Debates of Feb. 3rd, 2011

Canada-Panama Free Trade Act

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, there are so many questions I could ask the hon. member. I am glad to see him back in the House.

The same comments the Liberals were making about NAFTA and how NAFTA was going to lift Mexico out of the difficult economic problems it was having actually led to the opposite. The removal of the tariffs has led to a meltdown in the Mexican rural economy. Tens of thousands of people have died in the drug wars in Mexico. My colleague's argument about NAFTA is contradicted by the facts as are his arguments about Colombia.

The member said that the agreement with Colombia would somehow increase human rights respect and decrease the constant and ongoing human rights violations by security, secret police, the military and the paramilitary in Colombia. Instead, tragically, in 2010, 46 trade unionists were assassinated, many of them teachers. A few days ago Manuel Esteban Tejada was killed. We are seeing an increase in the number of murders, not a decrease. We will have to surmise that if the member was wrong on Mexico and he is wrong on Colombia, he and the Liberal Party must be wrong on Panama.

The IRS has said that Panama, along with the Cayman Islands, is the worst haven on earth for drug money laundering tax havens. This trade agreement would stimulate that. Rather than a double taxation agreement, Canada asked for a tax information exchange agreement, which the Panamanian government has refused to sign. How can the member justify this agreement when the Panamanian government is refusing to sign a tax information exchange agreement?

The Liberal Party is supporting an agreement that allows the unhindered flows of capital from Canada to Panama at the exact time when the IRS is saying that Panama is one of the worst in the world for money laundering of dirty drug money.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, I always enjoy listening to the hon. member. I basically disagree with everything he says because he is usually totally misinformed. It reminds me how important it is to have a party in the House of Commons that is not right of centre like the Conservatives or left of centre in the economic hinterland like the NDP. It is good to have a good politically centrist, economically pertinent and informed and socially progressive party like the Liberal Party in the House.

I do not know where to start. It is tough.

First, in terms of Colombia, 82% of Colombians support the government of President Santos. Only 6% of Colombians voted for anti-trade candidates in the last election. The Colombian people support free trade.

Second, the murders that he is referring to have often been committed by FARC, his ideological soulmates, and by drug traffickers. If he is serious about protecting trade unionists and teachers in Colombia, he should provide legitimate economic opportunity to the people and help wean them away from those terrible drug lords and drug trade, which for many people in Colombia, in fact for 40 years, represented the opportunity.

I find it interesting that the hon. member never talks about FARC. He never talks about his ideological soulmates, the Marxist-Leninist FARC in Colombia, that has been murdering people. He never talks about the murderous Hugo Chávez in Venezuela. He never talks—

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, I rise on a point of order. As the hon. member knows, we have denounced what violence has come from FARC. What we are talking about is the Colombian government.

[The Speaker, Liberal, Peter Milliken]

I am not sure that was a point of order.

The hon. member for Kings—Hants has the floor.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, I have never heard the hon. member in fact say anything against the tyranny of FARC or of the violence that it has continually committed on the people of Colombia and the fact that it has been housed in Venezuela. In fact, Hugo Chavez's Venezuela houses FARC and from Venezuela FARC is attacking the people of Colombia. The member and his party sit back and applaud Chavez. They believe Chavez is their folk hero when he is a cancer on Latin America.

We have a responsibility to work with President Martinelli in Panama, President Santos in Colombia and with democratic regimes in that region, those who understand the importance of free people and free economies to allow people to prosper and move forward.

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

Mr. Speaker, I am pleased to be speaking today about Bill C-46. This debate has been lively because of the divergence of opinions among the various political parties as well as their different values. The debate about these free trade agreements with Colombia and Panama is a debate about conflicting values.

I am speaking about this bill today because it deals with an agreement that I have been following for a while, having sat on the Standing Committee on International Trade for a few years.

To begin, I would like to say to the House that we, too, will be supporting the proposed amendments, even though they would void this bill. The fact remains that we think that is a good thing. In fact, this bill would allow Canada to sign an agreement with a tax haven, that is, with Panama. While the government is saying that it wants to fight against tax havens, it is now ready to sign a free trade agreement with a country that is on the OECD's tax haven blacklist.

