Debates of Nov. 6th, 2012

Bill C-24—Time Allocation Motion

[Some hon. members]

Agreed.

No.

[The Deputy Speaker, NDP, Joe Comartin]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker, NDP, Joe Comartin]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker, NDP, Joe Comartin]

In my opinion the yeas have it.

And five or more members having risen:

Call in the members.

And the bells having rung:

(The House divided on the motion, which was agreed to on the following division:)

Vote #490

Canada-Panama Economic Growth and Prosperity Act

[The Deputy Speaker, NDP, Joe Comartin]

I declare the motion carried.

I wish to inform the House that because of the proceedings on the time allocation motion, government orders will be extended by 30 minutes.

The House resumed from November 2 consideration of the motion that Bill C-24, 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, be read the third time and passed.

Third reading

[Marc-André Morin, NDP, Laurentides—Labelle, QC]

Mr. Speaker, the Conservative government is accusing us of being ideologically stubborn and against free trade. However, our position is very pragmatic: we oppose the kind of free trade proposed by the members opposite. We oppose free trade when it is negotiated without any economic, industrial or energy strategies.

Free trade agreements do not come out of a Cracker Jack box. They must be taken more seriously. The future of the country is at stake, and we are keenly aware of that.

We are asking these legitimate questions on behalf of Canadians. We are worried about the government's ability to negotiate these kinds of agreements.

I myself am by no means an expert in international trade. However, because of what I do know, I am worried about what this government is doing. One negotiator has said that only the intellectual property issue remains to be settled and that it will not take long, because it is a formality. In my opinion, he does not really understand what is happening.

We now realize just how important intellectual property is. All major conflicts and serious disputes in relation to international trade end up in lawsuits over intellectual property. And that is merely one aspect.

When a dispute arises after a treaty is signed, the problem is often not solved by lawyers but by discussions about semantics. Two words can easily cost billions of dollars and hundreds of thousands of jobs.

For example, two English phrases from article 14 of the North American Free Trade Agreement—“in comparison with” and “in relation to”—were challenged. In the end, after debating the meaning of these phrases, the United States levied a preposterous tax that almost destroyed Canada's softwood lumber industry and cost tens of thousands of jobs.

In the long term, we are gambling with the future of our country. I remember that, when I was young, we built locomotives and cargo ships. We manufactured and exported every kind of product. Naturally, things have changed, but soon we may not even be manufacturing hockey sticks or curling brooms anymore. It is time we had an intelligent long-term strategy for international trade.

It used to be that when I travelled abroad, people would tell me that Canada was a great country that had a coherent international policy and did a lot for foreign aid. Now, I am still told that Canada is a great country, but people tell me that it takes one week to travel by car from Montreal Island to Vancouver. That is not exactly the kind of grandeur to which we aspire. That is all about geography. Canada is fading as a great economic and diplomatic power. We must stop tarnishing our image. The members opposite need to think and listen when we ask intelligent questions.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, we do see the value of this particular agreement. As my colleague from the Atlantic region indicated earlier, the Liberal Party is quite supportive of the agreement. However, we also want to recognize that we have other trading partners, in particular the United States, which represents well over 70% of our economic trade and is responsible for hundreds of thousands of jobs in Canada.

It is important that we pass this particular agreement, and it will get passed now, but the question is, to what degree does my colleague believe we could be doing more with our trading partner just south of our border?

[Marc-André Morin, NDP, Laurentides—Labelle, QC]

Mr. Speaker, we do not live on a Pacific island. We have important neighbours on whom we already depend too much. We must not become a sort of Kazakhstan by taking care of border security for the Americans. Nor should we become a bottomless pit of natural resources and export our jobs south of the border. We must have a comprehensive trade strategy.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Mr. Speaker, I would like to thank the hon. member for Laurentides—Labelle for his very enlightening speech about the possible negative effects of these agreements.

One very important aspect to consider involves Panama's labour laws. President Ricardo Martinelli announced unilateral changes to labour law in the summer of 2010. These changes prohibited the collection of mandatory union dues, allowed employers to dismiss workers who were on strike and replace them with strikebreakers, allowed roadblocks and criminal acts, and even sheltered the police from legal action. This labour relations regime is completely unbalanced and harms workers.

I would like to my colleague to comment on that.

