Debates of Feb. 7th, 2011

Canada-Panama Free Trade Act

[Geoff Regan, Liberal, Halifax West, NS]

Ronald Reagan was the president, but that is Reagan not Regan. Let us make that clear. He had an extra “a” in his name.

There are many benefits of trade and we have seen over the past 50 or 60 years, with increasing trade liberalization, an improvement in the standard of living for millions and billions of people. Clearly, there is a long way to go for lots of folks around the planet and we still want to see better lives for people in many countries, but trade can play a positive role in improving people's lives by giving them access to markets.

I mentioned Africa. One of the problems it has is getting access to markets in the U.S. and Europe for its cotton and textiles. It has beautiful cotton fabrics that were made into dresses and shirts. It had trouble getting access to those markets because of subsidies and tariffs, and so forth. These issues are real from both points of view.

The Conservative government's mismanagement of our trading relations has resulted in trade deficits for the first time in 30 years. That is alarming for Canada and should be alarming for Canadians. For the first time in 30 years, under this regime, we are falling behind our competitors in emerging markets like China and India.

We suffered the embarrassment of not gaining a seat on the UN Security Council. Speaking of China, the government's clumsy approach in its attitude toward China was very much an element of that, one of the factors involved, as well as its decision to cut aid to many African nations. It certainly offended those nations and many Middle Eastern countries were unhappy with the government's approach on a variety of things.

It surprised me that the government actually decided to campaign for a seat on the UN Security Council when it ought to have been fairly obvious that with all the things it had done in recent years, it was unlikely to gain that seat and how badly it misjudged the number of votes it would have. For a Prime Minister who is often talked of as a political strategist, it is surprising that he would not see the dangers of that move.

However, the current government is also falling down on protecting Canadian interests vis-à-vis our largest trading partner, the U.S, not only on things like softwood lumber and other agricultural products, et cetera, but in relation to the current talks on the common perimeter where the government does not want to share with Canadians what it is planning to do and what it has in mind. It has not set out to the House or to Canadians what its approach is, what its attitude is, what its vision is for border issues and therefore, for issues such as immigration. We ought to have control over what happens with our immigration and refugee policies. Canadians are concerned that the government wants to surrender our sovereignty. We do not agree with surrendering any of that.

Recently we saw its approach to the situation in Egypt. The government has been slow to respond and very hesitant. We have been less forthcoming, in terms of supporting the protest, in terms of supporting principles like human rights and political freedoms, than the U.S. has been. That is disappointing. We need to have a long-term view and recognize that if we support regimes which do not allow those kinds of freedoms, in the long term, the effects would be negative for us. If we look at the history of many countries, we can see that.

Meanwhile, the U.S. is engaging in increasing protectionism which already has hurt Canadian business, yet the Conservative government is doing virtually nothing about it.

I could go on about other countries and the policies of the government in respect to them, but let us focus on Bill C-46 and Panama.

In spite of the global economic downturn, Panama's GDP actually grew at 10.7% in 2008. That is one of the highest in the Americas. It is forecast at 5.6% for 2010, which would put it well ahead of most other countries, including Canada, in terms of our growth last year.

In 2009, bilateral trade between the countries totalled $132.1 million, with Canadian exports making up $91.4 million and imports of $40.7 million.

Primary Canadian merchandise exports to Panama include, and these are some of the major things that we sell to Panama: machinery; vehicles; electronic equipment; pharmaceutical equipment; frozen potato products; pulses, which are beans and lentils, important sources of protein; financial services; engineering; information and communications technology services. These are all important areas where we currently export and there is room for us to increase our exports to Panama, particularly in relation to agricultural products and things like fish, as we referred to earlier in the debate.

The existing Panama Canal is vital for the international trading system. It is being expanded with completion slated for 2014. That expansion, worth $5.3 billion, is expected to generate opportunities for Canadian businesses in construction, environmental engineering and consulting services, capital projects, and more. There are many opportunities that we can see. There are no guarantees at all, but opening trade with Panama, in spite of some concerns we have, is a positive move.

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

Mr. Speaker, I listened attentively to the speech of the hon. member for Halifax West. I appreciate his support for Panama. I cannot say that I agree with everything he said in his speech, but it is nice to see the Liberals on board with our free trade agenda, especially in the Americas and on Panama.

Will we continue to see the Liberal Party support free trade agreements which are good for Canadian business and opportunities for Canadian workers, rather than as we saw in the 1993 election when the hon. member ran on a ballot against free trade?

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, I favour free trade. I have indicated that many times in the past. I do not recall personally having debated that issue in 1993. We had many other issues to talk about then and since. However, it was certainly an interesting election campaign, as my hon. colleague recalls. I believe he was involved in the campaign but not as a candidate at that stage. That came later.

