Mr. Speaker, it is a pleasure to rise in the House today to speak to the Canada-Panama economic growth and prosperity act. I was worried that I would not get here on time; my plane was delayed.
This is an important piece of legislation, as we can tell from the opposition benches. There is a lot of interest in it and we certainly encourage and look forward to the support of the opposition on this important bill.
Our government is committed to protecting and strengthening the financial security of hard-working Canadians. Our focus continues to be the economy, creating jobs and economic growth to benefit Canadian workers and their families. That is why we are continuing to deliver our job-creating pro-trade plan. The Canada-Panama economic growth and prosperity act is a key part of this plan.
We Conservatives understand, as do hard-working Canadians, that trade is a kitchen table issue. By that I mean that Canadians intuitively understand that trade is the key to their financial success. One in five Canadian jobs and over 60% of our annual GDP is generated by trade. Trade is a matter of fundamental importance to workers, as it helps put food on the table and helps families make ends meet.
In the past few months we have seen a vivid reminder to all of us that the world economy remains in the grip of a global economic crisis. The fragility of global markets has emphasized the importance and urgency of continuing to diversify our trade relationships and expanding our exports with emerging market economies like Panama.
These are challenging economic times. Problems in the global economic situation continue to persist. That is why our government is taking action today to create jobs and help our businesses and their workers succeed in the years ahead. That includes our ambitious pro-trade plan to help businesses expand their presence around the world.
In these tough economic times, Canadians expect their government to do everything it can to enhance the ability of Canadian firms to participate in global markets and to create an advantage for Canadian businesses. That is why our government took action on our budget 2010 commitment to make Canada a tariff-free zone for industrial manufacturers.
Eliminating tariffs on goods used in manufacturing helps Canadian companies lower their production costs and increase their competitiveness. This contributes to a stronger economy, creates jobs and growth here at home, and reinforces our G20 leadership in the fight against protectionism.
It is actions such as this that demonstrate our government's clear understanding that there is a link between open markets and free trade and jobs and the quality of life here in Canada. We know that when Canadian companies succeed, Canadian workers succeed.
Free trade agreements help small and large businesses. In fact, small businesses in particular are responsible for 43% of all Canadian exports. This free trade agreement would help small business exporters do what they do best: create jobs and wealth for this country.
With this legislation we are one step closer to giving Canadian businesses the access they need in Panama. By improving access to foreign markets for Canadian businesses, we are supporting the Canadian recovery and creating new jobs for Canadian workers.
In the midst of the global downturn, this government has demonstrated its commitment to seek out more trade and investment opportunity for our businesses.
Through the Canada-Panama economic growth and prosperity act, Canada is also sending a strong message to the world. Canada will not resort to protectionist measures and will continue to fight for an open rules-based system.
As a trading nation, Canadian workers, companies, producers and investors need access to the international marketplace to stay competitive. Canada is an export-driven economy, and pursuing bilateral and regional trade agreements is essential to bringing continued job prosperity and economic growth to Canadians. That is why our government has established an ambitious pro-trade plan.
A free trade agreement with Panama is also a part of our government's efforts to strengthen Canada's engagement in the Americas. Panama occupies a unique and influential position in the global trading system, thanks to the Panama Canal. This vital gateway is currently being twinned. Our government recognizes that Canadian firms are well placed to help. It should be noted that when the twinning of the Panama Canal is finished, it will carry approximately 5% of the entire trade on the planet. That is an opportunity Canada cannot turn its back on.
The would generate increased export and investment opportunities for Canadians by creating a preferential and more predictable trade and investment environment.
For example, for exporters of Canadian goods, Panamanian tariffs on over 90% of Canadian goods exported to that country would be eliminated upon entry into force of the free trade agreement. Most remaining tariffs would be eliminated over a period of between five to fifteen years.
For Canadian service providers, the free trade agreement would help expand market access opportunities in areas such as information and communications technology, energy and financial services.
This agreement would benefit workers in every region of this country.
For example, Quebec would benefit from the elimination of Panamanian tariffs on key exports, such as machinery, vehicles, pork products, pharmaceuticals and aerospace products.
Investment and services provisions would benefit the engineering, construction and transportation sectors.
Ontario would benefit from the elimination of Panamanian tariffs on key exports, such as pharmaceuticals, machinery, information and communications technology products, and electrical and electronic equipment.
Financial services provisions would benefit Canadian banks and financial service providers operating in Panama.
Western provinces would benefit from the elimination of Panamanian tariffs on key export interests, such as fats and oils, processed food, pork, information and communications technology products, pulses and cereals.
The Atlantic provinces would benefit from the elimination of Panamanian tariffs on key export interests such as frozen potato products, trees and plants, fish and seafood, and forestry products.
For Canadians looking to invest in Panama, the free trade agreement includes a chapter of comprehensive rules governing investment. The rules provide greater protections and predictability for Canadian investors and their investments in Panama.
The free trade agreement also provides Canadian exporters of goods and services greater market access to Panama's government procurement opportunities, including those related to the Panama Canal expansion and other infrastructure projects. It is clear that this agreement would benefit Canadian workers and their families.
I am also pleased to report that in July 2011 the OECD formally placed Panama on its list of jurisdictions that have substantially implemented the international standard for exchange of tax information, commonly known as the white list. This is an extremely important achievement. It demonstrates Panama's commitment to combat international tax evasion. I trust it will appease concerns regarding taxation.
Panama is committed to the implementation of this free trade agreement and has already completed its domestic ratification process.
Canada is not the only country with whom Panama has negotiated a free trade agreement. Panama is deepening its regional economic partnerships and is expanding its global reach through the negotiation of trade agreements with countries such as the United States and the European Union.
