Debates of Feb. 3rd, 2011

Canada-Panama Free Trade Act

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I am pleased to rise here today to speak to 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.

I am pleased to do so because I have the sense that by participating in this debate, much as our party critic in this area did, one is really doing something positive, not only for the Quebec nation, but also for the Canadian nation. Indeed, some members of this House are taking a back door approach in order to sign a free trade agreement that will be extremely harmful to Panamanians, Canadians and Quebeckers.

I would like to begin by saying that the Bloc Québécois will not support this implementation bill, and for a reason that is very important to us: Panama is a tax haven. Not only is it a tax haven, but it is on the OECD's grey list. Accordingly, it is a tax haven that does not co-operate with the OECD and does not sign the agreements set out by that organization.

Furthermore, Panama has seriously repressed its union movement. I would remind the House that in June 2010, the Panamanian government passed Law 30, which is considered to be very anti-union by the World Federation of Trade Unions and the International Labour Organization.

Of course, the government members will tell us that the president of Panama announced on August 5, 2010, that he plans to comply with all ILO conventions and remove the repressive aspects of the law. So far, however, no such action has been taken and we can only wonder what the real scope of the labour co-operation agreement with Panama will be. In that regard, I would also like to point out that the other co-operation agreements we have signed, whether concerning the environment or labour rights, have never been very effective and have never produced anything beyond meetings and symposiums. They have never led to any corrective measures when it comes to labour rights. Therefore, that is our second reason for opposing this free trade agreement.

I would also like to add that the Bloc Québécois is not completely inflexible on this issue. In 1994, the Bloc Québécois, who had been in the House for one year, supported the North American Free Trade Agreement, although, at that time, the Bloc was unaware of the magnitude of the effect that chapter 11 would have on the protection of American and Mexican investments in Canada. Clearly, this chapter also applies to the protection of Canadian investments in the United States and Mexico.

The fact remains that we supported this agreement at the time. We also supported free trade agreements with northern European countries. A Conservative member mentioned it earlier. We have absolutely no problem with this.

We are following with great interest the negotiations for an agreement with the European Union, despite the fact that we have some concerns, we are waiting for explanations and we would like to see the documents. I would like to remind the members of the House that the unions have been asking for these documents. As parliamentarians, we should have them, as has been the case in the past. Surely, the members remember how, several weeks before the Summit of the Americas in Quebec City, the governments that were negotiating agreements around the free trade area of the Americas made their negotiation documents available. That is certainly not the case with Panama and the European Union. However, we must still give the government the benefit of the doubt. Quebec and the Bloc Québécois are among those who have been promoting a free trade agreement with Europe for an extremely long time already, at least a decade. We hope that such an agreement will yield positive results for Canada, Quebec and the European Union.

Once again, in certain cases, we do not support the signing of trade agreements with countries that do not abide by a certain number of rules. Such is the case with Panama and Colombia. It is absolutely unbelievable that the Canadian government would be so irresponsible as to want to sign an agreement with Colombia, knowing full well that human and labour rights are violated there on a consistent and repeated basis.

It is evident that what is important is to have a position based on principles. Yes, we support opening borders, but we also support complying with major international agreements on human rights, labour rights, environmental rights as well as cultural diversity, which is extremely important.

In the case of Panama, the situation is even more serious and, in my opinion, this has not received sufficient attention in this debate. An article appeared in Le Devoir on January 10, 2011, entitled “The Canada-Panama Free Trade Agreement—Cozying up to the Drug Trafficking Paradise”. It was written by Alain Deneault, the author of Offshore, paradis fiscaux et souveraineté criminelle, and Claude Vaillancourt, who is the co-president of ATTAC-Québec. Not only is Panama a tax haven that does not co-operate, even by OECD standards, but it is a tax haven that makes life easier for drug traffickers. And that is the kind of bill promoted by the Conservative government. It says it is tough on crime. It is tough on petty criminals, but it is the friend of big-time criminals and we have the proof: the Panama free trade agreement it is trying to make us accept.

I would like to read a paragraph from this article in the January 10, 2011 issue of Le Devoir.

Panama certainly deserves its bad reputation. This country's main economic activity is providing financial services to drug traffickers and multinationals. It has specialized, among other things, in discount flags of convenience, without any bureaucratic red tape. This allows vessels to sail without worrying about domestic laws and sailors' working conditions.

Capital enters and leaves Panama without any restrictions. Transactions are protected by banking secrecy rules, and there is no monitoring of financial activity. The Organization for Economic Co-operation and Development (OECD), which is nevertheless fairly accommodating when it comes to evaluating how co-operative tax havens are, has placed Panama on its “grey list”.

Panama is a tax haven, and one that makes life easy for drug traffickers and money launderers. We are talking about organized crime, the mafia and other criminal groups or organizations. This will have disastrous effects on Panama. It will allow organized crime groups from Canada to launder their money in Panama. It will also allow some organizations that are currently located in Panama to benefit from the rules in the free trade agreement and locate here, in Canada and Quebec.

