Mr. Speaker, I want to thank the hon. member for Berthier—Maskinongé for his enthusiasm. His riding and mine are neighbours.
From the outset, I want to remind the House that the Bloc Québécois does not have an ideological position on matters of free trade, liberalizing trade, or open markets. We think that open markets and liberalized trade are conditions for economic growth. That is true for Canada and Quebec and for most industrialized and emerging countries. It is perhaps less true for some countries, especially African countries that, despite measures to open up borders, have seen their situation deteriorate.
Accordingly, knowing that liberalizing trade can be a way to increase wealth, we also have to consider that wealth is often poorly distributed around the world and within industrialized societies. In his book The Conscience of a Liberal, Paul Krugman points out that in 1980, 1% of the American population had roughly 8% of the total wealth and total revenue. In 2007, that same 1% of the population held 24% of total American revenue. This situation has not been seen since 1928. It is interesting to note that inequality of wealth contributes to economic instability.
The recent and ongoing economic crisis for which we are calling on the government to continue providing stimulus measures, namely by pushing back the deadline for the infrastructure programs which is currently March 31, 2011, was originally a financial crisis, of course. Nonetheless, income inequality in the United States caused a major portion of the American public to go into debt, to buy property in particular. The entire chain reaction that brought in the unsound financial products that provoked this crisis was caused in part by income inequality.
Therefore, we cannot simply open our borders, move forward and hope for the best. That is why, since its inception, the Bloc Québécois has always wanted the opening of markets to be regulated by the state. That is one of the reasons why we want Quebec to become a sovereign country. It would allow Quebec to take part in international forums during which basic rules must be formulated in order to avoid uncontrolled globalization and problems like the ones we encountered during the financial and economic crisis that originated in the United States and spread across the globe. We examine all agreements negotiated by the government through that lens. When agreements are negotiated on the basis of equality and mutual respect, we support them.
For example, we recently supported the Canada-European Free Trade Association free trade agreement. This association consists of Iceland, Norway, Switzerland and Liechtenstein. Members will say that, until recently, at least two of these countries were considered to be tax havens, which is the case for Panama. However, these two countries—Switzerland and Liechtenstein—were removed from the OECD list because they agreed to co-operate and transfer tax information to at least 12 other countries.
It seems that their economies are somewhat similar to Canada's, not in terms of industrial composition, but level of development. There was no chapter 11—I will come back to that—as there is in some free trade agreements recently signed and ratified by Canada. Therefore, we did not have a problem with that agreement.
The same goes for Jordan. The free trade agreement did not provide for the protection of investments beyond what is normally covered. Once again, I am referring to chapter 11 of NAFTA. I will have an opportunity to come back to this because some of Canada's free trade agreements include investment protection.
We did not have that problem with Jordan. I also believe that we must send a message to Middle Eastern countries that Canada has a balanced policy with respect to countries that may not be openly at war, but are in a conflict situation. I am obviously referring to Israel, with which we signed a free trade agreement in 1994, if I recall correctly. We are not challenging that. Having a free trade agreement with Jordan balances Canada's position in the region. Thus, we had no problem supporting the free trade agreement with Jordan.
However, we were fiercely opposed to the free trade agreement with Colombia because of the human rights situation, and we were quite right. It is completely wrong for Canada to sign a trade agreement with a country where human rights are widely violated.
For example, in my riding of Joliette, there is a community of new Quebeckers of Colombian origin who had to leave their home country because of violence. These people told me that they did not understand how Canada could sign a free trade agreement with Colombia, when the country does not respect human rights and people are victims of violence, particularly at the hands of paramilitary organizations that have ties to some Colombian political leaders. They told me that they did not understand how Canada, which is trying to improve respect for human rights around the world and at home, could sign this free trade agreement. Many of us regularly take action to address human rights violations, such as those the first nations suffer in many areas.
Therefore, we opposed that free trade agreement, as well as the agreement with Peru, because of chapter 11 on investment protection and the lack of a framework to make mining companies, specifically Canadian ones, accountable.
In looking at the free trade agreement with Panama, we can see that there are some problems. We do not think it will benefit Canada or the people of Panama. I am not necessarily referring to some industries here or in Panama that could benefit; I am referring to the people of Panama, Canada and Quebec.
How about the infamous chapter 11? I remember that NAFTA was the first free trade agreement to include that provision. The provision allows foreign companies to directly sue the Canadian, American or Mexican government before a special tribunal. That did not exist before. Any trade disputes between countries were resolved at the WTO.
This meant that multinational companies became a new entity, a new player on the international law scene. That makes absolutely no sense. It is extremely dangerous, and I think that the increase in the number of lawsuits and complaints filed under chapter 11 of NAFTA is proof of that. So far, there is not much jurisprudence, but the free trade agreement is relatively new. I believe that we opened a Pandora's box, and we need to close it up.
Unfortunately, the Canadian government decided to use this model as the inspiration for its bilateral agreements, in particular those with countries in the global south. That was the case with Colombia, Peru and Chile. We believe that it is completely immoral to allow companies from Canada, the United States or any other country to take governments to court over public health, environmental issues or industrial policies.
We cannot accept that Canada includes such investment protection measures in its bilateral agreements, particularly with more vulnerable countries in the global south. That is the main reason we are opposing this free trade agreement. The second reason is because of the issue of respect for human rights and workers' rights, as was brought up by my NDP colleague earlier.
Again just recently, in June 2010, there was a protest against changes to the labour code. These repressive changes were decried on July 14 by the International Trade Union Confederation, which is made up of practically the entire labour movement on the planet. We are not the only ones who are concerned about respect for workers' rights. If we move ahead with this free trade agreement, we will be accomplices in contravening certain international conventions of the International Labour Organization. I am specifically thinking about convention no. 87 regarding the right to freedom of association.