We as a party do support the principle of free trade, but it is important to examine each agreement by itself and bargain from the point of view of strength.

My main concern regarding the Canada-U.S. Free Trade Agreement is that Canada entered into its negotiations under the notion that this would be the economic policy as a government. The government of the day, under Mr. Mulroney, basically based its whole economic platform on establishing an agreement.

In that type of a situation the U.S. would expect to have good concessions or basically get whatever it wants. It would recognize it was in a strong position if Canada needed to have an agreement. I did not feel that was helpful, but in other respects there were many benefits which came from that agreement.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Speaker, I believe the free trade agreement that was negotiated in 1993 offered too many concessions, wide concessions, and was not thought through properly. I am wondering whether the member believes the Panama deal has been thought through and if there are certain aspects of the deal that concern him.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, I thank my hon. colleague from Don Valley East, with whom apparently I am not sharing my time because we are giving 10 minute speeches, as has been explained.

That is an excellent question. We do have some concerns. There are concerns that have been raised regarding such things as whether or not Panama is a tax haven and what impact that may have.

We know that the two governments are in discussions regarding not only the sharing of tax information, which I believe is the primary thing Canada wants, but also the issue of double taxation, which both countries ought to want. In fact, it is important that we have that type of sharing if we are to avoid issues such as tax havens. It is vital that our tax authorities at Revenue Canada have access to the information that Panama has on our taxpayers if in fact they are trying to hide income illegally and improperly. We are not talking about what is being done properly. However, if something is done illegally that is a different matter and we ought to know that.

That is an important concern. We are happy to see that this discussion is going forward and are anxious to see that it concludes successfully. However, at the same time we feel the general principle of this agreement is a good one and we ought to support it.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I wonder if the member could elaborate on the dismal performance of the Conservatives on freeing up the borders to the United States and other countries for trade.

[The Acting Speaker, Barry Devolin]

A quick answer from the hon. member for Halifax West regarding the bill.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, my hon. colleague from Kings—Hants, the former trade critic, is suggesting I take my time, but I do not think I will be allowed to do that. I am sure he would love for me to go on at great length about this. I trust he would enjoy it.

The way the government has treated border issues and trade issues with a variety of countries, particularly with the U.S., is a concern. Until last August I was the Liberal critic for natural resources. When I look at the government's attitude toward the softwood lumber agreement I find it has been quite weak.

[Yasmin Ratansi, Liberal, Don Valley East, 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.

As has been mentioned, Canada is a trading nation. In the global economy, it is important to get preferential agreements with countries, which is beneficial to both partners. We have seen the impact of relying too heavily on one trading partner. We have seen the government's lack of action on increasing U.S. protectionism and its failure to seize trade opportunities in China, South Korea and other countries.

The Conservative government's mismanagement of Canada's trade relations has led to the first trade deficit we have seen in over 30 years. The trade deficit record last July was $2.7 billion. Therefore, it is important that as a country we need to increase our efforts and our engagement in order to improve the economic situation, increase international trade, and help the Canadian economy.

Canada has always supported free trade. Our origins are that of a trading nation, having started with fur, wood, and other natural resources. The portion of our economic activity attributed to trade is greater than that of most other nations. Indeed, approximately 80% of our economy and millions of Canadian jobs depend upon trade and our ability to access foreign markets. We are, after all, a very small country. Our population is 32 million which, one day the U.S. ambassador told me, could fit into the State of California. Taking that perspective, we need to ensure that we make agreements that are based in the interests of Canada.

If a free trade agreement is negotiated properly, Canadian exporters benefit from the reduction and elimination of tariffs on their goods destined for other countries. Canadian manufacturers benefit from the reduction and elimination of tariffs at the Canadian border on the various materials that go into their products. Canadian consumers benefit from lower prices of imported goods when tariffs on these goods are reduced or eliminated.

I think it is important to note that people do look at the best return on their investment, and everyone is an economical shopper. In this global age, where we are exposed to just about any goods and services, it is important that when we make deals we are able to ensure a better deal for Canada.

We have heard the debate on protectionism and what steps could best promote Canadian business success and generate Canadian jobs. However, most Canadian businesses that serve domestic markets do benefit from free trade because they are forced to innovate and compete with others from abroad, provided that those abroad comply with international rules on trade, tariffs and non-tariff barriers. In the long run, Canadian businesses are more than capable of being strong, innovative, and competitive without hiding behind protectionist walls.

We know that when we are promoting trade in our green technology, as we have seen in examples such RIM et cetera, we need to be strategic and smart because we live in a global village. In that village, everyone knows what the prices are. We could go on eBay and get things from Australia that could be cheaper than what we could get in Canada. This makes businesses innovate, so they can compete in the global market.