[Marc-André Morin, NDP, Laurentides—Labelle, QC]

Mr. Speaker, one of the issues we discussed in parliamentary committee was protecting human rights and the environment. I think that this aspect was left out of this agreement. There are agreements in principle and a bunch of good intentions, but if someone violates these rules, there are no sanctions, or if there are, they are ridiculous.

If the members opposite were sincere and truly wanted this free trade agreement to benefit all the parties, they would have ensured that there were some legitimate rules. For example, they would have required that the tax information issue be resolved before ratification, as the Americans did. They are showing the same negligence with respect to labour and environment bills. There is all kinds of lip service and plenty of fine promises, but there are no sanctions or oversight mechanisms. It was the same thing with Colombia, and if we allow it to happen, it will be the same thing with China and other countries.

[Randy Hoback, Conservative, Prince Albert, SK]

Mr. Speaker, it is a pleasure to rise in the House today to share how this government's free trade agreement with Panama complements our government's Americas strategy.

First, I would like to speak about how our government's ambitious pro-trade plan and our global commerce strategy are creating new opportunities around the world for Canadian exporters.

Our government's global commerce strategy, developed in close consultations with the Canadian business community, was our strategy to respond to the changes in the global economy and to position Canada for long-term prosperity. The global commerce strategy identifies 13 priority markets around the world where Canadian opportunities and interests have the greatest potential for growth. The strategy also sparked the most ambitious pro-trade plan in Canadian history. It has driven Canadian leadership on the world stage in support of trade, job creation, economic growth and prosperity for hard-working Canadians and their families.

The results have been very impressive. Under the global commerce strategy, Canada has concluded a free trade agreement with nine countries, representing combined markets of $1.5 trillion. We have begun to deepen trade and investment ties with the largest, most dynamic and fastest-growing countries in the world, including Brazil, India, Japan and the European Union. There are also new foreign investment promotions and protection agreements with 14 additional countries.

The Americas are a priority market for our government. In fact, just this past year our government announced plans to strengthen our engagement in the region to ensure our efforts are focused where the impact will be the greatest.

Actually, a lot of members were at a function of ParlAmericas last night, meeting with different ambassadors from the Americas. I had many ambassadors say to me that it is nice to see Canada on their radar, to see that Canadians are travelling into their regions to do business and that the government recognizes the potential in both Central and South America and the Caribbean. They appreciate the work we have been doing in foreign trade, and this Panama trade deal will reinforce that.

I would like to share with the House a bit more about how our free trade agreement with Panama fits in with our Americas strategy. The renewed strategy has three goals. One, is to increase Canadian and hemispheric economic opportunity. Two, is to address security issues and advance freedoms, democracy, human rights and the rule of law, through capacity-building. Three, is to build a stable foundation for Canadian engagement and increased influence in the hemisphere. This agreement definitely helps us do that.

Strengthening economic ties is crucial in today's challenging and uncertain global economic climate. Expanding Canada's trade and investment in the Americas will help protect existing jobs and create new jobs and increased prosperity for all Canadians.

Canada's efforts to increase economic opportunity depend on deepening trade and investment ties by advancing our trade agreement. The Americas is a key region for Canadian bilateral trade initiatives. In fact, seven of Canada's ten concluded free trade agreements have been with countries in the Americas.

However, it is not enough simply to sign a trade agreement. In our government's Americas strategy is the need to make Canadian companies aware of the advantages and opportunities of these trade agreements. Our government understands that through engagement, development, trade and commercial ties, that Canada can be in support of change and growth in the Americas.

Promoting freer trade in the Americas opens new doors and creates new opportunities for Canadian companies, increasing economic benefit for Canadians, including new jobs for hard-working Canadians right across this country, from coast to coast to coast.

Canada's efforts to liberalize trade with the Americas is working. We are removing barriers to trade and facilitating two-way commerce. The Americas offer great potential. Total trade growth between the countries in the Americas and Canada has increased by nearly 40% in the 2005 to the 2010 period.

In order to promote economic opportunity, our government's renewed Americas strategy will focus on intensifying trade promotion and trade relationship building efforts to ensure Canadian businesses and exporters are taking full advantage of these new trade regions. As part of increasing economic opportunity with Panama, Canada is growing economic partnerships that will contribute to the long-term prosperity of both countries.

I have had the pleasure of travelling in Panama on numerous occasions, through the ParlAmericas and on personal trips by myself and with my family. Panama is a dynamic country. This country has the Panama Canal going through it, and three-quarters of the world's trade that goes on oceans goes through that canal.

