Jean-Yves Laforest

[International Trade, October 5th, 2010]

Mr. Speaker, the minister says he wrote to his counterpart in Panama, “asking that it undertake its obligations” regarding the sharing of tax information between Canada and Panama. That is not good enough.

Why does the minister refuse to demand an agreement on fiscal transparency before ratifying the Canada-Panama free trade agreement?

[International Trade, October 5th, 2010]

Mr. Speaker, the Minister of International Trade is trying to mislead people by saying that the Bloc Québécois is against all free trade agreements. We supported NAFTA, the Canada-Israel Free Trade Agreement, the agreement with the European Free Trade Association, and most recently, the agreement with Jordan.

How can the minister defend an agreement with Panama, a tax haven that appears on the OECD's list of 11 states that do not respect their commitment to share tax information?

[Tax Evasion, September 30th, 2010]

Mr. Speaker, the proof that the Conservatives are encouraging tax evasion is that they signed the free trade agreement with Panama. That country is one of the tax havens on the OECD's list of states that do not respect their commitment to exchange tax information.

Will the government agree that, before ratifying the agreement, it should first require Panama to sign a tax information exchange agreement with Canada based on the OECD model?

[Canada-Panama Free Trade Act, September 29th, 2010]

Madam Speaker, very quickly, I have never seen a political party change its tune faster than what we saw this spring concerning the free trade agreement with Colombia.

To answer his second question, we have not received any impact studies or anything of the sort in committee. We are not yet in committee.

[Canada-Panama Free Trade Act, September 29th, 2010]

Madam Speaker, with respect to workers' rights, I mentioned earlier that as long as we do not have proof that the government of Panama has backed off—although it has announced its intentions—on Law 30, which was passed last spring and is considered to be anti-union legislation that prohibits union protests, I think that we can say that there would be serious risks if the free trade agreement with Panama were adopted. If it were adopted, there is a serious danger that Canadian companies could be put in a situation where they would violate core convention 87 of the International Labour Organization.

[Canada-Panama Free Trade Act, September 29th, 2010]

Madam Speaker, I would like to thank my colleague for her question

Unfortunately, I did not hear the minister's presentation. I do not know how they make their plans, but the Standing Committee on International Trade was meeting just as the first debate got under way concerning this international trade bill. Perhaps they could have watched out for that kind of overlap, since they create the agenda. However, as for her question, even though I did not hear the minister, we have seen how the organizations that she mentioned, ones that defend people, see very dangerous gaps in terms of respect for human rights in various countries. We saw how the Conservatives acted during the debate about the free trade agreement with Colombia, when there were numerous presentations from people who came from all over, including Colombia. NGOs also came to testify that workers are under tremendous pressure and are also victims of relocation by mining companies. There are Canadian mining companies that are not respecting these workers' rights or the rights of the local populations in general. I cannot imagine that they have changed overnight. I think that they still have the same listening technique, which means that they choose not to hear the pleas of these people.

[Canada-Panama Free Trade Act, September 29th, 2010]

Madam Speaker, I do not get the impression that my colleague would be able to tell me whether the OECD will take Panama off the grey list of countries that promote tax evasion for companies investing in Panama.

All of these questions are hypothetical. The main objections we have voiced are in relation to that. I said that Panama is considered to be a country that openly promotes tax evasion. In addition, it has not yet passed laws or taken the necessary measures to protect all its workers.

[Canada-Panama Free Trade Act, September 29th, 2010]

Madam Speaker, the Bloc Québécois is opposed to this free trade agreement because it does not completely safeguard the workers in Panama today. If implemented, this agreement will allow some companies to set up shop there to evade taxes. Quebec workers would see companies take advantage of a free trade agreement to avoid their obligation to pay taxes here in Canada.

Quebec workers and the people of Quebec know what is what, and they will have no trouble understanding why the Bloc Québécois is opposed to this free trade agreement.

[Canada-Panama Free Trade Act, September 29th, 2010]

Madam Speaker, I am pleased to speak on behalf of the Bloc Québécois to Bill C-46 to implement the agreement negotiated by representatives of the Department of Foreign Affairs and International Trade with the Government of Panama. We oppose this free trade agreement. It is not that the Bloc Québécois is against free trade and free trade agreements, but in this case, there are strong reasons that justify our opposition.

Panama has one of the most well-developed economies in Central America. However, the Bloc Québécois does not believe we should ratify a free trade agreement with Panama when it is still on the OECD's grey list of tax havens. Every country turns to that organization for that list; it is used as a reference. People at the OECD evaluate different criteria with regard to tax havens, which I will say more about later.

We asked departmental representatives a few questions. They said that Canada is currently negotiating a tax treaty with Panama in order to tighten the rules on banking transparency to better combat tax evasion. However, there is no mention anywhere of such a treaty with Panama in the Department of Finance's register of tax treaties currently in effect or under negotiation.

