House of Commons Hansard #136 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was panama.


Canada-Panama Economic Growth and Prosperity ActGovernment Orders

4:55 p.m.


Gerald Keddy Conservative South Shore—St. Margaret's, NS

Mr. Speaker, the hon. member cannot have it both ways. He talks about money laundering and got his information from Google. We can find just about any information we want on Google but we cannot read part of it and ignore the rest. We need to read the entire thing. If he had read the entire thing, he would have found out that Panama is no longer on the OECD grey list. It has been removed from the list because its tax agreements with other countries have improved and its transparency has improved. It is a country that is making improvements, is moving into the rest of the world and is off the money laundering list and what does the NDP want to do that country? It wants to punish it.

Canada-Panama Economic Growth and Prosperity ActGovernment Orders

4:55 p.m.


Pierre Nantel NDP Longueuil—Pierre-Boucher, QC

Mr. Speaker, it is funny, in fact, because they are obviously making fun of me. They are saying that I get my information from Google.

We also have people who are well-informed and work hard. We have researchers and members who are very conversant with this subject. We have no trouble finding nonsense on Google, as I know some of his colleagues do among themselves.

We must not believe everything we see on Google. He is looking at me, but let him look at me; he may as well do it and may as well make fun of me. Thank you.

Canada-Panama Economic Growth and Prosperity ActGovernment Orders

4:55 p.m.


The Acting Speaker Conservative Barry Devolin

The time for questions and comments has expired. I would remind all hon. members to direct their comments through the Chair rather than to their colleagues.

The hon. member has 10 seconds remaining to complete his answer.

Canada-Panama Economic Growth and Prosperity ActGovernment Orders

4:55 p.m.


Pierre Nantel NDP Longueuil—Pierre-Boucher, QC

Fine, Mr. Speaker. Thank you.

In fact, Panama has made efforts to meet the criteria so it would no longer be on the grey list, but the fact remains that it is refusing to sign a tax information exchange agreement. I think we are entitled to wonder about that, and they are not entitled to shove it down our throats.

Canada-Panama Economic Growth and Prosperity ActGovernment Orders

4:55 p.m.

South Shore—St. Margaret's Nova Scotia


Gerald Keddy ConservativeParliamentary Secretary to the Minister of International Trade

Mr. Speaker, we have had copious and lengthy debate on the bill already but we will continue to debate the bill because it is an important bill for Canadian businesses, for Canadian industry, for Canadian workers and, quite frankly, for Panama.

The biggest issue for me when we look at these free trade agreements, regardless of which countries around the world we are entering into an agreement with, is that we are already trading with Panama. The NDP want us to spell it out that somehow this is a rogue nation with which no one is trading. When the Panama Canal is finished, 5% of all the containers on the world's oceans will go through the Panama Canal. That is an extremely important nation in our hemisphere. We are trading with it already. How can it hurt to put a rules based system in place so we know and can expect how our trading relationship will unfold?

I find it extremely troublesome that all the NDP members can do is find a reason not to support something, instead of looking for all of the good parts and the positive parts of this agreement.

As I said when I stood up, I am pleased to rise to speak to Bill C-24, the legislation to implement the Canada-Panama free trade agreement. I will spend a few moments today talking about how this agreement fits into Canada's engagement in the Americas.

Five years ago, while on a week-long tour of the Americas that included Bogota, Colombia and stops in Barbados and Haiti, the Prime Minister declared that reviving and expanding Canada's political and economic engagement in the Americas would be a major foreign policy goal of our government.

Last summer, the Prime Minister and the Minister of International Trade made a highly successful visit to Brazil, Colombia, Costa Rica and Honduras. During that visit, the Prime Minister made it clear that Canada was an active player in the hemisphere, strengthening economic ties with its partners, improving market access and promoting security, all things that I would think every member in this House could support.

Our commitment to the Americas is evident through the 175 ministerial visits to Latin America since we formed government in 2006, and the 20 countries in the Americas with which we have signed or are pursuing free trade agreements.

Canada is committed to playing an even larger role in the Americas, and doing so for the long term. Part of this commitment involves fostering closer economic ties with regional partners to promote trade, investment and prosperity across the hemisphere.

The Canada-Panama free trade agreement will support job creation and economic growth in Canada and Panama, which, in turn, will contribute to advancing security and democratic governance in the region. It is an important part of our job creating free trade plan.

Our government is in the midst of the most ambitious free trade plan in Canada's history. Our government understands that one in five jobs and 60% of our GDP depends upon trade. Jobs and prosperity in communities across Canada depend on the opportunities that free trade agreements, like the Canada-Panama economic growth and prosperity act, create.

Since 2006, we have concluded free trade agreements with nine countries and we are in negotiations with many more. That includes negotiations with the European Union and India. Just recently, the Prime Minister and Prime Minister Noda of Japan announced the launch of negotiations toward a free trade agreement that will deepen the trade and investment ties between Canada and Japan.

Free trade agreements help our businesses compete in global markets and, when our business succeed in global markets, Canadians succeed.

I will take a moment to talk about the opportunities in Panama for Canadian business, for Canadians and s for Panamanians in Canada. Panama is often referred to as the gateway to Latin America and its critical role in connecting the Latin American region also enhances the importance of a Canada-Panama free trade agreement.

Panama has long been considered a logistic centre and international connection point in the Latin American region. Over the years, Panama has evolved to become the pre-eminent air transportation hub and is now ranked as having the highest air connectivity in the Americas by the International Air Transport Association. Panama is also a central point for goods travelling to Latin America, a nexus for international trade and a strategic hub for the region.

According to Panamanian estimates, 5% of the world's trade passed through the Panama Canal in 2010. The Panamanian government's large investment to expand the Panama Canal means that Panama is positioned to play an increasingly important role in the Latin American region.