When we look at Panama's situation in the Americas, with airlines such as Copa, it is becoming the hub for transportation going in and out of Central and South America. That is why I think it is very important to this trade deal to make sure we have the ability to travel in and out of Panama, so we can do more business, not only with Panama, but throughout the region. Panama is a key component in that effort.

This agreement and its parallel labour and environmental agreements will promote trade and investments while creating a winning advantage for Canadian businesses and exporters.

To protect Canadian trade and commerce investments, the security situation in Central America must be taken into consideration. It is a core focus in our renewed Americas strategy.

Panama has recognized its security challenges and has significantly increased spending on security. It has also committed to continued reforms to security institutions. Panama continues to build a strong security co-operation with the United States and with its Central American neighbours, under the Central American Integration System, SICA, regional security strategy.

Our government is pleased with the significant efforts that Panama is making to meet the security challenges and confront the public security threats facing Central America.

International relationships are fundamental. Competition for market share is on the rise. Canada must demonstrate that it is a serious and committed trading partner. Our government has continued to deliver on an ambitious pro-trade plan that is creating new opportunities, not only in the Americans but in dynamic high-growth markets around the world. Furthermore, while sustaining high engagements is essential, Canada will continue to benefit by building relationships more broadly across the private sector, government and academia.

Looking back over the last two years, I have had the privilege of travelling in the region with the Prime Minister, reaching out to our trading partners and helping Canadian businesses secure access to opportunities in those countries. We have also had the Governor General, in countries like Brazil, promoting the educational systems we have here in Canada.

In fact, a country like Brazil is spending a large amount of cash to send students abroad. A lot of our Canadian universities are taking advantage of that situation and are attracting them to be educated here in Canada. When we build relationships like that, we are fostering growth between the two countries. If we look at Brazil and how it is growing, that is not a bad country to be aligned with.

All countries in the Americas have a vested interest in prosperity, security and stability. That is why our government is committed to building sustainable relationships with our like-minded neighbours. Through our strong bilateral relationships, increasing people-to-people ties generated through educational exchanges and increased tourism and business links, our links with Panama are growing stronger every day.

Every day we are seeing more and more opportunities for Canadian businesses and exporters. A good example is that just three weeks ago I had a phone call from a colleague in Panama, whom I had met in one of groups, asking about Canadian beef. He asked me how he could get a hold of Canadian beef, and about the process. That is how to build relationships. We can put him in touch with the appropriate people in the Canadian beef federation, and they can go there to make connections and use those new connections to actually sell more Canadian beef. That is just one example of how farmers are going to benefit from this trade agreement.

With regard to another example, if we look at the wheat industry, we are actually going to have preferential access into Panama over the U.S. The U.S. does not yet have its trade agreement done with Panama, so we are going to have access for Canadian companies long before our competition. We can get in there and build those strong relationships before they do.

The Canada-Panama free trade agreement is a key component to advance the goals of the Americas strategies. When we look at what is going on in the Americas, we see the growth and the growth potential. When we look at the issues they are facing, here is a country that is really reaching out to Canada. This is a country that has been patiently waiting for this agreement.

I know the former ambassador fairly well. He was anxious, as he wanted to see this thing go through the House. Unfortunately, he was recalled, but in the same breath he would always wonder why it took so long, because the people in Panama really want this trade agreement.

During one of my trips to Panama, I had the opportunity to spend some time with one of the diputados in Panama and to visit his riding. I toured some of the needier areas, the poor slum areas, and experienced what he faces in his job as a parliamentarian. It was heartwarming and heartbreaking at the same time. It was heartwarming because what he was doing was making a difference in the individual lives of those people. It was heartbreaking to see the situations the kids were growing up in and the implications of not having a strong economy.

Canada does not go around the world preaching; that is not who we are. What we can do is to help people, assist them, give them an economic opportunity, the ability to help themselves, and give them the tools so they can make their own lives better. How do we do that? One of the best ways is to trade with them, to do business with them and help them learn from us.

We will learn a lot from them because they have a lot to teach us about how to handle business in the region. They know a lot of things that we could learn from their business sector also.

That has been one of the advantages of being with ParlAmericas and something that I promote when I talk to my colleagues in the House. It offers a chance for parliamentarians to travel to different countries within the region in a non-partisan manner. A good example is my travel with a colleague from the Liberal Party to Panama this summer for the AGM of ParlAmericas. We had a chance to talk to parliamentarians from all parties and to build some bridges. This is also what trade agreements do: they allow businesses to get together and build bridges, to seek out opportunities of mutual benefit for companies and partners.

