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.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chairman.

Mr. Chairman, this is the first of the two motions that I'll move:That, notwithstanding the Order adopted by the Committee on Thursday, September 27, 2012, the Committee postpone its clause by clause consideration of Bill C-24 until Canada and Panama have signed a tax information exchange agreement.

I'll briefly explain the purpose and reasoning for this motion, Mr. Chair. One of the major considerations as this agreement has come before Parliament in the past has been Panama's reputation as being a known tax haven, a place where offshore money can be hidden in banks without disclosure to other countries. That concern has been exacerbated by the fact that illicit money from illegal activities, notably the drug trade, has also been identified to have flowed into Panama, leading to a concern that investment money that goes into Panama could fly out of Panama and go to other jurisdictions, including Canada.

We've heard evidence that the situation seems to be improving since this agreement came before the committee. We understand that Panama has been removed from the so-called grey list because it has signed 12 tax information exchange agreements with countries. That's enough to remove it from the grey list.

I understand from the witnesses we've heard that Panama and Canada have been negotiating a tax information exchange agreement. I reviewed the previous testimony before this committee and found that Panama was resistant to Canada's request that we sign such an exchange agreement.

It's important that Canada and Panama have the ability to exchange tax information as a means of stopping the laundering of illegal money and to ensure that Panama is not a tax haven. Again, to Panama's credit, we heard from the ambassador that the negotiations are at a fairly advanced stage. I formed the impression that they were near completion.

My research indicates that the U.S. Congress went in the reverse of this Parliament. Because of Panama's history as a tax haven and drug-laundering centre or attraction, the U.S. Congress required that a tax information exchange agreement be signed before they would sign off on a trade agreement. The reasoning is pretty obvious. Until you have a tax exchange information agreement, you really have no way of opening up the Panamanian banking system or tax system to scrutiny by our jurisdiction; therefore, you don't know if money flowing into Canada is flowing in from drug cartels or other illicit activities.

This motion essentially agrees with the same responsible position of the U.S. Congress, which is that whatever the merits of signing a trade agreement are—and I understand the government is fully behind such—I think we all agree that a tax information exchange agreement is an important part of the puzzle.

I think it's only prudent that we, as parliamentarians, reassure Canadians that such an agreement is in place so that we can rest assured that any concerns regarding status as a tax haven or a drug-laundering centre are taken care of prior to signing a trade agreement that will see the flow of investment—presumably from Panama into Canada and Canada into Panama—at increased levels.

I'd urge all members of the committee to vote in favour of this motion. It doesn't mean this Parliament won't pass a trade agreement; I think it just puts it in the right order, and puts prudence and care before haste.

[The Chair, Conservative, Rob Merrifield]

I call the meeting back to order.

We want to first of all thank the department for being here. We almost know them by their first names. It's good to have you with us as we go through clause-by-clause consideration of this very important piece of legislation. It has passed the committee once before—actually, maybe even twice. Not much has changed except the timeline.

We're dealing with clause-by-clause study of 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.

Go ahead, Mr. Davies.

[The Chair, Conservative, Rob Merrifield]

I call the meeting to order.

We want to thank the department for being here again for a second hour. We look forward to your testimony.

I know you have some brief opening remarks, Mr. MacKay, so I will yield you the floor.

We are dealing with Bill C-24, concerning the free trade agreement between Canada and the Republic of Panama. We look forward to clause-by-clause on Thursday, so we look forward to your informing the committee concerning whatever questions we might have. I'm sure there will be a few.

The floor is yours, sir.

[Don Davies, NDP, Vancouver Kingsway, BC]

Yes. I move that all the words after "2012" in the third line of the first paragraph be struck so that it reads, "that the committee begin clause-by-clause consideration of Bill C-24 on Thursday, October 4, 2012,".

Then it carries on with the second paragraph: "that if the clause-by-clause consideration has not been completed”, there would be no further debate, and the rest would read the same. It would just eliminate the part about limiting debate to five minutes.

[The Chair, Conservative, Rob Merrifield]

I call the meeting to order.

We are working on Bill C-24, the free trade agreement between Canada and the Republic of Panama.

We want to thank our witnesses for being here.

From the Embassy of Panama in Canada, we have with us Ambassador Corona. Thank you for being here.

Before we get to our witnesses, we have a motion for which we need unanimous consent to bring forward because of the timing.

Do we have unanimous consent to bring it forward?

[Cameron MacKay, Director General, China Trade Policy Bureau, Department of Foreign Affairs and International Trade]

Thank you, Chair.

Thank you, Mr. Chair, for this opportunity to appear before the committee and speak to 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.

