Mr. Speaker, today we are debating Bill C-46, 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.
To begin, I would like to say that the Bloc Québécois does not support this bill, mostly for the same reasons that it is against so many bills concerning the implementation of bilateral free trade agreements between Canada and certain countries. In this particular case, there is the additional issue of Panama being a tax haven, one that is on France's blacklist and the OECD's grey list. The latter lists countries that have committed to exchanging tax information but that have not substantially implemented the rules.
We know that some countries are tax havens. The OECD has come up with four criteria to determine if a country is a tax haven. Countries wanting to do business or trade with countries that are tax havens must ensure that those countries do not meet these four criteria.
There are tax havens with tax rates so low as to be non-existent, with no transparency when it comes to their laws, specifically their tax laws, and with legal or administrative barriers to sharing information. They attract investments simply for tax reasons, not for any economic activity per se. One of those countries is Panama.
The Bloc Québécois wants Canada to ensure that it can do business transparently, that it can get all available information on, for instance, Canadian or Panamanian businesses that want to do business here, so we can see where the money goes, who is paying taxes and how much.
We are calling on the Conservative government to sign a tax information exchange agreement with Panama. At present, we have no guarantee that any tax information exchange agreements with Panama have been signed or that such agreements provide a tax exemption for subsidiaries located in jurisdictions with which we have agreements. What does that mean? It means that Canada signs many bilateral free trade agreements, and Canadian subsidiaries that operate on islands or in countries with which we have such agreements should, theoretically, bring profits earned there back to Canada in order to pay taxes.
Canada does not force them do so. In fact, in 2007, the Conservative government expanded the definition of designated countries in the Income Tax Regulations in order to accommodate a country with which Canada concluded a tax information exchange agreement. Thus, income earned by a business operated by a foreign subsidiary in a country that has concluded a tax information exchange agreement is tax-exempt.
In 2007, the Conservative government made changes that distorted information exchange agreements. These agreements not only allow information exchanges, but also allow subsidiaries located in the targeted jurisdictions to be tax-exempt. That is why the Bloc Québécois is calling on Canada to implement a real tax treaty to improve the transparency of Panama's financial institutions and effectively fight tax evasion before agreeing to ratify a free trade agreement. Since Panama is a tax haven, we believe it will be easy for companies and individuals to set up there or to invest money there. There will be no transparency, and we will not know how much money these people make, how much they should pay in taxes and whether these taxes will be sent back to Canada. That is one of the reasons we do not accept this free trade agreement.
There is another reason behind our position. The Bloc Québécois is open to trade, but not at just any cost. It is open to trade if human rights are respected. Panama has a right-wing government that adopted legislation considered anti-union on June 30, 2010. That legislation includes a labour code reform that is perceived to be repressive since it would criminalize workers who demonstrate to defend their rights. In August, the Panamanian government agreed to review the legislation. We still have cause for concern about whether Panama's government really intends to comply with International Labour Organization conventions. I think it is important to postpone signing the free trade agreement and ensure that the Panamanian government changes its attitude toward unions and workers in its country.
The Bloc Québécois is open to trade, but its focus is fair globalization. We believe that in order for trade to be mutually beneficial, it must first be fair. A trading system that results in exploitation in poor countries and dumping in rich countries is not viable. The Bloc Québécois will never tolerate a system of free trade that would result in a race to the bottom. The absence of environmental or labour standards in trade agreements puts a great deal of pressure on our industries, especially our traditional industries. It is very difficult for them to compete with products made with no regard for basic social rights.
The Bloc Québécois believes that child labour, forced labour and the denial of workers' fundamental rights are a form of unfair competition, just like, or even more than, export subsidies and dumping. Prohibition of these practices is widely accepted at the international level, as reflected by the large number of countries that have signed the International Labour Organization's eight fundamental conventions. We must have the means to protect ourselves against such practices.
Trade agreements and trade laws do not protect our businesses and our workers from this social dumping. If a country wants to benefit from free trade, in return, it has to accept a certain number of basic rules, with regard to social rights in particular. Environmental organizations and human rights groups have been concerned about this issue for a long time. More recently, though, it has become a major economic issue. Quebec has proportionally more industries threatened by competition from Asia than the rest of Canada. Quebec is at the forefront of this debate.
That is why the Bloc Québécois is urging the federal government to revise its positions in trade negotiations in order to ensure that trade agreements include clauses ensuring compliance with international labour standards as well as respect for human rights and the environment.
Is my time already up, Mr. Speaker?