Debates of Sept. 30th, 2010

Canada-Panama Free Trade Act

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Madam Speaker, I would like to thank my NDP colleague for calmly explaining this bill's weaknesses, which suggest that our government has little to gain economically from this kind of agreement.

It is very important to emphasize that Panama is a tax haven. If we increase trade between our two countries, more of our country's money will be sheltered from taxation.

Signing this kind of agreement is contrary to Canada's interests. I would like the member to comment further on Panamanian tax shelters.

[Bruce Hyer, NDP, Thunder Bay—Superior North, ON]

Madam Speaker, I do not pretend to be an expert in this field. I was merely quoting the report by the Organisation for Economic Co-operation and Development in 2000, which said that this was a country with a serious a problem, because it is a tax haven.

Members may have noticed in the news this week that the Canada Revenue Agency is becoming increasingly concerned about large corporations and rich Canadians who are choosing, through legal, quasi-legal or sometimes not very legal means, to move their wealth into areas that are tax havens. It is a wake-up call to do a much better job of thinking about where Canadian wealth is being distributed.

[Claude Gravelle, NDP, Nickel Belt, ON]

Madam Speaker, I commend my colleague for his low-key speech on this bill.

The member opposite used the words “sabotaging Canada”. The fact that foreign corporations are using Panama as a tax haven for probably billions and billions of dollars is sabotaging our health care, education, and housing, all the things necessary to give Canadians a good life. How is this tax haven affecting ordinary Canadians?

[Bruce Hyer, NDP, Thunder Bay—Superior North, ON]

Madam Speaker, I would like to go back to the growing gap between the bottom and the top. In a good society, we need to be sure that no one is left behind. Increasingly, many Canadians are being left behind, and many small businesses, present or potential, are being left behind and are having trouble competing, even though they have created 80% to 90% of all new jobs over many decades.

We have increasingly been worshipping at the altar of bigger is better; trade with any country, whether it has ethics or not; the buck is all that matters; and worship the dollar. We will reap what we sow if we continue on that path.

[Gerald Keddy, Conservative, Parliamentary Secretary to the Minister of International Trade]

Madam Speaker, I listened to the hon. member's comments, and quite frankly, I disagree with just about everything he said.

I do not understand why his party would not want to trade with a country that handles about 5% of the world's trade through the Panama Canal and that is an automatic partner for our Atlantic and Pacific gateways. I fail to understand why it would not want to trade with a country that has an immediate $5.2 billion in infrastructure with the widening of the Panama Canal. I fail to understand why it would not want to trade with a country that is the gateway to 34 more countries and economies in Central and South America and the Caribbean. I fail to understand why it would not want to trade with a country that is democratically elected and is looking to improve the position and status of its citizens.

[Bruce Hyer, NDP, Thunder Bay—Superior North, ON]

Madam Speaker, I believe in trade, and my party believes in trade. We want to trade with any country that has fair trade and that deals with its citizens, unions, aboriginal peoples, and the environment with respect.

As we negotiate, and treaties are negotiations, we need to make sure that we look at all the factors that affect the long-term sustainability of both our economies and not do just short-term thinking.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Madam Speaker, I have spoken on other free trade agreements in the past. This will not be a complete repeat but what has happened is that the government has made the same mistakes again.

I will speak in two parts. In the first part, I will voice my concerns about this agreement, and, in the second part, I will talk about what a fair trade agreement should look like and what would be acceptable.

I will echo the hon. member's remarks. Canada is a trading nation. We need trade to survive, as does every other nation on this planet. Trade is essential. We believe in trade but we believe more than anything in fair trade. We believe agreements can be struck that reflect the values I will talk about right now as I speak to the concerns I have.

It seems that the Conservative government is engaging in NAFTA style trade agreements and, in this particular case, with a country that is also an offshore banking centre and that acts as a platform for multinationals and a conduit for opaque banking activities and tax evasion.

It is not just me who thinks that but also a Democrat congressman in the United States. I will quote just a small part from a letter he has written. It reads:

Panama’s industrial policy is premised on obtaining a comparative advantage by banning taxation of foreign corporations, hiding tax liabilities and transactions behind banking secrecy rules and the ease with which U.S. and other firms can create unregulated subsidiaries. According to the State Department, Panama has over 350,000 foreign-registered companies.