Panama's unique and influential position in the global trading system is significant. It represents an entry point for the broader region thereby enabling access to neighbouring markets. A free trade agreement with this strategically positioned partner would serve as a gateway for an increased Canadian commercial presence in both the Caribbean and Latin America.

As our results clearly demonstrate, Canada has provided global leadership throughout these difficult economic times by encouraging free trade and open markets. Our commitment to free trade is key to Canada's economic strength.

We will continue to open doors for Canadian companies in the Americas and around the world. We are enhancing trade and investment in the Americas by encouraging deeper commercial relationships and engaging in free trade negotiations, and with great success.

For example, our free trade agreements with Peru and Colombia are now enforced, and Canadian companies are taking advantage of the new opportunities these agreements have produced.

In August 2011, Canada and Honduras announced the conclusion of negotiations toward a Canada-Honduras Free Trade Agreement. The same month, Canada also announced that it would work with Costa Rica to modernize and broaden the scope of the Canada-Costa Rica Free Trade Agreement. An updated free trade agreement with Costa Rica stands to lower remaining tariffs on goods and would remove trade barriers in a broad range of sectors, creating new potential opportunities for Canadian construction, manufacturing and agriculture industries.

In April 2012, Canada and Chile signed an agreement to amend the Canada-Chile Free Trade Agreement, including the addition of a financial services chapter, which will ensure that Canadian financial institutions enjoy preferential access to the Chilean market.

We are not stopping there. As was announced last year, Canada is also engaged in exploratory discussions with Mercosur to enhance our trade relationship with this regional bloc, which includes Argentina, Brazil, Paraguay and Uruguay.

The trade agreements that Canada has negotiated or is looking to negotiate give our businesses an additional competitive edge that will help them succeed in these regional markets. That is why I am asking members to pass Bill C-24, implementing the Canada free trade agreement.

Our commitment to further liberalize trade and investment is a key component to our engagement in the Americas. Through the lowering of tariffs and the promotion of investment and commercial relationships, our government is supporting the efforts of Canadian businesses by helping them establish a strong presence in these foreign markets.

I am pleased to say that our businesses have seized the opportunity. Canadian firms have been forging commercial ties in the region for decades. Today we can find Canadian businesses, goods, services, expertise and investment dollars at work throughout Latin America and the Caribbean. This is a result of diverse opportunities and strong commercial ties throughout the region that are facilitated through free trade agreements. Many products manufactured in the region are using Canadian inputs before being sold domestically across Latin America and around the world.

I would repeat, once again, that I ask my Liberal and NDP colleagues here in the House to put partisan politics aside and look at what is to be gained here. This is not a complicated trade agreement. For example, there is a small company that makes oil and gas equipment in my riding of South Shore—St. Margaret's, in Nova Scotia. They have another company in Mexico. Mexico has no tariff for goods going into Panama. However, we pay an 18% tariff. The product that the company is making today and selling in Panama is being made in Mexico so it can avoid the 18% tariff.

If we bring down the tariff walls, there are advantages there for Canadian businesses and for Panamanian businesses. Everybody gains. The hemisphere gains. Canada is a sought-after partner in the Americas.

We need to take advantage of the position we are in, the hard work that our government and other—

Canada-Panama Economic Growth and Prosperity ActGovernment Orders

5:10 p.m.


The Acting Speaker Conservative Bruce Stanton

Questions and comments, the hon. member for Vaudreuil-Soulanges.

Canada-Panama Economic Growth and Prosperity ActGovernment Orders

5:10 p.m.


Jamie Nicholls NDP Vaudreuil—Soulanges, QC

Mr. Speaker, I thank my colleague across the way for his speech. We agree on one thing. Rules-based trade is a great place to start in these agreements. Once we are working within the rules, things can improve.

Trade can bring improvement, not only to Canada, but also to impoverished peoples worldwide. That is, when we are trading on the basis of our economic strength: the high-skill, value-added, high-wage sectors. If we are just exporting raw resources, then it is not such an advantage for the people of that nation.

However, I want to get back to rules. The member mentioned that we have been blocking the legislation, and there are reasons for that. We asked them to sign a tax information exchange agreement. We asked them to put this into the free trade agreement. They refused.

My question is, why has there been the exclusion of this simple rule?

Canada-Panama Economic Growth and Prosperity ActGovernment Orders

5:10 p.m.


Gerald Keddy Conservative South Shore—St. Margaret's, NS

Mr. Speaker, it is not an exclusion of a simple rule. The reality is that Panama has made great strides in suppressing money laundering. It is off of the OECD “grey list”. It is moving in the direction that we want to move.

We have a double taxation agreement with Colombia already. For this trade agreement, that is what is required on our side. We believe the Colombians are living up to that.

The advantages of trade with the Colombians, the advantages of trading with somebody in our own hemisphere and in our time zone, are huge. We are a sought-after partner in Central America, in South America, in the southern hemisphere.

I can tell members that we need to take advantage of this, because the opportunity is now.

Canada-Panama Economic Growth and Prosperity ActGovernment Orders

5:10 p.m.

Newmarket—Aurora Ontario


Lois Brown ConservativeParliamentary Secretary to the Minister of International Cooperation

Mr. Speaker, students of economics always look at the issues of absolute and comparative advantage.

We know that Panama has many opportunities in absolute advantage that Canada does not have. The last time I looked, it was impossible for us to grow bananas here, for instance.

When I look at the opportunities for trade for a country like Panama with Canada, I know there are going to be products in which they have comparative advantage over Canada. We know when countries enter into relationships where comparative advantage is looked at, there are opportunities there for Panama to trade with Canada.

When we look at the lifestyle or we look at where Panama is currently, we know there are people who are living in poverty. However, we know that trade can open doors for job opportunities.

I wonder whether the parliamentary secretary would comment on what those opportunities are for Panamanian people to grow opportunities and jobs and build a new lifestyle.