My name is Cameron MacKay, and I was the chief negotiator for the free trade agreement, or FTA, in 2008-09. I am currently the director general of the China Trade Policy Bureau of the Department of Foreign Affairs and International Trade. I am joined today by a few colleagues.

John O'Neill is director of the investment trade policy division, and Jeff Marder,

also from Foreign Affairs and International Trade Canada.

Jeff is director of the bilateral relations division with respect to Panama and Central America.

Also with me is Pierre Bouchard, from Human Resources and Skills Development Canada, as well as Alain Castonguay, from Finance Canada.

The Canada-Panama free trade agreement is a concrete demonstration of the government's commitment to an ambitious bilateral and regional pro-trade plan, consistent with both the global commerce strategy and the Americas strategy. To compete and succeed in international markets in this hemisphere and beyond, Canadian companies need a level playing field with respect to tariffs and market access. The Canada-Panama FTA achieves that goal.

Panama's economy is small, but by virtue of its geographic location, it occupies a strategic position in the global trading system, with approximately 5% of global trade transiting via the Panama Canal. That is why Panama is often referred to as the gateway to Latin America, and represents an entry point and logistics hub for the broader Latin American market.

Panama is also a high-growth emerging market. According to the World Bank, Panama's GDP growth rate over the past five years, from 2007 to 2011, was 10.6%. The IMF forecast for 2012 is 7.5% growth. That means Panama is the fastest-growing economy in Latin America, and, according to the IMF, is expected to grow by over 6% per year during the next five years. Clearly there are opportunities there for Canadian businesses.

But Canadian companies face some stiff competition in this dynamic market. Like Canada, Panama is a strong proponent of open and free markets, and has an active and ambitious free trade agenda. Late last year, President Obama signed the United States-Panama FTA into law, and that agreement could enter into force as early as this October.

Panama has also concluded FTA negotiations with the European Union, and is negotiating an FTA with the European Free Trade Association.

In fact, Canadian companies are already well aware of Panama's potential and are increasingly active there. In 2011, two-way trade in merchandise between Canada and Panama totalled $235 million. Canadian merchandise exports were valued at $111 million, while merchandise imports were valued at $124 million. Canada's two-way merchandise trade with Panama has grown by 78% over the last two years.

Key Canadian exports driving our merchandise trade with Panama include machinery, precious stones and metals, meat, aerospace products, mineral fuels and oils, fruits and vegetables, and electrical and electronic equipment. While the overall size of our trading relationship may not be large when compared with other partners, it is important to recall that Panama's robust economic growth bodes well for expansion.

It was against this backdrop that Canada sought and obtained a high-quality, comprehensive FTA with Panama. Both parties were highly motivated to conclude an ambitious deal. Negotiations were launched in 2008 and concluded a year later in 2009.

If Parliament agrees to implement this FTA, it will help Canadian companies take advantage of the opportunities offered by Panama's growing economy by immediately eliminating Panamanian tariffs on 95% of recent non-agricultural imports from Canada and 78% of agricultural imports. Tariffs on most other products will be eliminated over time, although both countries agreed to exclude a small number of goods, such as Canada's over-quota tariffs for dairy, poultry, and egg products.

This agreement will produce benefits for all parts of Canada, including pork producers in Quebec, frozen French fry producers in New Brunswick and Prince Edward Island, as well as pulse and cereal producers in Manitoba and Saskatchewan.

Canadian investors would also benefit from the FTA's implementation. Panama is already a popular destination for Canadian commercial interests, particularly in such areas as banking and financial services, consulting services, construction, and mining. Some of the Canadian companies with an existing presence in this market include McCain Foods, Scotiabank, Inmet Mining, SNC-Lavalin, and Golder Associates, an Ontario company providing consulting, design, and construction services.

The FTA will establish a stable legal framework to support Canadian investments in Panama, including guaranteeing the transfer of investment capital and protecting investors against expropriation. Investors will also have access to transparent and impartial dispute settlement procedures.

The number of Canadian companies active in the country is also expected to grow in the years ahead, in part owing to the many infrastructure projects planned by the Panamanian government and the private sector.

You may know that Panama's $5.3-billion canal expansion project is expected to be completed by 2014 and is projected to boost cargo flow by roughly 35% through 2025. With the Panamanian government investing in its country's growth and strategic importance, procurement opportunities are another key driver for the negotiation of a free trade agreement with Panama.

I am pleased to say that the government procurement provisions in the Canada-Panama Free Trade Agreement guarantee that Canadian suppliers have non-discriminatory access to a broad range of government procurement opportunities, including those under the responsibility of the Panama Canal Authority. Ongoing operation and maintenance of the canal is expected to generate ongoing opportunities for Canadian companies.

