Evidence of meeting #39 for International Trade in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was panama.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Félix Wing Solís  Executive Director, Environmental Advocacy Center
Claude Vaillancourt  Co-President, Quebec Association for the Taxation of Financial Transactions for the Aid of Citizens
Teresa Healy  Senior Researcher, Social and Economic Policy Department, Canadian Labour Congress

5 p.m.

Conservative

Ron Cannan Conservative Kelowna—Lake Country, BC

Whatever that means.

Thank you, Mr. Chair. I'll turn it over to Mr. Holder.

5 p.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

On a point of order, Mr. Chair, I think “whatever that means” was a question.

5 p.m.

Conservative

The Chair Conservative Lee Richardson

I don't think that's a point of order. We're running out of time.

Mr. Holder, you have the floor. I think we had a question asked and answered.

Mr. Holder, go ahead.

5 p.m.

Conservative

Ed Holder Conservative London West, ON

Thank you, Chair.

I'd like to thank our guests for attending and providing their testimony to us today.

It certainly seems clear to me that what we have is a philosophical difference about what free trade is intended to do. I suspect that no level of questions that I might ask or any answers that you might provide in support of this would probably provide any monumental shifts in the way either of us thinks. That's too bad in a way, because quite honestly, as I think about what we're trying to do in Panama with this deal, I look at what we've done with this. The effect, ladies and gentlemen, of a free trade deal with Panama would be to immediately remove tariffs from most of the two-way trade between our two countries. I don't know how that's bad for people.

I note that Miss Healy indicated that a free trade agreement would help multinationals avoid their responsibilities. That was a piece of a quote from an earlier comment. What I don't understand is what's wrong with having a rules-based system, We already do trade now. In fact, as I look at the statistics for trade between Canada and Panama, there's a balance of trade of about $50 million in Panama's favour. We do some $132 million of bilateral trade, and most of that is Panama's exports to Canada.

What I don't understand is how eliminating tariffs to help the economies of both countries prosper in the worst recession we've ever had can be bad for any individual, when in fact we're trying to give them the dignity of a job. I certainly understand social justice. I think I do. I think I understand what it is to treat people with respect. I think I know that as well, but it surprises me when what we're trying to do is increase the standards of living in our two countries. In addition to that, here we have a labour cooperation agreement that respects the International Labour Organization's Declaration on Fundamental Principles and Rights at Work and has in place an agreement on the environment that has a number of things that talk about the importance of that.

In the absence of those things, can you please tell me--and perhaps, Ms. Healy, I might ask you, because I'm not sure who to ask this question to, quite frankly--how not having this deal hurts the people of Panama and helps Canadians? Can you please help me get my head around that, because I'm terribly stressed by an arbitrary position that, frankly, feels that way and has no give, and I don't sense a given in all of this. Maybe you could help me understand in the brief moment that you have for a response.

5 p.m.

Senior Researcher, Social and Economic Policy Department, Canadian Labour Congress

Dr. Teresa Healy

Nothing would make me happier than to have a discussion along the lines you have suggested. I would start by suggesting that if we look at the labour cooperation agreement, what we see are certain principles being offered as important and as having to be taken into account right at the beginning.

5:05 p.m.

Conservative

Ed Holder Conservative London West, ON

Do you agree with those principles?

5:05 p.m.

Senior Researcher, Social and Economic Policy Department, Canadian Labour Congress

Dr. Teresa Healy

Yes. Those principles are freedom of association and the right to collective bargaining. This is very good. This is weaker, as it's written down, than the Canada-Colombia agreement, which is interesting.

I just want to point out that we already have a rules-based system. The question now is what kinds of rules are being developed on top of rules that already exist. The first four obligations that are outlined in the labour side agreement refer to the 1998 Declaration on Fundamental Principles and Rights at Work. Then the next three obligations refer to the decent work agenda.