The Liberal Party has always supported economic growth through proper free trade agreements. It also supports any initiatives that will improve access to foreign markets for Canadian businesses. It is important to note that we cannot rely heavily on one trading partner because, as was said, when the elephant rolls over, it is the poor mouse sitting next to it that might get hurt. It is important for us to be careful when we are negotiating but ensuring ensure there is freer trade with far more nations, rather than relying heavily on one partner.

Although Panama has a small economy and Canada's existing trade with that country is relatively limited, there are opportunities for Canadian businesses.

The expansion of the Panama Canal is currently underway and it is slated to be completed by 2014 at a projected cost of $5.3 billion. That is an interesting sum of money. The expansion is expected to generate opportunities for Canadian companies in such areas as infrastructure and construction, as well as environmental, heavy engineering and consulting services. In the area of capital projects, opportunities will be generated in human capital development and construction materials.

Like the free trade agreements between Canada and Chile and Costa Rica, the North American free trade agreement, and the free trade agreement between Jordan, the Canada-Panama free trade agreement includes side agreements on labour co-operation and the environment. These are important aspects of the agreement.

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. Both countries are required to ensure that laws, regulations and national practises 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 both include complaints and dispute resolution processes that enable members of the public to request an investigation into the perceived failures of Canada or Panama to comply with these agreements.

The free trade agreement with Panama is another opportunity to increase access to more markets for Canadian farmers and businesses. As was pointed out, our farmers need access to more markets. We are a small country and our farmers need to be competitive and innovative. This agreement will give them access.

Panama is a relatively small economy. In 2009 we exported $90 million in goods to that country, which is not as large as some trading partners. It is, however, a stable country which has made significant progress in recent years in terms of development and democracy. Canada is well placed to continue to encourage that.

In spite of the global economic downturn, Panama's GDP grew to 10.7% in 2008, one of the highest in the Americas, and is forecast at 5.6% for 2010. In 2009, bilateral trade between the two countries totalled $132.1 million. Canadian exports made up $91.4 million and $40.7 million in imports.

In the merchandise area, exports to Panama include: machinery, vehicles, electronic equipment, pharmaceutical equipment, pulses and frozen potato products. In the area of service, Canadian exports include: engineering, information and communications technology.

Under the agreement Canada will eliminate over 99% of its tariffs on imports from Panama.

It is important to note that there is no debate here over the issue of human rights. As members of Parliament we may be concerned about it, but we defer on what approaches to take, whether it is through trade, opening up doors, or through the wagging of fingers. Wagging fingers is not a good idea. When I was in India, we discussed what Canada could export, and the first thing I was told was pluralism.

As the government is focusing on creating free trade agreements with other countries, it also needs to look at creating free trade agreements within provinces.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, the human rights issue continues to concern me with respect to free trade agreements. When we are providing opportunities for free trade, we have to monitor human rights and labour rights.

These agreements may provide opportunities from a trade perspective, but how can they avoid exploiting some of the employees who would have additional work opportunities?

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Speaker, I know the hon. member is very interested in labour law, and there is a side agreement on Labour co-operation that recognizes the obligations of both countries under the ILO.

On the other front, from a human rights perspective, I made a statement very quickly on whether we would like to engage with other countries. Through trade, we engage people, and through this engagement, people see how different people operate. If we were to shut the country, close the doors, close our borders, people would not understand how others operate. I gave a prime example of when I went to India, I was in the state of Gujarat, and I asked what would be the best Canadian expert and they said it was pluralism. We did not have to teach it to them. They understood how we, as Canadians, worked and lived in harmony, and respected our diversity.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, I rise to speak to Bill C-46 at report stage.

My opinion on the bill has not changed over the course of time of it being in committee. In fact, many of the things presented in committee spoke very strongly against the nature of the bill and against the bilateral free trade agreement with a country like Panama.

Panama along with Colombia are two countries that the Conservative government has decided, in its wisdom, to pursue free trade agreements with and have brought them forward in this Parliament. Neither of these countries is appropriate for free trade deals with Canada.

Clearly Colombia had so many human rights violations that the nature of our protection for those human rights issues, which we hold so strongly in Canada, were simply not there.

In the case of Panama, quite clearly there are human rights issues, but more overwhelmingly are the issues surrounding the nature of the Panamanian business community. That has been brought forward, in great detail, to Parliament through our work, through the work of some of the other parties and through the witnesses at committee and clearly this is not a nation that holds the same level of integrity and honesty within its corporate structures as we do in Canada.

To enter into this free trade agreement, pushing investment with Panama is like injecting more poison into our system. Our system may falter because of the opportunities that exist in this.

