Guy Caron

[Business of Supply, April 18th, 2013]

Mr. Speaker, I would like to discuss four issues, that is, four specific problems raised by the Canada-China foreign investment promotion and protection agreement. I probably will not have enough time to address all four problems, but I should have enough time to discuss the three main ones.

I have already talked about the fact that the agreement uses different language in articles about most-favoured-nation treatment and national treatment, meaning that current Canadian investors in China, which is a very small number, will be protected. However, future investors will not be protected, which poses a serious problem.

The second point I want to discuss was also raised by my hon. colleague from Vancouver Kingsway, the official opposition critic for international trade. It has to do with the fact that both countries can keep all existing measures that do not conform with trade liberalization. This measure can help them locally. For instance, in China, provisions currently exist, and China will have the right to keep them after the agreement is signed, that is, after it is ratified.

These provisions require Canadian businesses to hire local workers or to have a certain number of local administrators, for example. There has been a lot of liberalization in Canada over the past 30 years, and we have eliminated all the measures that were not consistent with the spirit of freer trade. If each country can retain measures that are not consistent, we are giving an unfair advantage to our Chinese trading partner. That is what explains the lack of reciprocity I referred to earlier in my speech.

The third thing I want to talk about is the mechanisms for resolving conflicts between investors and the state. We have a lot of concerns about such provisions, which are in this agreement and in the previous ones. Unlike the existing agreements or the existing provisions between investors and the state, what is in this proposed agreement with China goes much further. It would allow either of the countries to go ahead with conflict resolution before an administrative tribunal that is not a judicial tribunal. These are not people chosen by the state, but private arbitrators who could, at the request of one of the countries, deal with these issues behind closed doors if one of the countries deemed it was not of public concern. They do not have to justify why it is not of public concern; they simply have to say so.

These three specific reasons—the different treatment of current and future investors, the maintenance of non-conforming measures and a different mechanism for settling disputes between investors and the state—make us wonder where the comments that the Parliamentary Secretary to the Minister of International Trade and the Minister of Canadian Heritage made in question period are coming from. They are telling us that the sole reason for the agreement is to protect investors, and that the agreement gives Canadian investors in China the same rights as Chinese investors in Canada.

Yet, there are enormous differences in how the two are treated, partly because of the non-conforming measures, which are much more prevalent in China than they are here. Chinese investors in Canada benefit from the same protection as Canadians who are currently investing in China. In 2011, Canadian investors had about $5 billion worth of investments in China. These investments will be protected. In 2012, Chinese investors had $22 billion worth of investments in Canada—that is five times more. These investments will be protected.

We can therefore already see the imbalance. The fact that the agreement will not protect investors with regard to national treatment and the establishment or acquisition of various investments means that new markets will not be opened to Canada, as the Conservatives have promised. The Conservatives think that the opposition should vote in favour of this agreement because of these markets.

I am trying to understand the logic behind that argument. This agreement has been on the negotiating table for about 30 years or more. However, a solution has still not been found.

The softwood lumber agreement was signed quickly after the Conservative government came to power in 2006. This agreement was very bad for Canada, but producers accepted it because they were absolutely desperate.

At that time, the Conservative government wanted to win a quick victory. Right now, they want to achieve a victory, even if it harms Canada's interests and those of future investors in China. That is why we cannot support this agreement. We therefore support the motion moved by my colleague.

[International Trade, April 18th, 2013]

Mr. Speaker, from the beginning, the Conservatives have been mishandling the negotiations for the foreign investment promotion and protection agreement with China.

Not only does it lack reciprocity, but it protects the few existing Canadian investments in China while not providing the same protection to new investors. It says that Chinese enterprises have the right to be treated fairly and equitably, but does not define what that means. It gives China the right to sue the Canadian government before secret administrative tribunals.

Will the Conservatives finally admit their mistake and tell China that Canada will not ratify the agreement in its current form?

[Business of Supply, April 18th, 2013]

Mr. Speaker, I rise in the House to speak to the foreign investment promotion and protection agreement. This is a very important issue. I am quite pleased that my colleague, the international trade critic for the official opposition, moved this motion calling on this House not to support the agreement that has been entered into, but not yet ratified by Canada.

I have only 10 minutes; five minutes before question period and five after. I would like to go over four key aspects of the agreement and certain parameters surrounding it. If I had more time, I would talk more about the problems with this agreement, but the four points I am raising are, in my mind, the biggest problems with this agreement. These points are the reason that I, as the member for Rimouski-Neigette—Témiscouata—Les Basques, agree to the motion and therefore reject the premise of the agreement proposed by the Conservative government.

The first point is the Conservative government's claim that the foreign investment promotion and protection agreement will protect foreign investment and encourage more investment. One very clear item in the agreement leads us to believe that the agreement will actually discourage investment, Canadian investment in China in particular. Investment might not be discouraged, but it is not being encouraged either.

Let us compare two articles in particular. One is about the most favoured nation. In short, it ensures that the party the government is signing the agreement with is given the same general or minimum protection that the government gives to other countries with which it already has agreements. I want to compare this article with the one on national treatment, which specifies that businesses protected in our territory must receive the same treatment as businesses from here. I will read both articles.

The article on most-favoured-nation treatment states that:

Each Contracting Party shall accord to investors of the other Contracting Party treatment no less favourable than that it accords, in like circumstances, to investors of a non-Contracting Party with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of investments in its territory.

In contrast, the article on national treatment states that:

Each Contracting Party shall accord to investors of the other Contracting Party treatment no less favourable than that it accords, in like circumstances, to its own investors with respect to the expansion, management, conduct, operation and sale or other disposition of investments in its territory.