We are against this free trade agreement. We now know that this tax haven, Panama, denied Canada's request for more tax information. In exchange, the two countries agreed on double taxation. That is nothing like our request for more tax information from each country once the agreement is signed.

The Bloc Québécois is not against all free trade agreements. We were against the one with Colombia, clearly, as well as the one with Panama. However, we were the first party in this House to call for a free trade agreement with the European Union. And we believe that agreement is more fair and reasonable for Canada and Quebeckers.

And we, the sovereignists, orchestrated the free trade agreement that was signed in the 1980s with the United States and Mexico. We are in favour of a free trade agreement when it is fair to workers and the economy and when it complies with environmental or labour standards or standards that make investment as prosperous for Quebec and Canada as for the country signing the bilateral agreement.

In the case of the free trade agreement with Colombia, I participated in the mission to Colombia and Panama in order to meet with different people affected by the agreement. I remember very well that the unions, women's groups and labour groups were opposed at that time to the Canada-Colombia free trade agreement for all sorts of reasons. There was the corruption, even within the Uribe government, and the role of the paramilitary, who protected some mine operators who exploited workers. We were against the agreement. It was unacceptable to Quebec and Canada.

Justice and fairness are values held by Quebeckers. We meet the standards of the International Labour Organization, as well as environmental standards. It is hard for us to imagine signing agreements with countries that do not respect these fundamental values.

As a leader in labour, environmental and economic relations, we should set an example and sign agreements with people and countries that respect our values. The opposite is true in the case before us. We are signing agreements with countries that do not respect our values. There is a lot of talk about drug dealers in Panama. It is a country where drug dealers launder money, a country that has many tax shelters. This agreement could allow some companies to avoid paying taxes, which would further reduce Quebec's and Canada's tax base. Our tax base equips us with more health and education services, social policies and social programs.

By signing an agreement with this country, the government would certainly encourage some companies to export, but there is a risk that these companies could take advantage of very low taxes and tax opportunities in Panama, which would lead to the loss of considerable revenue.

The situation in Panama is not as serious as the situation in Colombia, but it is still rather worrisome. First, there is the issue of workers' rights, which are not very well protected in Panama. Members will recall an announcement that made international headlines on June 30, 2010. The government of President Ricardo Martinelli passed Law 30, which was deemed to be anti-union legislation. This law included a reform of the labour code that was considered to be repressive because it would criminalize workers who demonstrated in defence of their rights. The Government of Panama recently agreed to review this law, but we have every reason to be concerned about the government's true willingness to comply with international labour conventions.

As parliamentarians and in the name of international solidarity, we must take action and speak out against bilateral free trade agreements that violate workers' rights.

Unfortunately, the Conservative government, with the support of the Liberals, is claiming that this kind of bilateral free trade agreement will generate revenue, create jobs and improve our competitiveness. I do not believe that the Canada-Panama free trade agreement will benefit workers in Berthier—Maskinongé or the rest of Quebec.

We must not forget that Panama is still considered to be a tax haven and a place that does not comply fully with international labour laws. The Conservative Minister of Finance told us that he was currently negotiating a tax treaty with Panama in order to tighten the rules on banking transparency to better combat tax evasion. We recently learned that Panama has no interest in signing this type of treaty. Furthermore, nowhere in the Minister of Finance's records do we see any evidence that such a treaty with Panama currently exists or is under negotiation.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, the hon. member's concern regarding this agreement is the lack of requiring adherence to critical environmental principles.

We had discussions in the House previously on the bill, in which I and others raised a number of problems, including the fact that the Government of Canada had severely downgraded the environmental side agreement it entered into with the United States and Mexico.

In the series of trade agreements that the Conservative government has entered into it has consistently downgraded environmental provisions. These provisions should be included within the trade agreement if the government really believes in balancing economic development and environmental protection.

Should the government at least have a strengthened agreement requiring that environmental obligations be lived up to by both sides including the effective enforcement of environmental laws?

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

Mr. Speaker, I want to thank the hon. member for her excellent question. This is no different than Colombia. We know full well that neither environmental standards nor the workers are being respected there and that the workers are often exploited.

I am a member of Parliament with a background in the labour movement, community and the environment. I naturally believe that workers' rights are universal rights. What I am saying and what I am trying to say to the House is that Quebec and Canada should be setting an example for the world with fair and equitable working conditions and by meeting environmental standards in mining, for example, or other common activities where we are concerned about greenhouse gases and climate change.