Along with the canal expansion, the Panamanian government has a five-year, $13.6 billion strategic investment plan, including $9.6 billion that will be allocated to infrastructure investments. As we know, Canadian companies are proven world leaders in infrastructure development projects. The FTA will help Canadian investors and service providers to compete for these opportunities on a level playing field against their competitors.

As I mentioned earlier, Canada's service sector also stands to benefit from a free trade agreement with Panama. In 2009, the last year statistics were available, Canadian commercial service exports were approximately $48 million a year, with room to grow. This figure is likely to be propelled by Canadian financial, engineering, professional, and information and communications technology service providers. The FTA will provide service providers like these with a secure, transparent, and rules-based trading environment.

Finally, in keeping with Canada's approach to free trade agreements, Canada negotiated side agreements on labour and the environment. These agreements will help ensure that neither side will weaken existing commitments on the environment or labour in order to gain a competitive advantage with regard to international trade.

Mr. Chair, Canadian companies that do business abroad rely on fair, transparent, predictable and non-discriminatory trade rules. In the case of Panama, Canadian companies have indicated that they want to increase their activity in that market. With the Canada-Panama Free Trade Agreement, we are looking to provide the rules they need so they can compete and succeed abroad, while building a stronger economy here at home.

Thank you, Mr. Chair. My team and I would be pleased to take your questions.

Canada-Panama Economic Growth and Prosperity Act

[The Deputy Speaker, Denise Savoie]

The House will now proceed to the taking of the deferred recorded division on the previous question at the second reading stage of Bill C-24.

The House resumed from June 19 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 second time and referred to a committee, and of the motion that this question be now put.

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I admit that I rise today in this House with a certain amount of anxiety to state my views concerning Bill C-24, an act to implement the Canada-Panama free trade agreement.

Obviously, this legislation is very important for the people of Canada and Panama. If it is enacted, there will be many lasting consequences, and they will not necessarily be positive. Before telling my colleagues what I really think, however, I believe it would be a good idea to give an overview of what is really in this bill.

First, the negotiations between Canada and Panama addressed a number of major changes to trade relations between the two countries. Several points drew my attention. First, it provides that Canada would eliminate all customs duties on non-agricultural products, and the vast majority of duties on agricultural products.

The best estimates available indicate that this means that 99% of customs duties on Panamanian imports would disappear with the stroke of a pen. Over a 15-year period, once the agreement is ratified, other duties would also be gradually eliminated.

The various products that would still be subject to customs duty include dairy products, poultry and eggs, and certain products containing sugar. In return, about 90% of Canadian exports to Panama would be exempt from customs duty. Obviously, that 90% includes numerous agricultural products.

At the end of a 5- to 10-year period, it will be possible to export most agricultural products, in fact virtually all of those products, free of customs duty. Knowing that at present, Panama’s customs duties come to nearly 70% on certain agricultural products, we can understand how significant the consequences of ratifying this agreement will be for both countries.

Apart from agricultural products, there will be a series of equally important changes if the agreement is ratified in this House. Those that cause the most concern obviously include the expansion of free trade in the service sector, such as information technologies, for example, and also increased access to government contracts in both countries. The agreement also addresses other points. For example, it mentions an agreement on the environment, an agreement on labour and provisions dealing with investments.

As we can see, this agreement is very wide-ranging and will have consequences for many different spheres of society. Earlier I mentioned agriculture, the services sector, government procurement, the environment, investment and labour law. It will have major consequences.

For this reason, I believe we should think long and hard about the agreement before deciding whether or not to support it. This is what I and my party have done. We have been watching the negotiations leading to Bill C-24, which we are currently studying. We were also in attendance at the meeting of stakeholders and experts.

Our analysis of these many discussions has had a chilling effect on our support. Above all, we heard a great deal of very convincing evidence that Panama is a tax haven. According to Todd Tucker, research director at Public Citizen's Global Trade Watch, Panama is home to an estimated 400,000 corporations, including many offshore corporations and multinational subsidiaries. In comparison, as just one example, this is four times the number of corporations registered in Canada. It is a number that speaks volumes.

According to the OECD, the government of Panama does not have the legal resources to efficiently verify the essential information concerning these corporations, including the information with regard to their capital structure. When we are talking about tax havens, needless to say, it is obvious that caution needs to be exercised.

This is also the reason why my colleague, the member for Burnaby—New Westminster, put forward a number of amendments that would help to resolve part of this issue. Unfortunately, the Conservative government, with the support of the Liberals, refused to listen, as it was probably too blinded by its ideology and by its disregard for compromise.

Another aspect that I have serious problems with is the rights of workers. In fact, the agreement we are examining today gives no specific protection to the right of association or the right to strike. A number of stakeholders raised this issue during the consultations. There is cause for concern, especially since the fines prescribed in the event of infractions are virtually non-existent.