I remind members that the OECD has come up with four criteria to determine whether a country is a tax haven. The first is whether the jurisdiction imposes no or only nominal taxes. For example, I remember the case of Barbados—I believe—where the tax rate is regressive instead of progressive. The higher the profits, the lower the tax rate. They start with the wonderful rate of 3% and go right down to the alarming rate of 1%. Since Canada has signed a double taxation treaty with Barbados, if a Canadian company operating in Barbados meets a certain number of administrative criteria and has paid that wonderful tax rate of 1% on its profits, it is able to repatriate money to Canada tax free. That was the first criterion.

The second criterion is a lack of transparency. I have already said that Panama fits the bill. The third criterion is whether there are laws or administrative practices with respect to the exchange of information. Panama has refused to sign the 12 bilateral agreements to meet the OECD standards. The fourth criterion is whether there is any indication that the country is attracting investments solely for tax purposes and not for the purposes of economic activity.

Panama fits that definition of a tax haven. As I mentioned, since it has refused to sign the 12 agreements, it is currently on the grey list. So before we implement this agreement, we must be certain that Canada has signed a tax treaty with Panama and that Panama meets the OECD criteria. Otherwise we would simply be an accomplice to international organized crime.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the member's input into this bill, a trade deal with Panama, has been straightforward and thoughtful.

As I understand his reasoning, he is very concerned about human rights abuses and also disrespect for union principles. The rest of the stuff seems to be okay, though.

I would ask the member if he believes we should not be doing business with countries that do not respect a collective bargaining position and do not respect human rights. I wonder how he squares that with doing business with China.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, internationally, Canada has a responsibility to uphold major international conventions. And it should start by signing the seven fundamental conventions of the International Labour Organization.

There is a big difference between doing business with the entire planet—including countries that do not respect workers' rights—and having free trade agreements that favour trade relations between countries. There will be a number of debates about the possibility of a free trade agreement between Canada and APEC because certain member countries pose a problem. I want to make a distinction. I am not saying that we should not trade with China, Panama or even Colombia, but there is a big difference between trading and favouring these countries by signing trade agreements, such as free trade agreements, with them.

There is another reason. The Bloc favours a multilateral approach within the framework of the World Trade Organization as opposed to bilateral, piecemeal agreements that are directed at the weak, in essence, using the countryside to surround the cities, as Mao Zedong said. That is what Canada is doing with the United States.

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

Mr. Speaker, a number of South American countries are refusing to negotiate with Canada because of its free trade model. Does my colleague agree with that? Can he explain why these countries are not prepared to negotiate with us?

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I want to thank the hon. member for his question because it allows me to make another point I have not had time to mention.

One of the big negotiation problems Canada is running into with the South American countries is that it is trying to impose chapter 11 of the North American Free Trade Agreement, which gives multinational companies and corporations state status, thereby allowing them to sue another state before a special tribunal. Proceedings are under way. Canada had to pay $300 million for decisions Newfoundland made with regard to a forestry company whose name I forget, because it wanted to avoid going before the special tribunal under chapter 11.

In the free trade agreement between Canada and Panama, chapter 11 is chapter 9. When did this chapter 11 come to be? It did not exist in the North American Free Trade Agreement or on the international level. It appeared when the United States and Canada entered into negotiations with Mexico. Since we did not trust the Mexicans—we being Canada and the United States, not me—a chapter was included allowing Canadian and American businesses to challenge the laws and regulations of the municipalities, provinces and countries involved. These countries were targeted. That is why a large number of Latin American countries refuse to negotiate with Canada. They do not want to negotiate with the United States either because they know full well that the scales are tipped in favour of big business against national governments and national sovereignty.

[Shawn Murphy, Liberal, Charlottetown, PE]

Mr. Speaker, I appreciate being allowed a few minutes to speak in this debate.

In principle, I am going to support this agreement. I am going to talk about one issue which I think the House and the international trade committee should not lose sight of as this discussion goes forward.

A number of members have talked about the importance of trade to our economy. This is very true. It goes right back to our country's founding when our economy was based on the trade in lumber and fur. It has not stopped. Eighty per cent of our gross domestic product relates to trade.

In the last couple of years, there has been a lot more bilateral trade agreements entered into mainly with smaller countries, and mainly as a result of the near death of the WTO Doha round, which does not seem to be going anywhere very fast. It comes right down to the law of comparative advantage. Canada is a large country. It has a large geography and many natural resources. It benefits us to trade not only with the United States, our closest and most important neighbour, but with other countries around the world, such as Panama.

We cannot lose sight of the other side of the equation. Many countries of the world, such as Panama, are what we call developing countries. Through the law of comparative advantage, they also benefit from trade. Bilateral trade lifts both countries.