As members of Parliament may be aware, the United States Congress approved the United States-Panama trade promotion agreement on October 12, 2011. This agreement, which could enter into force as early as 2012, would provide American firms with preferential access to the Panamanian market. Many Canadian goods and services compete directly with those of the United States in Panama. Canadian products would be at a significant competitive disadvantage if they continued to face duties while products from the United States enjoyed duty free access.
We cannot stand by and let Canadian companies compete on an uneven playing field. We must act quickly to ensure our businesses and workers can compete and remain competitive in the Panamanian market and reap the substantial benefits of this trade agreement.
I think all Canadians should be proud of this agreement. This treaty is a high-quality comprehensive agreement that would be beneficial for Canadian workers and their families. As I mentioned before, a free trade agreement with Panama would give Canadian exporters, investors and service providers preferential access to a dynamic up and coming economy. Two-way merchandise trade between Canada and Panama reached $213.7 million in 2010. As these figures demonstrate, Canadian exporters have been very active in the Panamanian market but there remains significant untapped potential.
Once the new agreement is in place, Canadian businesses will benefit from lower tariffs. This agreement would eliminate tariffs on 99.9% of recent non-agricultural imports from Canada with the remaining tariffs to be phased out over five to fifteen years. Tariffs would also be lifted immediately on 94% of Canada's agricultural exports to Panama. Panama currently maintains tariffs averaging 13.4% on agricultural products, with tariffs reaching peaks as high as 260%. This significant reduction in trade barriers would directly benefit a number of sectors that already have established business ties in Panama, including agriculture and agrifood products, pharmaceuticals, pulp and paper, vehicles, machinery and information and communications technology products among others. By eliminating tariffs on these goods and many others, Canadian exporters and producers would become more competitive against competitors from other countries such as the United States, the European Union, Chile and Singapore which already have or are seeking preferential access to the Panamanian market.
This agreement would also help Canadian businesses take advantage of the new investment opportunities in the Panamanian market. Panama is an established and growing destination for Canadian direct investment abroad, particularly in areas such as construction, mining, and banking and financial services. The stock of Canadian investment in Panama is expected to grow in the years ahead. It reached $121 million in 2010, in part due to the many infrastructure projects planned by the Panamanian government and the private sector. Once this agreement is implemented, Canadian investors will enjoy greater stability, transparency and protection for their investments.
The agreement would also ensure the free transfer of capital related to investment protection against expropriation without adequate and prompt compensation and non-discriminatory treatment of Canadian investments. Under this free trade agreement, all forms of investment would be protected, including enterprises, debt, concessions and similar contracts. These reciprocal commitments would serve to promote bilateral investment flow which is crucial to linking Canada to global value chains.
Among the most important benefits of this agreement would be the increased ability of Canadian companies to participate in large-scale infrastructure projects funded by the Panamanian government. Indeed, with the Panamanian government investing heavily in its country's growth and strategic importance, government procurement opportunities were a key driver for the negotiation of a free trade agreement with Panama.
As a case in point, Panama is currently undergoing a $5.3 billion expansion of the Panama Canal. This expansion, which began in 2007, is scheduled to be completed by 2014 which will mark the 100th anniversary of the canal. It should be obvious that activities related to the ongoing expansion of the Panama Canal provide many opportunities for Canadian companies. Canadian companies in the areas of environmental technology, capital projects, human capital development, construction materials and marine technology stand to benefit greatly from this ambitious project.
However, this is not the only opportunity for Canadian businesses. Just last year, the Government of Panama laid out a five-year strategic plan in which it plans to spend $13.6 billion on the country's infrastructure. Under this plan, $9.6 billion would be allocated to infrastructure investments and other economic programs designed to stimulate further growth.
Some examples of projects the government is looking to undertake include airport construction, expansions and upgrades, a new convention centre, a new water treatment plant, power generation projects, agriculture irrigation systems, and a $1.5 billion metro system. These are areas where Canadian businesses possess the necessary experience and expertise to successfully bid on these projects. With the passage of this agreement, Canadian workers and businesses will be able to capitalize on these opportunities.
I am pleased to say that the Canada-Panama free trade agreement includes strong government procurement provisions that guarantee Canadian suppliers will have non-discriminatory access to a broad range of procurement opportunities, including those under the Panama Canal authority. This means that Canadian workers and companies, wanting to bid on a government procurement contract for goods and or services, will receive the same treatment as Panamanian firms. It is thus important that Parliament acts fast and enables Canadians to take advantage of these opportunities right away.
Canadian services providers and their workers also stand to benefit considerably from the Canada-Panama free trade agreement. On services, this agreement will provide a transparent, predictable and rules-based trading system to Canadian services providers, while ensuring they are treated equitably with Panamanian companies.
Canada negotiated enhanced market access opportunities that would go well beyond Panama's World Trade Organization General Agreement on Trade and Services commitments in services sectors of key interest to Canada. This means that Canadian providers in such areas as professional services, engineering, mining, construction and environmental services will have preferential access to Panama's market.
This agreement would provide a great opportunity to take our current bilateral trade and services to a new level in the years ahead. As we can see, the Canada-Panama free trade agreement is a comprehensive agreement covering everything from market access for goods to cross-border trade and services to investment and government procurement. It would provide rules to assist Canadian businesses doing business in Panama and would deepen our commercial engagement with a strategic partner.
Canadians understand that international trade is the lifeblood of our economy. Canadians value the real and tangible benefits that trade brings to our country. That is why they have entrusted this government with a mandate to focus on economic growth by forging new trade opportunities around the world.
It should not come as a surprise therefore that Canadian businesses have been strongly advocating in favour of this agreement. Let us listen to what Jason Myers, from the Canadian Manufacturers and Exporters, said about this agreement's potential to improve market access. He said it:
—will improve access to two growth markets for Canadian goods, services and investment at a time when Canadian manufacturers and exporters are focusing on finding new customers and business opportunities around the world.