Free trade agreements need careful scrutiny, and we have been calling for that. Careful benefit scrutiny, net benefit analysis should take place on any free trade deal with any country in the world. I know we are negotiating a number of those, so there should be work put into that.

Take for instance the much wanted European free trade agreement. Many holes are showing up in that deal already. For instance, today there is a report coming out that indicates Canadian drug costs, drug costs that are directly related to government costs, are going to go up substantially if we go ahead with the European free trade deal as outlined, with the provisions in which the Europeans are most interested.

The opportunity to use generic drugs will be made more difficult. That difficulty is estimated to cost us in the order of $1.5 billion to $2 billion a year. Where does that come from? From the pockets of Canadian taxpayers. What benefits do we get from that? By going along with the Europeans on that, the net total investment in new research and development would be in the order of $400 million.

With the effect of marginal tax rate for corporations in this country of 18%, how much improvement to the economy has to go ahead to make up the difference of $2 billion to the taxpayers? There are no answers for that. No analysis has been done. That directly affects our federal government and all the provinces as well.

There was a curious reception that I went to the other night with the Japanese automotive association. There were opportunities for speeches. The Minister of International Trade made a fine speech about his total belief in free trade, the need to sign these agreements and to work on these things. That was fine. I accept that as his position.

However, the president of the Japanese automotive association said that the European free trade deal was not the panacea for the association, that it would lose on the deal if we signed with Europe.

Let us look at the Japanese automotive industry, one of the clear winners for Canada in the last decade with the setting up of new plants. Of the total number of vehicles produced, most are exported to the United States. Not only are the Japanese in Canada, probably because of our good conditions and public health care, but their product is part of our export development in manufacturing, which everyone in the chamber must understand is very weak on every other front.

The people who are doing a successful job for us in manufacturing automobiles and exporting to the United States are saying that we should look at the provisions of the European free trade deal. Quite clearly, we have to look at trade deals very carefully in this new world. This is not the old world of the 1980s and 1990s when the free trade mantra was something that no one could resist, that no political party was able to completely ignore, that no political party of the right was able to say anything other than it agreed.

Let me get back to the free trade deal with Panama. It is not really a free trade deal. This is about investment. This is about Canadian companies investing their profits in Panama, perhaps on the new expansion of the Panama Canal or a number of other areas. That is what is going to happen. Investors will be taking the money they make in Canada and investing it in another country.

What about agriculture? Riots are going on around the world right now over the price of agricultural products. Canada could do much better. A previous member spoke of pulses, the consortium of producers of lentils, peas and beans. I had an opportunity to speak with those people and they are not concerned about free trade. They are concerned about our railways that do not give them a proper deal on service. They have much more difficulty getting their products to the Canadian ports for export to the world market for produce that is ever-expanding and where the prices of products are going up.

When we talk about agriculture, we are talking about something that is going to be in great demand. When we think about agriculture in terms of free trade, what we should be thinking about is how to protect and enhance our agricultural capacity in our country. This is the way to deal with that.

What is Canada's trade? So much of it is energy and raw resources, the things the world needs, not what it wants. The world wants produced products, but it needs raw products and Canada is in a good position to provide those raw products. We do not want to sell them too cheap or give them away. We want to ensure that our children and grandchildren are well protected in our resources going forward. When we sign free trade deals with countries and say that we must give our resources in a fashion that we do not dictate anymore, we are giving up something, but what are we getting in return?

Let us talk about border security. A big issue right now is that the thickened border has slowed down free trade to the United States. That is nonsense. Trade since 9/11 to the United States has gone up consistently until 2008 when there was a recession and the value of the Canadian dollar accelerated. Those two factors hit our trade very hard with the United States. It went down from about $350 billion to about $100 billion, but it had nothing to do with free trade. It had to do with currency and our ability to deal with our own issues.

As for the currency, we do not have the opportunity to do like the Liberals did in 1993 and lower the interest rate because we are already at rock bottom. We are in a bind. What can we do, quantitative easing? What do we do to improve our currency position vis-à-vis the United States? That is the problem we have with trade with the United States.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, the member mentioned a couple of countries with which it would not be acceptable to have free trade agreements. With which countries would he be willing to sign free trade agreements?

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, my colleague from the Yukon and I share many things.

I agree with him that there should be some countries we enter into fair trade agreements with that are based on careful analysis and that provide us the answers we want.

In some ways probably multilateral trade with Latin America would be better. It has trading group there called Mercosur. There are certain provisions within that trading group that it wants to maintain. Canada has to understand that fair trade means we deal with what the countries that have banded together want.