Our trade with Panama is more symbolic than anything. It is very insignificant. I believe there is $90 million of mostly manufactured Canadian products going from Canada to Panama. In return we import about $30 million of products, mainly nuts and tropical fruits that are generally not grown in Canada. Really there is no sector that will be advantaged that much, and likewise there is no sector that will be disadvantaged through the Canada–Panama free trade agreement.

We had the same debate on the agreement with Colombia. Anytime we get into these debates we are not dealing with perfect situations. There are always going to be issues with these countries. A lot of these countries have very troubling and difficult histories. Some have made tremendous improvements over the last number of years, while others have made slight improvements. We cannot ignore that. We have to keep pushing, nudging and urging those countries to improve their human rights issues, to improve their environmental laws and regulations, and of course to improve their tax issues also.

There are some opportunities in this agreement with Panama. One that has been mentioned by previous speakers is the expansion of the Panama Canal. It is a $5.2 billion project. Canada has many engineering and construction companies that are well suited for this type of development and hopefully they will benefit from closer relationships with the country of Panama.

We are not dealing with a perfect situation, but I have reviewed the labour co-operation agreement. It is an agreement signed by Panama in which it agrees to respect the right of freedom of association, the right to collective bargaining, the abolition of child labour, elimination of forced work, and the elimination of discrimination.

I am not naive. I know that if we went to Panama today we would find abuses. We would find imperfect and problematic situations. However, from everything I have heard and read, I believe there have been significant steps made in the right direction. We see the same thing with some of the environmental issues.

It comes down to what comes first, the chicken or the egg. Do we wait until the country has a perfect record, perfect environmental regulations, no allegations of any labour code abuses and no allegations of human rights abuses, or do we wait until there is very significant development, put in place the framework for further improvement and allow the country to improve its economy with a free trade agreement with a developed country?

Those are the reasons I support the agreement going to committee for further study and review.

One issue that concerns me, which I will talk about for a few minutes, is the whole issue of tax havens and tax information. I would like us to move closer to an agreement, whether it is a double taxation or a tax information exchange agreement. There have been proposals from Panama to Canada and vice versa. It has not been finalized yet and hopefully this issue will be finalized shortly.

I am going to spend a minute or two talking about that issue because I feel strongly about it. We can talk about Panama, the Cayman Islands and Liechtenstein, but we should be talking about what is going on right here in Canada. We are basically not doing anything about tax evaders.

As a previous speaker alluded to, we have had two very serious situations recently. There have been 1,700 Liechtenstein accounts and 160 Swiss accounts. The names, account numbers and amounts are all clearly on the record. CRA officials know about it. They are all residents of Canada. They were given 30 days to walk into the nearest CRA office and declare amnesty. Are they fined? No. Are they charged? No. They might have to pay a small penalty, a bit of back interest or a bit of back taxes, but that is all that happens. To my way of thinking, that is a fundamental travesty of justice.

Let us say two kids went out last night, broke into a service station and stole a carton of cigarettes. Tonight they will be in jail and perhaps they should be in jail. But if a person puts $5 million in a Swiss bank account and leaves it there for 20 years, he is defrauding the Canadian taxpayers of probably $200,000, $300,000 or $400,000 each and every year. If the person is caught, what happens? He or she gets total absolute amnesty.

The person would then transfer the money to another haven, wherever it is around the world, because he or she has nothing to lose. If the individual is caught again, what does he or she do? Within 30 days the person would go in to the nearest CRA office, declare amnesty and the whole thing occurs over and over again.

The point I am trying to make is that Canada should be very aggressive. The people who are caught doing this should be charged, convicted and, if convicted, they should be jailed. I want to talk about tax havens, but I realize I am off topic.

In principle, this agreement should be signed. I know there is a tax issue. The whole tax issue should be worked on and I believe it will be finalized in due course.

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

Mr. Speaker, I listened to the presentation made by the Liberal member, who mentioned that he will vote in favour of the agreement presented by the government. I did not really understand what could possibly motivate him to support this bill. He said that human and labour rights are violated in Panama and that Panama is recognized as a tax haven on the OECD's grey list. An information exchange agreement is not even included in the main agreement. Only businesses will benefit from this agreement. Canadians will not derive any benefit from it, and the signing of such an agreement will also tarnish their country's reputation.

Does the hon. member see some advantage in supporting Bill C-46?

[Shawn Murphy, Liberal, Charlottetown, PE]

Mr. Speaker, on the issue of the labour agreement, I said that I am not naive enough to state in the House that everything is perfect, but Panama and Canada have entered into a labour agreement. It basically protects a number of issues. It is well-written. If the countries do not follow the agreement, further action will be taken. Also an environmental agreement has been signed and that again will push the envelope that much further.

From reading the background material, we are looking at a country that is moving forward. It has what I consider to be a significant gross domestic product increase every year. The country is in the process of modernizing. It is strategically located. I am not going to suggest that everything is perfect, but it is moving in the right direction. This agreement will be beneficial for Canada and for the people living in Panama.