Closer economic integration with Panama promises to deliver further gains for Canadian exporters, investors, consumers and the economy as a whole.
At a time when Canadian businesses are faced with the challenges of the global economic slow down, the quick implementation of the Canada-Panama free trade agreement is of tremendous importance to our economy.
I reach out to opposition colleagues in the House and I would ask them to support this agreement. This is an important agreement, not just for the Government of Canada, but for the country as a whole. Certainly, our government is focused on broadening and deepening our trading relationship, as it protects and creates jobs and economic growth for Canadian workers and their families.
I have some advice for my opposition colleagues. There are a number of special interest groups that continue to push their job-killing anti-trade agenda and they will continually invent any reason to oppose trade. I ask the NDP members, in particular, to stand strong against those groups, to be reasonable in their position on this important agreement for Canadian workers and to help us support the quick implementation and passage of the bill through the House.
This is important legislation. It means jobs in every part of the country from coast to coast to coast and where there are jobs, there are opportunities.
It has been pleasure to speak to the bill. As members know, this is the same bill we introduced in the last Parliament. During the 40th Parliament, the legislation was debated for 15 days and almost 30 hours. I think the debate is over. It is time to get this through the House.
Mr. Speaker, it is a pleasure to rise today to debate Bill . I will build off of the last question to start with and then return to some comments later.
It is important to note that New Democrats are in favour of trade. There is no doubt about it. None of us are against the movement of goods and services, but what we prefer is some balance in our trade agreements. The constant theme of trade is that when we give something, we get something back. Under this administration and previous ones, Canada has slipped significantly. It has signed a series of bilateral agreements since NAFTA that have actually put us into a significant trade deficit, even with the United States. My community lost the Auto Pact in NAFTA, and subsequently and eventually our auto manufacturing has gone from number two in the world to number eight.
When we look at Bill and the repercussions it could create, there are significant aspects with the loss of trade. It does not automatically guarantee that we are going to be the winner in a trade deal. Often Canada's bilateral agreements have been with smaller nation states that have advantages through lax environmental, labour and regulatory systems that allow their products to come into our markets while it is difficult for our products to subsequently get into theirs.
There are also issues related to non-tariff barriers, which I will touch on briefly. One country that has not come forward is Korea. There are tariff barriers there, but there are also non-tariff barriers in the auto manufacturing sector. As a result, hundreds of thousands of vehicles flood into Canada every year, but we sell virtually no vehicles in Korea. That also happens even when we do not have trade agreements or there is no balance.
Another good example is Japan. I was told recently that the only Canadian vehicles sold in Japan were the ones sold to the Canadian embassy. It is a problem when hundreds of thousands of vehicles are pushed into our market and we do not have any reciprocity whatsoever.
The issue of Panama is interesting. It has been put on the white list. There is a blacklist, a grey list and a white list, and I will get into that a little later if I have time. The OECD categorized these lists, but there still is not an automatic assumption of all the characteristics of what a tax haven is. Second to that, there is still a process in place.
The NDP's former international trade critic, the member for , was very serious in trying to create an agreement that could be worked out with the government to deal with serious tax haven issues with Panama, as well as labour issues and a number of different things. Unfortunately, the government has not agreed to include that as part of its process. It has not been willing to compromise to a certain degree to ensure that tax havens are going to be taken care of.
It is interesting because Panama has quite a significant history of money laundering and tax havens. It also has a history of flagging ships of convenience and basically throwing the seafarers out the window, so to speak, making them vulnerable for treatment that is not part of the conduct of an international agreement. Panama has used that as a way to supplement income and attract corporations for its net benefit at the expense of others.
Although Panama has been moved to this list, it does not mean that all the measures are being taken into account. It does not account for some of the internal taxation issues, or even the current issues that are taking place. Just because it is moved off a list does not necessarily merit having no checks and balances. New Democrats were proposing some checks and balances to the system. There is a big difference between that and just having a blind faith bilateral agreement and seeing what happens later. It just has not been working for Canada in this case, and has not been working in general.
New Democrats want more specifics built into the agreement with Panama, and we are willing to do that. This bill will go to committee, which needs to hear from some witnesses. I have some testimony that I will table here today, but there needs to be testimony from individuals to look at whether there is actual movement.
I know that the parliamentary secretary made a very important point about the Panama Canal opening up in 2014. It is very important. The Panama Canal is historic. My former legislative assistant, Mohummed Peer, actually did a documentary through PBS on the original Panama Canal. It is quite a significant achievement and a marvel in many respects.
The new Panama Canal will actually have 5% of the world trade going through it. I think that is part of the reason that there is a lot of pressure to move Panama onto the white list. I think that is one of the reasons there has been a lot of effort to move it along that way.
However, that does not mean that it has actually moved that way. We need to have some testimony or some checks and balances to ensure that it does.
The government claims it is tough on crime, but often it has been very lax when it comes to organized crime or tackling some of the difficult challenges with our trade partners that relate to crime and also relate to how things are affected on our streets. I would look at my riding of , for example, where 40% of Canada's daily trade goes to the United States, basically, along two miles of the Detroit River. It crosses on four crossings: the hazardous materials truck ferry, the Ambassador Bridge, the CP Rail tunnel, and the Windsor-Detroit tunnel. We have two kilometres there.
Despite having 40% of that trade, recently the government has cut back on the customs facilities and branch there. Now decisions about stopping trucks and smugglers dealing in guns, drugs, and human trafficking are now made 400 kilometres away, in Niagara Falls. Despite having reports saying that there should have been a consolidation in Windsor, the government decided to move the headquarters and so forth to Niagara Falls. My point is that cuts have been made, ideological cuts, and that has actually opened up our exposure to these elements.