Michael Michaud is the congressman who made those remarks.

It looks as if the Canadian government is building a so-called free trade platform that would provide front corporations with additional powers and incentives and give them the right to challenge Canadian regulations and standards, and shape trade to serve their needs, not necessarily the needs that are in the public interest.

It seems that we are making it easier for Canadian foreign companies to move to Panama, to flout Canadian labour laws and to pay their workers in Panama, which, I think, the average wage at the moment is about $2 an hour, and not have to pay for pensions, benefits and sick days.

Canadian law states that workers enjoy certain minimum workplace safety laws and benefits. Corporations in Panama do not have any of these.

As with the other free trade agreements with Colombia and Peru, appended outside of those agreements, outside of the main text, are labour co-operation agreements. We have heard people speak about those this morning.

The problem with the agreement, as it was in the other free trade agreements, is that it is an agreement without any vigorous enforcement mechanism. The same template was used in the Canada-Colombia and the Canada-Peru agreements. The labour side agreement does not deliver an effective mechanism for the protection of labour rights.

I will say what I said when I spoke on the Canada-Colombia free trade agreement. If the labour co-operation agreement is so important, why is it a side agreement? Why is it not in the main body of the agreement? If it is in the main body of the agreement, then there would be a vigorous enforcement mechanism. Again, it is a side deal.

The side agreement on the environment is the same. There is no effective mechanism to force Canada or Panama to respect environmental rights. The agreement commits both countries to pursue environmental co-operation and to work to improve their environmental laws and policies but it can only ask both parties to enforce their laws. That is why it has been put into a side agreement, at least I assume that is why. Why is it not in the main body of the free trade agreement?

I am also concerned as to why the Conservative government and the Liberal Party are in such a rush? Why are they in such a rush to move Canadian jobs overseas? Why are they in such a rush to enhance the capacity of multinational corporations to evade taxes? Why are they in such a rush to allow these corporations to leverage additional power over Canada's government and Parliament?

We heard earlier today various speakers in the debate talk about Panama, which is regarded as a tax haven by the OECD. In the last 24 hours, we have heard lots of news nationally about this very same issue.

In 2008, Panama was one of 11 countries that did not have a tax information exchange agreement signed or in force. Panama is one of three states that would not share banking information for any tax information exchange purpose at all. Panama does, however, have a bilateral agreement with the U.S. called the mutual legal assistance treaty to which Panama will share some information. Tax offences are not covered by the treaty. Tax information sharing could occur for a criminal offence, though, such as drug trafficking. Therefore, there is a possibility to move forward on this particular issue and this agreement could have done that, but it did not.

The OECD has blacklisted Panama since 2000. I did not want to say anything about this but Panama has not to date substantially implemented the internationally agreed tax standards to which it had committed itself. So nothing has been moved on that front. This free trade agreement would have been a wonderful opportunity for the Government of Canada to make that happen.

Today, in 2010, I find it interesting that the Colombian banking system retains a prominent role in the Panamanian banking system. We can draw our own conclusions from that. Again, it is on the NAFTA model and, as everybody knows, we have had trouble with NAFTA and softwood lumber.

I just want to say a little bit about that. Bilateral trade deals generally go against GATT and multilateralism. The International Monetary Fund has been complaining about the proliferation of bilateral trade agreements, which would spell a return to protectionism and trade wars between trading blocs, so it is concerned.

The Canada-Panama trade deal is a NAFTA-like agreement. It is the same template which overrides the democratic rule of Parliament and equalizes or gives precedence to corporate rights over human rights. All of the text of the accord is not yet available. The free trade agreement would very likely produce chapter 11-type issues, what has been proven to be an inadequate dispute resolution mechanism that can easily be abused by the dominant partner. I draw the attention of the House to softwood lumber, which is a good example.

The Canada-Panama agreement is another agreement, which, I guess we could say, is marginally improved on the Bush-style approach to trade. However, it would still put big business before people, it has no effective enforcement of human rights and it pays lip service to environmental protection without any real tough measures or any dispute resolution mechanisms.

We have an opportunity in free trade agreements to help the poorest of the poor. One of the big worries we hear bandied about is micro-financing. The trouble with micro-financing, as we talk about it now, is that it does not reach the poorest of the poor. When I say poorest of the poor I mean those who live on less than $1.25 a day. Those are the poorest of the poor on our planet. There are models that have worked when we talk about micro-financing. We can make it work for those people. We can make it work for housing, education and a whole host of other things that are so important to the survival of families and the ability for families to move ahead.