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

Mr. Speaker, I understand the member is not running in the next election, so I want to wish him well. I have had many good times with him in the public accounts meetings when I was a provincial member and he was the long-time chair of the Standing Committee on Public Accounts.

The member explained quite well the problems with tax evasion and money laundering. I disagree with his assessment that we should be signing and implementing a free trade deal when we should be doing what France did a year ago, that is, get tough with Panama. When France started taxing corporations doing business in Panama, the Panamanians simply signed the tax treaties that the French wanted.

We are not going to get anywhere if we simply sign agreements without getting tax treaties signed first. That is the point. The member was on the right track and he had great arguments, but he should vote against this deal until those tax treaties are signed.

[Shawn Murphy, Liberal, Charlottetown, PE]

Mr. Speaker, we probably both have similar views in certain situations, but we have come to a different conclusion as to whether the glass is half full or the glass is half empty. I do not believe we should hold up the trade agreement. I have read everything I could get my hands on. There have been many good and positive steps made on the tax treaty. Canada has given proposals. We received proposals back from Panama and I think it will be concluded.

The point I want to leave the House with is it is not what goes on in Panama, it is what goes on in this country regarding tax havens. If we took a dozen of the people who had large accounts in Switzerland and took the information that is readily available on the Internet, WikiLeaks, or wherever, and charged them instead of giving them amnesty, convicted them and put them in jail for five or six years, the whole issue of tax havens would disappear pretty quickly.

[The Acting Speaker, Conservative, Barry Devolin]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Davenport, Employment Insurance; the hon. member for Winnipeg North, Public Safety; the hon. member for Madawaska—Restigouche, Government Priorities.

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

Mr. Speaker, we are at report stage of this bill. My colleague has moved a series of amendments at this stage which, although they are only a small part of the overall bill, would have the effect of destroying the bill by deleting some key clauses in the bill.

It is quite appropriate that the House should support those amendments for the deletion of those provisions. This is another in a series, the Colombia free trade deal being the most egregious example, of bilateral trade agreements that we have entered into that are not in the interests of Canada. In many cases they are downright exploitive of the country that we negotiate them with.

If we analyze trading arrangements, the ones that are the fairest, as opposed to the nomenclature of being freest, are clearly the ones that are done at the multilateral level rather than the bilateral level. With a few notable exceptions, Canada is in a position with a country like Panama. We dominate it. We have heard figures that trading is relatively modest between the two countries by international standards, but it is much more to our advantage.

In this kind of relationship the smaller, weaker party is at a distinct disadvantage once the agreement goes into play. That is particularly true when one understands the history of this model of trading agreements. We accord what in effect is state status to very large multinational corporations under the NAFTA agreement. We have seen very clear examples where we have been the negative beneficiary of the clause that gives them that status and the right to sue national governments, in effect being on par with them.

A classic example where we were the negative beneficiary was the one involving a chemical substance that Canada wanted to ban and did so. Part of the refining process for this substance was in Sarnia near my community. We ended up paying something like $13 million or $18 million to a multinational corporation, without even fighting it. The Liberals at that time just caved, which they are really good at.

The one that really bothers me is when Mexico was at the receiving end of this type of a lawsuit. A multinational corporation based in the U.S. was moving toxic materials into a very poor community in Mexico. The national government simply did not have the financial wherewithal to fight the suit and ended up having a judgment awarded against it for many millions of dollars. I think it was $20 million to $30 million U.S. which it had absolutely no ability to pay.

We see those kinds of abusive processes and it is why there are many countries in Central America and South America that will not enter into negotiations with Canada on those kinds of bilateral agreements because of that clause and because in a number of cases we are the dominant partner.

It is not good for our international reputation if we enter into these agreements with these kinds of countries. That is particularly so, as we saw with Colombia and its history of abuse of human rights, but it is also true with Panama.

We have heard repeatedly today, and it is conceded by all sides, it is a tax haven and a centre for money laundering and organized crime. Some 400,000 corporations are registered by the Panamanian government, hundreds of times probably out of proportion to the normal economic activity that many corporations would represent. They are all shell companies and a good number of them are used to launder money through organized crime syndicates. Others are there purely to avoid their tax responsibilities in their domestic countries.

That is the kind of country and government, maybe government more so than country, because I do not want to disparage the people of Panama, with which the Conservative government is entering into the agreement. The end result, when we enter into an agreement with like this with a country with those types of practices, we are condoning those practices.

It is really interesting that the Conservative government is doing this, the so-called tough on crime government. I have oftentimes very great doubts about whether the Conservatives would know anything about fighting crime, how to get at it, but we know, any of us who have studied it to any degree, and they should know, that if we are to get at organized crime, we get at the dollars.

By allowing Panama to continue to be a tax haven that inspires those corporations to register there, it also makes it very easy for it to launder money through there. By doing that, the drug trafficking and human trafficking that goes on within those organized crime syndicates, Panama clearly is assisting them in their operations and we in effect are condoning it when we sign on to this kind of agreement.