With regard to Bill , my worry is that we do not have any of the important backstops that are necessary to look at the tax havens. I want to touch on the issue of the OECD here, because it is important that people understand that there is a blacklist that includes countries that do not live up to any expectations or standards. There are really no countries left on the blacklist that I am aware of. The grey list includes a number of countries that a do not follow some tax standards. Then there is the white list, to which Panama has been added. It has been moved to it recently, so that is a benefit.
However, at the same time, we still do not have the necessary backstops that the member for proposed. One of his amendments, which was defeated by both the Liberals and the Conservatives, was a taxation agreement that would track legal income while the tax information exchange agreement would track all income, including that made through illegal means. Considering Panama's history and reputation on such matters, it would be clear that such an agreement is necessary before signing a trade deal.
The member for was attempting to ensure that there would be more information and a deeper tax scrutiny on Panama.That would be important because of the hundreds of thousands of corporations that are actually in Panama.
Some testimony from Todd Tucker of the Public Citizen's Global Trade Watch was very important at committee. I want to read a little of what he had to say. He said:
I have two central points. First, Panama is one of the world's worst tax havens. It is home to an estimated 400,000 corporations, including offshore corporations and multinational subsidiaries. This is almost four times the number of corporations registered in Canada. So Panama is not just any developing country.
Later he said:
Let me elaborate on the first point. What makes Panama a particularly attractive location for tax dodgers and offshore corporations? Well, for decades, the Panamanian government has pursued an international tax haven strategy. It offers foreign banks and firms a special offshore licence to conduct business there. Not only are these businesses not taxed, but they're subject to little to no reporting requirements or regulations.
That is important, because when we want to get into a fair trade deal, we need to have access to the types of conditions and strategies that we are going to compete against. These tax havens give advantages on the trade arrangement that do not favour Canadian exporters, and that is why we have seen the trade surplus diminish under the current government and a trade deficit emerge on a continual basis. Our manufacturers, our labourers, abide by international and Canadian standards that make it uncompetitive for them when corporations are able to use those subsidies, being tax havens, to basically lower their costs in the way that they are able to compete, so the realtionship becomes naturally unfair and unfitting.
I understand the pressure on the government with regard to increasing its access to markets. We have seen a couple of other interesting issues emerge recently that are motivating the government, not only with Panama but also Jordan, to move toward some type of bilateral agreement. We recently saw our international trade committee go to Europe for the European trade agreement, CETA. That agreement is very important in many respects. It has a lot of conditions that are going to be very critical for our supply management and a series of different things.
The interesting thing that took place while our trade group was in Europe was that the Conservatives signed a perimeter agreement with the United States for more harmonization on regulations and on different services and products, including food and automotive products, which might actually limit our exporting capability into Europe, because the content requirements are going to further rise between Canada and U.S. regulations and they will then also be negated for Europe.
I can understand the overall strategy of the government in trying to find alternatives out there, but again, it cannot be done in the absence of labour laws and other types of laws that are important.
On Panama, we will offer some recommendations and amendments to try to move forward. However, we are disappointed with the government's lack of ability to compromise and add those elements.
I want to touch a bit on labour rights. Panama has a history of issues with labour rights, and we do not have the type of scrutiny necessary to evaluate this. The member for was asking for a commission to be set up to look at labour rights and provide some type of mentorship, in a sense, so that there would be oversight of this trade agreement and labour rights.
In some of the countries we are trading with, labour rights are lower. These issues emerge even in the context of larger trading partners. For example, there are child labour issues with India. These can present serious problems for us to compete against.
Panama, as we know, has ships under flags of convenience. That is important because it allows Panama to lower its labour standards, putting a whole bunch of people at risk, while limiting our capability to compete.
We saw the very high-profile case of Paul Martin's Canada Steamship Lines using flags of convenience. There was quite a controversy in this country. It was really shocking that a prime minister's company would take advantage of this loophole for labour rights to be able to advance his own pocketbook from Canada Steamship Lines. Flags of convenience are another situation that is not addressed in this agreement.
Therefore, we are going to oppose the bill at this particular time. We feel that there should have been some greater compromise with this.
Also, the member for proposed a yearly review of this deal to examine whether or not Panama has actually advanced on some of the tax haven issues. We would be open to those things as long as there was going to be some greater scrutiny and follow-up. That is the problem with just accepting the bill the way it is right now.
As I conclude, I want to say for the record that New Democrats are supportive of a trade agreement. There is no doubt about that. However, we want to see progressive trade as the difference, and there has to be some balance with regard to our operations and our trade agreements. Right now we are continuing to gut the Canadian economy with some of our trade agreements. How they are working out has led to Canada having the lowest number of manufacturing jobs since we have been tracking them in the 1970s. This is a real problem, because we are losing the value-added work that is necessary for this country to compete in the global economy. What we are witnessing is that when we open up trade, sectors of the economy have actually lost some of their strength.
We can look at the tool and die and mould-making industry, for example. There has always been the argument that we have to go to high-end, value-added manufacturing to be okay, and that will be a way that we can actually evolve our economy. However, tool and die and mould-making in Canada are the best in the world, but we are struggling to maintain it because of tariff and non-tariff barriers and some of the things brought down in trade agreements that have opened us up to competition against lower standards for labour, lower environment rights and less scrutiny. These are real problems.
We have not addressed some of the serious issues. When we actually have some power and some capability, as in the case of Panama, we should have some conditions built into the agreement that would require analyzing and reviewing it to ensure that those things are measured and taken seriously. We would then be able to put pressure on Panama to comply.
The hon. parliamentary secretary said that if we did not do this, we would be punishing Panama and it would go back to being a greater tax haven. First of all, we still do not know the evidence. President Sarkozy was very clear in his remarks. In fact, he was asked to apologize for his remarks and refused. He is very serious about the effects of the tax haven situation in Panama. I do not know why we would not measure and analyze this. Why would we not build into our base model for trade with Panama the ability to influence, in order to end that type of practice? If we did that, we would have a greater effect on the drug trade, organized crime and corporate responsibility. A series of measures would allow Canadians to compete, while also helping to deal with these issues around the globe. We have an opportunity to do this.