Canada-Panama Economic Growth and Prosperity ActGovernment Orders

5:10 p.m.


Gerald Keddy Conservative South Shore—St. Margaret's, NS

Mr. Speaker, I think there are tremendous opportunities in Panama for Panamanians. There are also tremendous opportunities in Panama for Canadian businesses and for Canadians.

The reality is that Panama is both the gateway to the Caribbean and the gateway to Latin America. It is the joining factor between the Atlantic and the Pacific. It is in a very enviable position in Central America. Nothing will change that. That is geography. Panama has a huge geographical advantage over its neighbours, and the only canal that joins the Atlantic Ocean and the Pacific Ocean.

The hon. member spoke about the complementary aspect of Canadian trade with Panama. There is a huge complementary aspect.

Last year, our exports to Panama totalled $111 million. That is small on a world scale, but that is extremely important to Canadian businesses and extremely important to Panama. We trade machinery, semi-precious stones and metals, meat, aerospace products, mineral fuels and oil, vegetables—primarily lentils, peas and frozen potato products—electrical and electronic equipment, paper and paperboard and pharmaceuticals.

There is a myriad of issues that we trade with Panama and a number of issues and expertise that we trade with Panama, with great opportunities and procurement in the twinning of the Panama Canal, the building of the copper mine, the copper-gold deposit in northern Panama. The opportunities are endless.

Canada-Panama Economic Growth and Prosperity ActGovernment Orders

June 7th, 2012 / 5:15 p.m.


Isabelle Morin NDP Notre-Dame-de-Grâce—Lachine, QC

Mr. Speaker, I rise today to speak to 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. The title of this bill, which suggests this legislation will provide excellent economic spinoffs for our country and for the country with which the agreement was reached, is somewhat misleading. Over the course of my speech, hon. members will come to understand what I mean by that. They will also understand that, for obvious reasons, my party and I are against this bill.

Let us begin with some background. Bill C-24 came out of the 2010 negotiations between the Government of Canada and Panama. At the time, Panama was still considered to be a tax haven under OECD tax haven criteria. Does wanting to conclude a free trade agreement with such a country not strike my colleagues as questionable? Let us not forget the problems related to tax havens.

Each year the Government of Canada loses $9 billion in taxes to tax havens. Obviously, this $9 billion is not being spent on programs and services for Canadians. By signing agreements with countries like Panama, the government is indirectly encouraging the rich and corporations to avoid paying their fair share to Canadian society, which means Canadians lose money. Clearly, that forces the middle class and the poor to make up the difference. Where is the logic in this?

The Prime Minister is also making cuts to several programs, organizations and services, such as Rights and Democracy, employment insurance, old age security, the experimental lakes program, the Canadian fisheries sector, and the list goes on.

An application for a lousy $12,000 to install a ramp for the disabled was denied recently in my riding on the pretext that the government has to tighten its belt and make cuts. The application was rejected in spite of the fact that it met all the eligibility criteria set by the minister. This application was denied at a time when $9 billion is being lost to tax havens. Again, where is the logic in that?

Evidently, cuts are often made to services that benefit the middle class and the poor. The government justifies that by saying that there is not enough money in its coffers, when on numerous occasions it could have replenished the government coffers, as is currently the case.

Of course, the government will say that Panama no longer meets the criteria because it signed 12 tax information exchange agreements with France. That is what the minister of state just told us. I would like to remind members, however, that that is the minimum number of agreements to get through the crisis. So, evidently, the government is expecting the minimum. What kind of logic is this?

This is not evidence of the Panamanian government's genuine intention to resolve these issues because these problems are due to the fact that Panama is a tax haven. All this demonstrates is Panama's desire to no longer be labelled a tax haven, because otherwise I would imagine that Panama would take a number of other steps to ensure that it in no way meets the four criteria for tax havens.

Furthermore, the New Democrats and many people in my riding of Notre-Dame-de-Grâce—Lachine and that of my colleague from Chicoutimi—Le Fjord—who was unable to speak because closure was invoked by this government—as well as people in the 308 ridings in our country, cannot believe that Canada would enter into a free trade agreement with a country that refuses to sign a tax information exchange agreement, given Panama's reputation.

The government believes that the double taxation convention is enough. Let us be serious. Given that Panama engages in many illegal financial activities such as money laundering, it is quite naive to be satisfied with a convention that requires Panama to disclose only its legitimate revenues. Come on.

It is as though the government were unaware of the importance of money laundering to the country's business and unaware that Panama's tax haven policies make it a place that cannot be ignored.

As Todd Tucker said in November 2010, when he appeared before the committee studying this matter, “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.”

The government does not seem to realize that by doing business with Panama, it is encouraging this whole industry. That is what the Conservatives want. Well, no. They are muzzling us in order to hide the truth from Canadians and to make sure they get this agreement, no matter what the consequences. They are invoking closure to ensure that the opposition does not say anything embarrassing.

The government cannot remain indifferent to these facts, for as Françoise Héritier said, “Evil begins with indifference and resignation.” We in the NDP still believe that fair trade is possible and that we do not have to remain indifferent to the challenges that exist in other countries in order to create economic agreements that are sound and beneficial for all parties involved.

Another key point in this bill that prevents the NDP from supporting it is the notion of respect for workers' rights. There is absolutely nothing in this agreement to protect the fundamental rights of workers. There is nothing to ensure that these rights will not be denied in the future, as they were in 2010, when collecting mandatory union dues was prohibited, when the boss could fire striking employees, when roadblocks became illegal and when the police were protected from all criminal charges, legitimate or not. There is no protection against this.

The Conservatives seem to think that we can enter into an agreement with Panama and everything will magically work itself out, unless the Conservatives do not like workers' rights and are not really interested in them. Who knows. Clearly, I could talk about other questionable aspects, but there is not enough time.

At least I had time to speak. Many of my colleagues have not been able to represent their constituents because of the Conservatives' time allocation and closure motion.