It is a very good reason why we should not be signing this. In addition to that, there are others. I want to deal with one in particular around setting standards.

If I have time, I will go to the environment, but I want to deal with labour standards. I must admit I was somewhat taken aback by the last speaker when he said that the Panamanian government was making progress. I am dealing now with labour standards, because this agreement, if it is processed to its final stage and is signed and ratified by both countries, does not have any meaningful provisions in it that would ensure workers in Panama would have even minimal standards of job protection, health and safety standards and environmental standards.

In 2010 there was some perception by the president of Panama that somehow the Panamanians were not friendly enough, and it is really hard to imagine this is the case, to the corporate world. Therefore, they passed a law in the summer of 2010 which eliminated environmental impact studies on projects deemed to be of social interest. That would be infrastructure programs, I assume, in many cases.

Then they went on and made it illegal to have mandatory dues collections for collective bargaining arrangements. People cannot do that in Panama, something on which my community led the way, back after the second world war. The ban formerly came out of Windsor in 1945, so now it is illegal to do that in Panama.

It allowed employers to fire striking workers when they were in the course of a legal strike. It criminalized street blockades, civil protests. It also protected police from prosecution when they abused workers in a strike-breaking situation.

That is the kind of country that we are going to be signing on to, and it is beyond the pale that we would be doing so.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Mr. Speaker, I listened with interest to my hon. colleague's remarks and I heard him talk about what this agreement would mean to Panama.

It is my understanding that as a Canadian parliamentarian my primary duty is to represent Canadians. I appreciate the hon. member's concern for human rights, which we all share, but here is the difficulty I have with his argument and I would like him to address it.

Panama is a democratic country. It is not a dictatorship. The government was democratically elected. If the democratically elected representatives of the people of Panama believe this is a good deal for Panama, why should Canadian parliamentarians be opposed to it on the basis of the argument that it is bad for Panama? Panamanian representatives support it for Panama. Canadian representatives support it because it is good for Canada. Why should we interfere in their democratic process?

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

Mr. Speaker, there are two answers to that, one a general one.

It is in the interests of Canada to protect our reputation at the international level, but the government has done a great deal of damage to that. That includes our relationship with countries that are quite prepared to abuse human rights. Every parliamentarian has the responsibility to protect Canada's reputation in that regard. That is the general answer.

With respect to his claims around Panama's democracy, we could have some strong arguments about that if we actually studied the country and in particular when we think of people like Noriega. I do not think that was a democratic government. Things have not changed a lot since then.

My colleague's real question was whether that government was a vibrant representative democracy. Even if we concede that it is, and I am not, it still comes back to our responsibility to uphold human rights, including the right to organize collectively and the right of a worker to have a safe working place and in the environmental field to have a safe environment for the community as well. We have a responsibility to be involved in that when we enter into these kinds of agreements.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, the hon. member knows I have the utmost respect for his thoughtfulness both in this chamber and outside and his legal analysis. He elevates the quality of debate in the House.

The hon. member will also know that his party and our party pushed for a bill on corporate social responsibility and ultimately it lost, which was quite regrettable in my opinion.

The hon. member and I probably also would agree that the side agreements on labour co-operation and the environment, et cetera are not as strong as one would like, but maybe as good as one is going to get.

Is the issue of corporate social responsibility, and that is the ability of an indigenous person to sue a Canadian corporation operating in Panama, advanced by this treaty or is it affected at all?

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

Mr. Speaker, there is a practical answer to that question. I do not see it being advanced because of the inability of individuals in Panama to use that.

It comes down though to the basic model. There is the Mercosur trading arrangement in South America in which maybe eight countries take part. I have had various discussions over the years with people from some of those countries who have told me there is a whole different model and the one in the European Union is the one they would prefer to enter into. It would be multilateral and resources would flow from the centre to new countries coming into the agreement. That would be a major plus.

When we were having multilateral discussions with South America, there was some discussion about there being some financial incentives from the wealthy countries to build the infrastructure and move technology into the country so it could advance. However, those discussions were broken off. That is the kind of model that we should be looking at and doing it at a multilateral level.

[Mario Silva, Liberal, Davenport, ON]

Mr. Speaker, I am pleased to speak on this issue once again.

I am a member of the international trade committee. This bill has been before the House. We have had an opportunity to listen to stakeholders. At the end, we concluded that this was a good agreement for Canada and was one that we should pursue. That is why I will be speaking in support of this bill.

Given that Canada is a trading nation, I believe it is in our interest to do so. We have launched a series of trade agreements with a variety of countries that have been very successful for many businesses in Canada.

We recognize that Panama, compared to the giants of Latin America, is a small player, but this is a strategic place and partner that has great potential for the future. There are important opportunities there for growth between the north and south. The Panama Canal is a gateway that will undergo a massive expansion and could be an opportunity for Canadian businesses. We hope, through this initiative, dialogue and agreements, that there will be business opportunities between both countries. There would be different projects going on underground on which hopefully businesses could bid successfully. We have this opportunity.