It is clear to us that Panama is still on the OECD grey list and France's blacklist of countries that promote tax evasion. That is the major reason we oppose such an agreement.

The other reason we object to implementing this free trade agreement is that we do not get the impression that workers' rights are very well protected in Panama. In June 2010, the right-wing government of Ricardo Martinelli passed Law 30, which is considered to be anti-union. This law is said to include labour code reform that is seen as repressive since it would criminalize workers who demonstrate to defend their rights.

On August 5, the Panamanian government agreed to review this law, but we have every reason to be concerned about the desire of the Martinelli government to respect the conventions of the International Labour Organization integrated into the side agreement on labour standards.

For these two major reasons—which we will look at again in more detail—we believe that we should delay the ratification of the free trade agreement, in light of the adoption of Law 30, with which the Panamanian government has taken a real step backwards.

Although two days ago we were talking about the Canada-Jordan free trade agreement—Bill C-8—which we were in favour of, we do not agree with the Conservative government's strategy of focusing on bilateral agreements instead of multilateral ones, which are preferred by the Bloc, as we said yesterday.

The Bloc Québécois believes that a multilateral approach is more effective for the development of more equitable trade that protects the interests of all nations.

I would like to come back to the issue of respect for human and labour rights in Panama. Human rights are guaranteed by the Constitution, and in general, they are respected. That is a fact. However, the judicial system still has a number of problems in Panama, including the conditions of imprisonment, the length of preventive detention, corruption, and the lack of independence of the judicial system. In rural areas, there are problems with child labour and with indigenous communities and marginalized ethnic minorities, as well as discrimination against women.

In recent months, Panama has seen a wave of what is considered to be anti-union repression. Sources estimate that between two and six people died, and about a hundred were injured during violent protests that followed the June 2010 adoption of Law 30, known as the “sausage bill”, because it contains all kinds of reforms, such as reforms to the labour code and to environmental legislation.

The reform of the labour code is seen as repressive, because it would make it a crime for workers to demonstrate to defend their rights.

Some of the country's environmental groups submitted an application for support to the UN environment program to convince the Panamanian government to review changes that will diminish the state's ability to preserve its natural resources.

Unions have asked for support from the international labour federations while the Inter-American Commission on Human Rights is asking for an investigation of police brutality during protests against Law 30 in July 2010. According to our sources, the Panamanian government is conducting its own investigation.

On July 14, 2010, the International Trade Union Confederation, together with its affiliated organizations in Panama, firmly condemned violent repression of the strike movement by workers and demanded the immediate repeal of “the controversial Law 30, which has become a licence to kill for the police, creating a climate of extreme violence” among the people. I am quoting from the article entitled “New Panamanian Law Threatens Environment and Human Rights.”

On August 5, the Panamanian government agreed to review the law. We should monitor this issue before going any further. Otherwise, after signing the agreement, Canadian corporations may find that they are damaging the environment or contravening the International Labour Organization's core convention, C87. That is rather important.

I will now return to the issue of Panama being a tax haven on France's blacklist and the OECD grey list. The latter lists countries that have committed to exchanging tax information but that have not substantially implemented the rules.

Section 26 of the OECD model tax convention provides the most generally accepted standard for the bilateral exchange of tax information.

There is no indication, on the Department of Finance web site of treaties and conventions, that an information exchange agreement is being negotiated with Panama.

Before entering into the Canada-Panama free trade agreement, the Conservative government absolutely must sign a tax information exchange agreement with Panama and this agreement must not allow subsidiaries located in the targeted jurisdictions to be tax exempt.

Obviously, it is important that this agreement be concluded, negotiated, drafted and signed before finalizing the free trade agreement. It is also clear that, under such an agreement, corporations cannot use their presence in Panama to justify tax evasion. For the Bloc Québécois, it is entirely inconceivable that we would be associated with such a practice.

With this free trade agreement, we will likely see more trade and a significant increase in Canadian investment in Panama. We will see more taxpayers, both individuals and businesses, earning income in both Canada and in Panama. That is why it is essential for the Government of Canada and Panama to sign the type of information exchange agreements I was talking about earlier.

Since Panama is a tax haven, such a free trade agreement would become an invitation to evade taxes, or use loopholes in the law to help a taxpayer avoid paying a tax he or she normally should.

At the end of the day, should a free trade agreement promote tax evasion? It is a very serious question because we would not want Canada to inadvertently promote investments that encourage tax evasion under the pretext of concluding more trade agreements and lowering taxes. That makes absolutely no sense.

For example, a company whose income would be legally taxed according to the rate in effect in Panama would be tempted to set up a business structure to take advantage of this near-zero tax rate.