With some of those countries, though, we have a problem because we have very large subsidies and tariffs against things such as sugared-based ethanol from Brazil. That is a problem. How would we get around that and keep the subsidies in place for our farmers? Those are things that bar us from fair trade agreements with large expanding trading partners.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Mr. Speaker, I thank the member for Western Arctic for clearly outlining why we should be opposed to this agreement. I have a question for him with regard to tax havens.

Back in November, Mr. Todd Tucker appeared before the committee that was examining the bill. He indicated that we were being told not to worry, that we were protected from the fact that Panama could continue to be a bad actor with the tax havens. He said that in the agreement there were clauses that would actually prevent Canada from taking any action, specifically article 9.10, which states:

Each Party shall permit transfers related to a covered investment to be made freely and without delay, into and out of its territory.

Then it goes on to talk about chapters 9 and 12 of the free trade agreement that have non-discrimination clauses.

Could the member for Western Arctic comment on the fact that Panama is noted for its tax havens and that we will not be protected under the agreement from the continuing abuse of the tax haven status in Panama?

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, that question troubles and perplexes all of us. When we go into a free trade agreement with the kind of provisions we have proposed with Panama, we open a Pandora's box. There are 400,000 corporations in Panama. They are not there for the weather. They are there because the tax haven status is such that they can be there. Interestingly enough, many of them are also criminal organizations. These are things that will filter through to the Canadian side with this kind of agreement.

Panama refused to sign a tax information exchange agreement. Therefore, the country recognizes what it is doing with its laws for the corporations it shelters. It is not interested in changing, so why would we go ahead with this agreement?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, many of the New Democrats give the impression that it is strictly the tax haven issue that prevents them from voting for the bill. I guess a hypothetical question for the member, and I would really appreciate a good answer, is this. If the issue were not a tax haven, would they then be more inclined to support the bill, the concept of freer trade?

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, it is hypothetical and we do not deal with hypothetical issues here. We are dealing with a trade agreement between Panama and Canada. Once this passes the House, then that is the law of the land. Therefore, we cannot be hypothetical about it. We have to be practical and realistic about it.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, I am pleased to add my voice to the debate concerning Bill C-46.

As has already been said by many of my colleagues in the House, if passed by Parliament, Bill C-46 would implement a free trade agreement, an agreement on labour co-operation and an environmental accord between Canada and the Republic of Panama.

I share many of the positive comments that have already been made during the debate. Canada is after all a trading nation that has, for the past 30 years, maintained a trade surplus with our global neighbours and our competitors, or at least that was the case until now.

Canada is still a nation on which 80% of our economy is trade-dependent, but despite the lofty trade talk, the Conservative government has presided over a tremendous decline in our national trade advantage. Now, for the first time in more than a generation Canada is in a trade deficit situation.

That is right, the nation that was created and has since maintained itself by trading with our neighbours is importing more than we are selling globally. This new dependency must concern all of us. It is disappointing to me, but for Canadian farmers, manufacturers, and other exporters of Canadian goods and expertise, this is simply a disaster.

As members can imagine, I am pleased to see that the government is starting to focus its attention on trade matters, even if I would rather have seen that focus be on larger, more robust and growing markets, markets that could provide a greater growth potential for Canadian goods and labour expansion.

I want to be clear, I am not suggesting that Panama is not worth the effort; just the opposite. Canada and Panama had more than $132 million worth of bilateral trade in 2009 alone. Then, despite the recession in 2010, Panama's GDP grew by just over 5%. Put another way, while Panama's market potential for trade is relatively small, it is moving in the right direction.

In contrast to the Conservative approach to trade, when the Liberals devised the team Canada approach to opening new trading opportunities, we set our focus on much larger markets, such as the U.S., China, the U.K., the Netherlands and Italy. I suppose the difference is that the Liberals were confident that Canada could and should compete at the highest levels on the global stage, while Conservatives continue to concern themselves with smaller, short-terms goals.

That was then and this is now, so I need to be thankful for smaller steps. With this in mind, I want to congratulate the Minister of International Trade for his efforts to make this agreement possible.

What does this agreement actually do for Canada and for the people of Panama? Right now, Panama levies tariffs on Canadian agricultural products in the range of 13% to 260%. That means that Canadian agricultural products such as pulses, frozen potatoes, processed foods and beef are taxed in a way that makes them uncompetitive when directly compared with some of our Panamanian goods. We clearly know that our agricultural community continues to be under fire and under huge stress, and we need to do everything we can to decrease those problems.

As an example, a bushel of soybeans that would sell for $13.98 in Canada would face a tax in Panama of 47%, or $6.57. With that extra taxation, that bushel would cost $20.55 to a further processor in Panama. That is unfair for our marketplace and unfair for our agricultural industry. This means Panamanians would be more apt to buy Panamanian produced goods when given that choice rather than pay the premium for a top notch Canadian product, understood by all of us.