That is what we are doing here. We are just laying out the proper rules for doing this as we move forward and making it easier for our business community and investors to go into different parts of the world, in this case to Panama, and do business. That is nothing but positive, not only for Canada but also for the Panamanians.

When we look down the road to the future and where we are going to leave this country for our kids and how we are moving forward, this trade agreement and others are something that we can do for them. We can give them opportunity, give them market access and let them know that the businesses they work for can export not only to the U.S. or Mexico but also to Panama, Chile, Colombia and, hopefully, Honduras in the future. These are the things we can do for our kids by giving them the opportunities. We cannot give them everything but we can give them chances and opportunities. By promoting a good bill like this, that is what we are doing. We should move this forward and pass it.

[Marc-André Morin, NDP, Laurentides—Labelle, QC]

Mr. Speaker, the member opposite just spoke about the agreement with Japan and how important it is for Canada to show that it is serious about its international commitment.

I was part of a delegation that went to Japan last June. We have never looked more foolish in our lives. During a meeting on the last day of our visit, a former Japanese diplomat told us that the Canadian embassy in Tokyo no longer offers consular services. We learned that from a Japanese colleague.

I do not think they are taking this very seriously, because if Panama is important, Japan is probably 25 to 30 times more important to Canada. It is the best partner we could sign an agreement with. If the government starts fooling around, we will lose our opportunity to do business with this country and that would be much more serious than losing opportunities with Panama.

[Randy Hoback, Conservative, Prince Albert, SK]

Mr. Speaker, the member makes a good point and I am glad to hear him talking about the New Democrats supporting a trade agreement with Japan, because that is something we should be considering and doing in the future. As we go across the globe, we should be looking for opportunities like those with Japan.

However, the trade agreement before us today is with Panama. There are some key things that we need to remind ourselves of as to why this agreement is important. First of all, Panama is a strategic hub for the Americas and an important logistical platform. It has the canal. It has airports. It is central in the region as far as transportation or branching out to other countries within the region is concerned. The agreement would generate export and investment opportunities for Canadians by creating preferential and more predictable trade and investments. These are things that Canadian businesses want. Panama is a good environment for investment as an emerging economy. People there are buying their first TV and first microwave. It is a growth economy that we can participate in.

Not only that, but when we provide that growth and see it happen, some of the other things disappear, for example, the drug and human trafficking or smuggling. We would take away the need for people to try to make money by any means. When they can make a dollar fairly and squarely, that is what they will do, thus reducing the amount of crime and violent crime in those regions. That is of benefit to us here in Canada because we are the consumers of some of those drugs coming this way.

This agreement would limit tariffs on 89% of non-agriculture imports from Canada. The majority of Panama's remaining non-agriculture tariffs would be limited to between five and ten years, including certain forest and paper products, certain iron and steel products, paints, soaps and various manufactured goods. I come from a riding with a pulp mill and forestry goods. These can now end up in Panama. That would be great for my riding and all Canadians.

I cannot understand why the New Democrats, the anti-trade group sitting over there, just cannot get it. Can they not understand that Canada is an exporting nation? If we want to seek growth and to give prosperity to our kids, this is what we have to do. We could never consume the resources the gods have enriched us with here in Canada. We have to be willing to trade, to exchange resources for other good of value throughout the world. That is what we would do through a trade agreement like this.

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

Mr. Speaker, one of the things my colleague talked about is the increased opportunity for trade with Panama in forestry products, plants and trees. Here, I want to break this down to the lowest common denominator, because some of my colleagues in the opposition who are talking about voting against this agreement still have a chance at third reading to change their minds and support this agreement.

The issue here is simple. Right now, with regard to one commodity alone, the Christmas tree industry in Nova Scotia, there is a tariff in Panama of 18%. That may not sound like a lot of money, but it is. Nova Scotia Christmas tree growers are paying an 18% tariff on their trees going into Panama. They have been shipping Christmas trees to Panama from before the 1960s. There has been over 50 years of business between Nova Scotia and Panama in that industry alone, albeit with a punitive tariff of 18% that will now be wiped out overnight. That is an opportunity for a niche market for a small industry in Nova Scotia, but that small industry is worth about $30 million to the province.

Items like these often get overlooked in these trade agreements but are significant for farm families and farm gate profits in rural Nova Scotia.