We should be signing free trade agreements with countries that meet these standards and share these values. But we are signing agreements with quasi-delinquent countries. In this case we are talking about Panama, which is a tax haven where drug traffickers generally launder their money. It is a known fact recognized by the OECD.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Mr. Speaker, the member is familiar with the OECD's grey list and blacklist as well as the French blacklist on tax shelters.

In February last year, the Government of France was tough with Panama because it was refusing to sign a double taxation avoidance treaty. France was creative and levied a tax of 50% on dividends, interest, royalties and service fees paid by anyone based in France to a beneficiary based in the countries on the blacklist, which includes Panama.

What happened? The Panamanians immediately rushed to get off the list and within months France signed a tax treaty with Panama.

France is not negotiating a free trade deal with Panama, yet Canada, which is actively negotiating a free trade deal with Panama, does not seem to be interested in the fact that it is dealing with a country on France's blacklist.

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

Mr. Speaker, I would like to thank my colleague for his excellent question. This worries the Bloc Québécois because, as I said earlier, this country is on the OECD's blacklist. It is difficult for the French to sign this type of agreement, and the U.S. Congress is no different. The Americans are very hesitant to sign an agreement with Panama for the reasons I gave in my speech.

We have a government right now that only seems to worry about the economic side. But this agreement will not produce huge economic spinoffs, and it will not create many jobs in Quebec and Canada. The government is not taking that into account. In any event, in the exercise of power, it is not concerned with environmental issues.

As everyone knows, we have tried many times to get the House to pass anti-scab legislation for the workers, to no avail. Look at employment insurance and it is clear what the government thinks of workers. There are still some issues there. So, with the support of the Liberals, unfortunately, the government is signing this type of agreement with Panama, but I do no feel that it is an agreement that respects the values of Quebec and Canada.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, if we followed through on the amendments being proposed and if the amendments were to pass, it would literally gut the bill as we know it and in essence void the bill.

The amendments brought forward at committee were not passed. I am not too sure in terms of the actual strategy in reintroducing them at this stage, other than I believe the New Democrats are trying to send a very strong message of opposition to the bill.

It is important for us to recognize that the greater economic engagements for Canada as a nation can best be done when we look at how we might be able to expand trade with the world.

A number of years ago we had the whole team Canada philosophy of former prime minister Jean Chrétien, with the idea of working with provinces and reaching out to other world economies and selling Canada as a trading nation. The Liberal Party was very aggressive in this regard.

Because we no longer take the approach of trying to appeal to the world to trade with Canada, a direct result is that Canada has a trading deficit. The Conservative government needs to be held accountable for that trading deficit. It is something we should not take lightly. If the Conservatives want to steal some ideas from previous Liberal governments, one of the ideas I would suggest they take is the idea of working with the provinces, going abroad, going to some of the economic powerhouses to see what we can do to generate more open markets so that both countries could benefit immensely.

I had the opportunity during the break to go to two countries, the Philippines and India. In both countries I had the opportunity to talk about trade. India is thought of as one of those countries that is going to be an economic powerhouse in the not too distant future. Some predict it will become more of an economic powerhouse than China. I would like to see the government pay more attention to the Government of India in terms of developing additional economic ties.

One of the greatest assets we have as a nation is our people. We have hundreds of thousands of people of Indian ancestry who have connections and the ability to use those connections to improve the relationships between Canada and India. It would go a long way in raising the standard of living not only for people living in India but also people in Canada. India is a phenomenal country that has much economic opportunity. Canada is missing the boat by not being more aggressive on the India file.

The Philippines is a country which I have fallen in love with. I would love to see more economic and social ties with it. It is an area where there is great potential.

I would like to see the Canadian government be more outward in its thinking in terms of how it can develop these countries, assist in different ways, but also to put an emphasis on improving trading relationships between Canada and countries like the Philippines and India.

That is why I was a big advocate of the concept of the team Canada approach. Not only did it involve government leaders but it involved educators and industry reps. It was very wide in terms of the different stakeholders that were involved. Many connections were made because of the size of the group that went to China or wherever it might be.