Free trade agreements are exactly the same. There is an opportunity to make all of those good things happen. However, this agreement does not do that. Panama, by the way, is not a major trading partner of Canada. It is less than 1%, which makes it an interesting choice for a free trade agreement. Because of the smallness of our trade, it has to send up some red flags and we have to wonder why. Are there not other countries that would be much better opportunities for Canada in terms of exporting and trade agreements?

Another concern I have is that we have yet another trade deal negotiated in record time and, because it was done in record time, I wonder if there has there been full consultation with environmental groups, trade unions, civil society and citizens of the countries? A fair and sustainable trade deal would not just address the needs for business but also the needs of working families and the environment.

The trade deal does not provide investors and labour with a level playing field. While under chapter 11 investors have the right to seek binding arbitration that they can pursue independently, a trade union in Panama does not get to pursue a case to arbitration. It could file a complaint that would lead to an investigation and possibly a report, but it is up to the government to seek remedies and damages. Experience with our past NAFTA templates shows that it is unwilling to do this. Empirical evidence strongly suggests that the minister of the day will not pursue these matters.

The trade agreement includes enforceable protections of patents, trademarks and copyrights but no meaningful protection of workers and no meaningful protection of the environment.

What would a fair trade policy look like? When we stand in the House we reaffirm our vision for a fair trade policy that puts the pursuit of social justice, strong public sector social programs and the elimination of poverty at the heart of any affected trade policy. Canada's trade policy should be based on the principles of fair, sustainable and equitable trade, trade that builds partnerships, partnerships with other countries that support the principles of social justice and human rights, while also expanding business opportunities.

The federal government should stop exclusively pursuing the NAFTA model at the expense of all the other alternatives, because there are alternatives. It should invest in other avenues of growth, including, above all, a vigorous trade promotion strategy that builds the Canadian brand abroad along the lines of the Australian experience, for example.

It is shocking to hear that the European Union spends in excess of 500 times more than Canada in promoting its wine industries. There may be a greater volume of wine in European countries, but 500 times more towards promotion than Canada?

There is an alternative and there is a better form of trading relationship that can be established with Panama or any other country, one with an overall fair trade policy that includes the following:

First, it should provide a comprehensive common sense impact assessment on all international agreements that demonstrates that trade deals Canada negotiates are beneficial to Canadian families, workers and industries. The government should never sign a trade deal that would lead to a net job loss.

Second, it should ensure that the trade agreements Canada negotiates support Canada's sovereignty and freedom to chart its own policy, support our ability to be a competitive force on the world stage, and support the principles of a multilateral fair trade system.

Third, by fundamental principle, all trade agreements must promote and protect human rights by prohibiting the import, export or sale in Canada of any product that is deemed to have been created under sweatshop conditions, forced labour or other conditions that are not in accordance with fundamental international labour standards and human rights.

Fourth, by fundamental principle, all trade agreements should respect sustainable development and the integrity of all ecosystems. That is straightforward. I do not think anybody in the House would disagree with these things.

Fifth, at any time the Government of Canada signs a free trade agreement, the decision to proceed with enabling legislation should be subject to a binding vote on whether to accept the terms of the agreement. The current system, which consists of tabling FTAs in the House for a period of 21 sitting days prior to ratification, is neither mandatory nor does it bind the government to a decision of the House.

The minister should be required to develop fair and sustainable trade-related performance indicators in concert with provinces and territories. Statistics Canada could collect the information and develop with the finance department new benchmarks for the evaluation of present and future trade agreements.

Performance indicators would measure the impact of bilateral trade agreements on the qualify of life, to include, in addition to detailed bilateral trade figures, an assessment of their effects on things such as employment, including quality of employment; impact on wage levels and core labour standards; things such as prices and market concentration, including the effects of currency manipulation; the effects on public health, including an assessment of the impact of intellectual property rights on drug prices, for example; environmental standards; human rights standards; the levels and types of investment by industry; economic diversification; food self-sufficiency; food safety standards; consumer safety; the effect on farms and farmers and the number of farms; access to essential services; the fiscal system; and intellectual property and copyright.