The agreement would put an end to that artificially prompted competitive disadvantage for our farmers and it would allow Canadian farmers to start to compete on a level playing field, something they have consistently proven their ability to do effectively in many other jurisdictions.

On non-agricultural goods, Panama currently maintains an average-applied tariff of between 6.2% and 81%.

The passage of Bill C-46 means that Canadian fish, construction materials, paper products, and vehicle and auto parts will no longer face this kind of harmful taxation. Again, this kind of tariff reduction means that Canadian industry will have the option of opening and exploring Panama's market potential from a position of strength rather than one of initial economic disadvantage.

In return, Canada will eliminate almost all tariffs on currently imported Panamanian goods. This deal will allow the market to sort out which industry is the most competitive and which products are of the greatest quality and desire to consumers. As I look back on history, I have every confidence that when competing on a level playing field, Canadian farmers, anglers, manufacturers, and paper workers will create success and generate tremendous wealth for their respective industries.

I should also mention that this Canada–Panama free trade deal would seek to address non-tariff trade barriers to further help ensure non-discriminatory treatment of imported goods. While each of these things represent positive advantages, I would be remiss if I focused only on trade and not on the labour portions of the agreement which continue to be of enormous concern to me and others. This is especially important given the refurbishing and expansion of the Panama Canal, which is expected to be completed by 2014.

As with some of the other trade deals that Canada has signed, this agreement includes a side agreement on labour co-operation and the environment. The Canada–Panama agreement on labour co-operation recognizes the obligation of both countries under the International Labour Organization's Declaration on Fundamental Principles and Rights at Work, which requires that each country ensure that their domestic laws, regulations, and practices protect fundamental labour principles and rights at work.

Specifically, this includes: 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. These are extremely important issues when we are talking about free trade. As a former minister of citizenship and immigration, I think these are important elements of any free trade deal.

While free trade agreements are most certainly economic devices, the Liberals have long viewed trade and engagement as important instruments of social advancement and human rights promotion. When a nation exists in isolation, there is little regard for these fundamental freedoms and rights. However, once a country becomes part of the greater community of nations, there is an imposition of a greater social responsibility.

Sometimes I wonder which comes first. Clearly, this is the avenue we are pursuing, but monitoring these issues must be of high importance to Canada.

Canada has been a trading nation since it was opened by the coureurs de bois in the 17th century. Our native people traded for all items they could not produce themselves. Generations of Canadians have exported our products and ideas to the entire world. Canadian expertise has been responsible for countless global advances, but it has also helped this nation in ways those first coureurs de bois could never have imagined.

Today, Canada is the 11th largest trader on the planet, ranking well ahead of countries such as Spain, Russia, Mexico, India, and Australia. Our international commerce amounts to more than $600 billion annually, and more than 80% of our economy is directly dependent upon trade and commerce with others. Indeed, to say that Canada is a trading nation would be a tremendous understatement, and it is for this reason that I am pleased to support Bill C-46.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, it seems to me that the position of the Liberal Party on this trade agreement is that as long as we sign the trade agreement, everything else will magically improve. We will just keep our fingers crossed, and do it on a wing and a prayer. I wonder if the member could comment.

This free trade agreement between Canada and Panama was signed in May 2010, but here is what happened in the summer of 2010. The president announced unilateral changes to labour law. The law ended environmental impact studies on projects deemed to be of social interest. It banned mandatory dues collections from workers. It allowed employers to fire striking workers and replace them with strike-breakers. It criminalized street blockades and protected police from prosecution.

The severity of this attack on labour rights was met with strikes and demonstrations. The police were exceedingly harsh in their response and this was just this past summer. At least six people were killed, protesters were seriously injured, and many were blinded by tear gas and police violence. Three hundred trade union leaders were detained. That was the summer and it was in May 2010 that this agreement was signed.

Does the member really believe that engaging in these kinds of trade agreements will help either labour standards, environmental standards, or human rights generally?

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, I thank my hon. colleague for that very important question. It is one of the issues that I, and I suspect many of my colleagues in the House, continue to try to find a balance.

Which comes first? Is there an improvement to the human rights record, labour, and so on, and then we will have a trade agreement? A good part of me would prefer it to go that way, but history has shown that it usually works the other way.

We need to be monitoring these things very carefully. It gives me a degree of confidence that they will be monitored. I would not hesitate to cancel the agreement and use that threat constantly if labour laws are not respected.

This is about providing more opportunities, not only for our Canadian farmers and manufacturers but also for theirs. It is a two-way street. If Panama cannot treat its citizens with respect and decency, then I would be the first one to stand up and say, “Cancel the agreement”, whether it is this one or any other trade agreement that we would have.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I wonder how much confidence the member has in this government to ensure that the trade agreement stands up for Canadian free trade given its dismal record in relation to the United States.

