International Trade Committee on April 14th, 2008

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

I did understand what you were getting at.

We signed an MOU with EDC, a memorandum of understanding with Export Development Canada, in September 2006. I'll be happy to send the text to your office, if you will allow me to.

In this MOU we speak of facilitating credit between Panama and Canada with two components: first, to allow Canadian companies to have credits to participate in Panamanian projects; and second, the structures that, as you suggested, would allow for the development of rural areas--water projects, infrastructure, roads, and also Panama Canal-related projects, which as you can imagine are massive, very important projects and would involve international trade.

It's not a given that all projects must be carried out with Canadian companies, but we try. We aim for Canadian companies participating in the projects, because it is a Canadian credit. But we do seek corporate social responsibility. We seek help for rural communities. And we want them to act in a serious way. We don't want drug trafficking, for example; we do not want to promote corruption, obviously.

Now, if the projects are from Panama, I imagine the question could be that if you have so many foreign investments, how can you guarantee, say, that a Venezuelan won't come up who's involved in some illegal activity? Well, obviously we do verify the fact that investors in Panama are not involved in illegal activities. That's a given. When a foreigner is involved in a project in Panama, they have to meet certain requirements in order to be deemed an investor.

Does this answer your question? That's how it works.

[Alan Tonks, Liberal, York South—Weston, ON]

Thank you for that.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

Going back to the other part of your question, about the OAS, Panama has been a leading country within the OAS to seek dialogue and understanding among all countries. In terms of the conflict between Colombia and Ecuador, for example, it was our OAS ambassador who promoted a dialogue between those two countries. So we do provide leadership in terms of dialogue, and in this sense we are the leaders in terms of our relationship with Canada in promoting our dialogue.

[The Chair, Conservative, Lee Richardson]

Thank you.

Unfortunately, we are running short of time. I'm going to try to make this fair. We'll do a rapid round and try to keep it to five minutes.

Monsieur Cardin, would you begin?

[Serge Cardin, Bloc, Sherbrooke, QC]

Good afternoon and welcome, Madam. It is a pleasure to meet you.

Is the presence of Canadian companies in Panama important?

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

Is the presence of Canadian companies in Panama important? Yes, it is.

We had a most important company, Hydro-Québec, and they had lots of profits. But they had to leave on orders from the Province of Quebec. That was very sad for us. When the energy sector was privatized in Panama, Hydro-Québec was a very important company when it came to the privatization of that sector. One year ago, Hydro-Québec had to remove all its foreign investments on orders from the Government of Quebec. It sold all the investments. But for 10 or 12 years, Hydro-Québec was a very dynamic and important Canadian company in Panama.

Scotiabank is one of the most important banks in Panama. We in fact need a lot more Canadian investment in Panama--definitely. I think the most important Canadian investment is from the retirees. We have lots of Canadian pensioners in Panama, and they are investing in real estate.

[Serge Cardin, Bloc, Sherbrooke, QC]

Yes, I saw a report recently that seemed very interesting.

You mentioned mines. Are there any in Panama currently?

I would also like to establish a link between your environmental policy and the behaviour of Canadian mining companies—if there are any—on environmental matters.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

I believe the issue of Canadian mining companies will be an international issue. I think there are Canadian groups that operate throughout the world. There's a very broad network that conveys the message that Canadian miners have had considerable activities in terms of the environment, and they are conveying this message throughout Latin American.

Now, it's difficult to counter this, but there are several points of view. I think what's important is to have a forum where both parties can meet, and for each party to be respected. One thing that is basic, I think, is the work carried out by EDC, Export Development Canada, to call for respect. They require that the principles of the World Bank are respected. If the environment isn't respected and if the Equator principles aren't respected.... I believe there are ten principles. These are the principles that EDC respects or requires in order to loan money. Money isn't simply given; these requirements have to be met in order to carry out any project.

Now, the trouble is that there are junior companies and large mining companies, and when a concession is issued or given in Latin America, what we should seek is for large companies to be involved in these projects. We should not be subjected to the activities of smaller junior companies that are interested in their shares but do not deal with responsible companies. We should look for responsible companies. There will always be a group that will have a negative opinion on companies.

[Serge Cardin, Bloc, Sherbrooke, QC]

Does my colleague have any time left?

You have a minute left, my dear colleague.

[Guy André, Bloc, Berthier—Maskinongé, QC]

I am listening to you, but I do not have a specific question for you. You have answered my questions.

[Serge Cardin, Bloc, Sherbrooke, QC]

So I will use the remaining seconds.

On the brochure, it says “Do you dream of a place where the world would be within your grasp? That place is Panama.”

Can we invest in Panama?

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

I don't know what the interpreter has said.

[Serge Cardin, Bloc, Sherbrooke, QC]

I do not know what the interpreter was able to say to you, but we are giving the floor to Mr. Masse.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

It will be worth while to invest in Panama.

[The Chair, Conservative, Lee Richardson]

We have to move on.

Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Chair.

Thank you, Your Excellency, for appearing at today's committee. Panama has a very interesting history, something we learn in our own history books here, prior to Jimmy Carter in 1979 and afterwards, so it's of great interest to Canadians.

I do know, through the documents here and your discussion, that we have been talking about a lot of positive issues around Panama and some of the things that have been going on. But I want to bring up one point on which I'd like to hear your response, because it is published through Foreign Affairs and International Trade Canada. It's a travel report for Panama. Currently, the travel report says of Panama: “Although the security situation is stable, Canadians should exercise a high degree of caution in Panama due to high crime rates.” This is a travel advisory from the Canadian government, and I would like to hear your response with regard to that.

