Madam Speaker, it is a pleasure to rise in the House today to talk about the Canada-Panama free trade agreement. I will spend a few minutes talking about how this agreement fits into our government's broader economic plan.
The one thing we always need to keep in context is that free trade agreements, while they are important, fit into a much larger plan of what our government is trying to accomplish. We have been working on a number of free trade deals, which I will touch on in a bit, but I also want to comment on the fact that we continue to lower corporate taxes to one of the lowest levels in any of the G7 or G8 countries. That is important as we look at trying to attract other investments and corporations for jobs.
There are other things we are doing. We are continuing to work on deals with the U.S. to try to get goods and services flowing quicker at the borders. A historic deal was announced just this week. The Prime Minister was able to make a deal in Windsor, which is hugely important in trying to get our goods and services across to the U.S., our largest trading partner. We continue to invest in research and development. We realize that new jobs will come as we are able to commercialize technology. That is why we continue to spend money on research and development and ensure we are getting the best bang for the buck.
We have been trying to reduce red tape. The Red Tape Reduction Commission talked to business owners and business people across the country to try to figure out how to reduce irritants so that Canada could become a friendly place to do business. It already does a great job. I think one of the differences between us and some of the other parties in the House is that we realize that we need to continue to find ways to sell our goods and services around the world. Sixty per cent of our GDP depends strictly on trade. With a population between 30 million and 35 million people, there is no way that we can consume all of our goods. Therefore, we need to continue to expand those markets. Tat is why I appreciate the opportunity to talk a bit more about this Panama free trade deal.
We understand the importance of benefits of trade. As I mentioned before, we are an export-driven economy and we need open borders. With one in five Canadian jobs dependent on international trade, bilateral and regional trade agreements are essential to bringing continued prosperity to Canadians. That is why deepening Canada's trading relationships is rapidly growing, and markets around the world, such as Panama, are important parts of this government's pro-trade plan for jobs, growth and long-term prosperity.
With a GDP of over $30 billion and a GDP per capita of over $10,000, Panama is among the fastest-growing and best-managed countries in Latin America. In fact, the Latin Business Chronicle has predicted that Panama will be the fastest-growing economy in Latin America in the five-year period from 2010 to 2014, matching Brazil's rate of growth of 10%.
Like most countries in the region, however, Panama is feeling the impact of the global financial crisis, which threatens to undermine the social gains made in the past few years. That said, the expansion project of the Panama Canal, combined with the conclusion of a free trade agreement with the United States, is expected to boost and extend economic expansion for some time.
As a former member of the Standing Committee on International Trade, I had the pleasure of visiting Panama in 2008 with my committee colleagues. I want to mention, since Lee Richardson, who was the chair of the committee at the time, is no longer in the House, that it was a pleasure travelling with Lee to Panama and he did a great job leading the delegation. He is certainly a colleague that we will miss in the House. I want to wish him all the best as he starts his work in Alberta.
While in Panama, we had a chance to visit the Panama Canal. One really cannot appreciate the sheer scale of this 97-year-old architectural marvel until one gets to witness it in person. The Panama Canal is an 82 kilometre ship canal that connects the Atlantic Ocean to the Pacific via the Caribbean Sea. It is one of the largest and most difficult engineering projects ever undertaken. The Panama Canal is a shortcut that allows for shorter, faster and safer access to the North American west coast, allowing those places, including Canada, to become more integrated with the world economy.
The Panama Canal has an annual traffic of over 14,000 trips, carrying about 300 million tonnes of goods annually, raising close to $2 billion in revenue for the Panamanian government. The Panama Canal expansion project, which is currently under way, will double the capacity of the Panama Canal, allowing more and larger ships to transit.
New components include the construction of the two lock complexes, the excavation of new access channels to the new locks and the widening and deepening of the navigation channels. The project is expected to be completed in 2014. Interestingly, this expansion was approved in 2007 by Panama's cabinet and national assembly with a national referendum in which 77% of Panamanians voted to support this project.
The Panama Canal Authority estimated the cost to construct the third set of locks at approximately $5.25 billion. This estimate includes design, administrative, construction and testing. As with most projects of this scale, there are opponents who contend that the project is based on uncertain projections about maritime trade and the world economy and that the project will cost more than the $5.25 billion price tag.
Again, according to the Panama Canal Authority, the third set of locks is financially profitable and will produce a 12% internal rate of return, which will help to continue to finance the project and will be a cash flow for the country as it moves forward.
Recent challenges in concluding the World Trade Organization Doha round regional and bilateral trade agreements have taken on increased significance. Our government recognizes that there are a growing number of countries where Canadian companies are at a competitive disadvantage because their competitors have preferential market access under some form of preferential trade agreement.
Canada cannot afford to sit on the sidelines while other countries vigorously pursue trade deals to secure better market access for their products and services. That is why our government is in the midst of the most ambitious pursuit of new and expanded trade and investments agreements in Canadian history. The Canada–Panama free trade agreement is yet another step this government is taking to help Canadians compete and succeed in a global economy. It supports the global commerce strategy which will ensure that Canada maintains its current economic strength and prosperity in an increasingly complex and competitive global economy.
With 60% of our GDP dependent on trade, it is clear that jobs in communities across Canada depend on the business we do with other countries. This government's pro-trade plan is an essential contributor to Canada's prosperity, productivity and growth.
By improving access to foreign markets for Canadian businesses, we are supporting domestic economic growth and creating new opportunities for Canadian workers. Canada's exporters, investors and service providers are calling for these opportunities. Business owners and entrepreneurs want access to global markets. This government is committed to expanding the various opportunities created by free trade agreements. Our track record speaks for itself.
Since 2006, Canada has concluded new free trade deals with nine countries: Colombia, Jordan and Peru; the European Trade Association member states of Iceland, Liechtenstein, Norway and Switzerland; and, most recently, with Honduras and, of course, Panama We are negotiating many more, including with the European Union.
A deal with the European Union would represent the most significant Canadian trade initiative since the North American Free Trade Agreement and could potentially boost our bilateral trade with this important partner by 20%. It could also provide $12 billion annually to boost the Canadian economy, which is equivalent to a $1,000 increase to the average Canadian family income or almost 80,000 new jobs.
Canadian companies recognize the many benefits to workers and businesses that a Canada–E.U. trade deal would bring.
We are also intensifying our focus on Asia. During the Prime Minister's visit to China in February 2012, leaders announced that Canada and China would proceed to exploratory discussions on deepening trade and economic relations on the completion of the bilateral economic study. Also, just this past March, the Prime Minister announced and launched the negotiations toward a free trade agreement with Japan and the start of exploratory discussions with Thailand. This week, the possible participation in the trans-Pacific partnership negotiations was also announced.
This free trade agreement would also better enable Canadian companies to participate in large projects.
For all those reasons, the proposed Canada–Panama agreement is a good deal. The agreement will support more Canadian jobs by enhancing our ability to export more goods and services to this market. This is why the implementation of a free trade agreement is a priority for this government.
I ask all hon. members to support Bill C-24, the legislation to implement the Canada–Panama free trade agreement and the parallel labour co-operation and environment agreements.