Earlier a member made reference to the China factor. China's economy is gigantic and continues to grow. The government really has not done well in terms of fostering a good relationship with China.

When we look at the things I am referring to, it is no wonder Canada as a nation is actually falling behind. We now have a trade deficit. My advice to the government is to put more emphasis on trade. After all, Canada is dependent on trade. We are a trading nation. It is important for us to recognize that we need to encourage other countries to purchase our materials, services and so forth. Without that, our lifestyle would be dramatically different from what it is today. We need to encourage that.

When we look at the proposed Canada-Panama agreement, unlike the New Democrats, I am not fearful of the opportunities that exist. Yes, I have some concerns. I think most Canadians would have some concerns and I do not question that. I see the value of having a trade agreement such as this and the impact it could have on Canada and Panama as well.

It equates to millions of jobs in Canada. Some would estimate that trade factors in the neighbourhood of 80% of our economic activity. Millions and millions of jobs are affected by it through exports of manufactured goods from Ontario or oil sales from Alberta.

One of my favourite industries in the province of Manitoba is the hog industry. The hog industry has grown considerably over the last number of years in the province of Manitoba. In fact, there are more pigs produced than there are people in the province of Manitoba. I could be corrected on this, but I believe that Manitoba is now producing in excess of three million pigs annually.

Manitobans are not the ones who are consuming all of those pigs. The pork industry is very dependent on exports and those types of exports need to be encouraged. If we go down the chain, there are a lot of jobs. Whether it is the producer, the slaughterhouse or the retailer, it generates a lot of jobs.

Freer trade can be a wonderful thing. I would suggest that we approach it with an open mind, that we be sensitive to the issues of labour and our environment and that we try to tie those into the agreement, because we are all better off if we do that, but I do not think we need to live in fear. If we lived in fear of freer trade, Canada would not be where it is today. We need that trade.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Mr. Speaker, I listened carefully to the member's comments. At one point he said that he would not care if the Conservative government would learn some lessons from the Liberals in terms of travelling abroad with its provincial partners and so on.

He also indicated that we are falling behind in our trade efforts. It appeared from his remarks that he might be unaware that our government has initiated talks with the EU and with India as it relates to free trade. We have also completed a number of free trade agreements. We completed one with Colombia. We are currently working on the Panama one, as we know, and there is one with Jordan.

If we look at the Liberals' 13 years of inaction on this file, when over 13 years they only signed three trade agreements, I am having difficulty understanding how he could suggest we are falling behind. How could we possibly be more aggressive? We are signing these agreements. Those in the business community are thrilled with the opportunities we are creating for them. I would like him to explain his position on that.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, quite simply, I would look at the bottom line. The bottom line is that we actually have a trade deficit for the first time in 30 years, from what I understand. There has been some movement on the file. It would be totally irresponsible of the government to completely ignore the world. However, there is so much more we could be doing and that we should be doing.

I use the team Canada concept as an example. That is something I believe the government needs to act upon. We need to work with the provinces and the different stakeholders, both government and private sector, in appealing to the nations of the world. I acknowledge the government has done some work in India, but we could do so much more. We could do much more in Asia, for example, in Malaysia, the Philippines and Taiwan. There are many other countries where we could be doing so much more.

I look at the bottom line. There is a trading deficit and there is so much more we could be doing in approaching other countries. The Government of Canada should be playing the lead role in doing just that.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Mr. Speaker, does the member think it is a bit odd that a federal government, the Conservative government, that proclaims itself to be tough on crime is signing free trade deals with countries like Panama that are on the OECD blacklist, on France's blacklist? According to the United States state department, Panama has over 350,000 foreign registered companies. It is definitely a tax haven involved in money laundering activities. It is a conduit for Mexican and Colombian drug traffickers.

Essentially, what is happening is the Conservatives are promoting this with the help of the Liberals. The member is actually aiding and abetting a government that purports to be tough on crime but is actively looking for trade opportunities with drug traffickers and money launderers.

How does he square that support?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, some of the problems the member for Elmwood—Transcona makes reference to can be found in the United States and we are not going to abandon trade with the United States. All countries have issues and do have some problems.

