Mr. Speaker, it is a pleasure to rise in the House today to speak to the Canada-Panama economic growth and prosperity act. I was worried that I would not get here on time; my plane was delayed.
This is an important piece of legislation, as we can tell from the opposition benches. There is a lot of interest in it and we certainly encourage and look forward to the support of the opposition on this important bill.
Our government is committed to protecting and strengthening the financial security of hard-working Canadians. Our focus continues to be the economy, creating jobs and economic growth to benefit Canadian workers and their families. That is why we are continuing to deliver our job-creating pro-trade plan. The Canada-Panama economic growth and prosperity act is a key part of this plan.
We Conservatives understand, as do hard-working Canadians, that trade is a kitchen table issue. By that I mean that Canadians intuitively understand that trade is the key to their financial success. One in five Canadian jobs and over 60% of our annual GDP is generated by trade. Trade is a matter of fundamental importance to workers, as it helps put food on the table and helps families make ends meet.
In the past few months we have seen a vivid reminder to all of us that the world economy remains in the grip of a global economic crisis. The fragility of global markets has emphasized the importance and urgency of continuing to diversify our trade relationships and expanding our exports with emerging market economies like Panama.
These are challenging economic times. Problems in the global economic situation continue to persist. That is why our government is taking action today to create jobs and help our businesses and their workers succeed in the years ahead. That includes our ambitious pro-trade plan to help businesses expand their presence around the world.
In these tough economic times, Canadians expect their government to do everything it can to enhance the ability of Canadian firms to participate in global markets and to create an advantage for Canadian businesses. That is why our government took action on our budget 2010 commitment to make Canada a tariff-free zone for industrial manufacturers.
Eliminating tariffs on goods used in manufacturing helps Canadian companies lower their production costs and increase their competitiveness. This contributes to a stronger economy, creates jobs and growth here at home, and reinforces our G20 leadership in the fight against protectionism.
It is actions such as this that demonstrate our government's clear understanding that there is a link between open markets and free trade and jobs and the quality of life here in Canada. We know that when Canadian companies succeed, Canadian workers succeed.
Free trade agreements help small and large businesses. In fact, small businesses in particular are responsible for 43% of all Canadian exports. This free trade agreement would help small business exporters do what they do best: create jobs and wealth for this country.
With this legislation we are one step closer to giving Canadian businesses the access they need in Panama. By improving access to foreign markets for Canadian businesses, we are supporting the Canadian recovery and creating new jobs for Canadian workers.
In the midst of the global downturn, this government has demonstrated its commitment to seek out more trade and investment opportunity for our businesses.
Through the Canada-Panama economic growth and prosperity act, Canada is also sending a strong message to the world. Canada will not resort to protectionist measures and will continue to fight for an open rules-based system.
As a trading nation, Canadian workers, companies, producers and investors need access to the international marketplace to stay competitive. Canada is an export-driven economy, and pursuing bilateral and regional trade agreements is essential to bringing continued job prosperity and economic growth to Canadians. That is why our government has established an ambitious pro-trade plan.
A free trade agreement with Panama is also a part of our government's efforts to strengthen Canada's engagement in the Americas. Panama occupies a unique and influential position in the global trading system, thanks to the Panama Canal. This vital gateway is currently being twinned. Our government recognizes that Canadian firms are well placed to help. It should be noted that when the twinning of the Panama Canal is finished, it will carry approximately 5% of the entire trade on the planet. That is an opportunity Canada cannot turn its back on.
The Canada-Panama economic growth and prosperity act would generate increased export and investment opportunities for Canadians by creating a preferential and more predictable trade and investment environment.
For example, for exporters of Canadian goods, Panamanian tariffs on over 90% of Canadian goods exported to that country would be eliminated upon entry into force of the free trade agreement. Most remaining tariffs would be eliminated over a period of between five to fifteen years.
For Canadian service providers, the free trade agreement would help expand market access opportunities in areas such as information and communications technology, energy and financial services.
This agreement would benefit workers in every region of this country.
For example, Quebec would benefit from the elimination of Panamanian tariffs on key exports, such as machinery, vehicles, pork products, pharmaceuticals and aerospace products.
Investment and services provisions would benefit the engineering, construction and transportation sectors.
