Mr. Speaker, I am pleased to participate in the debate on Bill , as I did the other day on Bill which dealt with another free trade agreement the government is proposing. This bill deals with a free trade agreement with Panama.
Obviously, free trade agreements are important to Canada given that we export over 80% of our goods, and obviously Canada needs to be competitive in the international community. It is disturbing that for the first time in over 30 years, we have a significant trade deficit. The government needs to look at a comprehensive approach in terms of how we deal with the issue of trade in the international community.
At the moment we have what I would call one-off agreements. There is one with Jordan and now there is this one with Panama. We also debated one involving Colombia. The difficulty is that our competitors are taking a much more aggressive approach. For example, we have no free trade agreements with any state in Asia. With markets such as Japan, China, India, the ASEAN members, this is very important, and a multilateral approach particularly with ASEAN would be beneficial.
We are still in negotiations with Korea; I believe we are in the seventh round now. With Singapore, we are in the ninth round. This is disturbing, given that the Americans have been reaching out. We see the Japanese concluding free trade agreements with countries as diverse as the Philippines and Mexico, yet at the same time, we are doing these small agreements.
The one with Panama is fine. We on this side of the House certainly support the bill going to committee. However, in terms of the big picture, there are real issues that we need to be grappling with on the issue of free trade. A multilateral approach gives us a bigger market. For example, ASEAN, with 590 million people from Vietnam, the Philippines, Indonesia, et cetera, is very important, yet we are simply chipping away at it. We do not have a coherent policy in terms of how we should tackle trade issues.
As a significant amount of our trade, some 75% or 80%, is with the United States, when there is an economic downturn in that country, as we have seen, it has an impact on our economy. We need to diversify, but diversifying with Jordan and Panama is not going to solve things in the big picture. It is not going to deal with what our competitors have been doing internationally. We need to be in the game. We have been more on the sidelines. We have to engage in these major markets. There are opportunities for us out there, but the government needs to lead. The government needs to demonstrate.
A few years ago, the Canadian Chamber of Commerce wrote a very compelling paper about China. It clearly indicated that there was no policy of the government in terms of how to engage that market. For example, Canada is a world leader in the area of environmental technology, particularly with respect to clean air, clean water and contaminated sites. This is very important work and certainly is useful for China. We need to be part of that, but we are not seeing the kind of leadership needed in order to go forward.
From that standpoint, the agreements the government has been putting forward simply focus on a very small niche. They do not deal with the kinds of issues they should be dealing with.
We are seeing an increase in protectionism in the United States. That is of concern, particularly in the area of agriculture. It means difficulties for our farmers. It is a difficulty in terms of our being able to compete in the international arena. The United States' protectionist policies are having an effect here. With respect to the America first policy, the government had discussions with the United States and changes were made in terms of Canadian companies being able to compete, but that only affected 37 of the 50 states in the U.S. It is important that we be there.
The Conservative government has not shown the kind of leadership that is needed on the multilateral side, in terms of being much more visible in the United States. Policy in the United States is not done in Washington; it is done in districts and states across the U.S. That is where we need to be focusing our efforts.
Canadian businesses can compete with anyone in the world if there is a level playing field. When there is not a level playing field, obviously we often face difficulties.
Although my party supports this bill going to committee, the fact is that we would like to see a clear strategy, particularly for the emerging key markets, such as Brazil, India, China, and Japan. We have watched and continually see the United States, Australia, and others being very aggressive, particularly in their talk about a big Asia Pacific free trade zone. If they are in first, we obviously will pick up the pieces.
I think Canadian businesses deserve more than picking up the pieces. They deserve the opportunity. Again, we have to be aggressive. We can talk free trade, but we really have to demonstrate it. The only way to demonstrate it is to show leadership.
Currently, penetrating the Korean market is an issue, particularly in the automotive sector, and the Japanese are carefully watching our discussions. If, and it is a big if, a free trade agreement were to occur between Canada and Korea, the Japanese would be particularly anxious to come to the table. At the moment, the Americans are talking to them about possible free trade.
Some people say that we could never get a free trade agreement with Japan because of agriculture. I do not know of too many people in this House who represent ridings that have a lot of rice. Rice is always the one issue the Japanese deal with. Even then, Japan was able to conclude a successful agreement with the Philippines, for example.
The issue in this agreement, and we are supportive of sending it to committee, is the Canadian merchandise we export to Panama: machinery, electronic equipment, pharmaceutical equipment, et cetera. It is a relatively small market. It is also important that we look at some of the other free trade zones in Latin America.
Latin America has developed, along with states such as Argentina, Uruguay, and Chile, zones in which there is a free flow of goods and where tariffs have been dropped so that businesses can compete. As a country, we need to send out a very clear message that we are prepared to enter into agreements where it is in our national interest.
Obviously, we have to look at environmental issues. This country has traditionally been a leader on climate change, clean water, and clean air issues. Countries really need that expertise.
Not only are Canadians very cost effective in terms of what they are able to produce and export, we can do it in two official languages, which is very helpful. Again, if we are not at the table, that is a problem.
We also have to look at the issue of labour co-operation. I notice in this agreement that there is a side agreement on labour co-operation. Obviously we have to expect that what we are asking is what we would demand at home, including the right to association, the right to collective bargaining, and the abolition of child labour. These are standards we have, and we would expect the same in dealing with other countries.
I know that some colleagues have concerns on the labour end of it. When it goes to committee and we have the appropriate witnesses, we can have those kinds of discussions and strengthen, if need be, those provisions. I think that is important. No piece of legislation I have seen in 14 years here has ever been perfect. That is why we send it to committee, where colleagues have an opportunity to look very carefully at legislation, hear from witnesses, and move forward.
My understanding, in terms of the major stakeholders on this particular bill with Panama, is that there are no major objections. On the whole, it is a fairly straightforward agreement. Again, it will give us some access, but we have to build on that, particularly in the Central American region in countries such as Nicaragua, Guatemala, and Costa Rica. Those countries are also looking at better co-operation. As a balance to the United States, I think Canada could play an important role.
Again, it is the whole issue of having a level playing field with access to markets. We need to be able to at least secure that. When we are looking at new partnerships, we must be able to tell our business community to go forward with the opportunity.
There were reservations about the free trade agreement with the United States and whether we could compete. Obviously, we can compete extremely well when a level playing field is available.
Canada's total exports to this particular country amount to 12.6%. Imports amount to about 17.3%. Over 80% of Canada's economy depends on trade. To keep that, we need to have as much access to markets as we can.
Former Prime Minister Trudeau, in the seventies, talked about a third option, and that third option was to diversify. If we had diversified in the seventies and eighties, maybe we would be in better shape than we are now.
Tariffs are the worst thing that can happen to a trading nation. Obviously, I am not old enough to remember the Great Depression in the 1930s, but some of my colleagues on the other side might. The first thing that happened was that major tariff barriers went up, and protectionism became rampant. That is not something we want to do. That was not good. We need to make sure that we have protection.
We also need to demonstrate leadership when it comes to issues such as climate change and the environment. The Conference of the Parties will soon meet in Mexico, and that will be an opportunity to strengthen international regimes.
Canada is traditionally well known for its international leadership, particularly in areas of multilateralism. The International Criminal Court is an example.
The 11th Conference of the Parties, in 2005, was the most successful COP ever to deal with developing a clear climate change regime internationally. That was important. The former Liberal government got a lot of accolades because of that. Again, it was because of the fact that we demonstrated leadership. We need to continue to do that. We need to continue to say to our allies and others that if protectionism is wrong, this is what we are prepared to do to focus forward.
The European Union has some very stringent policies, particularly when it comes to foodstuffs, even in terms of colouring food. We have to be able to talk about these issues with colleagues. We have seen other countries react to issues in this country, and we need to have a strong voice on those issues. Some of my colleagues, particularly those from Newfoundland and Labrador, are well aware of the issue with regard to the seal hunt.
