Mr. Speaker, as we know, Panama is an important partner to us in this hemisphere. Having visited this country a few years ago and having worked with Panamanian counterparts in various contexts, I believe that it is truly a country with which we should have closer ties. However, these ties must be based on sustainable and fair principles that benefit both countries. Yet the free trade agreement that is before us today really does not meet these criteria. In fact, this agreement is problematic in a number of ways. I will not hide the fact that many of these problems are common to a number of our free trade agreements. Despite this, I would like to revisit some of these problems, as some of my colleagues have done.
To begin with, it should be noted that there are problems when it comes to environmental protection. I will not elaborate on these problems today, because many of my colleagues have described them at length and, in any case, my time is short. There are also problems as far as protecting workers is concerned. For example, under the system we will end up with, investors will have the right to request compulsory arbitration that they can conduct independently, however a union can only file a complaint and it will be up to governments to seek and obtain remedies. Why this double standard? This is once again a whittling away of workers’ rights. This is not good for Panamanian or Canadian workers. When you start chipping away at the rights of workers in another country, what happens? We have seen this in the past. Companies relocate jobs to these countries and we lose manufacturing jobs left, right and centre, as we have seen in recent years. In short, that creates a system where nobody benefits.
There is also a somewhat more specific problem in this case, and that is the absence of a tax information exchange agreement. This is a major problem. We know that, at best, Panama is in a grey area when it comes to its tax haven status. We believe that Canada must help Panama and encourage it to be more fiscally transparent. The negotiation of a free trade agreement is an opportunity to do just that. We want to work with Panama to help stop the money laundering that is, unfortunately, happening in the country, and to help stop the funding of drug trafficking. This is a problem that affects the entire hemisphere and that has tragic consequences for Panama, the hemisphere and Canada.
I think that we should really require Panama to sign a tax information exchange agreement. Some say that the double taxation agreement will be enough. If double taxation agreements were enough, tax information exchange agreements would never have been invented. Double taxation agreements apply to legitimate and official earnings, but the problem is all the other revenue.
We are being told that the double taxation agreement covers some ground, but my fundamental question is this: why not have a tax information exchange agreement? Why not?
Who stands to lose if such an agreement were signed? It would certainly not be Canada, and I do not imagine that Panama would either. In fact, such an agreement would help put Panama in a position to better meet international standards, for example, its obligations under the OECD.
What we proposed was very simple: suspend the free trade agreement until a system is in place for exchanging tax information. The Conservatives rejected this proposal. Why did they reject it? What is the rush? Are they going to tell us that our national economy is at risk, as they did with the Air Canada situation?
Bilateral trade between Canada and Panama represents less than 1% of our trade. There is no rush. We can wait. We can use our tools and energy to help Panama meet international standards. This would help Panama. It would help the entire hemisphere, and clearly, it would also help Canada.
Meanwhile, the free trade agreement does not include the exchange of tax information. What would be the impact of signing such an agreement? According to Mr. Tucker, the research director for Public Citizen's Global Trade Watch, this would make things worse for Panama. I would like to read some of what he said, because it is really very interesting and it gets to the heart of the matter.
The Canada-Panama trade deal would worsen the tax haven problem. As the OECD has noted, having a trade agreement without first tackling Panama's financial secrecy practices could incentivize even more offshore tax dodging. But there's a reason to believe that the trade deal will not only increase tax haven abuses but will also make fighting them that much harder.
Chapter 9 of the Panama agreement expands the investor-state system under NAFTA, under which Canada has paid out hundreds of millions of dollars in legal fees and compensation to U.S. investors. Canada's defensive interests are many in the case of the Panama pact, because there are hundreds of thousands of U.S., Chinese, Cayman, and even Canadian corporations that can attack Canadian regulations by using aggressive nationality planning through their Panamanian subsidiaries.
In short, the free trade agreement as written, without a tax information exchange agreement, will hurt Panama because it will worsen the situation there, increasing abuses and making fighting them even harder. It will also hurt Canada.
I will repeat my questions: why not wait, and why not include a tax information exchange agreement?