I have just outlined the concerns I have about this free trade agreement and what a fair trade agreement would look like. I welcome questions from my colleagues.

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

Madam Speaker, my colleague said there were no effective enforcement mechanisms with respect to labour issues: occupational health and safety, exploitation of children, collective bargaining, forced labour, and workplace discrimination. I wonder if he knows that, in the agreement, failure to respect International Labour Organization principles would result in an independent review panel assessing monetary penalties as a matter of a special fund to be used to support the implementation of a remediation for whatever the issue was, exploiting children or whatever.

Therefore, there is that mechanism. I wonder if he is aware of that.

Also, if we do not engage countries such as Panama, how can we ever bring that kind of sustainability in the environment and fairness in trade if we do not have them under either a bilateral umbrella or availing ourselves of the multilateral umbrella provided by international dispute mechanisms? How are we ever going to bring a humane, humanitarian and empathetic solution to the kinds of issues that the member has talked about?

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Madam Speaker, there are two questions there, one on labour and one on the environment. I will try to answer them both at the same time.

I will go back to what I said earlier. We have side deals on both of those things, environment and labour, which are not part of the main text. They are not part of the main text so they can stay on the side and not truly have any sort of mechanism that deals with things when they go wrong.

For example, in labour, let us say a labour leader is killed, for the right to strike or for whatever reason a labour leader is killed. They would get a fine. They pay themselves a fine. That is what this side agreement means on labour. If it were in the main body of the text, there could be other mechanisms built in, other triggers that have penalties that suit the problem.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Madam Speaker, since there were two questions asked by the member for Richmond Hill, I am going to up him by asking three questions of my friend, the member from Thunder Bay.

First, what do these have in common: EFTA, Peru, Colombia, Jordan and Panama? Second, which party voted against the free trade agreements with each of those? Third, why does the New Democratic Party consistently oppose free trade when it is one of the reasons Canada is leading the G8 out of the recession?

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Madam Speaker, the answer to the member's first question is that those free trade agreements are ill-conceived. They are poorly put together. They could be put together better. I think that is the point I have been trying to make in the course of my last 20 minutes of speaking, that we could make them better if we just took the time to ensure that the elements I talked about in relation to the concerns I have about the free trade agreements were there.

If the things I talked about were in there, if we could protect labour with real teeth, protect the environment with real teeth, ensure that the poorest of the poor in any of these countries that we make agreements with are going to be much better off because of these agreements, ensure that our jobs do not disappear and all these other things that I talked about, I could tell this member that I would be supporting these free trade agreements.

There are ways to make trade agreements work.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Madam Speaker, I listened carefully to my NDP colleague's presentation. One point that stood out was the fact that there is no information exchange agreement in the bill before us. Information exchange is critical to any trade agreement. If this agreement works at all, trade between Canadian and Panamanian companies will increase. That is why it is important to have full access to information about revenue if we do not want to be taken for a ride. In the end, we have to ask ourselves whether this bill is just another gift to Canadian companies to help them avoid paying taxes.

I would like to hear his opinion on this since he has studied the bill so thoroughly.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Madam Speaker, several countries, including the United States, have listed Panama as a tax haven. That is the first part of my answer, that because it is listed as a tax haven and continues to be listed as such, we have to be concerned that businesses in Canada will have the opportunity to move jobs out of Canada to Panama. The other part is that they will have the ability not to pay taxes. That is a real problem.

What could have been in this trade agreement to prevent it from happening? There could have been a tax exchange section in this agreement or there could have been something constructed to ensure that does not happen, but it was not done. It was much easier to simply follow the same model for the other free trade agreements and get it done as quickly as possible. I do not know why a little more time was not taken.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Madam Speaker, as we speak today, there is a forum in Singapore with 200 delegates to fight tax fraud and bank secrecy. It met yesterday and is meeting today to look at the progress. It delisted countries such as the Philippines. It said the Philippines are doing good work and are no longer listed as a tax haven.

However, it went after Panama and said the reason was that it refused to give information to foreign tax authorities, there is a lack of transparency in the operation of the legislative, legal and administrative provisions, there is no requirement for a substantial local presence, and it promotes itself as an offshore financial centre. This is the country that we are talking about and about to do business with. Tax cheaters can sleep well tonight because there is no persecution or penalty.

