Mr. Speaker, it is a pleasure to rise today to debate Bill C-24. I will build off of the last question to start with and then return to some comments later.
It is important to note that New Democrats are in favour of trade. There is no doubt about it. None of us are against the movement of goods and services, but what we prefer is some balance in our trade agreements. The constant theme of trade is that when we give something, we get something back. Under this administration and previous ones, Canada has slipped significantly. It has signed a series of bilateral agreements since NAFTA that have actually put us into a significant trade deficit, even with the United States. My community lost the Auto Pact in NAFTA, and subsequently and eventually our auto manufacturing has gone from number two in the world to number eight.
When we look at Bill C-24 and the repercussions it could create, there are significant aspects with the loss of trade. It does not automatically guarantee that we are going to be the winner in a trade deal. Often Canada's bilateral agreements have been with smaller nation states that have advantages through lax environmental, labour and regulatory systems that allow their products to come into our markets while it is difficult for our products to subsequently get into theirs.
There are also issues related to non-tariff barriers, which I will touch on briefly. One country that has not come forward is Korea. There are tariff barriers there, but there are also non-tariff barriers in the auto manufacturing sector. As a result, hundreds of thousands of vehicles flood into Canada every year, but we sell virtually no vehicles in Korea. That also happens even when we do not have trade agreements or there is no balance.
Another good example is Japan. I was told recently that the only Canadian vehicles sold in Japan were the ones sold to the Canadian embassy. It is a problem when hundreds of thousands of vehicles are pushed into our market and we do not have any reciprocity whatsoever.
The issue of Panama is interesting. It has been put on the white list. There is a blacklist, a grey list and a white list, and I will get into that a little later if I have time. The OECD categorized these lists, but there still is not an automatic assumption of all the characteristics of what a tax haven is. Second to that, there is still a process in place.
The NDP's former international trade critic, the member for Burnaby—New Westminster, was very serious in trying to create an agreement that could be worked out with the government to deal with serious tax haven issues with Panama, as well as labour issues and a number of different things. Unfortunately, the government has not agreed to include that as part of its process. It has not been willing to compromise to a certain degree to ensure that tax havens are going to be taken care of.
It is interesting because Panama has quite a significant history of money laundering and tax havens. It also has a history of flagging ships of convenience and basically throwing the seafarers out the window, so to speak, making them vulnerable for treatment that is not part of the conduct of an international agreement. Panama has used that as a way to supplement income and attract corporations for its net benefit at the expense of others.
Although Panama has been moved to this list, it does not mean that all the measures are being taken into account. It does not account for some of the internal taxation issues, or even the current issues that are taking place. Just because it is moved off a list does not necessarily merit having no checks and balances. New Democrats were proposing some checks and balances to the system. There is a big difference between that and just having a blind faith bilateral agreement and seeing what happens later. It just has not been working for Canada in this case, and has not been working in general.
New Democrats want more specifics built into the agreement with Panama, and we are willing to do that. This bill will go to committee, which needs to hear from some witnesses. I have some testimony that I will table here today, but there needs to be testimony from individuals to look at whether there is actual movement.
I know that the parliamentary secretary made a very important point about the Panama Canal opening up in 2014. It is very important. The Panama Canal is historic. My former legislative assistant, Mohummed Peer, actually did a documentary through PBS on the original Panama Canal. It is quite a significant achievement and a marvel in many respects.
The new Panama Canal will actually have 5% of the world trade going through it. I think that is part of the reason that there is a lot of pressure to move Panama onto the white list. I think that is one of the reasons there has been a lot of effort to move it along that way.
However, that does not mean that it has actually moved that way. We need to have some testimony or some checks and balances to ensure that it does.
The government claims it is tough on crime, but often it has been very lax when it comes to organized crime or tackling some of the difficult challenges with our trade partners that relate to crime and also relate to how things are affected on our streets. I would look at my riding of Windsor West, for example, where 40% of Canada's daily trade goes to the United States, basically, along two miles of the Detroit River. It crosses on four crossings: the hazardous materials truck ferry, the Ambassador Bridge, the CP Rail tunnel, and the Windsor-Detroit tunnel. We have two kilometres there.
Despite having 40% of that trade, recently the government has cut back on the customs facilities and branch there. Now decisions about stopping trucks and smugglers dealing in guns, drugs, and human trafficking are now made 400 kilometres away, in Niagara Falls. Despite having reports saying that there should have been a consolidation in Windsor, the government decided to move the headquarters and so forth to Niagara Falls. My point is that cuts have been made, ideological cuts, and that has actually opened up our exposure to these elements.