What are we doing to educate? What are we doing to get our message out on some of these issues so that these sudden trade barriers will not come forward and harm the interests of Canadian farmers and producers, whoever they happen to be?
It is instructive to look at what went forward when we made an agreement with Israel in 1997. That was an opportunity to start further negotiations in other areas of the Middle East. Bill , the Jordan agreement, will build on that. The gulf trading area, a Middle East trading area, is important all the way from the United Arab Emirates to Algeria. That is another market we could penetrate.
In other words, what is the strategy? What is going to be the policy in order for us to move forward? We on this side of the House are quite willing to work with the government to develop a strategy, because it is in our nation's interest. If we do these kinds of things, we will serve our citizens well.
Non-agricultural products, particularly fish and seafood, would be helpful for our markets, but that is only one part of the puzzle. It would be nice to see a really strong policy that the government, members of the opposition, and members of key sectors that deal with international trade really hammer out together. It would be the kind the policy and the kinds of tools we need to be much more aggressive.
The Americans certainly have not been sitting idly by. The Australians, in particular, have been very aggressive in Asia and have reaped a number of benefits. ASEAN, of course, which was getting closer on trade issues with China, now realizes that they cannot put all their eggs in one basket. They are wondering where Canada is on the international stage. They see where the Australians and the Americans are, and they are saying that we need to be there.
Some people do not know that in Indonesia, for example, we are the fifth largest investor, particularly in the area of mining, but our approach is not necessarily coherent. It is not necessarily a policy to say, “Go out there and good luck”. That is not the way to build good trade relations.
Obviously, we support the faster elimination of tariff barriers, particularly in those areas that are important to Canadian industry. In this agreement, Panama will see the elimination of at least 90% of current barriers on goods coming from Canada, which is obviously a positive, but where are those big deals we need to hear about in the House? Where are those big negotiations going on?
On this side, we are watching very carefully the issue of Korea. That is very important because of the nature of that market. We need to be able to say to our businesses that there are tremendous opportunities out there. We do not want to be dealing just with our American friends, which is great, but given policy there, we need to make sure that we are at the forefront.
We were one of the first major countries in China. We had a tremendous opportunity there. Mr. Chrétien led a number of Team Canada missions there in the 1990s. We were leaders. Unfortunately, relations with China changed with the current government, and we lost a lot of ground.
We have to continue to have a consistent policy on how to deal with our trading partners. We cannot be all things to all people. We have to have a particular niche. For example, on the environment, we could have a whole Team Canada just dealing with environmental issues in the Pearl River Delta. There are days when the smog is so thick it rolls into Hong Kong and one cannot see across the harbour. We need to take advantage of those things.
People cry out and say that they need to see Canada there. It would be very helpful if we would do that. Although we will support the bill going to committee, we want to look at the issue of labour to make sure that the guarantees are there. We want to make sure that if these things can be strengthened, that will be done. We welcome the opportunity, but we want to see the bigger picture. We want to see more emphasis on multilateralism, and if that goes forward, it will benefit Canada in our future trading relationships around the world.
Mr. Speaker, I will first point out that I will be splitting my time with the member for .
First of all, I would like to quickly go over the Bloc Québécois position on bilateral agreements. Make no mistake, the Bloc Québécois is not a protectionist party. Quebec exports 52% of what it produces, and our businesses, especially cutting-edge businesses, could not survive in the domestic market alone. Therefore, the Bloc Québécois supported the North American Free Trade Agreement, NAFTA, and was the first party to propose entering into a free trade agreement with the European Union. Clearly, our party supports free trade.
We believe that in order for trade to be mutually beneficial, it must first be fair. A trading system that results in exploitation in poor countries and dumping in rich countries is not viable. The Bloc Québécois will never tolerate a system of free trade that would result in a race to the bottom.
We know very well that the lack of environmental or labour standards in trade agreements puts a great deal of pressure on our industries, particularly our traditional industries. It is very difficult for them to compete with products made with no regard for basic social rights. We support a true multilateralism policy and not shameless profiteering without regard for human conditions and the environment, which all too often is the basis for these bilateral agreements that our Conservative friends and, for some time now, our Liberal friends want to negotiate. This Bloc Québécois position was eloquently presented yesterday by the member for , and I would like to congratulate him on his apt remarks.
That said, the Bloc Québécois, as per usual, methodically examined Bill , which would implement a free trade agreement between Canada and Panama. We do not support this bill because, for the most part, it does not reflect the beliefs and values of our party and Quebeckers.
Even though the free trade agreement signed on May 14, 2010, comes with a side agreement on labour co-operation, protecting labour rights remains a serious concern. Indeed, President Ricardo Martinelli's right-wing government passed Law 30, legislation that is considered anti-union, in June 2010. Quite simply, and as my hon. colleague from explained so well, the law criminalizes workers who demonstrate to defend their rights. That cannot be justified.
We also know that Panama was shaken in recent months by crackdowns described as anti-union. Between two and six people were killed and about 100 were injured during violent demonstrations that were held after Law 30 passed in June 2010.
I have been a farm unionist for 20 years and I think we are fortunate to live here in Quebec and in Canada, in a democracy where we are not up against legislation like Panama's Law 30, which would bully us and prevent labour groups from raising their voices to improve their conditions. This is unacceptable. We are fortunate that we do not have to deal with such legislation and governments like Panama's that pass that kind of legislation in 2010.
As a member who comes from the labour movement, I naturally believe that workers' rights are universal rights, and no trade agreement—and I mean no agreement—should be entered into without absolute assurance that workers' rights will be respected.
Considering that in the present case we do not have that assurance, it is not possible for the Bloc Québécois to speak out in favour of this agreement.
We vigorously defend this position through our actions and our decisions. It is for that reason, among others, that we were able to support the Canada-Colombia free trade agreement.
Even though on August 5, the Panamanian government agreed to review this law, we nonetheless have cause for concern about the Martinelli government's true willingness to respect the International Labour Organization conventions. Why is the government in such a hurry to ratify this agreement? Should we not ensure that the Panamanian government is backing away from Law 30 before we make any commitment?
Something else that bothers the Bloc Québécois greatly is the fact that Panama is still on the OECD's grey list of tax havens. It is even on France's blacklist of tax havens.
While major European corporations are leaving this country because of its lack of banking transparency and its promotion of tax evasion, Canada wants to send its companies there. Does that make any sense?
Also worrisome is the fact that on the Finance Canada website on treaties and conventions there is no indication that Canada is negotiating an information sharing agreement with Panama.
We feel it is imperative that before concluding a Canada-Panama free trade agreement, the Conservative government, supported by the Liberals, sign an information sharing agreement with Panama. I hope the Liberals will support us on this. Nonetheless, this agreement must not exempt subsidiaries domiciled in the targeted jurisdictions from paying income tax.
In closing, without any assurance that workers' rights are respected in Panama and considering that this country is still on France's blacklist and the OECD's grey list of tax havens, unfortunately it is not possible for the Bloc Québécois to support this bill.
We will vigorously oppose any agreement, treaty or government decision that does not respect these fundamental rights.
Mr. Speaker, I would like to begin by congratulating my colleague on his excellent speech about the Canada-Panama free trade agreement.
I was involved in a parliamentary mission to Colombia with the NDP member here and the Liberal member. We also visited Panama as members of a committee to assess the possibility of free trade.
I am keen to talk about this today because I have been following the progress of this accord for the past few years. I should reiterate that we are against this free trade agreement. My Bloc Québécois colleague made it clear that we are not against all free trade agreements. We support a free trade agreement between Quebec and the European Union. Back in the day, the Quebec sovereignty movement was very supportive of the free trade agreement with the United States and Mexico, the North American Free Trade Agreement.