We should not just let the OECD determine our relationship with another country. That is not right. We should be putting our own standards of greater scrutiny in place, because we know there are a lot of politics relating to the OECD. However, if we are serious, we have an opportunity for Canada to have a stronger relationship with Panama. We can actually then have some scrutiny over the conduct in Panama. Leaving it to the OECD is not enough. Its members have disagreements on what a tax haven is. At the same time, OECD members like President Sarkozy note that the tax haven situation has not gone away. I think the evidence is strong enough that it merits our making some amendments. We will look at that in committee.
We are disappointed that the government came back with the same bill. It has been around a number of times, the first being August 11, 2009. The bill has been punted back and forth and subjected to electoral changes, yet has not changed at all. That is a real problem for us. We would have thought that at some point the government would introduce some of the measures it heard concerns about, so that it could move the bill through the House more quickly. There is no doubt that if there was that intent, we could move this legislation through the system a lot more quickly.
The member for was very clear about our concerns with respect to the bill. We would take this approach: we would go back to committee and examine it and hopefully have an opportunity to convince the government to make these changes. If the government were willing to make these changes, then we would work with it to move the legislation through as long as it would ensure that the tax haven, human rights and labour issues would be addressed and that there would be an ability for us to follow through. If we just act in blind faith, we know the results. We know the government's record.
Canada has diminished its capability to trade, especially from the value-added aspect. We are about more than just oil, gas and natural resources in this country. This country was built on value-added work, especially after the Second World War, when there was a real intent to make sure there would be opportunities. Just opening up a market and reducing tariffs and trade does not guarantee that we actually improve our quality of life.
There is no doubt that we want greater access to these markets in Panama, Jordan and the EU. Some policies will be changed; people who have already invested in businesses and parts of the economy will be affected. We need to identify those areas and ensure that Canadians can compete in a fair way. There may be damage to certain sectors of the economy. I know that the government is looking at putting supply management on the chopping block in a number of different agreements. If we implement those types of measures, there has to be a business case and a plan. Therefore, we should be proposing a series of amendments at committee to ensure that these issues can be taken care of.
I appreciate the opportunity to debate this bill. I think it is important for Canadians to understand where our economy is going. Our trade deficit has gone so dramatically high that it is a serious threat to our national economy and to our quality of life. It really shows the mismanagement of the government by just blindly thinking it can sign small bilateral agreements to solve the Canadian economy. We have to have a value-added economy. This agreement is a small part, but it actually has a big part to play in the tax haven issues.
The reality that we all understand is that Panama, as the canal opens up, will have a lot of power. The question is, what will we do right now to ensure there is some fairness and reciprocity regarding the abuse of tax havens?
Mr. Speaker, I am pleased to speak to Bill .
I mentioned the full title because I do believe that very important parts of this agreement, and ones we have been pushing for a long time, are the side agreements on labour co-operation and the environment. Whether they are strong enough at the end of the day, that is certainly something at which the committee will have to have a more in-depth look.
For years, various trade agreements have left out the important points of labour and the environment. It is unconscionable that in a trade agreement we would ask our businesses to compete on so-called fair free trade with other countries, where there are abuses of labour, low paid labour, and regulations on the environment, others do not. It is important to use these trade agreements to bring up labour and environmental standards around the world.
The trade agreement with Panama, though, is yet another example of the government pursuing new arrangements at the expense of established agreements. The most recent indication that the government is better at talking about the significance of trade while ignoring the practical matter of securing our trade with countries we have been trading with for a long time is demonstrated by the most recent trade statistics.
This past Friday, Stats Canada indicated that our merchandise exports declined by 3% and imports increased by 1.9%. Our trade balance, again, slipped into deficit.
While we are getting all kinds of talk from the government and the member for earlier in his remarks when asking a question of the parliamentary secretary talked about how aggressive the government is in securing trade agreements. Yes, it is aggressive. There is no question about that. However, it is aggressive in flitting all around the world trying to establish agreements with any number of countries, not big players in terms of actual trade, but while it is doing that, it is ignoring the countries with which we already have established trading relationships, especially the United States.
The government's mismanagement of Canada's trading relationships has resulted in trade deficits for the first time in 30 years, and that is worrisome.
Yes, while we support this particular trade agreement, we believe the government is failing over all in terms of a trade agenda around the world, basically by ignoring the key market that we trade with, which is the United States. In that market, in terms of the value of trade on a daily basis, more than $1.4 billion is traded between Canada and the United States. According to the international trade publication of Canada's State of Trade 2011, in 2010 the United States market accounted for 74.9% of our merchandise exports, and by 2040, according to the trade department itself, the U.S. share of Canada's exports will be 75.5%.
That regardless of the diversification of trade, even this government acknowledges, in its own documentation, that the United States is and will remain the dominant trading party of this country.
I express that because of all the propaganda and rhetoric we are getting from the government. It talks about a new trade deal here a new trade deal there. It is negotiating Panama today, but it is ignoring our established markets, and that point has to be made.
So yes, while the Conservatives sign the agreements, and they can add up the numbers, the fact of the matter is that they are failing Canadians on the trade agenda, especially with the United States of America.
In terms of merchandise trade, in 2010 Canada exported $339.4 billion internationally. The vast majority of our merchandise trade was with 10 countries, which, in descending order, were: the United States, accounting for 74.9%; the United Kingdom, 4.1%; China, 3.3%; and then Japan, Mexico, Germany, Korea, Netherlands and Brazil.
It is sad to say that we are now starting to lose ground in the Korean market, which is one of those top 10. The United States has just signed a free trade agreement with Korea and the tariffs to the United States will come down.