What happens in the process of dispute resolution is that the parties must make a decision as to whether or not a complaint will go forward from any dispute that comes up, but what happens is that not all of those obligations would ever be brought to a review panel. Only the first four would. The ones that have to do with the decent work agenda would not be brought to a review panel.

The other thing is that in this labour provision, part 3 stipulates that the matter must be trade-related if it's to go to the next stage of a review panel, which raises the question of why investment is not there, when trade and investment were mentioned earlier on.

With a fuller discussion, we could talk about why we have objections to the labour side agreement--

5:05 p.m.

Conservative

Ed Holder Conservative London West, ON

I have one last question.

In the absence of any rules, is this not a better arrangement than the current one?

5:05 p.m.

Senior Researcher, Social and Economic Policy Department, Canadian Labour Congress

Dr. Teresa Healy

We do have rules. The question before us is whether or not Canada would offer a preferential trade and investment agreement to this particular country. Canada and Panama are already quite related in terms of a whole web of international rules around trade and investment. The question now is whether Canada would offer a preferential bilateral deal to Panama.

5:05 p.m.

Conservative

Ed Holder Conservative London West, ON

Are you suggesting that these rules are somehow not as good as what's currently in place?

5:05 p.m.

Senior Researcher, Social and Economic Policy Department, Canadian Labour Congress

Dr. Teresa Healy

What I'm suggesting is that these rules are not as good.... They do not defend labour rights to the extent that investment rights are protected, and it's the relationship between the two that's crucial.

5:05 p.m.

Conservative

Ed Holder Conservative London West, ON

I would agree from this standpoint that they probably don't meet the perspective you would like to have on them. I understand that you have a very specific position, but I come back to the firm position that this labour cooperation agreement--this agreement on the environment--may not be to your magnitude, but it's significantly stronger than what we currently have in place.

Let's not forget that we do trade with these folks. We have a rules-based system that brings better clarity and advantages Canada and Panama, which from my perspective makes this a very sensible thing.

You've been very kind to answer as far as you have.

Thank you, Chair.

5:05 p.m.

Conservative

The Chair Conservative Lee Richardson

We are out of time on that side.

We'll have a final question from Monsieur André.

Welcome back.

December 8th, 2010 / 5:05 p.m.

Bloc

Guy André Bloc Berthier—Maskinongé, QC

Good afternoon. Mr. Richardson, we visited Panama together. I don't know if you remember, but, at that time, I was a member of the committee and we had begun looking into the development of this agreement.

Good afternoon, Mr. Vaillancourt. Good afternoon, Ms. Healy. I have five minutes and I would like to ask each of you a question.

Mr. Vaillancourt, I would like you to tell us who you think will benefit from the agreement between Canada and Panama. Who will really benefit from the agreement?

Do you have any data on the amounts of money Canadians currently have in Panamanian tax shelters?

I also have a question for Ms. Healy. You are probably aware of a bill that was adopted in Panama, bill 30. This piece of legislation penalizes unions to some extent and goes as far as to criminalize union members who could object to their working conditions. I know that this agreement greatly affects the mining sector.

Do you have any data on this? Could you tell us how this bill affects the labour conditions of people who work in the mining sector and how it affects the operators? There are often issues in the mining sector regarding compliance with environmental norms. I would like to hear your opinion on this.

Mr. Félix Wing Solís, you talked about fair trade. You said you were not against free-trade agreements. The Bloc Québécois certainly supports the free-trade agreement between Canada and Europe, but we were against the Canada-Colombia agreement, which is somewhat similar to the Canada-Panama agreement. It's not exactly the same thing, but there are some similar elements in connection with the mining sector and non-compliance with labour conditions.

How do you view this fair trade? Do you see it more in the context of a multilateral agreement? I think that a multilateral agreement can often ensure a better basis for negotiations and greater compliance with certain international standards than a bilateral agreement can. I would like to hear your thoughts on this. What kind of an agreement do we need to have with Panama to ensure fair trade?

5:10 p.m.