I want to make it clear that we are not against all free trade agreements. I have noticed that, anytime we discuss a free trade agreement in the House, there is a lot of pressure on those who oppose such agreements, as though they were opposed to economic growth and to making Canada and Quebec more competitive in a free trade environment.
That is not the case. We support free trade agreements when they are fair for workers and the economy and when they comply with environmental standards. We oppose free trade agreements when these basic conditions are not met.
When we were discussing the Canada-Colombia free trade agreement, we told the House about the human tragedies that befall unionized workers in Colombia. We also talked about violations of mine workers' rights and environmental standards. We opposed that bill.
Even though things in Panama are not as bad as they are in Colombia, the Canada-Panama free trade agreement includes a number of unacceptable clauses, so we should not sign it.
First of all, there is Law 30. We tend to sign agreements with right-wing governments. We signed an agreement with Mr. Uribe, whom my colleagues and I met. We signed an agreement with a right-wing government that does not respect workers' rights, particularly their right to demonstrate and unionize to protect their rights. The government lets companies violate environmental standards.
The Conservative government, unfortunately supported by the Liberals, tends to want to sign agreements with such right-wing countries because it says they will generate revenue and improve our competitiveness.
Our imports from Panama are five times greater than our exports to that country. How will this free trade agreement spur our economic growth? I do not believe it will happen. We must immediately disregard this argument.
I do not think that the workers in my riding of Berthier—Maskinongé, or Quebeckers as a whole, will get rich from this Canada-Panama free trade agreement. On the contrary, without respect for labour or environmental rights, these free trade agreements put pressure on our own companies operating in Canada. In the case of mining or the production of all kinds of agricultural products, for example, they create pressure to lower standards.
We must compete against countries that do not respect labour rights. In the case of Panama, it is even said that the right-wing government condones child labour, just like Colombia. Consequently, the agreement does not improve the working conditions of our workers, and it places pressure on companies. They think that in Panama or other countries, they can engage in such activities. This agreement will allow them to set up operations in those countries, where labour is cheaper. The agreement also eliminates tariffs and promotes trade.
Panama is also recognized as a tax haven. We have discussed tax havens on many occasions, and it is important.
A number of companies here receive subsidies. Some are having serious financial problems because of this global competition. Not only do our workers have to work very hard and in very difficult conditions, but they are financing these companies through their tax dollars, to make them a little more competitive globally. Indeed, with free trade and considering the degree of competition from China, we have lost many jobs in the manufacturing sector, in the furniture sector in my riding for example.
So the workers are paying to improve our productivity in the context of globalization and, on top of that, the revenues are going into tax havens. The companies receiving subsidies are earning huge profits. They will go and set up shop in other countries that offer more attractive tax benefits and where it is easier for them to exploit workers. So they simply move and do not pay taxes. They do not redistribute this wealth or the profits they make by paying taxes in Canada and in Quebec.
As an indirect result, this leads to cuts in social programs and education. We are told there is no more money. Our current system is already under tremendous pressure, so cuts have to be made to public services and education, all because the government does not have enough money.
Quebec and Canada should at least be collecting taxes from these companies, which are earning huge profits. We could follow the example of certain other countries, which I will not name, that have chosen to put education, health, and so on first, by making taxes a priority on a national level. That money must come back. If workers are subsidizing businesses, of course the tax dollars should come back to the country.
That is why we do not support this Canada-Panama agreement. On the one hand, it does not respect labour rights—Panama passed its Law 30—and on the other hand, there are also concerns about environmental standards. Lastly, we do not believe that this agreement will do anything to stimulate the economy in Quebec or Canada. Our exports to and imports from Panama are very limited. This will not create more jobs.
We want globalization to be fair and equitable, as defined by Joseph Stiglitz—a former adviser to the President of the United States—in several books, which I invite all members of this House to read. They are not necessarily leftist readings, and I invite all members to read them.
Mr. Speaker, I am saddened to rise in the House on Bill , which could be more aptly called the drug pushers, money laundering act. It is absolutely shameful what the government has brought forward.
Panama is ranked as one of the top drug pushing, money laundering, tax havens in the entire planet. The Panamanian government has done nothing to resolve that. There is absolutely nothing in Bill to deal with the drug pushing and money laundering that the Conservatives are promoting. It also would do absolutely nothing to address the tax haven status.
People who watched CBC or heard Radio-Canada last night would have seen the impact of tax havens and money laundering and how that impacted on our social programs in Canada. It impacts how we as Canadians can deal with some of the fundamental issues.
This widespread money laundering and the use of tax havens so drug pushers and folks who earn money illegally can get around existing tax laws are not small issues.
Hard-working middle-class Canadians, poor Canadians, work very hard and they pay their taxes. They do what they must do as Canadians to support our society. Yet the Conservative government is going to shamefully sign an agreement with a drug pushing, money laundering tax haven paradise without even addressing one word of it in this agreement. It is absolutely shameful. It is a symbol of what is dysfunctional about the Conservative government on trade policy. The NDP is the only national party to stand up in the House against this completely dysfunctional trade policy of the Conservatives.
We have seen the kind of bills the Conservative have brought forward. They brought forward the softwood lumber sellout. As a result, two thousand jobs were lost in my riding. Tens of thousands of jobs right across the country were lost as the Conservatives deliberately shut down the softwood lumber industry. It was appalling and incompetent. People from the industry, except the CEOs who wanted to take their operations across to the United States, told the government very clearly that it would be disastrous. The NDP was the only national party to rise in the House and say that it would be disastrous. The Conservatives rammed it through, with the support of their Liberal cohorts, and we saw the results.
We saw the results with the shipbuilding sellout. Shipbuilding workers from British Columbia, Nova Scotia, Newfoundland and Labrador and Quebec all said that this would have a negative impact on the shipbuilding industry. As a result, hundreds of jobs have been lost in the shipbuilding industry.
In the springtime, after what was an appallingly ridiculous debate, the Conservatives and the Liberals pushed through the Colombia free trade deal, essentially putting an X on Canada's reputation of standing up for human rights.
This present deal would provide a stamp of approval on the drug pushing, money laundering, tax haven paradise. This deal says that it would be okay to do this kind of activity, that it would be okay to have whomever, Hell's Angels, drug pushers, getting around Canadian income tax laws by having their money in Panama. Panama has strict rules about ensuring that Canadian authorities cannot find out a wit about the illegal money laundering taking place. The Conservatives say that is okay.
Each member of the Conservative Party, each member of Parliament who has made a great speech about cracking down on crime, is now going to stand and give his or her stamp of approval to a government that has not cracked down on fighting money laundering and drug pushing, one of the worst in the world.
Mr. Ed Fast: You should be embarrassed.
Mr. Peter Julian: Mr. Speaker, I hear the Conservatives reacting, as they normally do. None of them have read the agreement. There is not a single word in the entire text that deals with money laundering or the tax haven status. It is appalling. This is a symbol of a completely dysfunctional trade policy pushed by the Conservatives and supported, as we have seen every time, by the Liberal Party of Canada.
The Conservatives will say that by doing this they are actually contributing to the growth of our export industries.
The NDP has pushed for fair trade rules. We are the only national party speaking out against the hemorrhaging in our manufacturing sector, the loss of half a million good-paying manufacturing jobs. We are the only national party speaking out against the chronic under-financing of our major exporting industries.
I am pleased to say that this week some of the export associations have finally heeded our call. They are actually going to go to the government, with the support of the NDP, to get substantial increases in product promotion support.
Why? Because Canada, quite frankly, just plays lip service to exports. We have a who loves to cut ribbons and sign fancy agreements that do not deal with the fundamental issues.
Let us compare what Canada invests to support our export industries abroad with what other countries spend. We spend $12 million to $13 million in product promotion. Australia spends half a billion dollars. The European community spends $125 million for their wine export sector alone. That is 10 times what we spend for all industries right across the board. For the United States market, our most important trading partner, we spend $3 million or $4 million, which is the equivalent of promotion support for marketing a medium-sized enterprise in the lower mainland of British Columbia. We do that as a nation for the entire U.S. market.