The Conservative government is already signing tax treaties with tax havens and we all know it. The Bloc Québécois absolutely believes that we need to be vigilant because in June 2010 the government signed tax information exchange agreements based on the OECD model with eight jurisdictions: Bahamas, Bermuda, Dominica, the Cayman Islands, Turks and Caicos, St. Lucia, St. Kitts and Nevis, and St. Vincent and the Grenadines.

This information tells us that we absolutely must be careful; the Conservative government absolutely must avoid putting Canada in a position, once again, of promoting tax evasion, when there are plenty of workers in Quebec and Canada who can barely manage because they have to pay their taxes.

In La Presse on July 6, 2010, we read:

In return for these agreements, Canada seems to have given these jurisdictions an advantage. Subsidiaries of active Canadian companies domiciled in these islands can effectively repatriate their foreign profits to Canada tax free.

Bermuda, Bahamas and the other islands will thereby have a similar status to Barbados, which has been the only tax haven to have this privilege.

It is high time we gave ourselves a real policy of multilateralism.

The current course of globalization, a phenomenon bearing both great hope and great injustice, must be redirected. Disparity between rich and poor, the failure to respect rights and freedoms and the lack of regulations on the environment and labour give rise more to despair than to hope.

Openness to trade and the establishment of international regulations to counter protectionism and protect investment are good things that the Bloc supports. That does not mean that trade rules should have precedence over the common good and the ability of governments to redistribute wealth, to protect their environment and culture and to offer their citizens basic public services such as health care and education. These fundamental elements must always take precedence over any trade that we establish in order to increase our exports. These basic criteria must guide our negotiations and intentions to sign free trade agreements with other countries.

Quebec is a trading nation. Our companies, and especially our cutting-edge companies, could not survive on just the domestic market. International exports account for one-third of Quebec's GDP. If interprovincial trade is added, exports represented 52% of Quebec's GDP in 2005.

Protectionism is not in our interests, and that is why Quebec, and Quebec sovereignists in particular, massively supported the free trade agreement with the United States and then NAFTA.

That is also why the Bloc Québécois was the first party in the House of Commons to call for a free trade agreement with the EU.

Then again, it would be naive and false to claim that everything is just fine, in the best of all possible worlds. While freer trade has led to greater wealth overall, it has also produced its share of losers. And that is unfortunate.

The trade environment has worsened considerably over the last few years, and we must take that factor into account. Between 2003 and 2007, Quebec went from a large trade surplus to a $13 billion deficit. In 2006, every Quebecker therefore consumed $2,000 more than he or she produced. And this only covers our international trade balance; another $5 billion deficit must be added in interprovincial trade, which also made us considerably poorer.

The result of this trade deficit is that our manufacturing sector has become dangerously weak. Between 2003 and 2007, it lost nearly 150,000 jobs, which was nearly all the jobs lost in this sector in Canada, including 65,000 lost since the Conservatives came to power, mainly because of foreign competition and a strong Canadian dollar. Trade liberalization can only be profitable if it is guided by certain rules; otherwise, it is a race to the bottom.

For a long time, Canada's trade policy was simply to improve access to foreign markets. From that perspective, it has been very successful. Today a majority of products, over 80% of world trade, flow freely.

However, we are now beginning to see the downside of unbridled liberalization: heavy pressure on our industry, offshoring and trade agreements that amount to a licence to exploit people and the environment in developing countries. The trade environment has changed in recent years and as far as Quebec is concerned, it is not for the better.

Joseph Stiglitz, Nobel Prize winner in economics and former vice-president of the World Bank, had this to say when he received his honorary doctorate from Université de Louvain on February 3, 2003:

As our interdependence has increased, we have discovered that we need rules to govern the process of globalization and to create institutions to help it function. Unfortunately, these rules are too often established by the rich countries to serve their own interests and especially individual interests within these countries.

The Bloc Québécois is proposing a change in Canada's trade priorities. Canada should now shift its focus from trade liberalization to creating a more level playing field. The Bloc Québécois believes that our trade policy must focus on fair globalization, not the shameless pursuit of profit at the expense of people and the environment.

That is the Bloc Québécois' position on Bill C-46.

[Canada-Panama Free Trade Act, September 29th, 2010]

Madam Speaker, even though I did not hear her entire speech, I believe my colleague did not touch on a certain impression we get in all this. Does she not get the impression that the government is being hasty in passing various bills on free trade agreements it has concluded?

There was the one between Canada and Jordan, and now it is presenting an agreement between Canada and Panama. Is the hon. member not afraid that the government's secret goal is to speed things along? This all seems to be going very quickly. It might be better to take a bit more time to assess the repercussions, both positive and negative, of these free trade agreements.