Ontario would benefit from the elimination of Panamanian tariffs on key exports, such as pharmaceuticals, machinery, information and communications technology products, and electrical and electronic equipment.
Financial services provisions would benefit Canadian banks and financial service providers operating in Panama.
Western provinces would benefit from the elimination of Panamanian tariffs on key export interests, such as fats and oils, processed food, pork, information and communications technology products, pulses and cereals.
The Atlantic provinces would benefit from the elimination of Panamanian tariffs on key export interests such as frozen potato products, trees and plants, fish and seafood, and forestry products.
For Canadians looking to invest in Panama, the free trade agreement includes a chapter of comprehensive rules governing investment. The rules provide greater protections and predictability for Canadian investors and their investments in Panama.
The free trade agreement also provides Canadian exporters of goods and services greater market access to Panama's government procurement opportunities, including those related to the Panama Canal expansion and other infrastructure projects. It is clear that this agreement would benefit Canadian workers and their families.
I am also pleased to report that in July 2011 the OECD formally placed Panama on its list of jurisdictions that have substantially implemented the international standard for exchange of tax information, commonly known as the white list. This is an extremely important achievement. It demonstrates Panama's commitment to combat international tax evasion. I trust it will appease concerns regarding taxation.
Panama is committed to the implementation of this free trade agreement and has already completed its domestic ratification process.
Canada is not the only country with whom Panama has negotiated a free trade agreement. Panama is deepening its regional economic partnerships and is expanding its global reach through the negotiation of trade agreements with countries such as the United States and the European Union.
As members of Parliament may be aware, the United States Congress approved the United States-Panama trade promotion agreement on October 12, 2011. This agreement, which could enter into force as early as 2012, would provide American firms with preferential access to the Panamanian market. Many Canadian goods and services compete directly with those of the United States in Panama. Canadian products would be at a significant competitive disadvantage if they continued to face duties while products from the United States enjoyed duty free access.
We cannot stand by and let Canadian companies compete on an uneven playing field. We must act quickly to ensure our businesses and workers can compete and remain competitive in the Panamanian market and reap the substantial benefits of this trade agreement.
I think all Canadians should be proud of this agreement. This treaty is a high-quality comprehensive agreement that would be beneficial for Canadian workers and their families. As I mentioned before, a free trade agreement with Panama would give Canadian exporters, investors and service providers preferential access to a dynamic up and coming economy. Two-way merchandise trade between Canada and Panama reached $213.7 million in 2010. As these figures demonstrate, Canadian exporters have been very active in the Panamanian market but there remains significant untapped potential.
Once the new agreement is in place, Canadian businesses will benefit from lower tariffs. This agreement would eliminate tariffs on 99.9% of recent non-agricultural imports from Canada with the remaining tariffs to be phased out over five to fifteen years. Tariffs would also be lifted immediately on 94% of Canada's agricultural exports to Panama. Panama currently maintains tariffs averaging 13.4% on agricultural products, with tariffs reaching peaks as high as 260%. This significant reduction in trade barriers would directly benefit a number of sectors that already have established business ties in Panama, including agriculture and agrifood products, pharmaceuticals, pulp and paper, vehicles, machinery and information and communications technology products among others. By eliminating tariffs on these goods and many others, Canadian exporters and producers would become more competitive against competitors from other countries such as the United States, the European Union, Chile and Singapore which already have or are seeking preferential access to the Panamanian market.
This agreement would also help Canadian businesses take advantage of the new investment opportunities in the Panamanian market. Panama is an established and growing destination for Canadian direct investment abroad, particularly in areas such as construction, mining, and banking and financial services. The stock of Canadian investment in Panama is expected to grow in the years ahead. It reached $121 million in 2010, in part due to the many infrastructure projects planned by the Panamanian government and the private sector. Once this agreement is implemented, Canadian investors will enjoy greater stability, transparency and protection for their investments.
The agreement would also ensure the free transfer of capital related to investment protection against expropriation without adequate and prompt compensation and non-discriminatory treatment of Canadian investments. Under this free trade agreement, all forms of investment would be protected, including enterprises, debt, concessions and similar contracts. These reciprocal commitments would serve to promote bilateral investment flow which is crucial to linking Canada to global value chains.
Among the most important benefits of this agreement would be the increased ability of Canadian companies to participate in large-scale infrastructure projects funded by the Panamanian government. Indeed, with the Panamanian government investing heavily in its country's growth and strategic importance, government procurement opportunities were a key driver for the negotiation of a free trade agreement with Panama.