[Randy Hoback, Conservative, Prince Albert, SK]

Mr. Speaker, I thank the parliamentary secretary for his hard work and determination in getting this bill through. I think it has been before the committee three times, if I remember correctly. I know he has been doing a lot of the hard work with all committee members in getting this bill to where it is today.

He gives a good example of Christmas trees and the 18% tariff. An 18% tariff for what? It is just a trade restriction. That is all it is. Why the NDP would want a tariff on Canadian companies is beyond me. Why would the NDP say it is okay for farmers to sell their Christmas trees to Panama, but let Panama collect that 18% tariff? That is what New Democrats are doing when they vote against this trade agreement. That is a classic example of the NDP. There is not a tax it does not like, even a tax being collected by another country. That is what is happening in this case.

That is what the Canada-Panama free trade agreement would resolve. It would take away that 18% tariff and give companies stable market access into Panama. It would allow them to fill that niche market and maybe expand it, and not only in Panama. Maybe they could use Panama as a bridge to go to other countries within the region. We do not know what the potential is. That is up to individual investors. All we can do in government is to take away the barriers and allow investors to conduct the business they want to do. That is what this trade agreement would do.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

Mr. Speaker, in his speech, the member for Prince Albert said that through its free trade agreements Canada can support change and growth in the Americas.

A few years ago, I signed a petition concerning the free trade area of the Americas (FTAA), which was also signed by people from all across the Americas. Every single country signed the petition. It asked that we put a human face on trade and that human beings be just as important as economics in our trade relations. The petition was effective because we no longer hear about the FTAA today.

However, the Canadian government has started entering into bilateral agreements with countries, agreements that are similar to the FTAA and therefore do not include the human dimension that the people asked for in the petition.

Why enter into agreements that do not fundamentally help promote human rights in another country, such as Panama?

[Randy Hoback, Conservative, Prince Albert, SK]

Mr. Speaker, I believe that CAFTA is the trade agreement the member was referring to. There are really good reasons for my answer to her question. Bilateral agreements are very easy to do; we can reach bilateral agreements with countries that want to do business with us. When we get to a multilateral stage or venue, it is very difficult to get all the people to agree on the same topic, suggestions or issues. It is very tough to put together.

We should strive toward multilateral agreements like the TPP and, in a certain way, CETA, but in the same breath we cannot wait for multilateral agreements to come forward like the WTO. We need to be out there, like Chile is. It has something like 60 trade agreements with different partners around the world. Canada needs to be doing the same thing. If we cannot do it through multilateral venues, then we need to be vigilant and do it through the bilateral agreements we are reaching today.

Again, the focus has to be on families, and that is what we are doing by providing Canadian business with access to markets around the globe so that if one country like the U.S. decides not to trade with us, we have 10 more lining up to buy our products. That is what we are doing with our trade policy.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, one could always pose the question in terms of the time it has taken to get this bill through the legislature. The government has had the support of the Liberal Party throughout the process. Would the member comment on why he believes it has taken so long to get the legislation through?

The Prime Minister is currently in India and I believe he is going to Hong Kong and stopping in the Philippines. Could the member provide his perspective on the Philippines, a country with whom I have always argued it would be great to see more freer trade with. Does he believe that the Government of Canada is prepared to make it a higher priority at this time?

[Randy Hoback, Conservative, Prince Albert, SK]

Mr. Speaker, I would like to know the answer to that same question, why that has not happened before. I think the NDP is solely responsible for that being delayed at committee and being brought forward the way it has.

In regard to the Prime Minister's trips, it is nice to see a Prime Minister proud of going out on the global stage and actually attracting markets and increasing investment. We can be proud of the fact he is over there right now opening up markets for Canadian families and Canadian businesses.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, I am pleased to stand today in the House and speak to Bill C-24, the Canada-Panama trade agreement. The full name is 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 co-operation between Canada and the Republic of Panama.

Before I go too much farther, I will answer the question just raised by my hon. colleague from Winnipeg North. The reason this agreement has taken so long to get through the House is that the Conservative Party and the Prime Minister of this country prorogued Parliament twice and this bill that was before the House was killed and parliamentarians were deprived of their opportunity to deal with it. That is why the bill has been delayed, not because of anything New Democrats have done.

It is always nice to add some factual basis to the House, as opposed to the government's general approach of relying on spin and accusation and oversimplification, as opposed to solid evidence-based approaches to government.