We must be very aware of Panama's specific context in order to see how the rights of workers will be impaired by this agreement. Recently, demonstrations and strikes were held in Panama when the government made a full frontal attack on the rights of workers. Some of the government's repressive measures included the authorization to bring in strikebreakers, an end to environmental studies for certain projects and a prohibition on collecting mandatory union dues.

During the demonstrations in Panama, the police used excessive force to suppress protests. Six demonstrators were killed during confrontations with the police and 300 union leaders were detained. This is particularly worrisome if we consider that, with the government we have right now, workers are losing more and more of their rights. I therefore do not see how it will be useful to support a free trade agreement that does not respect workers' rights. Unfortunately, the state of workers' rights in Panama is far from rosy.

We have every reason to be concerned given that the free trade agreement set out in Bill C-24 will likely make the situation worse rather than better.

Once again, the hon. member for Burnaby—New Westminster proposed sound and intelligent amendments to fill this gaping hole in the agreement. These amendments could have protected unionized workers by guaranteeing them the right to bargain collectively. These amendments also would have required Canada's Minister of International Trade to speak with union representatives on a regular basis, which is a healthy thing in a balanced democracy.

It is nothing, for a democratic country like Canada, to make demands when signing a free trade agreement. That seems obvious. But the government simply brushed off my colleague's suggestions, which were realistic and showed a lot of compromise.

For all of the reasons I just listed, my party and I are opposed to Bill C-24. The NDP has always opposed trade models like this one. We saw it with NAFTA. These agreements put the interests of multinational corporations ahead of the interests of workers and the environment, which is unacceptable. They also promote inequalities and erode the quality of life of people and honest workers. It is not surprising that this government is pushing so hard for this agreement. It is rather ironic, though.

The agreement we are studying today is another step in the strategy adopted by Canada and the United States, which focuses on serial bilateralism through the use of trade agreements that are unfair to honest people, as I already mentioned. For a long time, the NDP has been preparing and suggesting a multilateral approach based on a fair, sustainable model that respects the environment and workers.

I urge my House of Commons colleagues to carefully consider the consequences of passing Bill C-24. I do not think we should pass it. This agreement will not help honest workers. The government has been utterly uncompromising and has rejected all of my colleague's fitting amendments.

I will never vote in favour of such an unfair agreement.

[For continuation of proceedings see part B]

[Continuation of proceedings from part A]

The House resumed 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 second time and referred to a committee, and of the motion that the question be now put.

CANADA-PANAMA ECONOMIC GROWTH AND PROSPERITY ACT

[Gord Brown, Conservative, Leeds—Grenville, ON]

Madam Speaker, it is a real pleasure to rise today to support Bill C-24, the act to implement the Canada–Panama free trade agreement and in support of our government's pro-job, pro-trade agenda.

As an export-driven economy, Canada needs open borders. With one in five Canadian jobs generated by international trade, our government's ambitious pro-trade plan is essential to bring continued prosperity to Canadians. That is why deepening and strengthening Canada's trading relationships in dynamic markets, such as Panama, is an important part of our government's plan for jobs, growth and long-term prosperity.

Canada and Panama have a history of strong bilateral relations. Canada established diplomatic relations with Panama in 1961 in recognition of the growing political and economic ties and to promote political trade and investment relations between Canada and Panama. Canada then opened its embassy in Panama in 1995.

Export Development Canada's regional office opened in the Canadian embassy in Panama in September 2010 and now covers all of Central America and the Caribbean. This decision endorses Panama's potential to become the Singapore of the Americas. It also echos other respects in which our embassy has adopted a regional mandate. In 2011 EDC supported more than 100 Canadian companies in Panama.

Apart from our physical presence, Canada and Panama also speak to each other in multilateral fora, such as the World Trade Organization. Panama acceded to the WTO in 1997. As a WTO member, Panama grants most favoured nation treatment to all of its trading partners and has bilateral investment treaties with 16 countries.

One of these investment protection agreements was with Canada and it came into force in 1998 as a means to deepen our commercial relationship by extending to Canadian investors legally binding rights, including provisions to protect them from expropriation without fair, adequate and prompt compensation and the freedom to transfer capital internationally.

Canada and Panama also have concluded an air transport agreement in order to facilitate greater travel between our two countries. Copa Airlines, Panama's national carrier and a prominent regional airline, has now launched four weekly direct scheduled flights to Toronto. This improved service will facilitate travel and people-to-people ties for nearly 100,000 Canadian visitors a year and an estimated 5,000 Canadian residents in Panama.

This year we are also negotiating a tax information exchange agreement with Panama. To combat international tax evasion, Panama committed in 2002 to implement the OECD standard for the exchange of tax information. Panama has now substantially implemented the OECD standard through the conclusion of more than 12 double taxation agreements or tax information exchange agreements that include the OECD standard. Like a double taxation agreement, a tax information exchange agreement will also have important benefit for investors.