I repeat: the NDP believes that it is possible, and desirable, for an effective trade strategy to make room for social justice, public-sector social programs and the gradual elimination of poverty.

Canada-Panama Economic Growth and Prosperity ActGovernment Orders

5:20 p.m.

South Shore—St. Margaret's Nova Scotia


Gerald Keddy ConservativeParliamentary Secretary to the Minister of International Trade

Mr. Speaker, I have to ask the same question to the hon. member that I asked to the previous speaker from the NDP. Hopefully, she will give a different answer.

The question is simple. We have negotiated this agreement with Panama based on the same template that we used in negotiating the Colombia and Jordan agreements. The agreements are practically identical, yet the NDP picks and chooses to support Jordan, apparently. We have not seen it support Jordan yet, but we will find out.

However, it does not choose to support Panama. It is in our own hemisphere. It is an area that certainly needs a hand up, an area that needs a good, fair and honest trading partner. My question for the hon. member is—and I do not want the nonsense about money laundering, because Panama is no longer on the OECD grey list—why support Jordan and not Panama?

Canada-Panama Economic Growth and Prosperity ActGovernment Orders

5:20 p.m.


Isabelle Morin NDP Notre-Dame-de-Grâce—Lachine, QC

Mr. Speaker, as I took the time to mention in my speech, we obviously do not have the same expectations, because we think that the minimum is not enough. For me, the minimum is not enough. To tell us that Panama met the 10 minimum criteria is not enough.

I would also like to take the time to say that money laundering occurs in Panama, that Panama is a tax haven and that it has a law against protests. It also does not respect workers' rights.

As a result of all these things, we believe that we need to discuss this now, while we are debating this bill. Unfortunately, the Conservatives imposed a 25th gag order on us today. Two gag orders today; it is rather harsh. We believe that we need to continue to discuss this and that there are essential things that need to be added to protect the rights of Panamanian workers before we sign this agreement.

Canada-Panama Economic Growth and Prosperity ActGovernment Orders

5:20 p.m.


Tyrone Benskin NDP Jeanne-Le Ber, QC

Mr. Speaker, we hear the government talk about the fact that it wants to export Canadian values on top of that. In Canada we work to respect the rights of workers, including the rights of workers to be protected, to work in safety and to earn a wage on which they can raise their families. Do we not have a responsibility to make sure that the agreements we enter into are mirrored in that way in the countries that we have these agreements with?

I wonder if my hon. colleague could comment on that.

Canada-Panama Economic Growth and Prosperity ActGovernment Orders

5:25 p.m.


Isabelle Morin NDP Notre-Dame-de-Grâce—Lachine, QC

Mr. Speaker, clearly, it is important that we export our values to Panama. The NDP is very aware of workers' rights. On this side of the House, we believe that it is essential to discuss workers' rights before signing any type of agreement. Other concerns reflect our values—certainly not those of the government but those of the NDP—including sustainable development in Panama, responsible investments, the protection of workers' rights, and collective bargaining. These are all things that are important to us, and we want to see them reflected in this agreement before we sign anything.

If the government would listen to us instead of imposing gag orders, we could come to an agreement, but things are definitely more difficult when the government silences us and we are told that, in any case, the government will refuse all of our proposals without even checking to see if they are worthwhile.

Canada-Panama Economic Growth and Prosperity ActGovernment Orders

5:25 p.m.


The Acting Speaker Conservative Bruce Stanton

Before I recognize the hon. member for London West, I will let him know that I will need to interrupt him at 5:30, this being the end of the time allocated for government orders.

The hon. member for London West.

Canada-Panama Economic Growth and Prosperity ActGovernment Orders

5:25 p.m.


Ed Holder Conservative London West, ON

Mr. Speaker, it is my privilege today to speak on behalf of the Canada–Panama free trade agreement.

After hearing some five dozen-plus speeches on this that have gone on in the House during this Parliament and some five dozen-plus speeches in the last Parliament, I am reminded of something that my Cape Breton mother once said about politicians. She said, “After it is all said and done, there is a lot more said than done”.

I respect the fact that those members who are currently on the trade committee and those who are making comments did not sit on the trade committee in the last Parliament, so they did not have the experience from the last Parliament that they are garnering this time.

However, having sat on the trade committee since I was elected almost four years ago, and now going through some 125 to 130 speeches that we have heard on free trade with Panama, it is clear to me that there is nothing that is brand new. There is not one thing that is new that we have not heard time and time again. For the benefit of newer members, we have heard these issues over many years and we would have had a free trade agreement in place had we not had an election forced upon us back in May of last year. That agreement would have been put in place. It would have been better for Canada and it certainly would have been better for Panama.

As my colleague, the illustrious Parliamentary Secretary to the Minister of International Trade, said so eloquently, we already do trade with Panama. What we are now saying is that we are looking to put in place a rules-based system that would ensure that in the event of disputes, there would be a mechanism in place to more quickly resolve issues relating to trade.

We have also issues relating to labour rights, and we have an ILO-approved standard by which we are asking Panama to increase its standards. At the same time, Canada has that provision and has the ability to work with Panama to ensure that it is put in place.

If there is a reality that I have seen in my time in trade, it is clearly this: if we want to engage with and promote better conduct in countries around the world, we do not do that by shunning them. We do that by engaging them. We do that by trying to increase their standard of living. We do that by trying to increase trade with those countries. It betters Canada, absolutely, but it betters the other country with which we do business. That is the honourable thing to do. It is the right thing to do for Panama.

I say to members across both sides of this House that if we really have that humanity about trying to raise the level of human rights, trying to raise the level of business, trying to raise the level of people so that they are in a position where they can improve their lifestyles, we do that in part by trade. To members opposite who have said they support trade, I would ask them then to please support trade. Again, in my four years I have not yet seen members in the official opposition support one free trade deal. It would be great if they could get behind Panama to improve the standard of living for those people and to improve job opportunities for Canada, which has a huge impact.