Korea is a huge market for Canadian pork and beef. However, the discussions between Canada and South Korea just seemed to have dried up. I do not know whether it is a dispute or whether the is trading off Canadian pork producers because the is so concerned about the auto industry that is in his backyard.
The government has to come together and balance, in an auto-pact kind of way, in order to protect the Canadian car industry, which the clearly wants to do as it is in his own backyard. However, the has to stand up to the Minister of Finance and say that Canadian pork and beef exports to Korea, where we trade over $1 billion in that market now, are important too.
Every day from here on, with the United States tariffs coming down, we are going to start to lose our Korean market share. It will go up for the United States and down for Canada. It is time that the stood up for Canadian pork producers in that particular market.
This is not Panama, but is an important market and we have to pull the whole trade agenda into context. Panama is important, but it is extremely important that we not lose markets wherein we have already established a market share.
Canada is a trade dependent nation with 80% of our economy depending on access to foreign markets for Canadian exports. The Liberal Party supports the principle of free trade. We support initiatives that improve market access for Canadian business.
To look back at how we got into some of these established markets, we see a failing with the current government. Prime Minister Chrétien led trade missions, sometimes with premiers and businesses, to China and other countries around the world to establish and expand the trading relationship. That is not happening with the present . The trade minister seems to be flying around the world, but as I said, we are losing established markets. We cannot continue to allow that to happen.
The international trade committee studied Bill in the previous Parliament and consulted with stakeholders to ensure that the agreement was generally good for Canada. The committee travelled to Panama and I believe to Jordan as well. I congratulate the committee on its work.
However, I agree with the parliamentary secretary that we do not need to go through that broad hearing process again. It is on the record and we can look at it. I think there are other issues that we need to look at as a committee in order to do our work, but we do not need to repeat what was already done. I would hope that we can give this piece of legislation relatively quick passage in the House.
Panama has a relatively small economy. In 2009 we exported $90 million in goods to the country. It is, however, a stable country which has made significant progress in recent years in terms of development and democracy, which Canada is well placed to encourage.
Some of the exports that have great potential in Panama, such as fish, shellfish, french fry potatoes and agriculture products, do come from my region of the country, so the agreement should be good for some businesses and farmers in my own particular region.
I would like to put this into perspective. While this is a very worthwhile venture, the Conservative government has been lagging behind our competitors in important emerging markets like China and India, and this has been mentioned by previous speakers, and has only recently attempted to engage in those markets. Canada should be focusing its trade agenda on larger growing markets where there are more opportunities for Canadian businesses and Canadian employers.
The Conservative government has been failing, and I underline that, to protect Canadian interests vis-à-vis our largest trading partner, the United States. The United States is engaging in increasing protectionism, which has already hurt Canadian businesses, yet the Conservative government seems to be doing virtually nothing.
Time and again we have asked the about the buy American issue, and he has surprised and disappointed us. We asked him about the additional fees on products going by sea and air into the United States, and he surprised and disappointed us.
Against the rule of law and undermining democracy, the Canadian government is trying to do away with the Canadian Wheat Board, and the bill may pass through the Senate tonight against the ruling of the Federal Court and against the rule of law.
To the disadvantage of producers in this country, the government is giving to the Americans, undermining democracy in the process. The Americans have challenged Canada 14 times with respect to that particular agency. Canada won every time and now the government is going to give it away. One has to wonder who the minister is really working for. Is he working for American or Canadian producers?
It is one thing to kill the Canadian Wheat Board, but are the Americans going to reduce their subsidies? No, they will not. They never negotiated anything like that. It is a win for the Americans, and that is the problem that we are seeing with the Conservative government.
At the WTO we won the issue with respect to COOL, country of origin labelling. Is the government demanding that the Americans pay compensation to our producers? No. Our industry lost over $5 billion as a result of that illegal, improper action by the United States, and the minister just sits on his hands. It just gives them something else in return. That is the key point in terms of the trade perspective.
Panama is important. Bill is a reasonably decent bill, but the government has been avoiding the bigger and broader trade issue. At the end of the day, even with a new trade agreement, Canadian exporters and Canadian businesses seem to be consistently losing ground, and they are feeling it in their pocketbooks.
We support Bill , but our focus in terms of trade is on the larger issues and larger trading partners, both existing and potential, that the government is neglecting to the detriment of the Canadian economy and Canadian jobs.
The agreement with Panama is helpful and in the opinion of the Liberal Party the legislation should move to committee for further examination. As I said a moment ago, we do not need to take months to examine it. We should be able to give the bill reasonably quick passage if we examine it critically.
I have a couple of points on Panama. In spite of the global economic downturn, Panama's GDP grew at 10.7% in 2008, one of the highest in the Americas. In 2010, Panama's GDP growth stood at 7.5%. Panama is Canada's largest export market in Central America. The bilateral trading relationship has grown 61% since 2009, reaching $213 million in bilateral trade in 2010.
Primary Canadian merchandise exports to Panama include machinery, vehicles, electronic equipment, pharmaceutical equipment, pulses and frozen potato products. Canadian service exports include financial services, engineering, information and communication technology services. Merchandise imports from Panama include precious stones and metals, mainly gold; fruits; nuts; fish; and seafood products.
The existing Panama Canal, vital, as we know, for the international trading system, is being expanded, with completion slated for 2014. The $5.3 billion expansion is expected to generate opportunities for Canadian companies in construction, environmental engineering and consulting services, capital projects and more. That is an opportunity for Canadian companies to work on the ground and to gain economy back home in terms of increasing the size of Panama Canal so it can handle super Panamax vessels.
Elements covered by the FTA include market access for goods, cross-border trade and services, telecommunications, investment, financial services and government procurement. Panama maintains an average most-favoured nation, applied tariffs on agriculture products of 13.4%, reaching as high as 260% on some products. The FTA would eliminate these immediately, and that is a good thing, in the case of 90% of the products and gradually on the rest over the next 5 to 15 years. This would likely enhance the competitive position of Canadian agriculture products, such as frozen potato products; pulses; beans and lentils; pork, which was previously taxed at 47%; malt; processed foods; and beef. As I said earlier, several of those products are important to the Atlantic region.