The result of these initiatives for Canadians in recent years is bilateral trade between Canada and Panama has been steadily growing. From just under $50 million in total trade in 2002, we were up to a total of $235 million per year by 2011. We are now in 15th position as a supplier of goods to Panama. Much of this is very diversified and includes pork, vegetables and vegetable preparations, vegetable oils, industrial machinery, electrical and electronic—

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Madam Speaker, it is a pleasure to rise in the House today to talk about the Canada-Panama free trade agreement. I will spend a few minutes talking about how this agreement fits into our government's broader economic plan.

The one thing we always need to keep in context is that free trade agreements, while they are important, fit into a much larger plan of what our government is trying to accomplish. We have been working on a number of free trade deals, which I will touch on in a bit, but I also want to comment on the fact that we continue to lower corporate taxes to one of the lowest levels in any of the G7 or G8 countries. That is important as we look at trying to attract other investments and corporations for jobs.

There are other things we are doing. We are continuing to work on deals with the U.S. to try to get goods and services flowing quicker at the borders. A historic deal was announced just this week. The Prime Minister was able to make a deal in Windsor, which is hugely important in trying to get our goods and services across to the U.S., our largest trading partner. We continue to invest in research and development. We realize that new jobs will come as we are able to commercialize technology. That is why we continue to spend money on research and development and ensure we are getting the best bang for the buck.

We have been trying to reduce red tape. The Red Tape Reduction Commission talked to business owners and business people across the country to try to figure out how to reduce irritants so that Canada could become a friendly place to do business. It already does a great job. I think one of the differences between us and some of the other parties in the House is that we realize that we need to continue to find ways to sell our goods and services around the world. Sixty per cent of our GDP depends strictly on trade. With a population between 30 million and 35 million people, there is no way that we can consume all of our goods. Therefore, we need to continue to expand those markets. Tat is why I appreciate the opportunity to talk a bit more about this Panama free trade deal.

We understand the importance of benefits of trade. As I mentioned before, we are an export-driven economy and we need open borders. With one in five Canadian jobs dependent on international trade, bilateral and regional trade agreements are essential to bringing continued prosperity to Canadians. That is why deepening Canada's trading relationships is rapidly growing, and markets around the world, such as Panama, are important parts of this government's pro-trade plan for jobs, growth and long-term prosperity.

With a GDP of over $30 billion and a GDP per capita of over $10,000, Panama is among the fastest-growing and best-managed countries in Latin America. In fact, the Latin Business Chronicle has predicted that Panama will be the fastest-growing economy in Latin America in the five-year period from 2010 to 2014, matching Brazil's rate of growth of 10%.

Like most countries in the region, however, Panama is feeling the impact of the global financial crisis, which threatens to undermine the social gains made in the past few years. That said, the expansion project of the Panama Canal, combined with the conclusion of a free trade agreement with the United States, is expected to boost and extend economic expansion for some time.

As a former member of the Standing Committee on International Trade, I had the pleasure of visiting Panama in 2008 with my committee colleagues. I want to mention, since Lee Richardson, who was the chair of the committee at the time, is no longer in the House, that it was a pleasure travelling with Lee to Panama and he did a great job leading the delegation. He is certainly a colleague that we will miss in the House. I want to wish him all the best as he starts his work in Alberta.

While in Panama, we had a chance to visit the Panama Canal. One really cannot appreciate the sheer scale of this 97-year-old architectural marvel until one gets to witness it in person. The Panama Canal is an 82 kilometre ship canal that connects the Atlantic Ocean to the Pacific via the Caribbean Sea. It is one of the largest and most difficult engineering projects ever undertaken. The Panama Canal is a shortcut that allows for shorter, faster and safer access to the North American west coast, allowing those places, including Canada, to become more integrated with the world economy.

The Panama Canal has an annual traffic of over 14,000 trips, carrying about 300 million tonnes of goods annually, raising close to $2 billion in revenue for the Panamanian government. The Panama Canal expansion project, which is currently under way, will double the capacity of the Panama Canal, allowing more and larger ships to transit.

New components include the construction of the two lock complexes, the excavation of new access channels to the new locks and the widening and deepening of the navigation channels. The project is expected to be completed in 2014. Interestingly, this expansion was approved in 2007 by Panama's cabinet and national assembly with a national referendum in which 77% of Panamanians voted to support this project.

The Panama Canal Authority estimated the cost to construct the third set of locks at approximately $5.25 billion. This estimate includes design, administrative, construction and testing. As with most projects of this scale, there are opponents who contend that the project is based on uncertain projections about maritime trade and the world economy and that the project will cost more than the $5.25 billion price tag.