With regard to Bill C-24, my worry is that we do not have any of the important backstops that are necessary to look at the tax havens. I want to touch on the issue of the OECD here, because it is important that people understand that there is a blacklist that includes countries that do not live up to any expectations or standards. There are really no countries left on the blacklist that I am aware of. The grey list includes a number of countries that a do not follow some tax standards. Then there is the white list, to which Panama has been added. It has been moved to it recently, so that is a benefit.
However, at the same time, we still do not have the necessary backstops that the member for Burnaby—New Westminster proposed. One of his amendments, which was defeated by both the Liberals and the Conservatives, was a taxation agreement that would track legal income while the tax information exchange agreement would track all income, including that made through illegal means. Considering Panama's history and reputation on such matters, it would be clear that such an agreement is necessary before signing a trade deal.
The member for Burnaby—New Westminster was attempting to ensure that there would be more information and a deeper tax scrutiny on Panama.That would be important because of the hundreds of thousands of corporations that are actually in Panama.
Some testimony from Todd Tucker of the Public Citizen's Global Trade Watch was very important at committee. I want to read a little of what he had to say. He said:
I have two central points. First, Panama is one of the world's worst tax havens. It is home to an estimated 400,000 corporations, including offshore corporations and multinational subsidiaries. This is almost four times the number of corporations registered in Canada. So Panama is not just any developing country.
Later he said:
Let me elaborate on the first point. What makes Panama a particularly attractive location for tax dodgers and offshore corporations? Well, for decades, the Panamanian government has pursued an international tax haven strategy. It offers foreign banks and firms a special offshore licence to conduct business there. Not only are these businesses not taxed, but they're subject to little to no reporting requirements or regulations.
That is important, because when we want to get into a fair trade deal, we need to have access to the types of conditions and strategies that we are going to compete against. These tax havens give advantages on the trade arrangement that do not favour Canadian exporters, and that is why we have seen the trade surplus diminish under the current government and a trade deficit emerge on a continual basis. Our manufacturers, our labourers, abide by international and Canadian standards that make it uncompetitive for them when corporations are able to use those subsidies, being tax havens, to basically lower their costs in the way that they are able to compete, so the realtionship becomes naturally unfair and unfitting.
I understand the pressure on the government with regard to increasing its access to markets. We have seen a couple of other interesting issues emerge recently that are motivating the government, not only with Panama but also Jordan, to move toward some type of bilateral agreement. We recently saw our international trade committee go to Europe for the European trade agreement, CETA. That agreement is very important in many respects. It has a lot of conditions that are going to be very critical for our supply management and a series of different things.
The interesting thing that took place while our trade group was in Europe was that the Conservatives signed a perimeter agreement with the United States for more harmonization on regulations and on different services and products, including food and automotive products, which might actually limit our exporting capability into Europe, because the content requirements are going to further rise between Canada and U.S. regulations and they will then also be negated for Europe.
I can understand the overall strategy of the government in trying to find alternatives out there, but again, it cannot be done in the absence of labour laws and other types of laws that are important.
On Panama, we will offer some recommendations and amendments to try to move forward. However, we are disappointed with the government's lack of ability to compromise and add those elements.
I want to touch a bit on labour rights. Panama has a history of issues with labour rights, and we do not have the type of scrutiny necessary to evaluate this. The member for Burnaby--New Westminster was asking for a commission to be set up to look at labour rights and provide some type of mentorship, in a sense, so that there would be oversight of this trade agreement and labour rights.
In some of the countries we are trading with, labour rights are lower. These issues emerge even in the context of larger trading partners. For example, there are child labour issues with India. These can present serious problems for us to compete against.
Panama, as we know, has ships under flags of convenience. That is important because it allows Panama to lower its labour standards, putting a whole bunch of people at risk, while limiting our capability to compete.
We saw the very high-profile case of Paul Martin's Canada Steamship Lines using flags of convenience. There was quite a controversy in this country. It was really shocking that a prime minister's company would take advantage of this loophole for labour rights to be able to advance his own pocketbook from Canada Steamship Lines. Flags of convenience are another situation that is not addressed in this agreement.
Therefore, we are going to oppose the bill at this particular time. We feel that there should have been some greater compromise with this.
Also, the member for Burnaby--Westminister proposed a yearly review of this deal to examine whether or not Panama has actually advanced on some of the tax haven issues. We would be open to those things as long as there was going to be some greater scrutiny and follow-up. That is the problem with just accepting the bill the way it is right now.