The Conservatives, on the one hand, love these camera opportunities and these signatures but have done absolutely nothing to stimulate export growth.
What has been the result? If the Conservatives say that, although their actions might encourage some money laundering and drug pushing and use of tax havens, they are really doing this for exports, then they are going to have to explain that in this House. They have been mute so far in this debate. They have not spoken to these issues at all. In fact, it appears that they do not want to stand up and defend this deal. This should indicate to the public, those who are looking for work but have taken a brief break and are tuning in to CPAC today, that if the Conservatives are not willing to speak to the issue it is because they know that they do not have a leg to stand on, that they simply do not have any basis for supporting this dysfunctional deal.
If we look at the export figures, what do we see? If we move from the realm of inflation-devalued current dollars to constant dollars, which actually reflects a constant value over time, what we see is that after we sign these bilateral trade deals our exports actually go down. Let me cite a few examples.
With Israel, before we implemented a free trade agreement, we had exports of $270 million a year. In 2003, seven years later, we had gone from $270 million to $239 million in exports. What is wrong with this picture?
It was the Liberal government at the time that starved our export industries. But at the same time they had the big song and dance about how this was going to be terrific for our export industries. What happened? There was a decrease from $270 million to $239 million.
Let us look at another example.
I can see the Conservatives waking up now. They are saying, “Gee, nobody told us that. Gee, we should have done our homework., Gee, we should have actually looked at the export figures Maybe we'd know what we were talking about if we actually compared the figures”.
I am the glad the Conservatives are waking up, because these are important issues. We are talking about lost jobs. We are talking about half a million manufacturing jobs lost. We are talking about an actual net decrease in income for most Canadian families. The Conservatives have not understood that; the Liberals certainly did not. For 20 years, this so-called free trade regime has proven very costly to the average Canadian family.
These are important figures. I am glad they are taking note.
Look at Chile. We had $467 million in exports, before the implementation of the magic free trade agreement. Well, the exports to that market have gone from $467 million to $433 million. That is after the FTA, after the song and dance, after all of the pretensions about how this was going to stimulate our export industries, even though Liberals and Conservatives have done nothing to stimulate our export industries beyond the photo ops and signatures on bad trade deals. With Chile, after 10 years of free trade our exports were down.
Let us move on. I could continue. I will not cite the EFTA figures, because we already had this debate. It was the famous shipbuilding sellout. Since we signed that deal, our exports have gone down. There has been a huge decrease in the EFTA market, and yet we had Conservatives and Liberals standing in this House and saying this was going to be a magical day for Canada. Our exports went down the toilet.
At the same time, we opened up our shipbuilding industry, and it lost a large number of jobs. Here again is an example of the dysfunction and incompetence of the Conservative government when it comes to trade policy. It is dysfunctional.
They are not reflecting Canadian values. They are selling out human rights, our softwood industry, our shipbuilding industry. Then, as we sign the bilateral agreements, we see a decrease in exports to these markets .
The final bilateral agreement I will mention is the one with Costa Rica. We have talked about the others; let us talk about Costa Rica. I think it is an important one to flag.
There again we saw a decrease. We had $77 million in exports before the implementation of the deal. Seven years later, in 2009, we had gone from $77 million in exports to $73 million.
I rest my case. The Conservatives have strange pretensions. It does not matter about endorsing money laundering. Forget about that, Canadians. Do not worry about drug-pusher tax havens, and these fiscal paradises for the wealthy, where they do not have to pay taxes as ordinary Canadians do. Do not worry about that, because we know what we are doing.
Clearly, they do not. In case after case, our exports to those markets, after we sign these FTAs, go down, not up. They fluctuate up and down, it is true. However, in case after case, we see that in constant dollars our exports to those markets have gone down.
The Conservatives might even be forced to admit that the exports went down, and that we are selling out human rights and the softwood industry. If so, however, they are giving a rubber stamp to drug-pusher money launderers.
But what about Canadians' incomes? They have gone up, right? Well, unfortunately, even that is not true.
Statistics Canada has essentially told us what has happened to middle-class and poor Canadians since 1989, since these free trade pacts came in, which in almost all cases have led to a decline in our exports to those markets.
We have the most recent figures. What has happened to the poorest Canadians? The poorest Canadians, viewed in terms of market income, have neither gained nor lost. Fortunately, that is because of the advocacy of the NDP, which has worked to ensure that some social programs have been maintained.
What about the middle class, the hard-working people who support their families and pay their taxes? Well, the second-income category has actually seen a 5% reduction in real income over the last 20 years. What is 5%? It is like going without a paycheque for a couple of weeks a year. This has happened on the watch of the Liberals and Conservatives over the last 20 years.
We were told that these so-called free trade agreements would not be costly to the Canadian middle class and poorer Canadians. It would not be costly for manufacturing jobs. It would not cost us a bit. Well, it has been extremely costly. It has hit middle-class Canadians hard. Even the upper middle class has seen a net reduction in real income.
If we think about that, it is very sobering. We have heard all the pretensions, spin, and flim-flam from Liberals and Conservatives about their having some idea of how to make sure we stimulate export growth and family incomes. Then we look at the hard facts. None of these facts have been studied by Liberals or Conservatives, because they do not even track this stuff. They do not track going in what the economic impacts will be on these trade deals, and they do not track going out what has actually happened. There is no tracking at all. It is simply a photo op.
We have a trade agreement that is negotiated badly, written badly and does not deal with any of the real issues. Then there is a photo op and the minister goes on his next little trip. There is no evaluation, no homework, and no sense of what the real impacts have been on ordinary Canadians.
There is, however, one group of people that has benefited over the last 20 years. Their income growth has skyrocketed by 25%. Corporate CEOs and lawyers now take 52% of all income in the country. Income has gone down for the middle class and stagnated for the very poor, but the very rich are taking a huge and ever larger piece of the pie. A hefty 52% is now going to the very wealthy. Yes, they will support these trade agreements. They move their money offshore. They invest in low-wage factories. They can afford to. However, government should be looking to stimulate the Canadian economy.
Government should be looking to make sure middle-class Canadians are taken care of. They say that through hard work poor Canadians can raise their living standard, that over time there will be progress, and that we can build local economies where small businesses thrive as we forge a national economy where nobody is left behind. But exactly the contrary has occurred over the last 20 years, because Conservatives and Liberals in the House are simply not doing their homework.
What have we in the NDP been proposing? We have been making proposals like many of our allies in places like the U.S. Congress, which now has a fair trade act before it. It was interesting to note the comments of the in Europe when he said free trade was looked down on there. He is right, because Europe is trying to move to a more progressive trade model.
This is perhaps a discussion for another day, but we have a completely dysfunctional approach to negotiations with the European Union. We went to them and said we were going to sacrifice supply management. Supply management is on the table. We sold out the softwood lumber industry in northern Canada, northern Ontario, and B.C. We sold out our shipbuilding industry on both coasts. What can we sell out this time? Let us sell out the prairie farmers in the west, farmers in Ontario and Quebec, rural Canadians. We have a dysfunctional trade approach with the European Union, and we are saying that this time it is farmers who have to pay.
We in the NDP are saying a fair trade model has to be put into place. We are saying that what we need to do is economically boost all Canadians and make sure nobody is left behind.
This Panama trade deal, this drug-pusher, money-laundering, tax haven, fiscal paradise act does not do it. The government did not do its homework. It shows a complete lack of regard for the valuable opinions of the Canadian public. We have a dysfunctional government that is trying to foist a bad policy on Canadians without having done its homework. That is why in this corner of the House we will be voting yes for the hoist motion and no to this bill.
Mr. Speaker, I want to thank the hon. member for 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 , the 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 , 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.