There is a fundamental difference between these two articles, which I admit are very technical. With regard to national treatment, the agreement does not give the same rights to investors who are getting established or acquiring new companies and therefore making new investments.

That means that, under the terms and conditions of the agreement before us, companies that want to invest in China will not have as much protection as companies that already have investments in China. Clearly, the opposite is also true. Chinese companies that are already investing in Canada have the same rights as a Canadian company. However, Chinese companies that will invest in Canada in the future will not have the same rights as Chinese companies that are already investing in Canada.

As a result, the agreement will protect the $5 billion in investments that we currently have in China, but it will not provide as much protection for future investments that Canadian investors want to make in China. The problem is that Canadian businesses in China are not getting nearly as much protection as Chinese companies and investors that are currently in Canada.

In 2011, we had only about $5 billion worth of investments in China, whereas China had over $22 billion worth of investments in Canada in 2012. From the outset, the agreement is not providing equal protection. This demonstrates a lack of reciprocity and is a blatant problem with the agreement before us today.

I would like to address another aspect that the hon. member for Vancouver Kingsway and the official opposition critic for international trade spoke about, and that is the changes being made to non-conforming measures in trade agreements in general.

This agreement allows countries, including China, to keep these measures that do not conform to international treaties.

I will come back to this after question period.

[Employment Insurance, April 17th, 2013]

Mr. Speaker, the quotas imposed by the Conservatives in their employment insurance reform continue to produce adverse effects.

Service Canada is forcing 80 workers at the Eastern Quebec Seafoods plant to repay the government for benefits they have received since 2011 under a Service Canada work-unemployment program. Plant employees might have to repay as much as $14,000 in benefits that the plant, the employees, but most of all Service Canada deemed to be legitimate.

Will the minister step in and ensure that Service Canada honours its agreements with the plant and the workers in Matane?

[Canada Revenue Agency, April 16th, 2013]

Mr. Speaker, rather than blindly cutting food inspection services and increasing taxes on practically all consumer goods, the Conservatives could be acquiring effective tools to combat tax evasion and thereby recover up to $8 billion a year, according to independent studies. However, that is not what they are doing.

Their report on plans and priorities for the Canada Revenue Agency contains many cuts that have a direct impact on investigative services, such as closing the voluntary disclosure centre in Montreal. The government has transferred the centre's responsibilities to Shawinigan without providing that office with any additional resources.

Why is the government cutting thousands of jobs at the CRA when it should be redoubling its efforts to combat tax evasion?

[Business of Supply, April 15th, 2013]

Mr. Speaker, like my colleague, I would like to say that our thoughts and prayers are with the victims of the Boston tragedy.

Getting back to the issue at hand, I do not know if the member in question realizes how ironic his comments are. He is boasting about the tax credits in budget 2013 and calling them tax reductions that will benefit certain classes of citizens. However, he makes no mention of the elimination of tax credits which, according to the gospel of the Conservative government, do not represent tax hikes.

The motion before us condemns the tax hikes, estimated at $8 billion over five years, contained in budget 2013.

I would like to ask a question about one particular tax increase that affects labour-sponsored venture capital corporations. Almost $355 million a year will be taken from small investors over the next five years. The elimination of this tax credit has been criticized by Canada's Venture Capital & Private Equity Association and by the Fédération des chambres de commerce du Québec.

Why is the government refusing to call the elimination of this tax credit a tax hike? Why is the government not listening to Quebec's business people in particular and Canada's Venture Capital & Private Equity Association, which have condemned these tax increases?

[Canada Revenue Agency, April 15th, 2013]

Mr. Speaker, the Minister of National Revenue has not done her homework on tax evasion. She cannot tell us how much money Canada loses to tax evasion every year.

This is a serious problem, but the Conservatives are refusing to take a serious approach. They are relying on investigative services in tax havens and the goodwill of the guilty parties. At the same time, they are cutting the resources of the Canada Revenue Agency.

The question is simple. Why are the Conservatives refusing to come up with effective means of fighting tax evasion?

[Business of Supply, April 15th, 2013]

Mr. Speaker, I am very pleased to rise to speak so frequently on a subject that might seem technical and dry, but that directly affects a key concern of many Canadians. This directly affects Canadian taxpayers' pocketbooks.

My question is very simple. We have heard a lot about the general preferential tariff and the list of 72 countries and over 1,200 products. There is a lot of talk about the fact that this will affect the status of certain countries that are now developed. Furthermore, this will allow the government to collect about $355 million in additional taxes.

I would like to know if my colleague considers this change an increase in taxes on imports.

[Business of Supply, April 15th, 2013]

Mr. Speaker, lady luck is not on my side. I asked some very simple questions of government members, but I did not receive a response. It seems that the government, rife with hypocrisy—and I apologize for using that term, but it is truly the case here—is denying the obvious existence of tax increases in this budget and refuses to acknowledge that they are there. My last question was on that exact topic.

The government feels that any kind of tax credit—for things like the arts or sports—constitutes a tax cut. Why then is it refusing to acknowledge that eliminating a tax credit, for businesses or individuals, is therefore a tax increase?

Since I have yet to receive an answer from the government, I would like to ask my colleague that question. Her speech was excellent, by the way. I would like to know why we should not consider the elimination of a tax credit for credit unions or labour-sponsored venture capital corporations, for example, to be a tax increase that will affect the Canadian economy as a whole, which this government is denying?

[Business of Supply, April 15th, 2013]

Mr. Speaker, I would like to ask a very quick question about tax credits.

How can the Parliamentary Secretary to the Minister of National Revenue say that creating a tax credit will reduce taxes for Canadians, but that scrapping a tax credit will not increase the tax burden for them?