to tell us that our national economy is at risk, as they did with the Air Canada situation?

Bilateral trade between Canada and Panama represents less than 1% of our trade. There is no rush. We can wait. We can use our tools and energy to help Panama meet international standards. This would help Panama. It would help the entire hemisphere, and clearly, it would also help Canada.

Meanwhile, the free trade agreement does not include the exchange of tax information. What would be the impact of signing such an agreement? According to Mr. Tucker, the research director for Public Citizen's Global Trade Watch, this would make things worse for Panama. I would like to read some of what he said, because it is really very interesting and it gets to the heart of the matter.

The Canada-Panama trade deal would worsen the tax haven problem. As the OECD has noted, having a trade agreement without first tackling Panama's financial secrecy practices could incentivize even more offshore tax dodging. But there's a reason to believe that the trade deal will not only increase tax haven abuses but will also make fighting them that much harder.

Chapter 9 of the Panama agreement expands the investor-state system under NAFTA, under which Canada has paid out hundreds of millions of dollars in legal fees and compensation to U.S. investors. Canada's defensive interests are many in the case of the Panama pact, because there are 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.

In short, the free trade agreement as written, without a tax information exchange agreement, will hurt Panama because it will worsen the situation there, increasing abuses and making fighting them even harder. It will also hurt Canada.

I will repeat my questions: why not wait, and why not include a tax information exchange agreement?

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I thank my colleague, the foreign affairs critic for the NDP. We benefit greatly from her views. Having been a diplomat in the Canadian foreign service, she has first-hand knowledge and experience of some of these matters of which she speaks.

I ask the member this. How did we arrive at this position? It begs the question, were the people around table negotiating on behalf of Canada involved in some treachery? Were they merely incompetent? What was their bargaining position?

Where I come from, one tries to bargain from a position of strength. As the dominant party in this trade agreement, in the overwhelming elephant-to-mouse relationship in this agreement, surely we would be dictating the terms and conditions of any ultimate agreement we come to. Therefore, were they incompetent or did they deliberately sign an agreement that is not in the best interests of Canada for some other unknown motivation?

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

Mr. Speaker, that is an excellent question. I have to confess that when I was looking at that, I was wondering exactly the same thing. We asked that there be such an accord and we understand that Panamanian authorities said no. The story leads us to believe that we walked away and said if Panama did not want one, then we would not have one. I do not understand that. It is a crucial element in that situation. It should have been there. The treaty should not have been signed until it was there. As my hon. colleague says, we do not want to over-exploit our situation of strength with other smaller economies, but in a case like that, in the long term, it is not helping anybody. It is a bit mind-boggling.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, my question is simple. The NDP has noted that it supported only one free trade agreement in the House relatively recently and that was the Canada-Jordan Free Trade Agreement. If the member looked at the free trade agreement with Jordan and the one with Panama, could she say where the differences are? New Democrats supported the agreement with Jordan. I do not understand why they are not supporting the one with Panama.

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

Mr. Speaker, that shows the problem with the way the government approaches issues like free trade. Despite what some of our colleagues say, New Democrats have never said we are against all free trade agreements. The government seems to say all free trade agreements are good.

With respect to Jordan, another country I have visited, by the way, we face a very different situation both in terms of human rights and workers' rights. To my knowledge, Jordan has never been on the OECD black list of tax evasion havens. They are two different situations. In each situation what would be ideal is that we negotiate more multilaterally, but if we are intent on negotiating bilaterally, we have to look at each situation and its specific circumstances, and Panama is not Jordan.

[Mathieu Ravignat, NDP, Pontiac, QC]

Mr. Speaker, my colleagues have made it clear that we oppose this bill for a number of very good reasons.

When the committee looked at the previous bill on free trade with Panama, Bill C-46, we heard convincing testimony about the fact that the Republic of Panama was a tax haven and about its poor record on workers' rights. We proposed motions and amendments that would have corrected the worst parts of the agreement, but the Conservatives and the Liberals both rejected our proposals. We are disappointed that the new bill, despite its inspiring new short title, has not fixed the fundamental shortcomings of its predecessor or introduced tax disclosure provisions.

The government will no doubt say that we oppose this bill because the NDP opposes all trade, but I am here to say that that is not true. The difference between the Conservatives and the NDP is that we believe that the economy should serve the people, not the other way around.

Their faith is in capitalism; our faith is in man. That is what truly separates us. With this principle in mind, free trade is not a good in and of itself but a means to an end, one that serves the interests of the majority of human beings and not a minority of wealthy people. As one of our old slogans goes, put humanity first.

However, I am personally willing to concede that trade is part of the march of history. I would even go so far as to say that trade makes the world smaller and can help bring humanity closer together, which is always a good thing. Man has too long suffered from tribalism, and what unites us is far more fundamental than what separates us. If I may use a metaphor, it is about time we undo the loss of family caused by the arrogance of the Tower of Babel.

However, history has proven that free trade does not automatically mean greater prosperity for the majority or greater rights. Free trade can also tear us apart. Must I remind my colleagues across the aisle that we are still living with the terrible ramifications of 19th century colonialism, that colonialism did not bring us closer together but rather has created deep cleavages and violence, which we are still trying to repair today, and that the major justification of colonialism was freer trade?

However, as progressives we cannot get in the way of the march of history. Having said that, these economic forces are not deterministic and there has always been a subjective element to them. Man has made decisions to engage in trade in particular ways, and better decisions must be made. These economic forces should not be viewed as the Titans of Greek myth, terrible chaotic forces that cannot be controlled. On the contrary, they are forces we must harness to make the world a better place. Olympus must prevail after all.