We can look at it from a positive point of view too in the sense that Panama is a part of the World Trade Organization. We have seen the expansion of the canal. There is great potential in Panama. I do not believe we should give up on countries because of some of the issues they have and are trying to deal with, or that we should pass judgment absolutely. At the end of the day, I think that Panama has proven itself to be of a stable nature and a country that is moving forward. I understand that its GDP even grew during the time of the recession. It has its tourism, shrimp and banana industries. There has been a lot of positive things happening in Panama too.

We need to respect the fact that it could be better and we do have some concerns, but it is important that we move forward.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Mr. Speaker, it is an opportune time for me to make my presentation on this bill because I was about to ask the member for Winnipeg North a follow-up question.

He said that we do not abrogate our trade agreements with the United States or other countries that might have questionable practices that we do not approve of. My retort to him would be that the United States is not signing this agreement either. In fact, no fewer than 54 United States congressmen have demanded that President Obama forgo the agreement with Panama until Panama has signed the tax information exchange treaties. That is how to get things done. We get tough with these countries. We refuse to sign free trade deals with them until they sign those tax information exchange treaties. That is my point.

France was able to get tough with Panama 12 months ago. France refused to accept the status quo. France got tough with Panama, and Panama with cap in hand immediately signed an agreement with France. Just so the member knows, in France, dividends, service fees, royalties and interest paid by French entities to a beneficiary in a blacklisted country, which is Panama and others, will be faced with a 50% tax. Gains from real estate and securities transactions will be subject to the same levy. Also, France's 95% tax exemption on dividends issued by a subsidiary to its French-based parent company will be removed if the subsidiary resides in any blacklisted jurisdiction. Guess what. There was immediate action. The companies themselves started putting pressure on the French government and it responded.

Just so the members knows, of the blacklisted countries we are dealing with now, the list is getting smaller and smaller. Ever since the OECD compiled the list some 10 years ago and France came up with its blacklist, the list of countries has been getting smaller. We can see that the process can work and does work if we want to put pressure on them.

I will give the member another example. Switzerland has been a famous tax haven for many years. Many Canadians have been involved in Switzerland. It was not until the Obama administration started to put pressure on Switzerland two years ago on the basis of the terrorism argument that Switzerland started to become compliant and gave out information. If we take away the terrorism case and if we take away the fact that it was a powerhouse country like the United States that put pressure on Switzerland, Switzerland would still be thumbing its nose and refusing to give out information.

In addition, two employees, one of a Swiss bank, sold their computer records to the German government. Canada was a beneficiary of some of that because the Germans gave us a list of about 100 Canadians, who have since declared their participation in this tax shelter. I believe that is how the information came out about the Mulroney situation that was before the House not too long ago.

Exactly the same phenomenon occurred with a bank in Liechtenstein in the last two years. An employee of the bank made off with the tax records and went to France. The authorities pursued the person and tried to recover the disks. The person turned the disks over to the authorities and the authorities went after the bank.

We now have another big group of several hundred names that was reported a few months ago. In fact, there are more people in that second group from Canada than from the United States. Progress is being made. These things can get resolved.

Canada now has this amnesty program rather than try to charge back taxes. It is crazy. If the hon. member, or any of us in the House, were chased for taxes, we would be hit up with penalties. We may even get time in jail for avoiding taxes. However, anybody who has been hiding their money in these tax shelters, the revenue department has an amnesty program. People just have to sit tight and wait until they are caught. The department will give a period of time, perhaps a month or two, for them to voluntarily declare what is being hidden.

That is what happened with the people in B.C. There were 100 people who walked into Revenue Canada and confessed. Their names had already been given to Revenue Canada so there was little investigation to do. They paid their taxes and they were scott free. I guess they were not supposed to do it anymore. With this latest group, the same principle applies.

Where is the big stick? Where is the initiative of the government? As much as it talks about getting tough on crime, it is all talk, especially when it comes to situations like this.

I think the member clearly understands that and would support it. That is why 54 United States congressmen have refused to proceed with the agreement. The American agreement was signed by George Bush before he left office and it is going nowhere.

The Liberals might want to ask their trade critic, the member for Kings—Hants, who is heavily involved in these areas. He does a lot of globe-trotting to meet with politicians in Colombia, or wherever Canada is negotiating trade deals. We were on a trip together to the United States to meet with senators. They are not getting anywhere in the United States. This deal is dead in the states because of the country's reputation as a haven for money laundering and tax evasion.