What they do is to really target certain sections of Panama as being of particular concern if you're going there. One of the things we have to deal with is recognition that if we do have a greater trading relationship, there will be personal visitation and so forth. The current administration report right now advises that travellers exercise a high degree of caution.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

Yes, I have complained several times to my colleague, the Canadian ambassador in Panama, and I keep telling him that I don't understand why the Department of Foreign Affairs has this advisory.

But, yes, there seems to be a lot of sensitivity. Panama falls at the lowest level of the degrees of danger, as we don't have that high a degree of criminality. But they cannot put us in another category; we have to stay in the one we're in, because they cannot find another category for us. Anyway, you'll be travelling there and will definitely see that this degree of criminality does not exist.

I represent my country and cannot talk about other countries. So I won't talk about other countries, other than to say that I could compare the capital of my country with other capitals in Latin America where there's more criminality. And I can tell you that any of the tourists who have gone to Panama will tell you that things are fine. I don't think there has been any case in the five charter flights, carrying 340 passengers each, of anybody being unable to return because they were attacked or assaulted or murdered, or who didn't somehow return with their charter. On the contrary, lots of people have stayed behind because they wanted to retire in Panama, and people haven't left because they were vandalized in Panama—and that's my opinion.

[Brian Masse, NDP, Windsor West, ON]

I wanted to provide you the opportunity to respond to that.

A second question that I have deals with the financial district, on which there's been much discussion, even today.

Some countries might allow people to engage in tax evasion by investing in Panama. Can you maybe respond to that allegation or that charge, that some countries may be able to offer some tax avoidance to people investing in Panama?

What are your laws regarding financial, banking, and taxation policies and treaties with other countries?

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

We're not on any blacklist, and this is one of the things that characterizes us. We have a very serious banking centre and we're not included in any blacklist. We're not a tax haven.

I think that Panama had a bad period during the Noriega days, when several banks left Panama precisely because of our political problem, and we were indeed on the blacklist of several countries. But we have worked on that. We've worked very hard. We've built up the banking centre again, and we have one of the most serious, one of the best, if not the best, banking centres in Latin America.

[Brian Masse, NDP, Windsor West, ON]

Thank you for your answers, Your Excellency.

[The Chair, Conservative, Lee Richardson]

Thank you. Very good.

Thank you for the timing, as well.

We're going to go quickly to the last questions. Who's going to start on this side? Mr. Keddy.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Welcome, Your Excellency. It's nice to see you again. It's always a pleasure.

Very quickly, as I know my colleagues would also like a moment for a question as well, in the general review of the investment climate in Panama, given the changes that have occurred in your country since the canal came into Panamanian hands and given your ability to use that as a revenue generator, and given the opportunities for Canadian business in Panama, it certainly appears to me that Panama would be a prime candidate for an FTA. There's a lot to be gained for both nations.

I want to congratulate you on the direction in which Panama is moving and the opportunities that are there for trade by Panamanians. How do you see those? How do you see those opportunities for your countrymen and countrywomen?

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

For us Panamanians, it's of vital importance to have trade agreements for the development of our country. It's obvious that when we look at Panama, a small country with three million inhabitants, we feel that it's a very small country. But we mustn't forget that a large volume of products goes through Panama, as well as people involved in international trade. So we cannot just measure the potential of Panama based on the population. Panama is an intermodal centre for trade in goods, an intermodal centre for passengers, an intermodal centre for virtual businesses, and this is where the potential of Panama and Panamanians is based. I think Panamanians are creative, and we have devoted ourselves to creating opportunities.

What would be good for us would be to have advantages in trade with Canada. We identify with Canada. Canada has a large area with a small population. We have a small area with a small population, with a large canal with great potential for business. You have marine logistics and large ports; we have a lot of experience in ports. This is where our complementary characteristics come into play. If we both put together this experience, all this expertise.... Well, since we have it, we should do great things together, and I think we can.

Besides, we're two nations that can tolerate the diversity of people from many nations. Panama has welcomed people from many cultures. We are a centre that welcomes people doing business from all over the world, including from Canada. I think we are very similar in that way, and we can complement each other's characteristics and should do business together. I think we're very similar, and we could benefit definitely from our relationship.

Panamanians are hard workers. Panamanians love their country. Panamanians do not emigrate; they go out for business and come back to Panama. So Panamanians are good business partners, and we have proved that we know how to do business. And we always go back to Panama; in other words, we don't leave our country, don't emigrate.

I think that is why we are a good business partner. We know how to do business.

[The Chair, Conservative, Lee Richardson]

Mr. Fast.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you, Mr. Chair.

I want to follow up on that line of questioning. I think Mr. Cardin also referred to this, the amount of Canadian investment in Panama. Clearly, trade is increasing dramatically between our two countries—since 2002, by about 18% each way, which is excellent. But I note that direct Canadian investment in Panama hasn't really grown measurably since 2002. I'm wondering why that is.

Thank you for the brochure and also for the CD. I notice the CD cover says “This CD contains one investment opportunity.” Presumably you're inviting us to invest in Panama. I'm wondering why it hasn't happened in the last six years. Is it high taxation? Is it an unfavourable investment climate? Is it security? Is it simply that Panama doesn't have a lot to offer to Canadians?

I'd like to know, because surely there has to be something of interest in Panama that would invite Canadians to invest in your country.