I will leave it there at this point. I hope I will have an opportunity to address this Parliament again, but I sincerely ask all members of this House for their thoughtful consideration as we work towards Panama. We could do a great thing together.

Canada-Panama Economic Growth and Prosperity ActGovernment Orders

5:30 p.m.


The Acting Speaker Conservative Bruce Stanton

The hon. member for London West will have six minutes remaining for his speech and the usual five minutes for questions and comments when the House next returns to debate on the question.

The House resumed from April 25 consideration of the motion.

Study on income inequalityPrivate Members' Business

5:30 p.m.


John McKay Liberal Scarborough—Guildwood, ON

Mr. Speaker, it is a great honour to rise today in support of Motion No. 315 by the member for Kings—Hants, in which he quite properly raises the issue of income inequality, a growing inequality in this country and others in the OECD.

This country is blessed to have some very able civil servants, none more able than Mark Carney, the Governor of the Bank of Canada. When he was asked about what he thought about the Occupy Wall Street movement, he did not lapse into bankerspeak. He did not lapse into the mumbo-jumbo that passes for rarefied conversation among bankers and to which very few are admitted as privileged conversationalists. Rather, he said what he thought. He said that the movement actually has a point that there is growing inequality among people, particularly in the U.S.

I do not particularly care to isolate or point to the United States, because what is true there is also true here, but the U.S. operates on a much larger scale than we do. Indeed, the Occupy Wall Street movement pointed to an income inequality that is far more exaggerated there, I would say, than here. Some of the executives on Wall Street have incomes and wealth comparable to the GDPs of small countries, but with a dubious contribution to actual wealth generation. In many instances, it is just moving money around in various circles with no corollary whereby actual wealth is increased.

In Canada we are developing a similar problem. Article after article talks about the difference between Main Street and Bay Street, but both the left and the right of the political spectrum are aware of the problem. I do not often quote David Frum, but he had the issue quite well nailed when he stated:

Equality in itself never can be or should be a conservative goal. But inequality taken to extremes can overwhelm conservative ideals of self-reliance, limited government and national unity. It can delegitimize commerce and business and invite destructive protectionism and overregulation. Inequality, in short, is a conservative issue too.

For those who think that tax cuts or market deregulation are the be-all and end-all both in industrial policy and in addressing the issues of income inequality, I would encourage them to read Mr. Frum's thoughts in his article on this matter. Those, of course, on the Liberal side see social equality as a goal in and of itself. Regardless of where one finds oneself on the political spectrum, if Mark Carney says we have a problem, then we have a problem.

Lack of opportunity leads to a sense of hopelessness and a withdrawal from the basic grease that makes society function. If it can be observed that people do not participate in NGOs, charities or various social functions, et cetera—and that has been observed in the literature—then the core of our social fabric starts to fray.

This, in turn, leads to some forms of anti-social behaviour, not necessarily among those who do not participate; increased criminality, which is a draw on the resources of the state for security; and other forms of cost. In other words, costs go up, cohesion goes down and frustration runs rampant.

The policy-thinkers on both left and right recognize the importance of designing policies that respond to these issues. To carry on with my theme of our being blessed with very able civil servants, I will quote the deputy governor of the Bank of Canada, Tiff Macklem:

Markets work better than anything else. They have proven over time to be the best generator of prosperity. But markets need to be guided by sound policy frameworks with clear rules that must be enforced with consistency and transparency. Effective inflation control, combined with well-regulated financial systems, are critical ingredients to sustained economic growth and shared prosperity.

The forces of globalization and technological change that have propelled global growth and driven rising inequality within many countries are not likely to abate. We need to harness these sources of growth while increasing opportunity for all our citizens.

That is not exactly what one would expect from a deputy governor of the Bank of Canada. It is an insight into the fact that not all of the people can hoard the wealth.

I would point to, as well, this month's Atlantic Monthly, which has a discussion about the issues of capital ratios. I know that will put a lot of people to sleep, and my colleague from Kings—Hants is snoring as we speak.

The issue is: In the great recession, what precipitated that? Was it capital ratios or was it incentives? The author argues in the article that we had the wrong incentives, particularly in the United States, but not so much here. However, we had the wrong incentives.

The capital ratios, how much capital we have to keep compared to how much money we are lending, were not all that different from historical norms. However, we had the wrong incentives.

The wrong incentives were essentially greed incentives. People who are brokers have to do the churn because their income is based upon the churn. People who are CEOs have to make that quarterly dividend or they are out the door. The market has a responsibility and so also do governments.

It is not as if the governments, and by that I mean both Liberal and Conservative governments, have been unaware of this issue. I remember when I was in finance, we worked on the working income tax benefit. It was probably one of the most intellectually intriguing but also intellectually challenging issues. I remember sitting around the finance table, trying to grapple with this as we would try to move it into the budget.

I am pleased to see that in fact the momentum of that initiative has gone forward with the current government. The universal child tax benefit was another issue dealt with. Again, it is an attempt to recognize not only the benefit of bringing children into the world and the costs of raising those children but also the social inequality that comes from parenting. The Canadian child tax benefit, as well, is a less subtle way of dealing with that issue.

As I finish, I want to urge all members to support the hon. member for Kings—Hants in his quest or attempt to address issues of income inequality. I think it is a worthy motion. I think it is a thoughtful motion. I think it would be worthwhile to refer it to the finance committee and report it back to this House.

Study on income inequalityPrivate Members' Business

5:40 p.m.


Jim Hillyer Conservative Lethbridge, AB

Mr. Speaker, there are two general reasons to reject the Liberal motion to study various income equality and tax issues. The more obvious fact is that there is content with which we fundamentally disagree. But there are a few points with which we do agree, so why should we reject the motion altogether? Is that not like throwing out the baby with the bathwater? No. We are already taking action on the sensible parts of the motion. We have a nice clean baby and the motion wants to throw the baby back into the dirty bathwater.