Time and time again, border crossings have put roadblocks in front of Canadian products going to the United States. There are the labelling and non-tariff barriers. The industry complained of huge lineups in the last few years. This has nothing to do with security. It has to do with standing up for Canadian trade. I wonder if the member would comment on that.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, those are the kinds of issues that are not only for the government side but it is part of our responsibilities in the opposition to stay very much attuned, monitor and raise those issues. We must ensure that the government monitors them as well. Part of our job is to make sure that the government does its job.

Clearly, we want to see opportunities for our farmers and manufacturers in Canada. My desire is to see the tariffs removed and assistance going to our farmers and manufacturers.

I am prepared to support this very cautiously. However, I will also monitor what is going on and keep my ear to the ground when it comes to labour law and any kind of outbreak happening in those countries when it comes to the abuse of their citizens.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, I am delighted to rise in the House again today to speak to Bill C-46, which seeks to implement the Canada-Panama free trade agreement.

I say “again” because I have previously had the opportunity to speak at length on this bill at second reading. At that time, I focused my comments predominantly on three areas: labour issues; the fair trade movement as opposed to the free trade movement; and, of course, the serious implications of signing a free trade agreement with a tax haven, a free port or free zone, such as Panama, which is a country of convenience.

While I may get back to some of those seminal issues later if time permits, I want to focus today on environmental concerns and the very serious cautions we received in committee about signing a trade agreement with a country that many suggest is a safe haven for international crime.

Let me begin with the latter first.

Alain Deneault, who is a sociologist at the Université du Québec à Montréal, gave a succinct presentation at the Standing Committee on International Trade that summarized much of the prevailing thought and evidence about criminal activities in Panama and how those activities threaten to permeate Canadian jurisdictions if the implementation of this free trade agreement proceeds as planned.

Let me remind members of some of the most salient points.

A number of criminologists consider Panama to be a hub for money laundering, with a link to international drug trafficking, because of the Colon Free Zone. Patrice Meyzonnier, the chief commissioner at the headquarters of France's judicial police, talks in his book about a state involved in drug trafficking and the laundering of a good chunk of the world's dirty money. He says that Panama plays a bridging role between the south and north, from Colombia to the United States.

The criminal activity in the Colon Free Zone takes place mainly in the hotel industry, and via fictitious commercial spaces and fictitious rents.

It is actually a whole economy of money laundering that is corroborated in another book by Marie-Christine Dupuis-Danon of the United Nations Office on Drugs and Crime. She states:

Drug traffickers capitalize on the benefits associated with free zones like the one near Colon in Panama. This zone actually fosters the movement of goods and cash, with little surveillance from the authorities. There are no fewer than 1,890 companies generating a total of $5 billion annually in re-export activities. By definition, there are no customs duties on the operations carried out in the Colon Free Zone. As a result, the authorities are not able to enforce the regulations that are in effect in the rest of the country, including the declaration of sums over $10,000. Drug traffickers buy goods and resell them for cash with a 20 to 30% discount to the dealers in the free port. So they deposit their pesos in banks in the free zone and transfer their funds to their regular accounts in Colombia.

Dupuis-Danon's findings are corroborated by Alain Delpirou and Eduardo MacKenzie in their book, The Criminal Cartels. They stress that cocaine and heroine trafficking is a major industry in the region and that it becomes an even greater problem because the free port of Colon has direct access to an uncontrolled zone in Colombia.

Finally, Mr. Deneault reminded us that Thierry Cretin, a former French judge who worked for the European Anti-Fraud Office, has published accounts that clearly demonstrate that the Colombian and Mexican mafias are very active in Canada while also very present in Panama. It seems hard to believe that we as legislators would vote in favour of anything that would make our country an even more porous jurisdiction for organized crime.

At a minimum, I would have thought that such mounting evidence from impeccable sources would have given the government pause for thought. I would have hoped that it would have caused the government to exercise extreme caution and that it would have reconsidered entering into a free trade agreement with this particular jurisdiction.

In passing, does it not strike others in this chamber as more than passing strange that this deal is being made by a Conservative government that is desperately trying to sell itself as being tough on crime? Does it even understand what it really takes to fight crime? Let me tell the members that it takes a lot more than a catchy slogan to get the job done.

If we want to get at organized crime, then we have to get at the money. By allowing Panama to continue to be a tax haven it is easy for corporations to register there and it makes it easy to launder money via Panama. In essence, Panama is being allowed to facilitate the operations of organized crime syndicates, along with the drug trafficking and human trafficking that go along with them. The Canadian government is essentially condoning those activities when it enters into a bilateral trade agreement with no strings attached.

