Madam Speaker, it is nice to get back to work again and stay focused on additional issues after we unfortunately passed Bill C-38, the budget bill, last night. Today we have to move on to a variety of other issues, whether we like it or not, and I am happy to add a few comments on the Canada-Panama free trade agreement.
The Liberal Party has been in support of this agreement for some time and, in spite of some concerns, which I will outline, we will continue to be in support of free and fair trade.
One of the key concerns with respect to expanding our trading relationship with Panama has been evident with respect to the government's free trade agenda. We must not put aside our domestic practices within the countries with which we are seeking new trade agreements.
As we negotiate free trade agreements, there are some very important issues that we need to keep in mind. Whether they are issues of money laundering, tax evasion, human trafficking or issues of human rights, areas in which we could use our leverage on the agreement to make some improvements in the quality of life for people in those countries with which we are making agreements, but also to have some clear benefits over and above just the dollars and cents factor for Canada.
An additional point that should be kept in mind and one that the government would do well to carefully consider was raised by Jim Stanford of the Canadian Auto Workers, someone we see often on the Hill when we are dealing with issues in the auto industry, who recently spoke at the international trade committee. Part of his presentation outlined the following with respect to the lack of apparent benefits, as far as he was concerned, that was being derived by the free trade agreement.
Mr. Stanford pointed out a variety of things and the five longest standing trade agreements were some of the things he talked about. He referred to the trade agreement with the United States, Mexico, Israel, Chile and Costa Rica. Canada's exports to them grew more slowly than our exports to our non-free trade partners, while our imports surged must faster than with the rest of the world.
Mr. Stanford went on to say that if the policy goal was to boost exports and strengthen the trade balance, then signing free trade deals would be exactly the wrong thing to do in his opinion.
With Colombia there are outstanding issues related to labour and human rights issues that I referred to earlier. The same concerns apply to Jordan as they do to Panama.
With respect to Panama, one of the outstanding concerns has been the issue of tax havens and issues relating to money laundering, which has been talked about a lot in this House over the several years that we have been discussing and debating this particular agreement, as with other agreements.
I will put this concern into context. The Parliamentary Secretary to the Minister of International Trade, in response to issues relating to the Canada-Jordan FTA, in violation of human and labour rights and Canada's response, told this House:
...what both hon. members fail to realize is the entire issue of extraterritoriality. There are certain things we can do when negotiating with another country and certain things we cannot do because they are beyond our sphere of influence.
Even if it is beyond our sphere of influence, we should always push right to the wall to get clear benefits for Canada. Whether we are talking about human rights, money laundering or other issues pertaining to that, if we can use our leverage, we should be doing it far more forcefully.
Clearly there are benefits on both sides but there are far more benefits in my mind to Panama. Therefore, we should be using that opportunity with these agreements to get everything possible we can get out of it, not only for our country but also for the people who live in the other areas of the world that are affected by many of these agreements.
The question that must be raised is that where there are concerns and issues that would not be acceptable to Canada, we need to know what mechanisms within the agreement should be in place with countries where issues of concern are found to exist and persist. It is a question of signing an agreement and then raising it every once in a while, issues, again, about human rights or money laundering, but being able to do absolutely nothing about it and having them ignore the concerns we are raising.
What kind of strength do we have with these agreements? How many years would we allow all of this to go on before deciding to cancel an agreement because of clear violations of the rules?
Canada is earmarked out there when it comes to doing things right, or at least it used to be. We were well respected in the world because we would follow the agreement, we would ensure the agreements were fair on all sides and we would be respectful of the countries that were trying to grow, better themselves and make a better life for their people. Often we do not use enough of our country's strength to insist that there should be some improvements to areas that we have concerns about.
An example would be the Panamanian situation. When federal government officials testified before the international trade committee earlier last fall, they could not adequately address the money laundering and tax haven issues relating to Panama.
In December 2010, Panama signed a tax information exchange agreement with the United States, not with Canada. In testimony before the U.S. house ways and means subcommittee on trade on March 30, 2011, the research director of Public Citizen's Global Trade Watch also raised concerns with respect to the money laundering issue in the wake of the agreement between the U.S. and Panama. He said:
Panama promised for eight years to sign a Tax Information Exchange Agreement.... Yet when it finally signed a TIEA with the Obama administration in November 2010, the agreement did not require Panama to automatically exchange information with U.S. authorities about tax dodgers, money launderers and drug traffickers.
Those areas have weaknesses and, because of everybody's interest in signing these agreements, they often take one particular part of the puzzle and accept it and continue to work on the tax information issue or whatever other avenue to ensure that we stop money laundering and drug trafficking. We need to be stronger on these issues and use them as leverage.
In the previous Parliament, concerns were raised with respect to Panama being a tax haven in which instances of tax evasion and money laundering were found. Concerns were raised as to whether a free trade agreement should be proceeded with prior to a clear tax information exchange between Canada and Panama being in place.
We would be far better off to keep going slowly with this process until we have what we want, which is both of those agreements when it comes to sharing the tax. We would then be eliminating opportunities for money laundering, tax havens and other issues rather than signing the agreement and going forward in good faith, which is clearly what the government wants to do and what our party has decided to do as well. As of yet there is still no tax treaty or tax information exchange agreement signed between Canada and Panama nor an intention that it will be done.
The history, as we understand it, is as follows. Panama has asked that Canada enter into a more comprehensive double taxation treaty. Canada refused, asking instead for a more limited TIEA. Panama, which at that time had only entered into double taxation treaties, insisted on a double taxation treaty. Canada has not yet responded to this second request.
I will go back to who is in charge. I think the benefits to Panama are far better than the benefits to Canada so why would we turn around and continue to water down our leverage?
Members should note that all of the DTA's include tax information and exchange obligations between signatory countries based on article 26 of the OECD model convention. As of November 2010, Canada was party to DTA's with 87 countries, with 8 more signed but not yet in effect. As of November 5, 2010, Canada had signed 9 TIEA's, none of which are in effect.
In testimony before the international trade committee on September 29, reference was made to correspondence between Canada and Panama in which the latter was asked whether Panama had responded to the concerns expressed by Canada on the tax haven issue. According to DFAIT officials, no such response had been received.
There are a variety of concerns as we move forward. I know the government is anxious to move this forward but I hope we put in what is best for Canada first and Panama second, not Panama first and Canada second.