As I conclude, I want to say for the record that New Democrats are supportive of a trade agreement. There is no doubt about that. However, we want to see progressive trade as the difference, and there has to be some balance with regard to our operations and our trade agreements. Right now we are continuing to gut the Canadian economy with some of our trade agreements. How they are working out has led to Canada having the lowest number of manufacturing jobs since we have been tracking them in the 1970s. This is a real problem, because we are losing the value-added work that is necessary for this country to compete in the global economy. What we are witnessing is that when we open up trade, sectors of the economy have actually lost some of their strength.
We can look at the tool and die and mould-making industry, for example. There has always been the argument that we have to go to high-end, value-added manufacturing to be okay, and that will be a way that we can actually evolve our economy. However, tool and die and mould-making in Canada are the best in the world, but we are struggling to maintain it because of tariff and non-tariff barriers and some of the things brought down in trade agreements that have opened us up to competition against lower standards for labour, lower environment rights and less scrutiny. These are real problems.
We have not addressed some of the serious issues. When we actually have some power and some capability, as in the case of Panama, we should have some conditions built into the agreement that would require analyzing and reviewing it to ensure that those things are measured and taken seriously. We would then be able to put pressure on Panama to comply.
The hon. parliamentary secretary said that if we did not do this, we would be punishing Panama and it would go back to being a greater tax haven. First of all, we still do not know the evidence. President Sarkozy was very clear in his remarks. In fact, he was asked to apologize for his remarks and refused. He is very serious about the effects of the tax haven situation in Panama. I do not know why we would not measure and analyze this. Why would we not build into our base model for trade with Panama the ability to influence, in order to end that type of practice? If we did that, we would have a greater effect on the drug trade, organized crime and corporate responsibility. A series of measures would allow Canadians to compete, while also helping to deal with these issues around the globe. We have an opportunity to do this.
We should not just let the OECD determine our relationship with another country. That is not right. We should be putting our own standards of greater scrutiny in place, because we know there are a lot of politics relating to the OECD. However, if we are serious, we have an opportunity for Canada to have a stronger relationship with Panama. We can actually then have some scrutiny over the conduct in Panama. Leaving it to the OECD is not enough. Its members have disagreements on what a tax haven is. At the same time, OECD members like President Sarkozy note that the tax haven situation has not gone away. I think the evidence is strong enough that it merits our making some amendments. We will look at that in committee.
We are disappointed that the government came back with the same bill. It has been around a number of times, the first being August 11, 2009. The bill has been punted back and forth and subjected to electoral changes, yet has not changed at all. That is a real problem for us. We would have thought that at some point the government would introduce some of the measures it heard concerns about, so that it could move the bill through the House more quickly. There is no doubt that if there was that intent, we could move this legislation through the system a lot more quickly.
The member for Burnaby—New Westminster was very clear about our concerns with respect to the bill. We would take this approach: we would go back to committee and examine it and hopefully have an opportunity to convince the government to make these changes. If the government were willing to make these changes, then we would work with it to move the legislation through as long as it would ensure that the tax haven, human rights and labour issues would be addressed and that there would be an ability for us to follow through. If we just act in blind faith, we know the results. We know the government's record.
Canada has diminished its capability to trade, especially from the value-added aspect. We are about more than just oil, gas and natural resources in this country. This country was built on value-added work, especially after the Second World War, when there was a real intent to make sure there would be opportunities. Just opening up a market and reducing tariffs and trade does not guarantee that we actually improve our quality of life.
There is no doubt that we want greater access to these markets in Panama, Jordan and the EU. Some policies will be changed; people who have already invested in businesses and parts of the economy will be affected. We need to identify those areas and ensure that Canadians can compete in a fair way. There may be damage to certain sectors of the economy. I know that the government is looking at putting supply management on the chopping block in a number of different agreements. If we implement those types of measures, there has to be a business case and a plan. Therefore, we should be proposing a series of amendments at committee to ensure that these issues can be taken care of.
I appreciate the opportunity to debate this. I think it is important for Canadians to understand where our economy is going. Our trade deficit has gone so dramatically high that it is a serious threat to our national economy and to our quality of life. It really shows the mismanagement of the government by just blindly thinking it can sign small bilateral agreements to solve the Canadian economy. We have to have a value-added economy. This agreement is a small part, but it actually has a big part to play in the tax haven issues.
The reality that we all understand is that Panama, as the canal opens up, will have a lot of power. The question is what will we do right now to ensure there is some fairness and reciprocity regarding the abuse of tax havens?