Further, I am sure the member is aware of a company called AIG, a big insurance company. It was one that was bailed out when the economy collapsed in 2008. That company had a lot of nerve. It took billions of dollars of taxpayer money to be saved from collapse as it was argued they were too big to fail. The company was one of the 350,000 foreign registered companies doing business in Panama. Six months after it took all of this cash from the taxpayers of the United States, the executive gave themselves huge bonuses. About this time, the company filed a law suit against the United States government to recover taxes it felt it should get back on its investments in Panama. Talk about nerve.

That has riled up the members of Congress. I have a letter signed by Michael Michaud, member of Congress, and Walter B. Jones, member of Congress. This really has the Americans riled up and they will not allow this agreement to go through. Why is Canada putting this as a top priority and why are the Liberals supporting it?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I do not think there is anything wrong with Canada taking an action which goes against what the U.S. doing.

The United States has made a choice for whatever reason, and the member for Elmwood—Transcona does not know what those reasons are. He can speculate as to what those reasons are, but he does not know what the rationale is in terms of the U.S. not signing a trade agreement with Panama.

What I know is Panama has demonstrated stability over the last number of years, with the World Trade Organization, the doubling of the canal, different labour and environmental issues have been dealt with.

Canada has been afforded the opportunity to enter into a trade agreement. If that means some tractor companies in Winnipeg might be able to get a bit of an inroad now or some of our agriculture can get a bit of an inroad, I see that as a positive thing.

Does the member for Elmwood—Transcona believe that Canada can not go alone, or do we always have to go with the United States? Is that what the member would argue?

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Mr. Speaker, the issue is whether we should sign trade deals with money launderers and drug dealers.

Does the member support money laundering and drug dealing? We are supposed to be cracking down on these activities. The government is supposed to be tough on crime. Where is the example of that? Why is the government not following through on their rhetoric? If the government was going to be tough on crime, it would ask the Panamanians to sign the tax agreements and then it would negotiate.

That is what is happening with the United States in this situation. The former president of Panama, Manuel Noriega, is doing time in a Florida jail. He was involved in money laundering and drug dealing. The Americans went in, seized him and put him in a Florida jail for many years to come. He has been there a long time. That is getting tough on crime.

Where are those guys and why is the member supporting them?

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, a lot of good points were made by my colleague. It is obvious he thoroughly researched the matter. He raises a lot of concerns about this agreement, which are not being responded to fully.

Within the context of how Canada holds itself out to the world, we hold ourselves out to believe in fair working standards, reasonable pay, protection of the environment, livable communities. It is a real stretch to entertain an agreement with a country such as Panama. My colleague has raised a number of critical points.

In her testimony before the committee, Dr. Teresa Healy, senior researcher for social economic policy department of the Canadian Labour Congress, pointed out a number of important issues, which I was not aware of before. One was this. In 2010 apparently President Martinelli announced unilateral changes to the labour laws. One of those changes ended environmental impact studies on projects deemed to be of social interest. He is even undermining basic environmental assessment which is internationally recognized.

How can we conceive of entering into an agreement that he will balance environment and the economy?

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Mr. Speaker, that is a very good question.

There is trade, albeit limited trade, with Panama. Whether we sign an agreement, ratify the agreement or not, it will not stop trade.

The member for Winnipeg North should recognize that. Trade will continue under the current conditions. The current high dollar is what is really determining the trade balance in this situation. As the dollar goes up, our exports will become more expensive and our imports will be cheaper. It is an issue of the dollar.

The member is absolutely right about the lack of trust in those governments with which we negotiate. They do not honour commitments they make in terms of labour or environmental rules. We have seen this over and over again. Once the agreement is signed, they start backtracking on these promises, if they even make the promises.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Mr. Speaker, I rise today in support of 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. The Liberal Party will be supporting the bill.

I would like to raise a couple of concerns about the government's lack of action on increasing U.S. protectionism and its failure to seize trade opportunities with Indian recently, China, South Korea and other countries. I will also raise concerns about the lack of a tax treaty.