My question is this: Why are the Conservatives and Liberals soft on crime when it comes to cross-border cheaters and tax fraudsters?

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Madam Speaker, to answer that question, we will have to wait and see what happens with the Canadian government and the potentially thousands of cheaters that have been found in the last 24 hours. We will see how the government deals with them. That will be an important part of it.

We have a trade agreement that has been negotiated in record time, with no consideration for all the things I talked about, including the problems that Panama has and the lack of sharing of tax information. I do not understand the urgency when there could be a trade agreement that is much better than the one the Conservative government has come up with.

[Claude Gravelle, NDP, Nickel Belt, ON]

Madam Speaker, there has been a wave of anti-union repression in Panama, resulting in several workers killed, over 100 injured and over 300 arrested, including the leader of the SUNTRACS and CONATO trade unions. This was the government of Panama's brutal reaction to protests against new legislation restricting the right to strike and the freedom of association, including provisions to jail up for up to two years any workers taking their protest to the streets. This simply proves that the labour protection agreement will not provide any real protection of labour rights in Panama as it lacks any effective mechanism for enforcement and the Panamanian government clearly intends to ignore it.

This is but one reason why we against this trade agreement. I will give more reasons why we oppose this trade agreement.

We are engaging in a NAFTA-style trade agreement with a country that is also an offshore banking centre that acts as a platform for multinationals and a conduit for opaque banking activities and tax evasions.

We heard recently in the news media about Canadians who were avoiding taxes. Panama is just one of these countries where Canadian corporations can take the profits they have earned off the backs of Canadian workers, Canadian workers who have paid their share of the taxes to improve society as a whole so the poorest Canadians can live better. However, these companies are taking their profits, which may be millions or even billions of dollars, and investing them in Panamanian banks where they do not pay any income taxes.

We are building a so-called free trade platform that would provide front corporations with additional powers and incentives to challenge Canadian regulations and standards and shape trade to serve their needs and not the public interest, and I want to expand on this a bit.

We just finished a year-long strike in my community. A foreign company challenged Canadian regulations and standards by using scabs to perform the work of striking workers, by using intimidation, by firing people just for expressing the fact that the company did not want to negotiate, by ignoring bylaws in our community, bylaws that were set in place to protect the people of our region. The company was housing scab labourers in office buildings. They were sleeping in those buildings. This is completely against the bylaws of my community of Sudbury. The company had the gall to take our municipality to court over this. The company was breaking the bylaws, but it was the one that was taking our municipality to court. That is why I want to repeat this: Canadian regulations and standards and shape trade to serve their needs and not the needs of the public.

We are making it easier for Canadian and foreign corporations to move to Panama, flaunt Canadian labour laws and pay their workers in Panama an average of about $2 an hour, and not have to pay pensions, benefits and sick days. Pensions, benefits and sick days are the core values of Canadian workers and they should be the core values of any Panamanian worker.

Canadian laws state that workers enjoy certain minimum workplace safety and benefits. Corporations in Panama do not have to do any of this. Imagine if we did not have any safety laws in Canada. Imagine what would happen to the workers who worked in deep underground mines if there were no Canadian laws to protect them so they could go home to their families at night. We are encouraging companies to invest in Canada and flaunt our Canadian laws.

This agreement is without a labour co-operation agreement, without any vigorous enforcement mechanism. The same template was used in the Canada-Colombia agreement, “kill a trade unionist, pay a fine”. The labour side agreement does not deliver an effective mechanism for the protection of labour rights. The side agreement on the environment has no effective mechanism to force Canada or Panama to respect environmental rights.

The agreement commits both countries to pursue environmental co-operation and to do work to improve their environment laws and policies, but it can only ask both parties to enforce their domestic laws. If they do not, there are no consequences. In other words, Panama can do anything it wants to the environment and there are no consequences.

Why is the Conservative government in such a rush to move more jobs overseas and enhance the capacity of multicultural corporations to evade taxes and leverage additional power over Canada's government and Parliament? With this agreement, we will move more jobs out of Canada, the same as the Brazilian company that bought Inco and moved jobs out of Canada. When jobs are moved out of Canada, there is no net benefit to the Canadians.

We are not against free trade agreements. We are not against foreign ownership. We are against losing our jobs in Canada. We want these agreements to be beneficial, not only to the Panamanian people but also to Canadian people.