The finance committee will already be engaging in its annual prebudget consultations this fall, where the member can raise the issues in the motion. The Senate is already engaged in studying and examining the sensible points of the motion. It has been studying social inclusion and cohesion in Canada since November. So the issues reflected in today's motion are already being or will be examined.

When I conduct prebudget consultations in my riding, and whenever I meet with constituents in general, I find that there is one thing that frustrates Canadians. If there is one thing they want us to cut back on, it is government waste. They want the government to quit wasting money and quit wasting time. With that in mind, I am confident that the majority of constituents in my riding would not support the establishment of another study to study something that is already being studied.

I do not have a problem with wanting to improve or increase equality for Canadians when it comes to opportunities and prosperity for all. However, we need to take action to get to that point.

We need action. Please do not let me give the House the impression that our commitment to concrete actions based on sound understanding is the only way we differ from the Liberals. Another fundamental issue on which our Conservative government cannot agree with the Liberal Party is the issue of taxation, which is core to today's debate.

In recent years our government has made decisions to reduce taxes, whether it be lowering the GST, lowering business taxes or lowering income taxes and leaving more money in the hands of Canadians to support their families and grow their businesses to create more jobs. The Liberal Party has made it clear that it believes those decisions are the wrong decisions.

Our Conservative government is committed to continue to lower taxes for all Canadians, building on our record of lowering taxes 140 times and saving the average Canadian family more than $3,100 per year in taxes. The Liberal Party has unsuccessfully fought against these measures every step of the way.

The motion talks about looking for tax regimes that would increase per capita GDP, that would increase prosperity for all Canadians. The Liberals want to look for a plan that they have already voted against. The best thing a government can do, the best social program it can provide, is to help create jobs for Canadians.

However, the Liberals have voted against and campaigned against our low tax plan that has helped fuel job creation in Canada. Since we formed government in 2006, Canada has seen more than 1.3 million net new jobs created, the best record in the entire G7.

The motion talks about looking for ways to eliminate disincentives for paid work that may exist as part of a welfare trap. Now I know why the Liberals are rejecting reforms to the employment insurance program that do exactly what they are looking for, because if they accept it, they will have to stop looking for it. It seems that, for the Liberals, looking is better than finding and better than implementing.

Let me remind the House what the motion's sponsor, the Liberal finance critic, once believed and what he said in this very chamber only a few years ago. He was already a Liberal at the time. He said:

Innovative, forward-thinking governments globally have proven that we can build a competitive economy with dramatic reductions to corporate taxes...

We only need to look at the Netherlands, Sweden.... Australia and New Zealand.... They have reformed their tax system to make their economies magnets for capital and talent....

The old globaphobic, socialist, Luddite nonsense that somehow innovative and forward-thinking economic policy is contrary to good social policy is wrong.

I could not agree more with these words. In fact, it seems as if I agree with them more than the member agrees with them.

The member's political evolution is indicative of the entire Liberal Party. The Liberals have turned their back on supporting lower business taxes, a policy they once said they supported. Instead they have chosen to align their policies with the extreme left, anti-business NDP.

“Another study”, they say, “another review”. There is nothing wrong with study and review, but struggling Canadians cannot be helped by the study of potential action alone. What they really need is targeted support and concrete action. We will continue to look for ways to improve the lot of all Canadians, but that will not stop us from acting on those proven principles of freedom, happiness and prosperity.

The NDP and Liberal members will tell us that our tax cuts have only benefited a select few ultra-rich, but the facts clearly show that nothing could be further from the truth. Besides the fact that corporate tax cuts actually do help create jobs, one-third of all the personal income tax relief provided by the Conservative government is going to Canadians with incomes under $42,000, even though they pay less than 15% of all taxes in Canada.

Furthermore, because of measures taken in 2006, more than one million low-income Canadians, including about 380,000 seniors, have been removed from the tax rolls altogether, and we have introduced unique targeted tax relief for low-income Canadians to help them engage in the workforce, by removing financial barriers to work. In other words, we have not only identified disincentives to paid work; we have implemented measures to remove them.

Another noteworthy example is the working income tax benefit, or the WITB. Since it was introduced in 2007, the landmark WITB has made work pay for low-income individuals by combating perverse policies that penalize them for taking a job.

For years under the Liberal government we had situations where taxes, reduced income support and loss of benefits often discouraged individuals receiving social assistance from working, because it would claw back nearly 80% of their working income.

Consider an example of a single, unemployed father living in Nova Scotia with a five-year-old daughter receiving $15,020 in combined federal and provincial benefits. If he were to find a part-time job and earn $15,000 a year, his provincial social assistance benefits would be reduced to about $4,800, and his overall income would now be about $19,810. In other words, he would only gain $4,790 by making the decision to go to work, but now with the WITB refundable tax credit, he would see an extra $1,605, or 34% more due to his decision to go to work.

Overall, over $1 billion in working income tax benefits is provided to individuals and families every year. Clearly, this is a major, positive development, and many diverse third-party organizations like the OECD, TD Economics, Food Banks Canada and the United Way have welcomed it. Even the member for Kings—Hants who sponsored this motion welcomed it, at least at one time. The February 3, 2009, edition of the Hants Journal quotes him as saying:

The Working Income Tax Benefit...has helped many working families...helping make work pay.

Again, this is concrete action that our Conservative government has already taken to support low-income Canadians, rather than simply studying potential ways to help them.

Here are some more examples of concrete Conservative action.

The universal child care benefit provides all families with up to $1,200 a year for each child under the age of six to help cover their child care costs.

We have introduced the child tax credit, improved the Canada child tax benefit and improved the national child benefit supplement.