As I said, the trade is relatively small, at about $100 million, but it has potential to grow. As well, these are significant steps in relation to tying things up, country by country, in the Americas.

My hon. colleague spoke about Mercosur, which is a large bloc in South America that includes Brazil, the dominant player there, Argentina and other regional players such as Uruguay, Paraguay and now Venezuela. It is a market that we have to get into. This is a market that we would eventually have a trade agreement with, similar to the agreement we are in the process of with the European Union. It is a complex process, but one that is necessary to engage in because the European Union is an equally important bloc on which we have to concentrate.

As we all know, trade for Canada is predominantly with the U.S. at over 80%. We have to diversify the treaty relationships we have with other countries around the world. This offers us an opportunity. Strategically it makes sense, given the major projects in the canal as well as the strategic importance of Panama.

Panama has made some strives over the years. It went through a very difficult time during the Noriega regime and afterwards. The 1980s was a difficult period, but it has made a transformative presence on the world stage. It is a stable democracy. It is a major player in the Organization of American States, of which Canada is a player, and this is a very positive thing. It is a country that has been providing stability for the region. Panama is a player that we want to engage bilaterally and through this agreement.

It is important to note that this agreement has very important side agreements on issues of labour and the environment. On the labour issue, my colleague spoke of corporate social responsibility, which I feel strongly about, and that needs to be done. In some ways this elevates the discussion and brings the focus not just on trade agreements, but labour rights and human rights issues, as they are equally important. We did that with the Colombian free trade agreement. There was a very important agreement on a human rights review. That was an historical step in terms of a trade agreement.

Although we are not anywhere near where we want to be in terms of corporate social responsibility, we are beginning to realize that it cannot be ignored and it has to be addressed in our trade agreements, bilateral agreements and discussions. We want to make sure that Canadian businesses are conducting themselves ethically abroad. By and large, I think they are but Canada can play a major role as a leader for the rest of the world in the fields of human rights and corporate social responsibility. This has to be the issue for the future.

Getting back to the agreement, it covers such issues as the right to freedom of association and the right to collective bargaining, among other things. I am very supportive of such an agreement that recognizes that when entering arrangements like free trade agreements, labour rights must be protected and encouraged. This is a positive outcome of this particular agreement.

In terms of potential business for Canadian companies, the opportunities, although presently small, have considerable room for growth. Canadian business provides a wide range of products, including vehicles, pharmaceutical equipment and machinery, among other things, but the opportunity for growth exists. Certainly it exists in the financial sector. We have major players in the Americas, such as Scotiabank, which has been carrying the flag of Canada. It plays a major role in the financial sector throughout Latin America and, of course, it is a major player in Canada as well.

As for the services provided by Canadian companies in the financial, engineering and communications sectors, there can also be an opportunity for growth.

Some concerns have been raised about the free trade agreements. I know there have been issues raised in committee in relation to the banking regulations in place in Panama with regard to money laundering. This is a big issue and the government needs to take it very seriously. It is a challenge that other countries face when they have tax-free havens, including some in Europe. This needs to be addressed.

The thrust of this agreement is one of economic support and solidarity between two countries that are important allies and provides stability in that region.

As I mentioned at the beginning of my remarks, Canada is a trading nation and responsible sound trade agreements are in the interest of Canada and are good for Canada. I think most Canadians would agree that we cannot act in isolation. This is the time for us to engage the world.

We are all aware that the discussions in Doha have not gone very well. Given that those discussions have not gone well, countries like Canada have engaged in bilateral agreements. There are those who would challenge the wisdom of that and whether the agreements should be multilateral or bilateral, but at the end of the day we have to move forward because the discussions have not been very meaningful or conclusive thus far. We cannot stand back while other countries sign agreements.

As I mentioned, Brazil is a huge player in that area. It is a country of 170 million people with a $2.2 trillion budget that keeps on growing. Our engagement in Panama further links us to the markets in South America, such as Brazil and other players.

The GDP of Panama is $44 billion. As I mentioned, the amount of trade we do with it is small, about $100 million, but it is nothing that we can dismiss as there are strategic interests for Canada.

I would be pleased to support this agreement. It is fairly good for Canada and Panama and offers the opportunity for mutual benefits, increased trade and co-operation in years to come. This is the essence of good trading relationships and good trade agreements.

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

Mr. Speaker, I still find it disappointing to hear a Liberal colleague speak in favour of this bill. He says that the proposed agreement is good for Canada. That is too abstract for me, and I would like him to be more specific.

We need to remember that the OECD considers Panama to be a tax haven. Perhaps it would be good to review the criteria for declaring a country a tax haven: lack of transparency; laws or administrative practices that prevent the effective exchange of information; and indications that the country is attempting to attract investments that are purely tax-driven and not for economic activity.

I am wondering what good there is for Canada in all of that. Perhaps it is good for businesses that will avoid paying taxes, which our constituents will end up paying for them. I would like to hear the member explain his position.