Madam Speaker, I am not an expert in foreign trade, although I am a person with a small business and I do some foreign trading in a variety of forums. I am a forester and a biologist, and I am still listening and learning in this debate.
However, I am alarmed about what I hear about Bill . Despite popular mythology, the NDP is not protectionist. The NDP believes in trade and the jobs that are created by trade, but we believe in fair trade, trade that is fair to all parties, all Canadians, not just large multinationals but fair to average Canadian citizens, to our middle class, our working people, people with small businesses, trade that is fair to workers and fair in the area of women's equity.
Forget about Latin American countries, where they have far to go. Canada still has huge gaps in pay equity, which is shameful. We believe in trade that is fair to farmers, especially farmers of small and medium size farms across Canada.
My area of expertise is in the environment and I am concerned about fairness to the environment, not only the Canadian environment but also the global environment.
Fair trade would be fair in the areas of clean water, water quality, surface water, ground water and especially drinking water, which should be a basic human right and not traded away in trade agreements anywhere. I believe in trade that is fair to air quality, which we now realize is a global concern and not just an urban concern. I believe in trade that is fair to biodiversity. We have important biodiversity in Canada, but in Panama it is amazing. It has over 10,000 documented species in Panama, but almost 1,300 of those are found nowhere else in the world. I am concerned that in our rush to promote multinationals, in promoting quick development in Panama, that we will put many of these species and rare diverse ecosystems, forested ecosystems at risk.
Canada has its own endangered species and biodiversity problems. Some of them are very small and very little known and some of them are quite well known, like grizzlies, wolverines and polar bears.
Speaking of polar bears, I am concerned about the entire lack in Bill and the proposed treaty to do anything about concerns of greenhouse gases and global climate change.
As many of us recognize increasingly that the Conservative government is more interested in protecting the rights and benefits for large multinationals, especially big banks and big oil companies.
In the name of big oil and the Conservatives attachment to it, several decades ago they brought us NAFTA. As we know, the Liberals won a majority election by promising to scrap NAFTA, but they did not keep their word.
Now the Conservatives, through a series of serial bilateral NAFTA-style agreements, are pandering to the aspirations of those large multinationals with which they seem to see as their main client base.
This template is well documented and forecasted in Naomi Klein's book, The Shock Doctrine. Every Canadian who can read should read Naomi Klein's book. It is alarming, it is prescient and it should be required reading.
As we can see, the Bill treaty will move this agenda one step forward. It is a small step, a small country and a small portion of our trade, but it is part of a disturbing trend.
Let us talk about a few specifics.
With respect to the area of market access, an important part of this treaty, Bill would eliminate all non-agricultural tariffs in to and out of Canada. It would eliminate most agricultural tariffs either immediately or within the next five to ten years.
Let me get back to the environment and some of the wording in the proposed bill.
The bill promises not to weaken environmental regulations. As we know, environmental regulations in Canada are already disturbingly weak, but in Panama they are virtually nonexistent. Bill proposes to enforce existing regulations. In theory that sounds great, but, again, Canada is already doing little in the area of environmental enforcement. Panama has virtually no environmental enforcement.
In the area of disputes, Bill proposes to hold consultations, information exchanges. We have seen these kinds of words before in Conservative legislation and we know what kind of commitment to protecting our environment, or Panama's environment or the world's environment for that matter, would entail.
Where is this free trade agreement and other various free trade agreements that the Conservative government has been signing not fair?
Let me talk about some of the problems with so-called U.S.A.-Canada relations. Very few Canadians, and even some members of Parliament, know that the nominal tax rate for large corporations in the United States is 36%. Very few know that in Canada, under the Conservatives, it has been reduced to 18%, half of the U.S. rate.
That has been justified by those who know about it and agree with it. They claim it is an alleged stimulus to investment, but that investment has not occurred in Canada. The moneys from those huge tax breaks to big corporations has moved out of Canada into the U.S. and into various tax havens, including Panama. That investment simply has not occurred in Canada.
I can understand having slightly lower tax rates than the United States, but half the large corporate tax rate? How will we continue to pay for our health care system? How will we continue to invest in the technologies and industries of the future, such as clean energy, sustainable energy?
Let us talk about another aspect of the bad NAFTA agreement and a bad softwood lumber deal.
The U.S. has rolled over our economies in many of the areas that are covered by NAFTA, which is most of our areas. It has exported jobs from Canada. It has exported natural resources in low value-added form, in the form of minerals, trees, cereal grains and other crops and especially in the area of oil.
Under NAFTA, we can either do as we are doing now, which is giving the United States relatively low cost oil, but we have to charge ourselves the same for that oil. We cannot take advantage of our natural asset, sell it at the world price and sell it to ourselves at a reasonable cost that Canadians can afford to foster economic development in Canada.
Canada could choose to be 100% self-reliant on oil and energy, but we export about half of it to the United States and import roughly the same amount from places like Saudi Arabia and Venezuela. Most of the oil that runs our cars and heats our homes in eastern Canada comes from those places. It does not come from our west at an affordable price with a guaranteed supply for the future. Rather it is imported from other places so large multinational oil corporations benefit by exporting those jobs and those litres of oil to the United States.
The government does not believe in fair trade on oil. It does not believe in fair trade on energy self-sufficiency. It does not believe in fair trade on Canadian autonomy.
Let us go back to Panama and why I and my party are inclined to oppose Bill .
Panama is a well-known source of drugs. It is a well-known tax haven for those wealthy multinational corporations and wealthy tax-avoiding Canadians, whose interests the Conservatives seem to be placing paramount.
It seems this is a new opportunity for the Conservatives, with the passive support of the Liberals, to export lost tax dollars, low value-added resources and hundreds of thousands of jobs: manufacturing jobs, real jobs, productive jobs, jobs that can support a family, jobs that can support the Canadian health care system.
The Conservative initiative in Bill is one more new opportunity, it seems, in a small, symbolic but worrisome way, to sabotage Canadian regulations, autonomy, health care and Canadian labour standards. The labour agreement here is not in the treaty itself; it is a side agreement. The side agreement has no effective mechanism to protect our labour rights, not to mention the labour rights in Panama.
The side agreement on the environment for this Panama treaty will unfortunately continue the degradation of the natural environment not only in Panama, but probably will help to continue the stagnation of dealing effectively with our environmental degradation. It is a side deal with no teeth.
Let us talk about tax havens. In 2000 the Organisation for Economic Co-operation and Development, the OECD, blacklisted Panama as, “An unco-operative tax haven”. In 2008 Panama was one of only 11 countries with no tax sharing information.
I would like to ask a large question, much bigger than Panama, much bigger than Bill . What is happening to our Canada under this Conservative government?
In looking at the past Conservative government of Brian Mulroney, if one liked Mulroney, then one would love the current government. It is moving faster and more effectively to undercut the core of Canadian values, jobs and autonomy.
We have half the large corporate tax rate in Canada than what there is in the United States, 36% versus 18%. We have a huge growth in Canada, in a time of fiscal difficulty, of banks, big oil, their executives and a variety of speculative traders.
Canada has a huge growth in unemployment, especially in real full-time jobs. Those are not the part-time, or underground jobs. Those are not the jobs of people scrambling to survive after they have given up trying to look for real jobs, which are not even reflected in the statistical figures anymore. These are the kinds of jobs that will support families, mortgages and a university education. The quality of life that Canadians have come to expect for decades is eroding. We have a huge loss in Canada of our middle class.
The Conservatives have been doing a wonderful job of distracting Canadians, distracting the media, and distracting the House of Commons with wedge issues. There was a huge one last week. Wake up, Canadians. Wake up, parliamentarians.
As I said, Naomi Klein, in The Shock Doctrine, does a good job of documenting the blueprint for this plan. If members have not read it, I urge them to read it. It documents the right-wing agenda, which is clear. It is as clear as Das Kapital. It is as clear as what was in Mein Kampf.