Canada is now experiencing the first trade deficits it has seen in 30 years. Indeed, the country set a trade deficit record in July of $2.7 billion. The government's priorities are concerning. Rather than pursue east-west bilateral or multilateral trade opportunities with growing economies such as India and China, the government is focused on trade agreements with smaller nations, representing a small fraction of our trade. It focuses on a misguided crime and justice agenda, which does little to stimulate the economy or to create jobs.

The Liberal Party supports the principle of free trade. Canada is a trade-dependent nation. Eighty per cent of its economy depends on access to foreign markets for Canadian exports. Liberals support initiatives that create jobs and improve market access for Canadian businesses.

In 2008 Panama had one of the highest real GDP growth rates in the Americas at almost 11%. Despite the global economic downturn, Panama posted a positive growth in 2009 at 2.4%, a trend that is expected to continue throughout 2010 and 2011.

The expansion of the Panama Canal is currently under way and is slated to be completed by 2014 at a projected cost of $5.3 billion. The expansion is expected to generate opportunities for Canadian companies in such areas as infrastructure and construction, as well as the environment and heavy engineering, consulting services, capital projects, human capital development and construction materials.

Like the Canada-Chile and Canada-Costa Rica free trade agreements, the North American Free Trade Agreement and the free trade agreement with Jordan, the Canada-Panama free trade agreement would include side agreements on labour co-operation and the environment.

The Canada-Panama labour co-operation agreement recognizes the obligations of both countries under the International Labour Organization's Declaration on Fundamental Principles and Rights at Work, which requires both countries to ensure that laws, regulations and national practices protect the following rights: the right to freedom of association; the right to collective bargaining; the abolition of child labour; the elimination of forced labour; and the elimination of discrimination.

The Canada-Panama labour co-operation agreement and the agreement on the environment would include complaints and dispute resolution processes that would enable members of the public to request an investigation into the perceived failures of Canada or Panama to comply with these agreements.

Yes, Panama is a relatively small economy, as I mentioned. In 2009 Canada exported only $90 million of goods to that country. Yet it is a relatively stable country that has made significant progress in recent years in terms of development and democracy, which Canada is well-placed to continue to encourage.

In spite of the global economic downturn, Panama's GDP grew at almost 11% in 2008, one of the highest in the Americas, and is forecast at almost 6% in 2010. In 2009 bilateral trade between the two countries totalled $132 million, Canadian exports making up $91 million of that and imports $40.7 million.

Primary Canadian exports to Panama include machinery, vehicles, electronic equipment, pharmaceutical equipment and frozen potato products. Canadian service exports include financial services, engineering, information and communication technology services. Merchandise imports from Panama include precious stones and metals, mainly gold, fruits, such as bananas, nuts, fish and other seafood products.

The existing Panama Canal, vital for the international trading system, is undergoing a massive expansion, with completion slated for 2014. The $5.3 billion expansion is already generating business opportunities for Canadian companies. Canada will immediately eliminate over 99% of its tariffs on current imports from Panama should this proceed.

The free trade agreement also addresses non-tariff barriers by adopting measures to ensure non-discriminatory treatment of imported goods and promoting good regulatory practices, transparency and the use of international standards.

On the matter of a tax agreement, my party has some concerns that nothing has been undertaken. The concerns reflect the lack of a tax treaty. Neither a DTA, which is a double taxation agreement, or a TIEA, a tax information exchange agreement, has been signed with Panama. However, the Liberal Party will support this bill on the basis that a tax agreement will ultimately be achieved between our two countries. We will not put the benefits of free trade on hold while we wait for either a DTA or a TIEA. We believe a delay would take away the clear competitive advantage that a free trade deal would give Canadian businesses and farmers given the lack of free trade that currently exists between Panama and the United States.

At this point I wish to highlight some real concerns about the Conservative government's approach to international trade. We are losing the concept of free trade with our biggest trading partner to the south, the United States. When the recession hit, the U.S. government responded with protectionism in putting forth its buy American policies and tighter rules and regulations. The Conservative government initially stood by watching as if it did not know what had hit it. It engaged in photo ops in Washington, not realizing that the battle needed to be fought across all states at the state level.

By the time a so-called exemption was worked out, which itself required significant concessions by Canadian provinces, the protectionism in the United States had already hurt Canadian businesses, costing real Canadian jobs. The exemption only covered 37 states, a great example of how it is not just Washington that must be engaged.