[Mario Silva, Liberal, Davenport, ON]

Mr. Speaker, I thank my hon. colleague for the question. I would especially like to thank him for his concern and his interest in everything that is good for Canada.

At committee, we had the opportunity to hear from several witnesses who spoke about this bill. Representatives from certain businesses clearly indicated that this bill offers many advantages for our country and for businesses that work in Panama. After several meetings during which I had the chance to hear many people's testimony, in the end, while I cannot say there was a complete consensus, I can say that people who have been able to invest in Panama said that the bill would benefit businesses and would benefit Canada.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, I listened with great interest to the member's speech and the one presented earlier by his Liberal colleague. I would have to say that I am very puzzled because I specifically remember his saying that side agreements are important. Let us backtrack from this. What is very important for fair and balanced trade is that we enter into trade agreements that provide for a balancing of trade to further economic development and looking after human rights, labour standards, and environmental protection. The scholars would tell us that we do that by making sure there is one trade agreement that contains all those measures and is legally binding.

If there is anything we should have learned from the failings of the NAFTA and its side agreements, is that it was a mistake. As I recall with two previous U.S. presidents and moving on through to President Obama, there were great concerns about the frailties of the NAFTA.

I think the member is confusing apples and oranges. Actions by the government to command another party to agreement are different from corporate social responsibility where obligations are imposed on an independent corporation.

I wonder if he could speak to that.

[Mario Silva, Liberal, Davenport, ON]

Mr. Speaker, I spoke on two issues. One was the issue of this particular agreement and the side agreements which I thought was important. I said in terms of the evolution of the agreement, I think this is a very big step. I mentioned the fact that even on the Colombia free trade agreement, we did deal with the issue of human rights with a review that takes place annually.

It is not the ideal of the corporate social responsibility bill that I had supported that was put forward by my hon. colleague, but it certainly is a step forward that we even have this on the table. That should be seen as an achievement in itself, and not going back to the idea that it cannot happen, because it is happening with these side agreements.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am pleased to provide some commentary on 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.

This afternoon we are debating the four report stage motions which were moved by a member from the NDP. These four motions are all motions to delete certain clauses in the bill.

The first motion is to eliminate clause 7, which outlines the purpose of the bill. I think the bill probably would still operate even if we did not have the narrative about what the purpose is because it is almost self-evident.

The second motion is to eliminate the clause which designates that the minister is the representative of Canada. That is almost self-evident as well, although it is probably good to have it in there.

The third motion is to eliminate clause 12, which lays out the minister's authorized activities in his role.

The last one is to eliminate the final clause, which is the coming into force clause, i.e., when this bill would become law.

The member for Windsor—Tecumseh had indicated that, in substance, putting all these together probably makes the bill somewhat sloppy or inoperative and basically would kill the bill.

Now we know exactly why we are spending all this time on this. It is probably why the Speaker has given so much latitude to members who are speaking because there is not very much we can say. These are constructive motions basically to scrap the bill. Some people would rather talk about the bill, which is really not what we are debating.

It is interesting that there has been so much irrelevance relative to what we are supposed to do, but probably some of the more interesting commentary that we have had with regard to bilateral free trade agreements in general. There have been a lot of very good issues that have come up. Some relate to double taxation issues, or tax-sharing information, or multilateral versus bilateral agreements, and some of those benefits and whether or not we should be doing trade at all with countries that do not respect human rights, with countries that do not respect the collective bargaining process.

We talked about the fact that in this particular case the trade activity between the two countries is very small. It is $90 million one way and $30 million the other. It is inconsequential. Yet, there have been eloquent speeches about what a great thing this is for agriculture and so forth. That is nonsense, quite frankly. There is not a great deal of trade.

However, what there is, is a future. There is the expansion of the Panama Canal which is going to be finished, I think, in 2012. It is going to open up new opportunities.

The most important aspect that has been raised is that there is a problem in Panama. It has been identified critically by the OECD, and it has to do with tax evasion through tax havens. Tax havens are fine. Tax avoidance is fine. Tax evasion is illegal.

We need good faith with our trading partners. They may not be part of a particular trade instrument that we have, such as a bill like this one, but they should be part of the conversation. I think that members have basically said we need to have this conversation about how we are going to conduct ourselves in terms of having ethical trade with other countries around the world. We need that conversation. I hope that it will start as a consequence of the input of hon. members today and that we understand that even in Canada there are people who do bad things. There are people who are money launderers, who break the laws, all the things we accuse these other countries of. Let us not be holier than thou. We have problems ourselves. We have to clean them up.

Mr. Speaker, I will finish this speech at the next sitting.

[The Acting Speaker, Conservative, Barry Devolin]

It being 5:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

The House resumed from November 2, 2010, consideration of the motion that Bill C-507, An Act to amend the Financial Administration Act (federal spending power), be read the second time and referred to a committee.