On non-agriculture goods, Panama maintains an average MFN applied tariff of 6.2%, reaching as high as 81% on certain key Canadian exports. The FTA would completely eliminate these tariffs, which could help Canadian exporters of fish and seafood, construction materials and equipment, industrial and electronic machinery, paper products, vehicles and parts. Canada would immediately eliminate over 99% of our tariffs on current imports from Panama.
The free trade agreement also addresses non-tariff barriers by adopting measures to ensure non-discriminatory treatment of imported goods, promoting good regulatory practices, transparency and use of international standards. Ratifying this free trade agreement appears to have little economic risk for Canadian industries. The concerns that have yet to be resolved and relate to the issue of Panama is Panama as a tax haven and the issue of money laundering. I do not want to get into the technicalities in those particular areas. That is an issue that we need to talk about at committee. I asked the parliamentary secretary a question earlier. We see that as an important issue that really does need to be addressed.
The bottom line is that we are supportive of this particular trade agreement but we are critical of the government in terms of its overall trade agenda where it continues to lose out on already established markets as it vies to find new ones.
Mr. Speaker, I will be sharing my time with my friend, the member for .
It is my pleasure to rise in the House today to talk about the issue of labour in the context of the Canada free trade agreement.
It is my pleasure to rise in the House today to talk about the issue of labour, in the context of the Canada-Panama free trade agreement.
We live in an increasingly global community and it is integral that we work to broaden and deepen our trading relationships with countries around the world. Canada's pro-trade plan is creating economic opportunities and jobs for Canadians. As our focus remains on the economic recovery, trade agreements are opening up new markets and helping Canadian workers and businesses compete internationally. While improving trade opportunities for Canadian workers and businesses, we also recognize that ensuring strong labour principles, practices and standards is important. That is why Canada has negotiated a strong labour provision in parallel with this free trade agreement.
This labour agreement would ensure a level playing field for Canadian workers and businesses while creating good well-paying jobs for Canadian workers by making it clear that as we grow our economies, we will create jobs and economic growth in both our countries.
We know that the NDP does not want to support freer trade and we have a fundamentally different approach to engaging internationally than the NDP has. It prefers isolation, but we know that through engagement we can promote economic growth that would benefit workers in both countries. The NDP's record speaks for itself. It has opposed every single free trade agreement Canada has ever signed, including the North American free trade agreement and agreements with Chile, Costa Rica, Israel, Peru, Colombia, Panama, the European free trade association, Jordan and Honduras.
Through trade we are creating jobs and prosperity here in Canada. One in five Canadian jobs is generated by trade. We understand that through trade agreements such as this one, we create jobs and prosperity right here in our country. However, as part of the Canada–Panama agreement on labour co-operation, Canada and Panama have committed to ensuring that their labour laws as well respect and embody the International Labour Organization's 1998 Declaration on Fundamental Principles and Rights at Work. It is through this declaration that we demonstrate our shared commitment to improving labour standards and protecting workers' rights. It also demonstrates this government's firm belief that through trade we create economic growth and prosperity for workers in both countries.
I can confidently say that despite the NDP's protestations, the provisions found in the Canada–Panama labour co-operation agreement are thorough, comprehensive and robust. Both countries have committed to provide protections for occupational health and safety, including compensation in cases of injury or illness. Both countries have committed to establishing and maintaining minimum employment standards, including with respect to wages and hours of work. The parties have also agreed to provide migrant workers the same legal protections as those afforded to nationals. This prevents discriminatory working conditions and protects some of the most vulnerable workers. Overall, this agreement would help create and maintain productive and healthy labour environments that would benefit both countries.
As members can appreciate, these commitments are only as strong as the dispute resolution mechanisms and penalties that back them up. That is why this agreement also includes a strong dispute resolution mechanism that is transparent and easy to use. Both countries would be obligated to respect the agreements and could face financial penalties should they fail to respect internationally recognized labour rights or fail to enforce domestic labour laws. The Canada–Panama free trade agreement also includes a non-binding chapter on labour that reaffirms both countries' obligations and objectives as found in the parallel agreement on labour co-operation. As part of the Canada–Panama agreement on labour co-operation, the Canadian government has agreed to work with Panama to actually improve labour standards and help protect workers.
Through the international program for professional labour administration, Canada is currently funding projects in Panama to build institutional capacity, to foster social dialogue and to promote rights-based labour migration administration strategies. The Government of Canada also recently provided funding for a project to promote occupational safety and health.
By voting in support of Bill , our government will further strengthen the relationship that we are building with Panama. The bill seeks to implement the free trade agreement and the parallel labour co-operation and environment agreements with Panama.
This Conservative government will be voting to pass this legislation in order to support strong labour practices, strengthen Canada's economic position and build on our previous successes with our global partners.
That this question be now put.
Mr. Speaker, I thank my hon. colleague for sharing her time with me.
It is a pleasure and honour to rise in the House to talk about the benefits of the Canada-Panama free trade agreement and what it would bring to Canadian workers and their families from coast to coast to coast.
With one in five Canadian jobs generated by trade, we recognize how important our success depends on our ability to access foreign markets and global value chains. Our government received a strong mandate on May 2 to implement an ambitious job-creating free trade plan that will benefit Canadian workers and their families. Our plan is creating jobs and economic growth for Canadian workers and their families. For example, on August 15 of this year, the Canada-Colombia free trade agreement came into force. Through that agreement, Canada's producers and exporters will benefit from reduced or eliminated tariffs on nearly all of Canada's current exports to Colombia. This agreement demonstrates our government's commitment to creating good new jobs and economic growth for Canadian families, workers and businesses.