Again, according to the Panama Canal Authority, the third set of locks is financially profitable and will produce a 12% internal rate of return, which will help to continue to finance the project and will be a cash flow for the country as it moves forward.

Recent challenges in concluding the World Trade Organization Doha round regional and bilateral trade agreements have taken on increased significance. Our government recognizes that there are a growing number of countries where Canadian companies are at a competitive disadvantage because their competitors have preferential market access under some form of preferential trade agreement.

Canada cannot afford to sit on the sidelines while other countries vigorously pursue trade deals to secure better market access for their products and services. That is why our government is in the midst of the most ambitious pursuit of new and expanded trade and investments agreements in Canadian history. The Canada–Panama free trade agreement is yet another step this government is taking to help Canadians compete and succeed in a global economy. It supports the global commerce strategy which will ensure that Canada maintains its current economic strength and prosperity in an increasingly complex and competitive global economy.

With 60% of our GDP dependent on trade, it is clear that jobs in communities across Canada depend on the business we do with other countries. This government's pro-trade plan is an essential contributor to Canada's prosperity, productivity and growth.

By improving access to foreign markets for Canadian businesses, we are supporting domestic economic growth and creating new opportunities for Canadian workers. Canada's exporters, investors and service providers are calling for these opportunities. Business owners and entrepreneurs want access to global markets. This government is committed to expanding the various opportunities created by free trade agreements. Our track record speaks for itself.

Since 2006, Canada has concluded new free trade deals with nine countries: Colombia, Jordan and Peru; the European Trade Association member states of Iceland, Liechtenstein, Norway and Switzerland; and, most recently, with Honduras and, of course, Panama We are negotiating many more, including with the European Union.

A deal with the European Union would represent the most significant Canadian trade initiative since the North American Free Trade Agreement and could potentially boost our bilateral trade with this important partner by 20%. It could also provide $12 billion annually to boost the Canadian economy, which is equivalent to a $1,000 increase to the average Canadian family income or almost 80,000 new jobs.

Canadian companies recognize the many benefits to workers and businesses that a Canada–E.U. trade deal would bring.

We are also intensifying our focus on Asia. During the Prime Minister's visit to China in February 2012, leaders announced that Canada and China would proceed to exploratory discussions on deepening trade and economic relations on the completion of the bilateral economic study. Also, just this past March, the Prime Minister announced and launched the negotiations toward a free trade agreement with Japan and the start of exploratory discussions with Thailand. This week, the possible participation in the trans-Pacific partnership negotiations was also announced.

This free trade agreement would also better enable Canadian companies to participate in large projects.

For all those reasons, the proposed Canada–Panama agreement is a good deal. The agreement will support more Canadian jobs by enhancing our ability to export more goods and services to this market. This is why the implementation of a free trade agreement is a priority for this government.

I ask all hon. members to support Bill C-24, the legislation to implement the Canada–Panama free trade agreement and the parallel labour co-operation and environment agreements.

The House resumed 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 second time and referred to a committee, and of the motion that this question be now put.

Canada-Panama Economic Growth and Prosperity Act

[Devinder Shory, Conservative, Calgary Northeast, AB]

Madam Speaker, I rise in the House today to speak in support of Bill C-24 , the Canada–Panama free trade agreement. This is a trade agreement that would help Canadians from all regions of the country, including the hard-working people of Calgary Northeast.

The Canada-Panama free trade agreement would level the playing field for Canadian businesses in Panama. As we all know, healthy Canadian businesses produce jobs, growth and long-term prosperity. Seeing as how Panama has negotiated a few free trade agreements in recent years, Canadian companies are currently at a disadvantage in Panama because many of their competitors have better market access under one of Panama's recent free trade agreements.

In March 2011, six Central American countries, including Panama, initialled an association agreement with the European Union. The agreement includes a section on trade, which will reduce tariffs on European goods such as machinery and transport equipment, goods that are also key Canadian exports to Panama.

In addition, since 2003, Panama has signed and implemented free trade agreements with Chile, Peru, Singapore and Taiwan. However, it is not just these trade agreements against which we are competing.

The United States is our friend but it is also a competitor. The U.S. signed a comprehensive free trade agreement with Panama in 2007. It has been ratified by both Panama and the U.S. and it is expected to come into force before the end of 2012. Once that agreement is brought into force, over 87% of U.S. exports of consumer and industrial goods and nearly 56% of American agriculture exports to Panama will become duty-free immediately. Canadian producers of pork, potatoes and other goods will be hard pressed to succeed in the Panamanian market if their American competitors enjoy such duty-free access while we do not.