We recently enhanced the guaranteed income supplement by providing a top-up of more than $600 a year for a single senior and $840 a year for couples.

We have made significant investments in housing, and our Conservative government provides record amounts in social and health transfers for the provinces, and these amounts are not only insured, but they are committed to grow.

I could go on, but in summary, I just want to suggest that our record of action bodes well, and our Conservative government is committed to continuing its record of action.

I would like to end with a quote from an Ottawa Citizen editorial that dealt with the subject matter of this motion:

This isn't a problem we can tax our way out of....

The thing we should be discussing is how to broaden our economy so that more people have a chance of earning a decent living. In the end, that's what Canadians really want, and need.

Study on income inequalityPrivate Members' Business

5:50 p.m.


Isabelle Morin NDP Notre-Dame-de-Grâce—Lachine, QC

Mr. Speaker, today I rise in the House to discuss an issue that is now a primary concern for Canadians: growing income inequality in our country. My Liberal Party colleague moved Motion M-315 to instruct the Standing Committee on Finance to undertake an in-depth study on income inequality in our country. When I hear a speech like the one by the member for Lethbridge, it is clear to me that we need just such a study. Statements such as those we were just subjected to are appalling.

This situation is alarming. A few weeks ago, the United Nations Special Rapporteur on the Right to Food was in Canada and made the following remarks:

What I've seen in Canada is a system that presents barriers for the poor to access nutritious diets and that tolerates increased inequalities between rich and poor, and Aboriginal [and] non-Aboriginal peoples...Canada has redistributed to the rich. Maybe it’s now time for Canada to redistribute to the poor.

He could have added that income inequality between men and women, between generations and between Canadians and newcomers is also growing steadily.

In the wake of the occupy movement, inequality is now ranked as one of Canada's main problems, and the polls show that it has become Canadians' number one concern.

Although the Conservatives cannot stop telling us that they care about Canadians' welfare, the statistics paint quite a different picture.

Although often cited as an example of an open, tolerant and welcoming society, attracting thousands of newcomers every year, Canada lags behind other OECD countries and is ranked 12th out of 17 countries in terms of equality, far behind many European countries.

Canada is experiencing economic growth and yet Canadians' standard of living has not increased. In fact, it has even gone down in the poorest segment of the population. Here are a few statistics: the real income of 60% of Canadians has stagnated over the past 33 years. Sixty percent! At the same time, the richest 1% of Canadians have seen their income climb steadily. They now possess 14% of the nation's wealth, whereas in the 1970s, this figure was only 8%. It has almost doubled. Yet the Conservatives say there is no need for a study.

According to Statistics Canada, there are 61 billionaires in Canada. They alone possess 6% of the private wealth in Canada. Together, those 61 people have twice as much wealth as 17 million Canadians. It is quite absurd. But it does not stop there: whereas the average billionaire got $100,000 richer in 2010, the average Canadian only earned $524 more. Statistics show that the taxes of the wealthiest Canadians have gone down. That is exactly what my colleague wants to discuss, in committee, with experts who will be able to confirm this trend. We represent the public and the issues. We make decisions based on facts, even if the party in power does not like the facts. I think that if a committee were to consider the issue, the facts, and perhaps solutions, might come to light.

From 1980 to 2005, the income of the wealthiest segments of the population has risen by 16.4%, whereas the income of those at the bottom of the ladder has dropped by 20%.

What is even more worrying is the speed at which these gaps are growing. Canada has always been more egalitarian than its American neighbour, and yet now, income inequality is rising twice as fast here as it is in the United States.

The government claims to be building a fair and egalitarian society, but it would rather help the oil companies than help Canadians. The Conservatives are cutting social programs and employment insurance, aggravating the problem instead of tackling it head-on. Thousands of workers will be forced to accept very low-paying jobs, which will only exacerbate the income inequality problem and reinforce the economic disparity between the have and have-not provinces.

Across Europe we are seeing that austerity policies lead to a dead end. But austerity programs are exactly what the government is proposing. Furthermore, the public has clearly rejected these policies in recent elections in a number of countries. We cannot wait for 2015. In some European countries, youth unemployment has reached alarming, huge, never-before-seen proportions. Up to 46% of young people have been hung out to dry.

Is that the kind of society the government wants to leave for our children? Way to go.

Today's new generation carries more debt than the previous generation did at the same age, and job prospects for young people have considerably deteriorated compared to those that existed 10 years ago. Today, a student finishes school with $30,000 in debt. This means that a couple starts their new life together with $60,000 in debt. How is it possible to start a family with $60,000 in debt? My parents did not have $60,000 in debt when they finished their schooling. They were able to buy a little house in the suburbs and have a family life. When we were young, my sisters and I would play in the yard and have a lot of fun.

I am a member of Parliament. I have been fortunate in life and I have come through all right. But I have friends who finished university two years ago and who are still trying to pay their debts. Couples are living in three-bedroom apartments and working very hard to pay their debts. Maybe in 10 years, when they are 37 and it is a bit late to raise children, they will think about putting money aside to buy a house.

That is what is going on right now. These are the kinds of inequalities that are being created.

Today more than ever, having a post-secondary education is key to getting a job. The numbers speak for themselves: the income and wealth gaps between people with a university degree and people who have only a secondary school education continue to grow. That is why the NDP has always come out in favour of higher education being affordable and accessible to everyone. That is why we are talking about education transfers these days.

Canadians are borrowing more and more and going into debt to make ends meet. At this time, Canadians owe more than $1.50 for every dollar of annual income. In these circumstances, more and more Canadian families are having to make sacrifices. When nearly 10% of the population in a developed country like ours has to go to food banks, and three million Canadians are living in poverty, including 600,000 children, that is not acceptable. In this country, 600,000 children are living in poverty. And yet we have a Conservative member telling us that there is no inequality. We have a special rapporteur telling us there is famine in Canada and the Conservatives tell us there is no famine. That is why it is important to have a study, so they can be enlightened a little.