Therefore, free trade must also be fair trade and must help solve the deep-rooted inequalities between the developed and underdeveloped world, the rich and the poor, the northern and southern hemispheres. We simply cannot allow free trade to exacerbate existing divisions or, worse, create new ones between peoples. We cannot be so naive as to believe that Canadian companies, like companies all over the world whose raison d'être is profit, do not see a particular pecuniary advantage in doing business in countries whose labour standards are lower. I am convinced that if we ask most Canadians whether their government should sign trade deals with another country because some influential companies would like to have access to cheaper labour, where fellow human beings are not paid a decent wage and where dirty money can be laundered, they would say that is simply not fair.

The reality is that there are many Canadian companies behaving badly all around the world, in Africa, Jordan and Latin America, and it is misplaced patriotism to defend them. However, what if we create a situation where free trade and fair trade can work together; where free trade can assure social progress is maintained and enhanced with those countries we trade with; where more prosperity and not more exploitation is the result; where the gap between rich and poor is rendered smaller; where the environment is respected? Is this not the ideal of trade?

The problem is that the bill does not do enough to secure everyone's prosperity and protect their fundamental rights. For instance, it should have protected unionized workers in Panama by giving them the right to collective bargaining and requiring the Minister of International Trade and Minister for the Asia-Pacific Gateway, as the principal representative of Canada on the joint Panama-Canada commission, to consult on a regular basis with representatives of Canadian and Panamanian labour and trade unions. Unfortunately, the fact is that a free trade zone would do nothing to protect workers' rights, and this is already a serious problem in Panama.

As for sustainable development, a clause needs to be added that meets the needs of a free trade agreement in the present without compromising the ability of future generations to meet their own needs, as set out in the Brundtland report published by the World Commission on Environment and Development. The problem is that protecting the environment is difficult in Panama.

In order to be considered responsible, an investment must maximize social good as well as financial return, specifically in the areas of the environment, social justice and corporate governance, in accordance with the United Nations Principles for Responsible Investment. A responsible investment should help to put an end to tax havens that allow money from illegal drug trafficking to be laundered.

Unfortunately, this bill does very little to correct these problems. It is simply not enough. Canada's trade policy should be based on the principles of reciprocal, sustainable and equitable trade, trade that builds partnerships with other countries that uphold human rights principles, while recognizing the need to expand market opportunities. The federal government should stop focusing exclusively on the NAFTA model and remain open to other possible solutions.

Panama is not like the United States or Europe. The government should explore other means of expanding trade by coming up with a vigorous trade promotion strategy that will set the standard for a fairer society for the rest of the world. Fair and equitable trade should be the overarching principle, and not just an afterthought, in all trade negotiations between the Canadian government and other countries.

The NDP strongly believes in an alternative and a better form of trading relationship that can be established with Panama and any other country. Such a trade agreement would involve a comprehensive trade strategy whereby the fundamental principle of negotiation would be the defence and protection of human rights. It would prohibit the import, export or sale in Canada of any product that is deemed to have been manufactured under sweatshop conditions, using forced child labour, or under other conditions that are inconsistent with fundamental international labour standards and human rights.

In the NDP's vision, all trade agreements should respect sustainable development and the integrity of all ecosystems. That is a fundamental principle. This positive and decent vision puts humanity at the centre of our concerns. Let us build a better future for everyone in our trade relations with other countries.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, I want to thank my hon. colleague for his presentation this afternoon. I enjoy working with that member on my committee, government operations and estimates. He does an excellent job there on behalf of the New Democratic Party.

I know he is probably as surprised as I was that he supported the free trade agreement with Jordan, but I would just like to know if the member could tell us which clauses in this bill, on the Panama agreement, are different from the clauses in the bill on the Jordan agreement? Why are they different, and why is that a problem and the reason for not supporting the Canada-Panama agreement?

[Mathieu Ravignat, NDP, Pontiac, QC]

Mr. Speaker, first I want to thank my hon. colleague from the Standing Committee on Government Operations and Estimates for his question. I would also like to say that he does excellent work on that committee.

As it happens, I just came from a meeting of the Standing Committee on International Trade, which is currently studying the Canada-Jordan free trade agreement. The hon. member should not jump to any conclusions about the level of support from a party.

We are currently studying the problem. For example, we just heard some very disturbing testimony on the working conditions in Jordan, specifically for foreign workers. There are some extreme cases of abuse. At this time, the hon. NDP members who sit on that committee are studying the agreement in order to ensure that it is a good agreement.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I think the member might be confusing other people inside the chamber in regard to what the NDP position is on Jordan. When I asked the question of one of his colleagues earlier, she made it very clear that the NDP would be supporting the Jordan free trade agreement.

Now, the member indicates, because it is still in committee, that he wants to approach it with an open mind. I think the NDP members should be a little clearer. I know they are nervous about this being the first ever free trade agreement they might contemplate supporting and so they are treading carefully, but they should be a little consistent on this.

The NDP voted to see it to go into committee. However, is the NDP supporting the free trade agreement with Jordan? We know its position on this particular bill but what is its position on the Jordan bill?

[Mathieu Ravignat, NDP, Pontiac, QC]

Mr. Speaker, I think the hon. member is the one who is confused. It is quite normal to vote at second reading stage to refer a bill to committee in order to learn more about the bill. I am not going to apologize for our open-mindedness, because that is one of our party's strong suits.

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

Mr. Speaker, I appreciate the member's intervention on this issue. He is doing a great job on the international trade committee and thinks very thoughtfully about these issues.

I wonder if he would talk about why it is so important for this country to be entering these trade negotiations with some thought about the kinds of conditions and the kind of message of the way we want to work and walk on this earth. How do we want to be perceived by other countries? What kind of good can we do if we understand those things when we begin to negotiate a trade deal?