So, after this chapter on investment protection that gives too much power to multinational companies—or that gives them power that they should not have—there is issue of respecting workers' rights, which is the second reason we oppose this agreement.
There is a third very important reason: the fact that Panama is a tax haven on the OECD's grey list. It signed co-operation agreements with a number of countries, but does not abide by those agreements. So here we are signing an agreement with Panama, which has signed agreements to disclose and exchange tax information, but does not follow through on those obligations. And we are not even talking about the fact that the corporate tax rate is insignificant, that there is a lack of transparency—as I mentioned earlier—and that there is a lot of information missing about what is going on with tax treatment, especially for foreign companies.
I am not leaving out the other two issues I mentioned, but we think it makes perfect sense for Canada to start by signing a real tax information exchange agreement with Panama, at the very least. If that works, then we can figure out what comes next. The problem is that the Conservatives included in this tax information exchange agreement a provision making subsidiaries located in jurisdictions with which we have agreements tax exempt.
Panama's corporate income tax rate is insignificant. If Canadian companies report profits made in Panama there, they pay 1%, 2% or 3%, as in Barbados, and they can transfer that capital without paying tax in Canada. Once again, this is a manoeuvre that found its way into Conservative budgets that were passed in collusion with the Liberals because they were too weak to oppose them. Not only do we want a tax information exchange agreement, but we also do not want exemptions for profits taxed in Panama because the tax rate there is just too low.
We should take our cue in this matter from France. The French president decided that French companies, especially banks, located in tax havens that appear on the OECD's grey list had to divest their assets. This is how it happened. In a September 30, 2009, press release, the French economy and finance minister announced that companies, banks in particular, operating in jurisdictions like Panama would be penalized. Bercy implemented retaliatory measures in early 2010.
This made the banks think twice, and a few days later, the banks announced that by the end of March 2010—so a few months ago—they would divest themselves of all assets in any tax havens still on the OECD grey list. So as I said, on September 30, 2009, the French finance minister announced his intention to take retaliatory measures and the next day, the banks themselves, through the Association Française des Banques, announced that by March 31, 2010, they would divest themselves of all branches in any tax havens still on the OECD grey list.
We do have the means, and this is a perfect example, but it takes political will. Unfortunately, despite the fine words of the Minister of Finance, the Prime Minister and the government on this issue, what we are seeing is quite the opposite.
The government has made it very easy to use tax havens. Do people know who bought the French bank branches in those tax havens? Most of them were purchased by Canadian banks. Clearly, our banks are confident that they have the support of the Conservative government to invest more in these tax havens, particularly Scotiabank, the Canadian bank that uses tax havens the most. This has already been criticized in this House. We now know that it is one of the banks that purchased many of the French bank branches in these tax havens. That is unacceptable.
In closing, I would remind the House of the point raised by my colleague from Berthier—Maskinongé, specifically, that the bilateral approach to these trade agreements is not beneficial for Canada or for emerging and developing countries. This strategy was imposed by the Americans in the Bush era, which is now over. President Obama has said he would like to return to multilateralism. It was reminiscent of Mao Zedong's strategy in the 1940s, before his successful revolution in 1949, of encircling the cities from the countryside.
How does it work? We attack the weak, like Panama, and we get them to sign a free trade agreement that suits our vision of unbridled liberalization, what we call neo-liberalism, which has now been completely discredited by the financial crisis and the economic crisis. We impose our view on the weak to try to encircle countries like Brazil, which is currently putting up resistance at the Doha round, as are India and China. The Doha round is at a standstill because industrialized countries like the United States and Canada do not realize that the old negotiating process does not apply in this new climate. China is a major player. Brazil, in South America, is a major player. They have managed to make the point that the agenda the industrialized countries wanted to set does not serve the interests of the vast majority of countries around the world. As long as Canada, the United States and Europe do not understand that, it is quite clear that we will not make any progress on issues related to multilateral negotiation at the World Trade Organization.
I find it particularly ironic that Canada is in such a hurry to sign a free trade agreement with Panama and that we are being presented with a bill to ratify the agreement as quickly as possible, when this is dragging on in the United States and in other countries, where the long-term effects of these bilateral agreements are assessed more seriously than they are here.
This is an ill-conceived and outdated bilateral negotiation strategy, and we are not in favour of this free trade agreement.
We think the future is in multilateral organizations such as the World Trade Organization. Obviously, we have to go further. People are starting to talk about it. We support the idea of second-generation free trade agreements. What is more, Europeans do not like the expression “free trade” whatsoever. They prefer to talk about partnerships. The agreement currently under negotiation is a partnership agreement. This goes far beyond free trade. This partnership must include more than just trade. Second-generation agreements absolutely must take into account the effects of trade liberalization on industrial sectors. There need to be conversion periods for industrial sectors that might otherwise be left out in the cold.
The Bloc Québécois thinks that agriculture should be left out of trade negotiations, as culture is or should be, because these are not commodities as other things are. Culture is not simply about entertainment. It is a nation's signature, a country's signature. So we must ensure that there is a convention to protect these cultures, and more specifically cultural diversity.
Canada and Quebec were driving forces behind the convention, and I congratulate everyone on that. For agriculture, it could be the same thing. We should perhaps exclude some sectors, give them the time to adapt and include mechanisms so that respect for environmental rights recognized by major international conventions, such as the Cartagena convention, which Canada has still not signed, and the major conventions of the International Labour Organization is a condition for opening our markets.
The Canada-Panama free trade agreement is a bad example; it is not the right way to go. I can assure this House that we will continue with the debate and that we will vote against this agreement if we do not see some considerable improvements. I think that there are far too many improvements needed for them to be made here.