Federal Spending Power Act

[Jacques Gourde, Conservative, Parliamentary Secretary to the Minister of Public Works and Government Services and for Official Languages]

Mr. Speaker, there are several reasons why I wanted to participate in this debate on Bill C-507, introduced by the member for Saint-Lambert.

First, I must say that only the Bloc could come up with a scenario like the one described in this bill. Our party will obviously be opposed. This bill would not benefit anyone in Quebec or in the rest of Canada. It proposes a system that cannot work, and the consequences of this bill would no doubt be terrible.

We have to wonder about the relevance of this initiative and about its real goal, which is purely political and partisan. I was very surprised that it was introduced, since the federal spending power is something on which we have taken concrete action.

In the spirit of our open federalism, our government has shown flexibility, particularly by restoring the fiscal balance, by focusing on its core jurisdictions and by avoiding interfering needlessly in the provinces' jurisdictions. Furthermore, when such expenditures were necessary, we sought and obtained the consent of the provinces. We avoided creating shared-cost programs in provincial areas of jurisdiction, and when we did so, we sought and obtained the consent of the province or territory.

Let us look at the example of Canada's economic action plan. I do not think I need to go into detail about the difficult situation that forced us to adopt this series of aggressive measures to help Canada make it through the worst economic crisis since the recession in the 1930s. But we worked together with the provinces for the benefit of Canadians. And now, with this bill, the Bloc is asking us to forever abandon this tool that successfully helped us through the crisis.

To that end, our government had to spend in areas of provincial responsibility, sometimes through shared-cost programs such as the $500 million recreational infrastructure Canada program or the $4 billion infrastructure stimulus fund. The provinces' approval of this approach reflected the belief that the response to the crisis had to be a shared response. Furthermore, the targeted, temporary and time-limited nature of the economic action plan reflected our government's desire to avoid long-term distortions of roles and responsibilities.

When the economic recession hit the world, we implemented one of the largest stimulus plans in the G7. Canada's economic action plan used every means at its disposal to stabilize the Canadian economy and get Canadians back to work.

Canada was able to respond to the crisis from a position of strength owing to the stability of its financial sector, the good financial health of businesses and households, the ongoing effect of broad-based tax reductions it had already instituted, as well as its strong fiscal position.

What was the outcome of this co-operation among the various levels of government? Canada is leading the global economic recovery.

Of all the G7 countries, Canada recorded the smallest decline in output during the recession. It is the only G7 country to have practically returned to pre-recession output levels. It is the only G7 country to have recorded, in March 2010, a year-over-year increase in employment. Since July 2009, our government has contributed to the creation of more than 420,000 jobs.

This exceptional performance has not gone unnoticed by other countries.

Canada's economic leadership stands out and has been recognized by international economic organizations and the press. In an article that appeared in the New York Times on January 31, 2010, economist Paul Krugman wrote that the United States must learn lessons from countries that have obviously made the right choices and that their northern neighbour is at the top of that list.

In this context, Quebec is benefiting from Canada's performance.

In his March 30, 2010 budget speech, Premier Jean Charest said:

The recovery plan we have implemented and the strategic investments we are making in our infrastructure, which total $9.1 billion for 2010-11, have enabled Quebec to distinguish itself and do better than any other economy in the world. With more than 3.9 million Quebeckers in the labour force, we are reaching new heights in our history.

At this time, we would like to point out the importance that Mr. Charest gives to the infrastructure program, which is both an essential component of the economic action plan and an excellent example of intergovernmental co-operation.

Although the economic recovery in Canada remains fragile, Canadians can be proud of how the federal, provincial and territorial governments have worked together to deal with the major issue of the country's economic vitality.

It goes without saying that the model proposed in this bill would have made the implementation of the action plan extremely complicated because of the delays the proposed amendments to the Financial Administration Act would have caused. Our government was able to quickly implement the economic action plan; however, the federal-provincial-territorial negotiations that would be necessary if this bill were passed would make such a quick and efficient response impossible. This is just one of the major flaws in this proposal.

There is also another disadvantage to this bill that does not really seem to pose a problem for the Bloc Québécois but that is certainly an issue for anyone who cares about the proper functioning of our federation: the role that the Government of Canada is called upon to play. The constraints imposed by Bill C-507 would make the federal government's leadership subject to the mercy of the provinces. The bill would deprive the Government of Canada of the latitude needed to react to changing circumstances both within the country and throughout the world. It would also undermine the Government of Canada's ability to strengthen the country in the interest of all Canadians.

I am sure everyone will agree that this bill would not improve the functioning of our federation in any way; the only party in the House that is not striving to achieve this objective is the very same party that is proposing that Bill C-507 be passed. This party's loyalties lie elsewhere and it is easy to see where.

By way of example, I would like to quote the member for Bas-Richelieu—Nicolet—Bécancour who said in the September 11, 1997 issue of Le Droit, “We have to show that federalism is not advantageous for Quebec. Sometimes, it appeared to be working. Now, we will be able to take it apart at our leisure.”