I am sure my hon. colleagues will agree that we must take steps to maintain Canada's competitiveness in Panama. The Canada-Panama free trade agreement would do just that. By removing the majority of tariff barriers faced by Canadians goods exported to Panama, this agreement would help Canadians succeed in one of Latin America's most dynamic and rapidly growing economies.

The Canada-Panama free trade agreement would also help Canadian companies bid competitively on major government procurement contracts, including projects related to the $5.3 billion U.S. expansion of the Panama Canal. If we in the House believe that Canadian exporters and investors are among the best in the world, we must help them prosper by ensuring that they are not disadvantaged in the Panamanian market. The opportunities are there and it is our job to help Canadians take advantage of them.

Now I will turn to the second set of benefits that the Canada-Panama free trade agreement would provide. As members know, Canada is a country of many regions. Tariff concessions under the Canada-Panama free trade agreement would make Canadian goods from every region more competitive in Panama's market, bringing economic benefits to every province.

Permit me to briefly remind the House of a few specific benefits that this agreement would have for exporters across Canada.

When I migrated to Canada, Quebec was my first home. That is where I met my wife Neetu. Our first son Jatin was born in Montreal on January 15, 1991. It is a beautiful part of Canada and a province that would benefit from this trade agreement. Quebec pork producers would enjoy immediate duty-free access to the Panamanian market. Panama's tariffs on pork currently range up to 70%.

Quebec producers of industrial and construction machinery would benefit from the immediate elimination of Panama's current tariffs, which are as high as 15%. Quebec firms in the pharmaceutical and aerospace sectors would also enjoy duty-free access to Panama. Panamanian tariffs in these sectors currently range up to 11% for pharmaceuticals, and up to 15% in the aerospace sector.

Therefore, I urge all Quebec members to stand up for Quebec producers and to vote in favour of this agreement.

In Ontario, the free trade agreement would benefit exporters through the elimination of Panama's tariffs on industrial and construction machinery. Ontario exporters of electrical and electronic equipment which currently face tariffs of up to 15% would also enjoy immediate duty-free access to the Panamanian market. Other sectors of export interest for Ontario include pharmaceuticals, chemicals and furniture. In all of these sectors, Panama will immediately eliminate its current tariffs when the free trade agreement comes into force. I know that the Leader of the Opposition likes to blame all manufacturing slowdowns on other provinces, but supporting this agreement is one real way, an easy, honest way, that the NDP can stand up for Ontario manufacturers and exporters.

In B.C., where I also lived before settling in Alberta, exporters would benefit from the immediate elimination of tariffs on goods such as paper and paperboard, processed food products and wine. Exporters in my home province of Alberta would enjoy duty-free access for industrial and construction machinery, and power-generating machinery.

In grain-growing provinces like Saskatchewan, Manitoba and Alberta, farmers of oilseeds, pulses and cereals would benefit from the immediate elimination of Panama's tariffs, some as high as 40%, on their products.

Let us jump back east. In Atlantic Canada, exporters would benefit from the immediate reduction of Panama's tariffs on paper and paperboard. Current tariffs on these products range as high as 15%.

Panama would also eliminate its tariffs on fish and seafood, which range up to 15%, and frozen french fries, which range up to 20%. As we know, french fry superstar McCain Foods is fast becoming a global player, and recently I had the pleasure of touring one of its facilities in Gujarat, India with our hard-working Minister of International Trade. Let us not stand in its path to success with Panama.

Other sectors of interest for Atlantic Canadian exporters that would receive duty-free access under the Canada-Panama free trade agreement include plastic, electrical and electronic equipment, and information and communication technology.

These represent just a few of the ways that Canadians would benefit from this free trade agreement, but before workers and businesses across Canada can take advantage of these new opportunities, we must do our part and pass Bill C-24. We live in challenging economic times, and we cannot allow Canada's competitiveness to diminish. By pursuing an aggressive bilateral trade agenda, this government is helping Canadians to compete and win in markets beyond our borders.

International trade plays a critical role in the success of our nation; 60% of our GDP and 1 in 5 jobs depend on trade. Free trade agreements, including this agreement with Panama, are necessary to help Canada maintain its current economic strength and prosperity. That is why I hope that my hon. colleagues here in the House will join me in supporting the passage of Bill C-24. It is good for constituents, it helps produce jobs and growth, and it is good for Canada.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Mr. Speaker, it is an honour to stand in the House today and talk about the Canada-Panama labour co-operation part of the agreement in Bill C-24, which is a very positive initiative. It started many years ago, but even in January of this year our Minister of Labour visited Panama to talk about labour co-operation and discuss labour related issues. She met with government officials and people in business. She took the trip to support the free trade agreement but specifically to discuss labour related provisions. As we all know, our Minister of Labour is very much a supporter of having good labour relations and ensuring those conditions are in place so people can continue to work.