I would like to briefly describe to the House what Bill C-24 is about. By this legislation, Canada would eliminate all non-agricultural tariffs as well as most agricultural tariffs upon ratification of this agreement. Overall the bill, if passed, would eliminate 99% of tariffs for imports from Panama, and a limited number of tariffs would be phased out over the next 15 years. Canada would not, by this agreement, eliminate over-quota tariffs on supply managed goods such as dairy, poultry and eggs. Additionally, Canada would not eliminate its tariffs on certain sugar products. Therefore this deal is not comprehensive and it does not deal with certain sensitive agricultural issues that are often so delicately handled in trade agreements.

This agreement would see Panama immediately eliminate all non-agricultural tariffs for imports from Canada, and upon ratification 90% of Canada's exports to Panama would enter the country duty-free, including many agricultural products. Other agricultural tariffs would be phased out within five to ten years. A limited number of Panamanian tariff lines would be unaffected by the implementation of the proposed free trade agreement.

Currently, Panama's average most favoured nation tariff rate, which is the lowest tariff rate Panama offers to countries with which it does not have a free trade agreement, for non-agricultural products is 6.4%. Its average most favoured nation tariff rate for agricultural products is 13.6%. However, some agricultural imports into Panama face tariff rates as high as 70%.

This agreement deals with services as well. It extends liberalization of trade and services beyond that established by the World Trade Organization's general agreement on trade in services in finance, information and communication technology, environmental services and energy services.

This agreement facilitates border entry for service providers and business people. It would provide a framework for the eventual reciprocal recognition of professional licensing qualifications in both countries.

This deal also has a chapter on government procurement. It allows contractors to bid on government contracts in both Panama and Canada. Moreover, contractors from Canada would be eligible to bid on Panama Canal Authority contracts. This agreement would prohibit government contracts with domestic content requirement rules that may impede potential suppliers or subcontractors from the partner country. Panama and Canada would both be required to post contract opportunities in a transparent manner for contractors from the partner country. In other words, this deal would open up procurement in Canada to Panamanian businesses and vice versa.

There is a labour co-operation agreement appended to this agreement that is referred to as a side deal on labour. It would require both parties to respect commitments under the International Labour Organization's 1998 Declaration on Fundamental Principles and Rights at Work. It would protect the right to collective bargaining, obligate the parties to work toward abolishing child labour, eliminate compulsory labour and prohibit employment discrimination. Canada and Panama would also agree to minimum employment standards, occupational health and safety standards and compensation for sick and injured workers.

Moreover, either country could request a consultation with respect to the other country's obligations under the proposed agreement. If the countries could not reach an agreement with respect to a complaint, a review panel would or could be established if a country persistently abrogated its obligations under the proposed agreement and if the matter is so-called “trade related”.

This independent review panel could impose monetary penalties, which would be collected pursuant to a domestic court order. Those penalties would be limited to $15 million per year for each country and would be spent on programs in the country that violated the labour co-operation agreement.

There is also a side agreement on the environment in this trade deal. Both Canada and Panama would be required not to weaken their environmental regulations, such as they are, in order to attract investment. Both countries would be required to enforce their existing environmental regulations, again such as they are. To this end, mechanisms would be established to ensure that environmental impact assessments occur for proposed projects. In both countries, interested persons could request that the government investigate alleged violations of environmental rules.

Furthermore, the agreement would provide a framework for environmental co-operation between the countries with respect to environmental enforcement capacity, protection of biodiversity, conserving shared migratory or endangered species and developing mechanisms to protect the environment.

Disputes between the countries would be resolved through consultations and exchanges of information only. If those consultations and exchanges were unable to resolve the dispute, the offended party could request that an individual review panel be established to investigate the dispute.

We are opposing this bill for a number of reasons.

First, Panama has an established clear and absolute long-standing reputation as a tax haven for tax evasion and tax avoidance.

Second, Panama has a history of military dictatorship. It has a poor record of labour and human rights. As well, the deal's side agreements for both labour and the environment are very weak, as I will delineate.

Third, we are also concerned that the agreement provides greater rights and powers to foreign investors. This is worrisome given controversies on the environment and human rights records of some Canadian mining firms in Panama.

There are no penalties for environmental violation of this agreement whatsoever. If there was any single violation or multiple violations of the environmental side agreement, not one penny is provided for in this agreement to be levied in terms of fines or penalties; in other words, the environmental side agreement is only suggested.