Co-President, Quebec Association for the Taxation of Financial Transactions for the Aid of Citizens

Claude Vaillancourt

Can I answer first?

5:10 p.m.

André Guy

Yes, go ahead, Mr. Vaillancourt.

5:10 p.m.

Co-President, Quebec Association for the Taxation of Financial Transactions for the Aid of Citizens

Claude Vaillancourt

First, as I already said, this agreement will certainly not benefit Canadians owing to tax evasion and avoidance. It will not benefit Panamanians either. As far as tariffs go, here are some statistics from African countries:

[Translation] [...] the 40% tariff reduction in Ivory Coast resulted in massive layoffs in the chemistry, textile, footwear and automobile assembly industries. In Senegal, a reduction of tariffs from 165% to 90% lead to the disappearance of one third of all jobs in the manufacturing sector between 1985 and 1990.

Therefore, reducing tariffs makes local companies a lot less competitive. That could have negative consequences. It's important to point this out.

Regarding your question about whether we have data, the problem with tax havens is that the money disappears into big black holes. We have looked into this, and it's extremely difficult to get exact data. This is a constant challenge because bank secrecy stands in our way. This secrecy makes it impossible for us to know how much money is tucked away in tax havens. If only for this reason, that is, the cloak of secrecy under which transactions take place, we should withdraw from these kinds of agreements.

5:10 p.m.

Senior Researcher, Social and Economic Policy Department, Canadian Labour Congress

Dr. Teresa Healy

On the question of labour law in Panama, one of the important things to realize is that there was a profound political crisis that erupted in the summertime over the institution of the new labour law in Panama. There were deaths. It was a very profound crisis.

The law was then withdrawn after the objections of civil society. What happened was that the most egregious aspects of the law were withdrawn. However, there are still problems with limitations on the right of freedom of association in Panama. There are restrictions on the right to hold office. The minimum number of workers to form a union is 40. Therefore, for example, to avoid unionization, companies will restructure themselves to make sure that they have fewer than 40 employees.

There are problems with the federations and confederations having the right to strike. There are limitations on the right to strike in enterprises that have been in existence for less than two years. We've talked about the problems in the Canal Zone and in the zone of Barú.There are severe limitations on the right of maritime workers to strike. There's a very broad definition of what essential public services are, and therefore, there is no right to strike for them. They have compulsory arbitration in that case. Again, a minimum of 40 workers are required to form an association.

Some of the other problems with labour law have to do with organizing and collective bargaining and problems with short-term contracts and subcontracting. There were other decrees that were meant to deal with some of the most difficult areas on those issues, but we have no real way of knowing to what extent those 2009 decrees have actually been enforced.

5:10 p.m.

Bloc

Guy André Bloc Berthier—Maskinongé, QC

Thank you.

Mr. Solís.

5:15 p.m.

Executive Director, Environmental Advocacy Center

Félix Wing Solís

As I mentioned in my presentation, I don't think this FTA promotes fair trade. We at CIAM advocate for the highest common standards possible governing environmental and social safeguards. Therefore, we would advocate for any free trade agreement or negotiation or the like that adopts such high standards.

For example, if we compare this FTA with others in the region, such as NAFTA and CAFTA, environmental provisions are not as solid and, as I mentioned, there is no grievance mechanism provided, in specific terms, in this FTA.

Thank you.

5:15 p.m.

Conservative

The Chair Conservative Lee Richardson

Thank you again, Mr. André. We're pleased to have you back with us.

That will conclude our questioning. We've gone about 15 minutes overtime, but I thought we owed it to our witnesses, who've been very patient with us, particularly with the telephone conversation. I hope that wasn't too inconvenient for you, Mr. Solís. Thank you for your participation.

Mr. Vaillancourt, as well, thank you for joining us on conference.

Again, Ms. Healy, thank you for coming back.

I'm going to take a one-minute suspension here while we bid adieu to our witnesses and switch to an in camera meeting. I want an in camera meeting for about 10 minutes on committee business.

[Proceedings continue in camera]