In conclusion, income disparities are not the only kind of inequality. We are talking about inequality in health care, in education and in access to food. People cannot even eat because the disparities are so great. Amartya Sen, the recipient of a Nobel Prize in economics, called this “capabilities”: being able to do things like read, write, choose where to live, eat properly and enjoy good health.

By doing nothing here in Canada, we are widening the gulf in this regard and telling certain people, telling the 61 billionaires in this country, that they are entitled to all of that. But we are telling the others they were not born in the right place, they were not born into the right family, and they have to stay the way they are: they will have to eat poorly and they will get less health care and fewer educational opportunities.

To summarize, there are income inequalities between men and women. Women have always been poorer than men, and this means that a more egalitarian society will improve the welfare of women more, proportionally speaking. The same is true for young people. And yet here we are, leaving the most enormous environmental, economic and social debt to our future generations, while we continue to widen that gulf.

I will close by talking about the occupy movement that we see everywhere. I think that society is starting to wake up and I am quite pleased. The purpose of the occupy movement, which began a little over a year ago, was to criticize the fact that there are people in our societies who have a great deal of wealth. The question is, what do they do with that money? I, personally, earn a good salary. I earn $150,000 a year. I do not necessarily need all that money. To me it is only proper that I should pay a bit more tax than someone who earns $35,000 and yet I hear people say that they do not want their taxes to increase. We are not talking about taking an arm and a leg. We just want to make sure that people pay their fair share so that we can have a fair and egalitarian society where everyone's basic needs can be met.

I support Motion M-315, moved by the hon. Liberal member, and I commend him for it. I hope that by the time we vote, the Conservatives will agree to study the matter. I think it is very important.

Study on income inequalityPrivate Members' Business

6 p.m.


The Acting Speaker Conservative Bruce Stanton

Resuming debate. Accordingly, I invite the hon. member for Kings—Hants for his right of reply. The hon. member has five minutes.

Study on income inequalityPrivate Members' Business

6 p.m.


Scott Brison Liberal Kings—Hants, NS

Mr. Speaker, I thank members from all parties who have expressed support for Motion No. 315.

Canadians do believe that the growing income inequality in Canada is an incredibly important issue. In fact, they believe that members of Parliament ought to be serious about studying it and addressing it.

The motion simply asks that the finance committee study the issue, make recommendations and report back to the House. During the study, we will have the opportunity to review Canada's system of income taxes and income support in order to understand how they may be contributing, inadvertently and unintentionally, to income inequality. We will be able to identify some of the gaps in the systems. We will be able to look at some best practices across Canada in terms of provincial governments that may be doing things well, in some cases, and look at other countries that have been able to combine innovative economic policy with progressive social policy. Finally, we would be able to propose solutions to help combat this growing issue of income inequality and equality of opportunity in Canada.

During my first intervention on the motion, I discussed our moral responsibility as parliamentarians to address the issue of income inequality and equality of opportunity. Today, I would like to lay out the business case and why it is good for business to address income inequality.

We have heard from economic voices, including the Conference Board of Canada, the Rotman School of Management dean, Roger Martin, and the Bank of Canada governor, Mark Carney. All have warned us that income inequality could limit Canada's economic growth and threaten sustainable prosperity.

While inequality can be bad for society, it can also be bad for business as it comes with great economic and social costs. The real threat to the economy and to society is when income inequality becomes so great that it starts to threaten equality of opportunity.

As American Nobel Prize winning economist, Joe Stiglitz, has said, “growing inequality is the flip side of something else: shrinking opportunity”.

Canada benefits from good public education, public health care and a strong society safety net. These essential foundation blocks of equality of opportunity are key to why we are doing better than some other countries. Along with our natural resource sector, our natural wealth, it is our people and giving our people a good start with good education and good opportunities are the keys to economic growth and sustainable prosperity.

However, not all Canadians have access to the tools they need to prosper. For instance, aboriginal and first nations communities have the fastest growing and youngest population in Canada but they are also Canada's most economically disadvantage and socially disenfranchised population. If we fail to address this issue faced by our aboriginal peoples, this is a demographic, social and economic time bomb.

All Canadians have a responsibility and a vested interest to narrow and eliminate the gap between aboriginal and non-aboriginal Canadians. The long-term social costs of inequality and loss of opportunity are far more costly than the measures to address it.

I will put it another way. Looking out for the other guy is not just good for the soul, it is good for business. Business should also be concerned that the public could lose faith in a market-based economy if they no longer have hope for economic and social success. When people lose faith in the system, they can be drawn to class warfare and to economically dangerous anti-market policies, and that could be really bad for business.

The issue here is too serious a problem and too important an issue to allow partisan politics to get in the way of finding solutions. The fact is that this is a problem that has grown under federal governments and provincial governments of all party stripes. No one party has all the answers and no one party is to blame.

I am not naive enough to believe that a study of this issue will fix the problem, but it is a start because we need to understand the issue better and we need to move forward toward building public policy that will address growing income inequality.

In contemplating how to vote on Motion No. 315, I hope that members will be guided by their hearts, their heads and their desire for good public policy.

Earlier tonight, a Conservative member spoke of the working income tax benefit. That actually was introduced in the last Liberal budget in the fall 2005 by the then finance minister, the member for Wascana.

We are pleased with the working income tax benefit that the Conservatives continued to maintain in their fall budget. That is a case where two parties, two governments, worked together on an issue to address inequality.

We can work together across party lines in the House. The start will be on the vote for Motion No. 315. I will appreciate the support and Canadians will appreciate the support for this first step toward addressing this important issue.

Study on income inequalityPrivate Members' Business

6:05 p.m.


The Acting Speaker Conservative Bruce Stanton

The question is on the motion. Is it the pleasure of the House to adopt the motion?