I will first deal with the tax haven situation. The amount of money invested in tax havens in the world globally at the moment is at an all-time high. In 2011, almost 25% of Canada's investment was invested in the world's top 12 tax havens.

According to a Tax Justice Network report from 2011, Canada loses an estimated $80 billion per year to all forms of tax evasion. The government does not have a system for estimating and publishing the amount of lost revenues due to offshore non-compliance.

In 2011, there were more than 9,000 CRA employees working on taxpayer compliance. As of May 2012, 510 were assigned to the international audit program. That number has not changed since 2008, even though the use of offshore accounts has skyrocketed.

The CRA's 2010 audit of its own enforcement branch confirms the agency's inability to pursue complex offshore cases worth millions of dollars. Instead, it prefers to chase down the so-called “low-hanging fruit”, such as small business and the self-employed.

Panama, as I said, has a long history of serving as a tax haven. Here is some of the testimony we heard at committee in 2010 by Todd Tucker, who is the research director of Public Citizen's Global Trade Watch. He testified that Panama offers foreign banks and firms a special offshore licence to conduct business there. Not only are those businesses not taxed; they are subject to little or no reporting requirements or regulations.

According to the Organisation for Economic Co-operation and Development, the OECD, the Panamanian government has little to no legal authority to ascertain key information about these offshore corporations, such as their ownership.

Panama's financial secrecy practices also make it a major site for money laundering from places throughout the world. According to the U.S. State Department, major Colombian and Mexican drug cartels, as well as Colombian illegal armed groups, use Panama for drug trafficking and money laundering purposes. The funds generated from illegal activity are susceptible to being laundered through Panamanian banks, real estate developments and more.

A recent Cornell University study analyzed all prosecutions of the Internal Revenue Service in the United States over a 10-year period, and it found that Panama was tied as the number one country in the world as a source of drug-laundered money and as a tax haven.

There was some testimony at committee that this situation was so-called “improving”. Recently, Panama was removed from the so-called OECD “grey list” after implementing the standard for exchange of information when it signed a tax information exchange agreement with France. Panama now has 14 such agreements.

In March 2012, Canada and Panama entered into negotiations for a tax information exchange agreement. However, importantly, and critically for the opposition, this agreement has not yet been concluded or signed.

This is very troubling, considering the large amount of money laundering in Panama, which I believe no one in this House disputes, including money from drug trafficking. Panama's lack of taxation transparency has led the OECD to continue to label the nation as a tax haven.

I should point out that the so-called “greyness” is lifted from a country when it signs tax exchange information agreements with 12 countries. Notably, former president Sarkozy of France said that, notwithstanding that Panama had signed more than 12—in other words 14—such agreements, he still did not consider Panama to have entered the legitimate world of open transparent banking systems in the globe.

At committee, I questioned the government officials who testified about what due diligence Canada had done in determining the role of drug money in Panamanian banks and businesses. Astonishingly, they had done no study.

Cameron MacKay, a DFAIT official, on October 2, 2012, testified thus:

...we don't have figures in that regard, and to my knowledge the Canadian government hasn't done particular studies. But we are well aware, of course, that Central America is a region now that's suffering very seriously from the narco-trafficking trade. It's a serious issue across the region, including in Panama.

The U.S. Congress refused to ratify a free trade agreement with Panama before signing a tax information exchange agreement. According to witnesses, this agreement has “a large loophole...that...allows Panama to sidestep tax transparency provisions if they are 'contrary to the public policy' of Panama”.

Analyses of these tax exchange information agreements indicate they are highly ineffective in preventing legal tax avoidance or legal tax evasion unless they are carefully drafted. These agreements typically do not have an automatic information-sharing provision, but rather individual requests must be made.

Furthermore, these tax exchange information agreements generally do not require a partner country to provide information necessary for determining tax compliance in the other nation if it has not been previously created. In particular, it is typically necessary to know the name of the individual suspected of tax evasion to request the overseas tax information. Governments rarely have this information without a whistleblower.

Prior to the clause-by-clause review of Bill C-24, the NDP official opposition proposed to the committee a motion that would stop the implementation of the Canada-Panama trade agreement until Panama agreed to sign a tax information exchange agreement, as the U.S. Congress did.

My motion was defeated by the Conservatives and the Liberals who argued that progress was being made on this matter with regard to negotiations underway to sign an agreement. However, we do not have a tax exchange information agreement between Canada and Panama today as we sit and vote on this free trade agreement.