The Canada-Panama agreement is another marginally improved copy of the George Bush-style approach to trade. It still puts big business before people, with no effective enforcement of human rights and pays lip service to the environmental protection without any real, tough measures or dispute resolution mechanisms.

[Kevin Sorenson, Conservative, Crowfoot, AB]

George is back.

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

I haven't heard that for at least one speech.

[Claude Gravelle, NDP, Nickel Belt, ON]

I can hear the opposition members talking about George Bush, but they are sure anxious to follow his lead. That is why the want to sign the trade agreement with Panama.

According to the U.S. Department of Justice and many other entities, Panama is a major financial conduit for Mexican and Colombian drug traffickers and money laundering activities. Again, just like we did with Colombia, we want a free trade agreement with a drug-producing country. How will that benefit Canadian workers? I do not know.

It is yet another trade deal negotiated in record time, without any consultations with trade unions, environmental groups or civil society and citizens. A fair and sustainable trade deal would not just address the needs of business, but also the needs of working families and the environment.

I will give the House our vision of a realistic free trade policy. The NDP reaffirms its vision for a fair trade policy that puts the pursuit of social justice, strong public sector social programs and the elimination of poverty at the heart of an effective trade strategy. Would it not be nice if we could help eliminate poverty in Panama with an effective fair trade agreement?

Canada's trade policy should be based on the principle of fair, sustainable and equitable trade, which builds trading partnerships with other countries that support the principle of social justice and human rights, while expanding business opportunities. We want our Canadian businesses to expand their opportunities, but we want them to do it in a fair and equitable way for workers across the world.

Fair trade should be the overarching principle, not just an afterthought of trade negotiations. The NDP strongly believes in an alternative and a better form of trading relations that can be established with Panama and other countries, one that includes the following within an overall fair trade strategy.

The first is to provide a comprehensive common-sense impact assessment on all international agreements that demonstrates the trade deals Canada negotiates are beneficial to Canadian families, workers and industry and that the government does not sign any trade agreement that would lead to net job losses.

The second is to ensure that the trade agreements Canada negotiates support Canada's sovereignty and freedom to chart its own policy, support our ability to be a competitive force on the world stage and support the principles of a multilateral fair trade system.

The third is the fundamental principle that all trade agreements must promote and protect human rights by prohibiting the import, export or sale in Canada of any product that is deemed to have been created under sweatshop conditions, forced labour or other conditions that are not in accordance with fundamental international labour standards and human rights.

The fourth is the fundamental principle that all trade agreements should respect sustainable development and the integrity of the ecosystem.

The fifth is that any time the Government of Canada signs a free trade agreement, the decision to proceed with enabling legislation would be subject to a binding vote on whether or not to accept the terms of the agreement.

The current system which consists of tabling FTAs in the House for a period of two sitting days prior to ratification is neither mandatory nor binds the government to a decision of the House.

These are very simple suggestions that I have read. These principles could be easily implemented into any agreement that we sign with any country.

I do not know what the rush is with the Conservative government.

I would like to read into the record a letter from the Hon. Michael H. Michaud, member of Congress. Parts of this letter have already been quoted today, but I want to read the whole letter:

Just when we thought we'd heard almost everything there is to know about the American International Group (AIG), from its bailouts to its bonuses, many may not know AIG is suing U.S. taxpayers claiming it “overpaid” U.S. taxes on activities in Panama, a country which applies low to no regulations and taxes on firms registered there. AIG wants to get back those taxes it dodged with this Panamanian front....

We could substitute “U.S.” or “American corporations” or “AIG” with any Canadian company.

Panama's industrial policy is premised on obtaining a comparative advantage by banning taxation of foreign corporations, hiding tax liabilities and transactions behind banking secrecy rules and the ease with which the U.S. and other firms can create unregulated subsidies. According to the State Department, Panama has over 350,000 foreign-registered companies.

AIG is very keen on tax havens with Panama.

Imagine, a small country like Panama has 350,000 foreign registered companies. I think the only reason it has so many foreign registered companies is that it is a tax haven. Companies do not have to pay taxes so they are investing in Panama.

