Mr. Speaker, I am pleased to rise to speak on Bill C-24. The Liberal Party has long been in support of opening new markets on the basis of fair trade. We will be supporting this particular legislation. We do have some concerns, given the obvious bipartisan support, that this is yet another instance where time allocation has been imposed, but nonetheless, the Liberal Party stands in support of the content of the legislation.
One of the key concerns with respect to our trading relationship with Panama, and this has been evident with respect to the government's free trade agenda, is about the domestic practices within some of the countries where we are seeking to have new trade arrangements. An additional point to be kept in mind, and one the government would do well to carefully consider, was raised by Jim Stanford of the Canadian Auto Workers, who appeared recently at the international trade committee.
Part of his presentation outlined the following, with respect to the lack of apparent benefits derived from free trade agreements. Mr. Stanford, before the committee, reviewed the five longest-standing trade agreements. He said:
...with the United States, Mexico, Israel, Chile and Costa Rica. Canada's exports to them grew more slowly than our exports to non-free-trade partners, while our imports surged much faster than with the rest of the world.
Mr. Stanford went on to say:
If the policy goal (sensibly) is to boot exports and strengthen the trade balance, then signing free-trade deals is exactly the wrong thing to do.
Looking back on some of the previous free trade agreements, with Colombia there were outstanding issues with respect to labour and human rights, and the same concern applied in Jordan. With respect to Panama, one of the outstanding concerns, as I raised in my question just a few moments ago, is the issue of tax havens and issues related to money laundering.
Just to put this in context, the Parliamentary Secretary to the Minister of International Trade , in response to issues on the Canada-Jordan free trade agreement and violations of human and labour rights and Canada's response, told the House
...what...members fail to realize is the entire issue of extraterritoriality. There are certain things we can do when negotiating with another country and certain things we cannot do because they are beyond our sphere of influence.
The question that must be raised, of course, is: What mechanisms within any agreement should be in place with countries where issues of concern are found to exist and persist?
For example, with respect to the Panamanian situation, when federal government officials were testifying before the international trade committee last fall, they could not address adequately the matters of money laundering and the tax haven issues related to Panama.
Again, as I indicated earlier in my question to the hon. member for Saskatoon—Humboldt, in December 2010, Panama signed a tax information exchange agreement with the United States. In testimony before the United States' House ways and means subcommittee back in March of last year, Public Citizen's Global Trade Watch research director raised concerns with respect to the money laundering issue in the wake of the agreement signed between the U.S. and Panama. He said:
Panama promised for eight years to sign a Tax Information Exchange Agreement (TIEA). Yet when it finally signed a TIEA with the Obama administration in November of 2010, the agreement did not require Panama to automatically exchange information with U.S. authorities about tax dodgers, money launderers and drug traffickers.
In the previous Parliament, concerns were raised with respect to Panama as a tax haven in which instances of both tax evasion and money laundering were found. Concerns were raised as to whether a free trade agreement should be proceeded with, without a clear tax information exchange between Canada and Panama in place.
There is as yet no tax treaty or tax information exchange agreement between Panama and Canada.
The history, as we understand it, is this: Panama asked that we enter into a double taxation treaty, which is more comprehensive than a tax information exchange agreement; Canada refused and asked for a more limited, less all-encompassing agreement; Panama, which at the time had only entered into double taxation treaties, insisted on a double taxation treaty; Canada has not yet responded to this second request.
All double taxation treaties include information exchange obligations between signatory countries. That is because of the model convention of the OECD. As of November 2010, Canada was party to double taxation agreements with 87 countries, with eight more signed but not yet in effect. As of November 2010, Canada had signed nine tax information exchange agreements, the less robust agreements, and they were yet to come into effect.
In testimony this past fall before the international trade committee, reference was made to the correspondence between Canada and Panama, in which the latter was asked whether Panama had responded to the concerns expressed by Canada on the tax haven issue. According to Department of Foreign Affairs officials, no such response had been received.
This past December, during debate on Bill C-24, the parliamentary secretary went to considerable lengths to express his confidence in the commitment by Panama to improve its exchange of tax information and went to great lengths to reference the OECD statement acknowledging the progress of Panama in that regard. However, the issue of tax havens and money laundering is and should be of concern to the government.
It is unfortunate that the parliamentary secretary apparently did not read the statement issued last July by the OECD, which states that the OECD's Global Forum:
...must still evaluate whether Panama's domestic laws will allow for effective availability, access to and exchange of information.... The government has introduced domestic changes so that the agreements can be effective. The Global Forum will follow up to make sure they work as intended. It is important that Panama continues to work to fully implement the standards.
Article 6 of the agreement between the United States and Panama on the issue of tax co-operation and information, entitled “Possibility of declining a request”, states that the “The competent authority of the requested Party may decline to assist”.
To conclude, the Liberal Party will be supporting this agreement. We feel, in the circumstances, that the discussions and negotiations between the two countries with respect to the exchange of tax information should be at a more advanced stage before we as parliamentarians consider this legislation and we raise that as a concern, but it will not be a significant enough concern to prevent us from supporting the agreement.
We would encourage the government to proceed as rapidly as possible to ensure that the issues with respect to tax havens and money laundering with our trade partners in Panama are properly and adequately addressed.