In other words, we are dealing with a noted tax haven, one of the most notorious drug laundering centres in the world. The U.S. Congress said it would not be safe or prudent to sign a free trade agreement with such a country until it first had a tax exchange information agreement in place. However, in this House, the government is asking parliamentarians to go ahead and give a most favourable nation status free trade agreement that would allow money and investment to flow with very little barrier between our two countries, when we do not have a tax exchange information agreement in place, but one might happen in the future. That is imprudent. That is irresponsible.

The U.S. Congress would not ratify its FTA with Panama before a tax exchange information agreement was signed. Why are we?

I want to talk a bit about the labour co-operation agreement. It is not as strong as it could be. It has weak enforcement mechanisms. It invokes international labour organizations' core labour standards. However, according to testimony we received at committee, the agreement does not include specific protection for the right to organize and the right to strike. It provides instead for so-called “effective” recognition of the right to collective bargaining, making this deal weaker than others Canada has signed. Enforcement is weak. Fines are small. There are no countervailing duties and there is no provision for abrogation or any other such remedy.

We heard a lot of testimony that what Canadian business wants is a level playing field. I questioned experts and witnesses at committee and asked what the minimum wage was in Panama. The answer I got was between $1 and $2 per hour. How is that a level playing field for Canadian employers who have to pay minimum wages in Canada of at least $9 or $10 an hour, as well as workers' compensation, health benefits and Canada pension plan benefits? As well, they have to comply with a whole bunch of regulations that are part and parcel of a modern industrial economy. How are they supposed to compete on a so-called level playing field with Panamanian employers who are paying their workers $1 to $2 an hour? That is not a level playing field. It is not fair to Canadian business to sign and enact a trade agreement with a country that has such low standards.

The agreement on the environment is a replication of environmental agreements we have signed before and does not provide for a single penny of penalty. What kind of agreement obligates another country to certain environmental standards, but if it violates them we send it a letter and admonish it? That is irresponsible.

I have a quote from Jennifer Moore from MiningWatch. She states:

Although [this agreement] includes an environmental side chapter, this is a non-binding declaration that relies on political will for its implementation, of which sort we have not seen in Panama. On the contrary, we've seen the undermining of environmental protections at the behest of Canadian companies.

The agreement has an investor-state dispute settlement, something that we have heard a lot about in the House over the last two weeks because one is contained in the foreign investment protection agreement with Canada and China. This deal would further entrench the ability of companies to sue governments for policies that are seen to hurt investments. They are administered through tribunals that do not live up to Canadian values of justice, where the judges do not have security of tenure and there is no effective appeal mechanism. In fact, there are about 60 international lawyers around the world who sit on these tribunals. One recently said that he could not believe that any country in the world would give over to an unaccountable panel of three lawyers the power to strike down its domestic democratic legislation. That is exactly what was said.

These investor-state dispute settlement mechanisms are very dangerous. We have seen in the FIPA that they could subject Canadian taxpayers to millions, perhaps billions, of dollars of liabilities simply for the government taking measures to protect Canadian businesses or the environment or social programs. That is wrong.

In terms of the environment, there is a Mesoamerican corridor in Panama that is one of the most important biological and biologically diverse areas of the world. Currently there is a worldwide attempt by mining companies to mine in that area. This is something that is very concerning to many environmentalists. Hundreds of different types of species are at risk through unrestricted mining activities. We heard testimony at committee that this is also of major concern.

Panama accounts for less than 1% of our trade. It is actually 0.03% of Canada's trade. The government always brags about the number of agreements that it has signed. It has signed nine agreements. Who were those agreements with? They were with Panama, Jordan, Colombia, Honduras, Liechtenstein. With great respect to these countries, they are not major economic powers.

What the New Democrat opposition wants is a strategic trade policy where we restart the multilateral negotiations, where we sign trade deals with developed countries that have high standards and developing countries that are on progressive trajectories. These are countries like Japan, India, Brazil, South Africa and the BRIC countries. These are the countries that we should be signing trade agreements with, not countries like Panama that are drug laundering centres, tax havens and have low standards that will hurt Canadian business.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, I like some of the sentiment in what the member is saying and his concern about the domestic situation in Panama right now. I will make my question very simple because I want to explore how we go about improving the situation.

One of the things I liked about the free trade agreements were the imperatives and standards being set for labour and other issues. However, if every country isolated Panama because of its low wages and other things, how would it better itself?