I would like to recommend another book, called The Spirit Level. The Spirit Level is by Wilkinson and Pickett. Wilkinson and Pickett are epidemiologists and statisticians, and The Sprit Level is full of graphs. It does not sound very interesting, does it? However, it is fascinating.
The Spirit Level documents scientifically what many of us have known for decades, which is that trickle-down economics is baloney. Wilkinson and Pickett, in The Spirit Level, have taken the figures and facts from the United Nations and other data sources for all the developed wealthy countries of the world and have shown clearly that the best countries in the world to live in are the Scandinavian countries. When it comes to health, happiness, fairness, equitableness, crime, and prisons, the United States heads the list of the worst developed country in the world in which to live.
They do a wonderful job of showing how that is highly correlated with the gap in income in those countries. Those countries that have a reasonable gap in income between the bottom 20% and the top 20% are happy, healthy countries. They are the Scandinavian countries, some of the European countries, and Japan.
On the other hand, countries such as the United States, Portugal, and others have a huge gap and a growing gap.
Where is Canada in that spectrum? Canada is right in the middle. We are halfway between the Scandinavian countries and the United States in terms of happiness, welfare, and quality of life, and we are also halfway between those countries in terms of the spread of income.
My question for this Parliament, for Canadians, is this: Do we want to drift or be driven, as is happening now, closer to the U.S. greed-based model, with its excessive gaps in income, or do we want to move back toward the Scandinavian model that has done such a good job of providing employment, wealth, happiness, and security for Scandinavians?
The last thing I would like to say is that Panama is less than one-tenth of 1% of our trade. It is pretty minuscule. In 2008, we had a trade surplus. We exported $128 million, and Panama exported $21 million to Canada. It has been going down since 2008, though. In 2009, it was $91 million and $41 million. The trend throughout Latin America has been that the balance-of-trade deficit is getting worse for us.
As we make hard decisions in this act, over how many months and years and coming elections, I hope we will give real consideration to how we get back to fair trade rather than alleged free trade and to how we get back to a Canada that has values based on a middle class and full employment.
Madam Speaker, I have spoken on other free trade agreements in the past. This will not be a complete repeat but what has happened is that the government has made the same mistakes again.
I will speak in two parts. In the first part, I will voice my concerns about this agreement, and, in the second part, I will talk about what a fair trade agreement should look like and what would be acceptable.
I will echo the hon. member's remarks. Canada is a trading nation. We need trade to survive, as does every other nation on this planet. Trade is essential. We believe in trade but we believe more than anything in fair trade. We believe agreements can be struck that reflect the values I will talk about right now as I speak to the concerns I have.
It seems that the Conservative government is engaging in NAFTA style trade agreements and, in this particular case, with a country that is also an offshore banking centre and that acts as a platform for multinationals and a conduit for opaque banking activities and tax evasion.
It is not just me who thinks that but also a Democrat congressman in the United States. I will quote just a small part from a letter he has written. It reads:
|| Panama’s industrial policy is premised on obtaining a comparative advantage by banning taxation of foreign corporations, hiding tax liabilities and transactions behind banking secrecy rules and the ease with which U.S. and other firms can create unregulated subsidiaries. According to the State Department, Panama has over 350,000 foreign-registered companies.
Michael Michaud is the congressman who made those remarks.
It looks as if the Canadian government is building a so-called free trade platform that would provide front corporations with additional powers and incentives and give them the right to challenge Canadian regulations and standards, and shape trade to serve their needs, not necessarily the needs that are in the public interest.
It seems that we are making it easier for Canadian foreign companies to move to Panama, to flout Canadian labour laws and to pay their workers in Panama, which, I think, the average wage at the moment is about $2 an hour, and not have to pay for pensions, benefits and sick days.
Canadian law states that workers enjoy certain minimum workplace safety laws and benefits. Corporations in Panama do not have any of these.
As with the other free trade agreements with Colombia and Peru, appended outside of those agreements, outside of the main text, are labour co-operation agreements. We have heard people speak about those this morning.
The problem with the agreement, as it was in the other free trade agreements, is that it is an agreement without any vigorous enforcement mechanism. The same template was used in the Canada-Colombia and the Canada-Peru agreements. The labour side agreement does not deliver an effective mechanism for the protection of labour rights.
I will say what I said when I spoke on the Canada-Colombia free trade agreement. If the labour co-operation agreement is so important, why is it a side agreement? Why is it not in the main body of the agreement? If it is in the main body of the agreement, then there would be a vigorous enforcement mechanism. Again, it is a side deal.
The side agreement on the environment is the same. There is no effective mechanism to force Canada or Panama to respect environmental rights. The agreement commits both countries to pursue environmental co-operation and to work to improve their environmental laws and policies but it can only ask both parties to enforce their laws. That is why it has been put into a side agreement, at least I assume that is why. Why is it not in the main body of the free trade agreement?
I am also concerned as to why the Conservative government and the Liberal Party are in such a rush? Why are they in such a rush to move Canadian jobs overseas? Why are they in such a rush to enhance the capacity of multinational corporations to evade taxes? Why are they in such a rush to allow these corporations to leverage additional power over Canada's government and Parliament?
We heard earlier today various speakers in the debate talk about Panama, which is regarded as a tax haven by the OECD. In the last 24 hours, we have heard lots of news nationally about this very same issue.
In 2008, Panama was one of 11 countries that did not have a tax information exchange agreement signed or in force. Panama is one of three states that would not share banking information for any tax information exchange purpose at all. Panama does, however, have a bilateral agreement with the U.S. called the mutual legal assistance treaty to which Panama will share some information. Tax offences are not covered by the treaty. Tax information sharing could occur for a criminal offence, though, such as drug trafficking. Therefore, there is a possibility to move forward on this particular issue and this agreement could have done that, but it did not.
The OECD has blacklisted Panama since 2000. I did not want to say anything about this but Panama has not to date substantially implemented the internationally agreed tax standards to which it had committed itself. So nothing has been moved on that front. This free trade agreement would have been a wonderful opportunity for the Government of Canada to make that happen.
Today, in 2010, I find it interesting that the Colombian banking system retains a prominent role in the Panamanian banking system. We can draw our own conclusions from that. Again, it is on the NAFTA model and, as everybody knows, we have had trouble with NAFTA and softwood lumber.
I just want to say a little bit about that. Bilateral trade deals generally go against GATT and multilateralism. The International Monetary Fund has been complaining about the proliferation of bilateral trade agreements, which would spell a return to protectionism and trade wars between trading blocs, so it is concerned.
The Canada-Panama trade deal is a NAFTA-like agreement. It is the same template which overrides the democratic rule of Parliament and equalizes or gives precedence to corporate rights over human rights. All of the text of the accord is not yet available. The free trade agreement would very likely produce chapter 11-type issues, what has been proven to be an inadequate dispute resolution mechanism that can easily be abused by the dominant partner. I draw the attention of the House to softwood lumber, which is a good example.
The Canada-Panama agreement is another agreement, which, I guess we could say, is marginally improved on the Bush-style approach to trade. However, it would still put big business before people, it has no effective enforcement of human rights and it pays lip service to environmental protection without any real tough measures or any dispute resolution mechanisms.
We have an opportunity in free trade agreements to help the poorest of the poor. One of the big worries we hear bandied about is micro-financing. The trouble with micro-financing, as we talk about it now, is that it does not reach the poorest of the poor. When I say poorest of the poor I mean those who live on less than $1.25 a day. Those are the poorest of the poor on our planet. There are models that have worked when we talk about micro-financing. We can make it work for those people. We can make it work for housing, education and a whole host of other things that are so important to the survival of families and the ability for families to move ahead.