The New York Times ran an exposé on how AIG is currently suing the U.S. government for $306 million in back taxes it claims it does not owe thanks to its use of one of Panama's corporate entities, Starr International Company, SICO. SICO is AIG's largest shareholder. It is also the manager of a compensation fund for AIG employees who are paid by AIG in shares. SICO's chairman is former AIG chairman Maurice Greenberg. The same company that received government bailouts and used taxpayers dollars for outrageous bonuses is now demanding twice the amount of the bonuses it paid in back taxes.

If people are not already outraged by the greed of AIG executives, the fact that it is using Panama's tax haven statute as a way to sue the American taxpayers for back taxes is completely egregious. The Panama free trade agreement would make matters worse.

I will finish by asking, what is the rush? Let us stop and think about what we are doing here. Let us think about the Panamanian workers. Let us think about the Canadian jobs we could end up losing.

Most of all, let us think about the Canadian companies that are hiding money in Panama and not paying taxes. That is tax money that could be used to improve our health care system, improve our education system and provide long-term care facilities which we are lacking. We could use those taxes for a lot of other good Canadian values.

[Kevin Sorenson, Conservative, Crowfoot, AB]

Madam Speaker, today we are debating another free trade agreement. As always, the NDP stands to debate against it and will vote against it. I find it quite disappointing that every NDP member stands and says, “We are not against free trade, we are just against this free trade. It is just this agreement. It could have been much better”. Every member so far has said, “We would support it if it was fair trade”.

The truth is, this negotiated agreement is fair trade. It is much fairer than what Panama has seen on the environmental file and on the labour file.

A number of members from the NDP have stated that it has not done anything to address the sweatshops and child labour. That is not correct. This declaration covers a wide range of worker rights. It covers the abolition of child labour. Why are the NDP opposed to that? The right of freedom of association is in the side agreement. The right to collective bargaining, elimination of discrimination and the elimination of forced or compulsory labour are in the labour side agreement. I just want to get that on the record.

I have a question for the NDP members as they have been languishing, opposing every free trade agreement. There is one member of the NDP who has had a certain measure of success and that, of course, is former premier Gary Doer. He defended NAFTA. He supports these types of free trade agreements. Why is it that the New Democratic Party here does not take the lead from former NDP premier Gary Doer and start defending some of these trade agreements that we are negotiating?

[Claude Gravelle, NDP, Nickel Belt, ON]

Madam Speaker, the member opposite is right: former premier Gary Doer was a great New Democrat and he still is.

I reiterate that we will support fair trade with any country. Fair trade means that we are not going to murder trade unionists. We are going to elevate the poorest of the poor. That is what we want to do. That is what fair trade does. Free trade does not do that.

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

Madam Speaker, the issue with respect to tax havens has been addressed, according to another colleague, through the OECD. It has created a grey list and is looking very seriously at, particularly within the context of globalization, capital mobility and so on, building tax accountability into the global banking system. The OECD is moving on that.

Would it not be better to address the kinds of issues the member has raised by having this bill go to committee to look at that? It could look at taking Canadian leadership on an issue that has been described as the next generation of globalization and the issue of banking institutions which must be addressed. Would it not be better to take that approach than to say there is no opportunity here to achieve labour solidarity so let us not go there at all; let us just say that we cannot do that and not negotiate? Why not continue the negotiations and address those kinds of issues and bring back a better bill?

[Claude Gravelle, NDP, Nickel Belt, ON]

Madam Speaker, it is a very good question and I am glad the member asked it. It is obvious that the bill will go to committee because, for the 106th time, the Liberals are going to vote with the Conservatives. What a coalition that is.

Hopefully, when the bill gets to committee the necessary change will be made that will make it possible for trade unionists to live a free life, that it will be possible to lift up the poorest of the poor and make their lives better. Hopefully, when this bill is at committee we can make some of those changes.

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

Madam Speaker, I listened to the member talk about fairer, more sustainable trade that shows more respect for the environment and workers' rights. The Liberals and Conservatives in the House seem oblivious to this issue in an international context, but Bloc Québécois members would like to see fairer international trade.

I listened to some of the arguments made by Conservatives. One of them talked about the Panama Canal. He wondered how we could refuse to sign a free trade agreement with Panama given that it has the canal. That is odd because I never heard anyone say that this free trade agreement with Panama would lead to lower tariffs for our ships going through the Panama Canal. This shows—

[The Acting Speaker, NDP, Denise Savoie]

Order. I would like to give the member a chance to respond to the question.

The hon. member for Nickel Belt.