Despite our vociferous efforts to get the Conservative government to engage much more forcefully at the state level, the government did not seem to understand either the whats of the negative effects on Canadian business or the hows of fixing the problem, and here we are again. The United States is threatening more protectionist legislation with its foreign manufacturers legal accountability act, which, although not technically aimed at Canada, would significantly hurt many Canadian businesses and affect many Canadian jobs.

I also want to use this opportunity in the debate on the merits of free trade to encourage the government to do much more in its dealings with China, South Korea and others. I acknowledge the announcement and production of the report last week between Canada and India, and I am encouraged that this is moving in the right direction.

I urge the government to capitalize on the extraordinary growth and scale that presents such fantastic opportunities for so many Canadians here and around the world, an economy that is growing at an incredible rate.

There are incredible investment opportunities being made in infrastructure, water, sewage treatment and public transit. We have been told repeatedly by the Chinese people that they are looking for green technology, for forestry products and for investments in the financial services industries. There are tremendous opportunities for trade in educational services, in co-operation and engagement not just at the Canada-China level but provincially and municipally as well.

We in the Liberal Party have stressed and will continue to stress the importance of Canada in the world. In support of this, we have proposed the concept of global networks. We say that the older, simpler concept of trade and commerce on its own, of simple export and import of goods and services, should be expanded to include all kinds of engagement on all levels, such as education, culture and environmental co-operation, a much greater engagement, a much broader engagement and exchange of people and ideas.

I look forward to this bill moving along as quickly as possible while formalizing a solidified tax treaty. In doing so, I intend to give my full support to the bill and I urge all hon. members to do the same.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Mr. Speaker, I wonder if my hon. colleague is aware that in four short years our Conservative government has signed new free trade agreements with Colombia, Peru, Jordan, Panama and the European Free Trade Association states of Iceland, Norway, Switzerland and Lichtenstein.

Our government continues to work to open doors around the world so that our producers, our job creators, can continue to exploit export markets and trade from one end of this continent to the other, as well as across the seas in Europe and Asia. We are doing everything we can to ensure we open up markets for our producers.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

I am aware of that, Mr. Speaker.

However, the fact is that the government spent the first three years with the Prime Minister being churlish with China and ignorant of India. The government has had four trade ministers in five years, denying any of them any real opportunity to build important and sustainable relations with other ministers in other countries, trade relations, foreign relations or simply relations between people. Changing trade ministers almost every year is not good for policy or for defending Canadian interests abroad.

The fact is that a Liberal government would take a different approach. We would focus on the global network strategy that I talked about in my speech. We would work in partnership with business, universities, civil society and private citizens in order to better leverage Canadian relations with the world. We would harness our multicultural communities as a natural bridge to the fastest growing economies in the world, the economies of India and of China, which the Conservatives have so neglected over the years, and other growing economies. We would return to the very successful team Canada mission approaches focusing on several sectors where we have had a comparative advantage, areas like education and clean energy technologies.

A Liberal government would clean up the fiscal mess that the borrow and spend Conservatives have got us into.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, it is important to understand that this issue is not black and white. that there are things to do, but that a trade agreement is a positive development for agriculture and agri-food and other sectors, plus the expansion of the Panama Canal.

There have been some concerns and a lot of those concerns, quite frankly, are a consequence of the inaction of the government not having a plan to deal with the tax issues and not having a plan to broaden its interests in, as the member referred to, China and India. In fact, it has damaged those interests and I think the member may have something to say about that.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Mr. Speaker, I would like to comment on the advantages of this agreement and why we have chosen to support it.

We support the agreement for two reasons: first, it would l provide significant improvements and opportunities for significant Canadian enterprises; and second, it would encourage Canadian jobs.

Many Canadian companies are already active in Panama, including AIMCo, the Bank of Nova Scotia, Borealis, Canaccord, Brookfield, Talisman, SNC-Lavalin and other engineering construction firms, and this would continue.

Many of the witness who came forward at committee stressed how Canada would have a comparative advantage in this agreement since the United States has not yet signed an agreement with Panama.

There would be significant advantages from a job creation standpoint and from a comparative advantage economic standpoint for Canada.