As a case in point, Panama is currently undergoing a $5.3 billion expansion of the Panama Canal. This expansion, which began in 2007, is scheduled to be completed by 2014 which will mark the 100th anniversary of the canal. It should be obvious that activities related to the ongoing expansion of the Panama Canal provide many opportunities for Canadian companies. Canadian companies in the areas of environmental technology, capital projects, human capital development, construction materials and marine technology stand to benefit greatly from this ambitious project.
However, this is not the only opportunity for Canadian businesses. Just last year, the Government of Panama laid out a five-year strategic plan in which it plans to spend $13.6 billion on the country's infrastructure. Under this plan, $9.6 billion would be allocated to infrastructure investments and other economic programs designed to stimulate further growth.
Some examples of projects the government is looking to undertake include airport construction, expansions and upgrades, a new convention centre, a new water treatment plant, power generation projects, agriculture irrigation systems, and a $1.5 billion metro system. These are areas where Canadian businesses possess the necessary experience and expertise to successfully bid on these projects. With the passage of this agreement, Canadian workers and businesses will be able to capitalize on these opportunities.
I am pleased to say that the Canada-Panama free trade agreement includes strong government procurement provisions that guarantee Canadian suppliers will have non-discriminatory access to a broad range of procurement opportunities, including those under the Panama Canal authority. This means that Canadian workers and companies, wanting to bid on a government procurement contract for goods and or services, will receive the same treatment as Panamanian firms. It is thus important that Parliament acts fast and enables Canadians to take advantage of these opportunities right away.
Canadian services providers and their workers also stand to benefit considerably from the Canada-Panama free trade agreement. On services, this agreement will provide a transparent, predictable and rules-based trading system to Canadian services providers, while ensuring they are treated equitably with Panamanian companies.
Canada negotiated enhanced market access opportunities that would go well beyond Panama's World Trade Organization General Agreement on Trade and Services commitments in services sectors of key interest to Canada. This means that Canadian providers in such areas as professional services, engineering, mining, construction and environmental services will have preferential access to Panama's market.
This agreement would provide a great opportunity to take our current bilateral trade and services to a new level in the years ahead. As we can see, the Canada-Panama free trade agreement is a comprehensive agreement covering everything from market access for goods to cross-border trade and services to investment and government procurement. It would provide rules to assist Canadian businesses doing business in Panama and would deepen our commercial engagement with a strategic partner.
Canadians understand that international trade is the lifeblood of our economy. Canadians value the real and tangible benefits that trade brings to our country. That is why they have entrusted this government with a mandate to focus on economic growth by forging new trade opportunities around the world.
It should not come as a surprise therefore that Canadian businesses have been strongly advocating in favour of this agreement. Let us listen to what Jason Myers, from the Canadian Manufacturers and Exporters, said about this agreement's potential to improve market access. He said it:
—will improve access to two growth markets for Canadian goods, services and investment at a time when Canadian manufacturers and exporters are focusing on finding new customers and business opportunities around the world.
Closer economic integration with Panama promises to deliver further gains for Canadian exporters, investors, consumers and the economy as a whole.
At a time when Canadian businesses are faced with the challenges of the global economic slow down, the quick implementation of the Canada-Panama free trade agreement is of tremendous importance to our economy.
I reach out to opposition colleagues in the House and I would ask them to support this agreement. This is an important agreement, not just for the Government of Canada, but for the country as a whole. Certainly, our government is focused on broadening and deepening our trading relationship, as it protects and creates jobs and economic growth for Canadian workers and their families.
I have some advice for my opposition colleagues. There are a number of special interest groups that continue to push their job-killing anti-trade agenda and they will continually invent any reason to oppose trade. I ask the NDP members, in particular, to stand strong against those groups, to be reasonable in their position on this important agreement for Canadian workers and to help us support the quick implementation and passage of the bill through the House.
This is important legislation. It means jobs in every part of the country from coast to coast to coast and where there are jobs, there are opportunities.
It has been pleasure to speak to the bill. As members know, this is the same bill we introduced in the last Parliament. During the 40th Parliament, the legislation was debated for 15 days and almost 30 hours. I think the debate is over. It is time to get this through the House.