Free trade agreements are exactly the same. There is an opportunity to make all of those good things happen. However, this agreement does not do that. Panama, by the way, is not a major trading partner of Canada. It is less than 1%, which makes it an interesting choice for a free trade agreement. Because of the smallness of our trade, it has to send up some red flags and we have to wonder why. Are there not other countries that would be much better opportunities for Canada in terms of exporting and trade agreements?
Another concern I have is that we have yet another trade deal negotiated in record time and, because it was done in record time, I wonder if there has there been full consultation with environmental groups, trade unions, civil society and citizens of the countries? A fair and sustainable trade deal would not just address the needs for business but also the needs of working families and the environment.
The trade deal does not provide investors and labour with a level playing field. While under chapter 11 investors have the right to seek binding arbitration that they can pursue independently, a trade union in Panama does not get to pursue a case to arbitration. It could file a complaint that would lead to an investigation and possibly a report, but it is up to the government to seek remedies and damages. Experience with our past NAFTA templates shows that it is unwilling to do this. Empirical evidence strongly suggests that the minister of the day will not pursue these matters.
The trade agreement includes enforceable protections of patents, trademarks and copyrights but no meaningful protection of workers and no meaningful protection of the environment.
What would a fair trade policy look like? When we stand in the House we reaffirm our vision for a fair trade policy that puts the pursuit of social justice, strong public sector social programs and the elimination of poverty at the heart of any affected trade policy. Canada's trade policy should be based on the principles of fair, sustainable and equitable trade, trade that builds partnerships, partnerships with other countries that support the principles of social justice and human rights, while also expanding business opportunities.
The federal government should stop exclusively pursuing the NAFTA model at the expense of all the other alternatives, because there are alternatives. It should invest in other avenues of growth, including, above all, a vigorous trade promotion strategy that builds the Canadian brand abroad along the lines of the Australian experience, for example.
It is shocking to hear that the European Union spends in excess of 500 times more than Canada in promoting its wine industries. There may be a greater volume of wine in European countries, but 500 times more towards promotion than Canada?
There is an alternative and there is a better form of trading relationship that can be established with Panama or any other country, one with an overall fair trade policy that includes the following:
First, it should provide a comprehensive common sense impact assessment on all international agreements that demonstrates that trade deals Canada negotiates are beneficial to Canadian families, workers and industries. The government should never sign a trade deal that would lead to a net job loss.
Second, it should ensure that the trade agreements Canada negotiates support Canada's sovereignty and freedom to chart its own policy, support our ability to be a competitive force on the world stage, and support the principles of a multilateral fair trade system.
Third, by fundamental principle, all trade agreements must promote and protect human rights by prohibiting the import, export or sale in Canada of any product that is deemed to have been created under sweatshop conditions, forced labour or other conditions that are not in accordance with fundamental international labour standards and human rights.
Fourth, by fundamental principle, all trade agreements should respect sustainable development and the integrity of all ecosystems. That is straightforward. I do not think anybody in the House would disagree with these things.
Fifth, at any time the Government of Canada signs a free trade agreement, the decision to proceed with enabling legislation should be subject to a binding vote on whether to accept the terms of the agreement. The current system, which consists of tabling FTAs in the House for a period of 21 sitting days prior to ratification, is neither mandatory nor does it bind the government to a decision of the House.
The minister should be required to develop fair and sustainable trade-related performance indicators in concert with provinces and territories. Statistics Canada could collect the information and develop with the finance department new benchmarks for the evaluation of present and future trade agreements.
Performance indicators would measure the impact of bilateral trade agreements on the qualify of life, to include, in addition to detailed bilateral trade figures, an assessment of their effects on things such as employment, including quality of employment; impact on wage levels and core labour standards; things such as prices and market concentration, including the effects of currency manipulation; the effects on public health, including an assessment of the impact of intellectual property rights on drug prices, for example; environmental standards; human rights standards; the levels and types of investment by industry; economic diversification; food self-sufficiency; food safety standards; consumer safety; the effect on farms and farmers and the number of farms; access to essential services; the fiscal system; and intellectual property and copyright.
I have just outlined the concerns I have about this free trade agreement and what a fair trade agreement would look like. I welcome questions from my colleagues.
Madam Speaker, there has been a wave of anti-union repression in Panama, resulting in several workers killed, over 100 injured and over 300 arrested, including the leader of the SUNTRACS and CONATO trade unions. This was the government of Panama's brutal reaction to protests against new legislation restricting the right to strike and the freedom of association, including provisions to jail up for up to two years any workers taking their protest to the streets. This simply proves that the labour protection agreement will not provide any real protection of labour rights in Panama as it lacks any effective mechanism for enforcement and the Panamanian government clearly intends to ignore it.
This is but one reason why we against this trade agreement. I will give more reasons why we oppose this trade agreement.
We are engaging in a NAFTA-style trade agreement with a country that is also an offshore banking centre that acts as a platform for multinationals and a conduit for opaque banking activities and tax evasions.
We heard recently in the news media about Canadians who were avoiding taxes. Panama is just one of these countries where Canadian corporations can take the profits they have earned off the backs of Canadian workers, Canadian workers who have paid their share of the taxes to improve society as a whole so the poorest Canadians can live better. However, these companies are taking their profits, which may be millions or even billions of dollars, and investing them in Panamanian banks where they do not pay any income taxes.
We are building a so-called free trade platform that would provide front corporations with additional powers and incentives to challenge Canadian regulations and standards and shape trade to serve their needs and not the public interest, and I want to expand on this a bit.
We just finished a year-long strike in my community. A foreign company challenged Canadian regulations and standards by using scabs to perform the work of striking workers, by using intimidation, by firing people just for expressing the fact that the company did not want to negotiate, by ignoring bylaws in our community, bylaws that were set in place to protect the people of our region. The company was housing scab labourers in office buildings. They were sleeping in those buildings. This is completely against the bylaws of my community of Sudbury. The company had the gall to take our municipality to court over this. The company was breaking the bylaws, but it was the one that was taking our municipality to court. That is why I want to repeat this: Canadian regulations and standards and shape trade to serve their needs and not the needs of the public.
We are making it easier for Canadian and foreign corporations to move to Panama, flaunt Canadian labour laws and pay their workers in Panama an average of about $2 an hour, and not have to pay pensions, benefits and sick days. Pensions, benefits and sick days are the core values of Canadian workers and they should be the core values of any Panamanian worker.
Canadian laws state that workers enjoy certain minimum workplace safety and benefits. Corporations in Panama do not have to do any of this. Imagine if we did not have any safety laws in Canada. Imagine what would happen to the workers who worked in deep underground mines if there were no Canadian laws to protect them so they could go home to their families at night. We are encouraging companies to invest in Canada and flaunt our Canadian laws.
This agreement is without a labour co-operation agreement, without any vigorous enforcement mechanism. The same template was used in the Canada-Colombia agreement, “kill a trade unionist, pay a fine”. The labour side agreement does not deliver an effective mechanism for the protection of labour rights. The side agreement on the environment has no effective mechanism to force Canada or Panama to respect environmental rights.
The agreement commits both countries to pursue environmental co-operation and to do work to improve their environment laws and policies, but it can only ask both parties to enforce their domestic laws. If they do not, there are no consequences. In other words, Panama can do anything it wants to the environment and there are no consequences.
Why is the Conservative government in such a rush to move more jobs overseas and enhance the capacity of multicultural corporations to evade taxes and leverage additional power over Canada's government and Parliament? With this agreement, we will move more jobs out of Canada, the same as the Brazilian company that bought Inco and moved jobs out of Canada. When jobs are moved out of Canada, there is no net benefit to the Canadians.
We are not against free trade agreements. We are not against foreign ownership. We are against losing our jobs in Canada. We want these agreements to be beneficial, not only to the Panamanian people but also to Canadian people.