Clearly, that should never happen. My NDP colleagues and I are doing everything in our power to ensure that it does not happen. That is why we are here today debating the four amendments that we have introduced to Bill C-46.

The four motions are as follows. The first motion is to eliminate clause 7 that outlines the purpose of the bill. The second motion is to eliminate the clause designating that the minister is the representative of Canada. The third motion is to eliminate clause 12 that lays out the minister's authorized activities in his role. The last one is to eliminate the final clause, the coming into force clause stating when the bill would become law.

Together these four motions essentially gut the bill, giving the government an opportunity to rethink its approach to international trade. We certainly would not be the only jurisdiction to take that opportunity. When the debate began in this House on the Canada-Panama free trade agreement, we were told over and over again that it must be okay to proceed because the Americans were forging ahead with a similar agreement.

Well, the air has certainly gone out of that balloon, because not only have the Americans not passed that agreement, but no fewer than 54 United States congressmen have now demanded that President Obama forgo the agreement until Panama has signed the tax information exchange treaties.

Those treaties are the first step to putting an end to the tax havens that facilitate money laundering, and the Americans got it right: sign the treaties first and then negotiate.

In Canada, the Conservatives and Liberals are operating on a wing and a prayer. They would implement the free trade agreement and then use moral suasion to get the Panamanians to do the right thing. It is not going to work; others have tried and failed, and we should have learned our lesson.

I see that I only have a couple of minutes left to conclude my comments here today, and I really did want to focus on the environment as well, since I did not have an opportunity to do that in my last intervention. I will try to be brief.

First, let me acknowledge that MiningWatch Canada was absolutely right when it pointed out in its submission to the committee that the environmental impact of this FTA is impossible to gauge because it has not been made public, as it was supposed to be after the signing of the trade agreement.

The report that is publicly available on the initial environmental assessment is almost completely devoid of meaningful content. The one thing it does acknowledge, however, is that:

The main effect is likely to be greater protection for existing Canadian investment in Panama.

There it is in a nutshell. This agreement is all about protecting investments while ignoring the environmental implications of that protection. There is absolutely no attempt to frame any aspect of this agreement in terms of sustainable development.

This will be of huge concern to both environmentalists and to all of those Canadians who were actively engaged in the campaign on corporate social responsibility. As the bill on CSR was recently defeated in this House by Conservatives and Liberals, I guess I should not be surprised that this free trade agreement will be passed by the same coalition.

Nonetheless, let us be clear about what is happening in Panama. Examples of Canadian mining projects in Panama include the proposed Cobre Panama open pit copper project by Inmet Mining on the Petaquilla concession, west of Panama City, which is forecast to deforest 5,900 hectares of what is mostly primary rainforest in the middle of the Mesoamerican biological corridor; the controversial Molejón gold mine project of Petaquilla Minerals, which is repeatedly accused by nearby communities of deforestation and contaminating local rivers, and was fined almost $2 million for environmental violations; and Corriente Resources' illegal activity in the Ngöbe-Buglé indigenous territory, trying to overcome community opposition to a huge open pit copper mine project so the company can first obtain and then sell the property to a larger mining company for development.

This free trade agreement will only increase such Canadian investments, yet we know that environmental protection and legal enforcement and compliance in general in Panama are notoriously weak, even within the framework of existing laws and regulations. Why would we enter into a trade agreement that will end up protecting mining investments that are taking advantage of lax governance and the resulting low cost operating environment, and allow Canadian corporations to undertake projects that would never be approved in Canada, or any other country for that matter, without more stringent controls?

In a global economy, we must take global responsibility. That means that we must vote against the Canada-Panama free trade agreement.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Mr. Speaker, I want to thank the member for Hamilton Mountain for very ably outlining some of the other concerns that New Democrats have with this latest round of free trade agreements that the Conservatives are proposing.

I wanted to touch on two points. In her speech the member raised these issues around mining and sustainability. When this bill was being studied at committee, the member for Burnaby—New Westminster actually brought forward two proposed amendments that were defeated by the Liberals the Conservatives.

One was with regard to sustainable development. That amendment defined sustainable development as:

development that meets the needs of the present without compromising the ability of future generations to meet their own needs, as set out in the Brundtland Report published by the World Commission on Environment and Development.

The second amendment that the member for Burnaby—New Westminster proposed was with regard to sustainable investment. That amendment defined sustainable investment as:

investment that seeks to maximize social good as well as financial return, specifically in the areas of the environment, social justice, and corporate governance, in accordance with the United Nations Principles for Responsible Investment.

The member ably outlined some of the concerns with the mining companies in Panama. I wonder if she could comment on how these two proposed amendments would at least have improved that particular situation.