Our government is proud of its journey of bringing into place a number of free trade agreements. We are a free trade country. We have products that we need to export to other countries and we do that by partnering with other countries. However, we also need to ensure that we coordinate our labour issues with those countries. If we do that and work with our partners on a trade agreement, then obviously it becomes a potential benefit for Canadians.

As free trade agreements are signed and brought forward, they will bring forward many preferential investment opportunities. Many of those, through trade, will reach out into many aspects of the commodities that we have in Canada. However, we also want to ensure we protect the environment and those investments in it, along with labour. As we know, economic advancements cannot be made at the cost of labour rights.

It will be in interesting when the free trade agreement comes into force because Panama's trade tariffs sit at over 90% for Canadian exports going to that country. We hope that many of those tariffs will be eliminated. That is good news for all Canadian companies that export into that market.

For service providers to gain access, we need to help expand Panama's communications, technology and financial services markets. There is also a chapter that ensures there are rules that will govern Canadian investments to give greater protection and predictability to Canadian investors who are looking to invest into Panama, which will encourage companies to invest and help strengthen Panama's economy.

The free trade agreement also gives Canadian exporters of goods and services greater market access. That access goes into Panama's government procurement opportunities, one of the few that are available to it. One example that we know of is the Panama Canal expansion process that is happening or about to happen. It is one of the U.S. $5.3 billion worth of investment projects that will widen and make export and trade more accessible. It gives Canadian companies a procurement opportunity for products, whether it is Canadian goods and services, that they will be able to bid on.

When we talk about trade and economic growth, the goal is rationale, which we talk about within our economic action plan. We believe it is a part of free trade. It is more than just a philosophy. It is a key element of our economic policy and our relationships with other countries.

Quite honestly, this recession was the worst since the Great Depression of the 1930s and many countries around the world are still struggling through it wishing they had the same economic stability and governance that Canada does. It has intensified our negotiations with other countries so that we will be able to partner with them to help them and ourselves become stronger in our economy and labour rights. We are doing that particularly in the discussion today around Panama.

How do those opportunities for Canadian exporters actually happen?

Panama is a strategic hub logistically. It is a platform on which Canada can build on. It will allow commercial activity to grow through Central America, the Caribbean and the Andean region of South America. It brings in a great global perspective for trade. However, free trade is also about having a level playing field where Canadian businesses can compete in the Panamanian market.

In these challenging economic times, it is important than ever to build solid trade relationships with countries around the world to secure our future prosperity. Canada is committed to pursuing initiatives that will help Canadians compete in global markets, and Panama is one of those markets.

I will now talk about the importance of labour rights. As Canadians, we naturally want to see our country prosper and continue to prosper, but not at any price. We are eager to advance our trade agenda but we must also ensure that labour rights and obligations are respected. Prosperity cannot come at the expense of labour rights. This is a concession that we are simply not willing to make. We will not accept this free trade agreement nor any other accord without the proper concessions in place. As I said, we will ensure a level playing field and that means that everybody must play by the same rules.

There is also a labour co-operation agreement, which is why the free trade agreement with Panama is paralleled with a labour co-operation agreement. This agreement includes the enforcement of labour rights and a transparent complaints and dispute resolution mechanism.

Under the terms of the labour co-operation agreement, Canada and Panama have committed to ensuring that their laws respect and embody the International Labour Organization's 1998 Declaration on Fundamental Principles and Rights at Work. The declaration covers the right to freedom of association, the right to collective bargaining, the abolition of child labour, the elimination of forced or compulsory labour and the elimination of discrimination in the workplace.

It sounds a lot like the same labour standards that we uphold in this great country of Canada. However, it also demonstrates the government's belief that prosperity cannot come at the expense of workers' rights.

In the Canada-Panama labour co-operation agreement, both countries have committed to protect workers' health and safety on the job, as well as to provide compensation in cases of work -related injuries or illnesses. Both countries have also committed to establishing and maintaining minimum employment standards.

The fact that the Government of Canada is helping Panama address these issues speaks well of Canada. We are recognized as a country that is compassionate. We do what we say we will do and we trade with honest intent.

Businesses that treat their workers decently are more likely to attract skilled and productive employees, just like businesses that treat their customers well are likely to have better sales.

We have a reputation for honesty, integrity and reliability. We keep our promises and we play by the rules. We want to help build a Canada-Panama relationship to that same extent.

, I would encourage the members opposite to support Bill C-24, not only for Canada but also to help build a strong partnership with our colleagues in Panama. We want to strengthen Canada's economy, a foundation for future trade and opportunities to promote and ensure fair, productive and safe workplaces that will benefit both countries.