The Canada-Panama agreement is another marginally improved copy of the George Bush-style approach to trade. It still puts big business before people, with no effective enforcement of human rights and pays lip service to the environmental protection without any real, tough measures or dispute resolution mechanisms.
George is back.
I haven't heard that for at least one speech.
Mr. Claude Gravelle: I can hear the opposition members talking about George Bush, but they are sure anxious to follow his lead. That is why the want to sign the trade agreement with Panama.
According to the U.S. Department of Justice and many other entities, Panama is a major financial conduit for Mexican and Colombian drug traffickers and money laundering activities. Again, just like we did with Colombia, we want a free trade agreement with a drug-producing country. How will that benefit Canadian workers? I do not know.
It is yet another trade deal negotiated in record time, without any consultations with trade unions, environmental groups or civil society and citizens. A fair and sustainable trade deal would not just address the needs of business, but also the needs of working families and the environment.
I will give the House our vision of a realistic free trade policy. The NDP reaffirms its vision for a fair trade policy that puts the pursuit of social justice, strong public sector social programs and the elimination of poverty at the heart of an effective trade strategy. Would it not be nice if we could help eliminate poverty in Panama with an effective fair trade agreement?
Canada's trade policy should be based on the principle of fair, sustainable and equitable trade, which builds trading partnerships with other countries that support the principle of social justice and human rights, while expanding business opportunities. We want our Canadian businesses to expand their opportunities, but we want them to do it in a fair and equitable way for workers across the world.
Fair trade should be the overarching principle, not just an afterthought of trade negotiations. The NDP strongly believes in an alternative and a better form of trading relations that can be established with Panama and other countries, one that includes the following within an overall fair trade strategy.
The first is to provide a comprehensive common-sense impact assessment on all international agreements that demonstrates the trade deals Canada negotiates are beneficial to Canadian families, workers and industry and that the government does not sign any trade agreement that would lead to net job losses.
The second is to ensure that the trade agreements Canada negotiates support Canada's sovereignty and freedom to chart its own policy, support our ability to be a competitive force on the world stage and support the principles of a multilateral fair trade system.
The third is the fundamental principle that all trade agreements must promote and protect human rights by prohibiting the import, export or sale in Canada of any product that is deemed to have been created under sweatshop conditions, forced labour or other conditions that are not in accordance with fundamental international labour standards and human rights.
The fourth is the fundamental principle that all trade agreements should respect sustainable development and the integrity of the ecosystem.
The fifth is that any time the Government of Canada signs a free trade agreement, the decision to proceed with enabling legislation would be subject to a binding vote on whether or not to accept the terms of the agreement.
The current system which consists of tabling FTAs in the House for a period of two sitting days prior to ratification is neither mandatory nor binds the government to a decision of the House.
These are very simple suggestions that I have read. These principles could be easily implemented into any agreement that we sign with any country.
I do not know what the rush is with the Conservative government.
I would like to read into the record a letter from the Hon. Michael H. Michaud, member of Congress. Parts of this letter have already been quoted today, but I want to read the whole letter:
|| Just when we thought we'd heard almost everything there is to know about the American International Group (AIG), from its bailouts to its bonuses, many may not know AIG is suing U.S. taxpayers claiming it “overpaid” U.S. taxes on activities in Panama, a country which applies low to no regulations and taxes on firms registered there. AIG wants to get back those taxes it dodged with this Panamanian front....
We could substitute “U.S.” or “American corporations” or “AIG” with any Canadian company.
|| Panama's industrial policy is premised on obtaining a comparative advantage by banning taxation of foreign corporations, hiding tax liabilities and transactions behind banking secrecy rules and the ease with which the U.S. and other firms can create unregulated subsidies. According to the State Department, Panama has over 350,000 foreign-registered companies.
AIG is very keen on tax havens with Panama.
Imagine, a small country like Panama has 350,000 foreign registered companies. I think the only reason it has so many foreign registered companies is that it is a tax haven. Companies do not have to pay taxes so they are investing in Panama.
The New York Times ran an exposé on how AIG is currently suing the U.S. government for $306 million in back taxes it claims it does not owe thanks to its use of one of Panama's corporate entities, Starr International Company, SICO. SICO is AIG's largest shareholder. It is also the manager of a compensation fund for AIG employees who are paid by AIG in shares. SICO's chairman is former AIG chairman Maurice Greenberg. The same company that received government bailouts and used taxpayers dollars for outrageous bonuses is now demanding twice the amount of the bonuses it paid in back taxes.
If people are not already outraged by the greed of AIG executives, the fact that it is using Panama's tax haven statute as a way to sue the American taxpayers for back taxes is completely egregious. The Panama free trade agreement would make matters worse.
I will finish by asking, what is the rush? Let us stop and think about what we are doing here. Let us think about the Panamanian workers. Let us think about the Canadian jobs we could end up losing.
Most of all, let us think about the Canadian companies that are hiding money in Panama and not paying taxes. That is tax money that could be used to improve our health care system, improve our education system and provide long-term care facilities which we are lacking. We could use those taxes for a lot of other good Canadian values.
Madam Speaker, I am pleased to have this opportunity to speak in the debate on Bill .
We are debating a motion that was proposed and moved by the member for , the NDP labour critic, to delay consideration of the bill for six months, given the serious problems with it that she outlined in her speech yesterday. We usually call it a hoist motion, and if there has ever been a piece of legislation before the House that deserves to be hoisted off the agenda, it is this bill to implement the trade agreement between Canada and Panama.
Once again, we have before us a bilateral trade agreement that was presented to the House and Canadians with all kinds of claims about how good this will be for Canada and the Canadian people. Sadly, the reality is that in the past these free trade agreements have not done much for either Canadians or for trade.
There is a debate going on about the efficacy of these agreements. Studies are showing that more often than not trade actually declines between countries after bilateral free trade agreements have been signed. This has been shown to be the situation in the United States, with the agreements that it has signed. As champions of this method of improving trade around the world, the Americans will really have to struggle with that research.
The NDP international trade critic explained earlier today that, when we look at the value of Canadian trade in real dollars, factoring in changes in the value of the dollar, this lessening of trade is in many cases true for Canada as well, perhaps with the exception of NAFTA. Canadian trade exports to countries with which we have signed bilateral trade agreements have actually gone down after the agreements have come into effect. Costa Rica is a good example. And generally, there is no clear correlation between increases in exports and these so-called free trade agreements.
In addition, some people are arguing that our trade exports with the United States would have gone up regardless of the NAFTA agreement. Even with NAFTA, the grandpappy of all these agreements, there is some question about how well it did all the things that it promised to do. The benefits of these deals are highly overrated and oversold by the governments that have put them forward to the Canadian people and the House.
The reality is that the situation of Canadians has not improved with the signing of these free trade agreements, starting with NAFTA. Where is the prosperity that was promised every time we heard about one of these agreements? The incomes of the wealthiest 10% of Canadians have increased dramatically since the implementation of the NAFTA agreement, but every other income category in Canada has either stagnated or declined. These deals have not been good for middle-class Canadians. They have been a disaster for low-income and working Canadians.
There is a real problem with bilateral trade agreements, with seeking out specific trade agreements with specific partners around the world. There is also a serious problem with the effect these agreements have on Canadian sovereignty.
We have all heard about chapter 11 of the NAFTA agreement, which allows for the override of the democratic will of Parliament by corporate interests. We know that the same kind of provision is included in the deal we are discussing today. It has been included in other trade deals that have been brought forward since NAFTA, and we know that such a clause amounts to a serious diminution of the sovereignty of Canada. We have to protect our ability to make the laws that we need in order to ensure prosperity and success in our own country.
It would be great if the Conservative government spent as much time and effort promoting Canadian trade as it does in negotiating these questionable free trade agreements. It is remarkable to consider how little Canada spends on promoting Canadian exports around the world, compared with Australia or the European Union. There is probably more bang for our buck in trade promotion than in pursuing these kinds of deals.