We continue to work to provide Canadian workers and companies with opportunities for growth in key economies. The access to foreign markets and the rules for secure and stable trade and investment across our borders is of key importance. Passing the Canada-Panama economic growth and prosperity act is an important part of this plan. This agreement represents an opportunity for Canadian workers and businesses to expand their operations in the growing and dynamic Panamanian economy.
Although small in size, Panama is a significant player in the region. It is a platform for commercial activity through Latin America and is a nexus for world trade. Canadian workers and businesses want to deepen their ties with Panama, access new commercial opportunities, and further develop their operations in this exciting market. Passing the Canada-Panama economic growth and prosperity act would help our export-oriented industries, investors and service providers do just that.
Many Canadian sectors have already demonstrated their interest in Panama. These include the machinery, motor vehicles and parts, pharmaceutical equipment, pulse crops, and other sectors. Our agreement with Panama would give these and other exporters enhanced access to the Panamanian market, addressing both tariff and non-tariff barriers. The agreement would offer tangible benefits to Canadians and companies across all regions of this country.
We should consider the prospective benefits to Western Canadian families. This agreement would specifically help my home province of British Columbia, as wood exporters would no longer have to pay Panamanian tariffs of up to 15% on their wood products. It would remove a significant barrier. It would be a great opportunity for British Columbia and the western forestry industry. Exporters of fats and oils would see tariffs as high as 30% eliminated from their products.
Alberta's power generating machinery sector and information and communications technology sector would no longer have to contend with tariffs of up to 15% on their exports to Panama. Agriculture producers in Saskatchewan would see the elimination of tariffs on pulses and cereals, which currently amount to 15% and 40% respectively. In Manitoba, producers of precious stones and metals, as well as iron and steel, would benefit from the elimination of Panamanian tariffs of up to 15% on their exports. In addition, Western Canada's investors that are active in the mining sector in Panama would benefit from this agreement's investor protection and legal framework.
Shifting to the other side of the country, the Atlantic region would also stand to significantly benefit from the Canada-Panama free trade agreement. My hon. colleague, the member for , will be especially interested to know that Prince Edward Island potato producers would see the elimination of Panamanian tariffs as high as 81% on their exports. I think that would make our folk legend, Stompin' Tom Connors, sing about Bud the Spud from the bright red mud rolling down the highway smiling, because the spuds are big in the back of Bud's rig and they are from Prince Edward Island. There would be more spuds rolling down to Panama if we get this agreement through the House.
In New Brunswick, producers of frozen french fries would no longer face Panamanian tariffs of up to 20%. Paperboard producers would see the elimination of tariffs reaching up to 15%.
Nova Scotian exporters of trees and plants will see the elimination of tariffs of up to 15% and tariffs of up to 20% will be eliminated for vehicles and parts exporters.
In Newfoundland, the information and communications technology sector will see the elimination of Panamanian tariffs of up 15% on Canadian products.
That is not all. The benefits of this free trade agreement will also be felt in Ontario, where key exports to Panama include pharmaceuticals, industrial and electrical machinery, vehicles and scientific and precision instruments. For pharmaceutical products, tariffs as high as 11% will be eliminated. Exporters of industrial and construction machinery, information and communications technology, electronic equipment and precision instruments will see the elimination of tariffs as high as 15% for their respective sectors.
In addition, Ontario service providers active in this market, including those providing mining, banking and engineering services, will benefit from a secure, predictable, transparent and rules-based trading environment, something we have heard about over and over from Canadian businesses. They want secure, predictable, transparent and rules-based trading. They will have the advantage of being able to plan for the future.
For Quebec exporters, investors and service providers interested in expanding into the Panamanian market will receive real, tangible benefits from the implementation of the free trade agreement. With $25.7 million in merchandise exports to Panama last year, Quebec accounts for the largest share of Canada's two-way trade with Panama. These exports are primarily in the areas of meat, mainly pork, paper and paperboard, pharmaceuticals, fish and seafood and electrical machinery and equipment.
Quebec's automotive sector will enjoy improved access for vehicles and auto parts, with tariffs of up to 20% eliminated. Quebec's pork producers will see the elimination of tariffs as high as 70%.
For Quebec's highly competitive aerospace sector, current Panamanian tariffs of up to 15% will be eliminated. Tariffs as high as 15% on pulp and paperboard will be eliminated.
As the Forest Products Association of Canada has testified in the Standing Committee on International Trade, the Panamanian market for forestry products such as pulp and paperboard is currently worth $120 million, but this figure grows by 10% a year, a great opportunity for the forest products industry.
Canada currently only exports $6.5 million in these goods, so there is significant room for growth and this tariff elimination will help considerably. In particular, it will help Quebec plants that supply a large quantity of the Canadian paper to Panama.
Quebec's service providers will benefit as well. For instance, SNC Lavalin, a company with substantial interests in Panama, has indicated that the Canada-Panama free trade agreement will “provide a good framework for further business”.
In 2010, Panama announced a $13.6 billion strategic investment plan that would focus on economically sustainable infrastructure projects, including a $1.5 billion metro system and an airport project that will triple its current capacity.
As we can see, the passage of the Canada-Panama economic growth and prosperity act will provide economic benefits to Canadian workers across the country from coast to coast to coast and across a wide number of industries and sector. It will provide new business opportunities for exporters countrywide, from forestry workers in British Columbia to farmers in Ontario, from information and communications technology providers in Newfoundland to manufacturers in Quebec.
We live in an era of global competition. Succeeding in the global economy means keeping pace with competitors and securing new access to foreign markets. There is no question that Canadian companies are world competitors, but the government has a role to play as well.
We need to strengthen Canada's trading relationships abroad, eliminate barriers to trade and provide opportunities for Canada's businesses to expand and grow in key markets. Our government is doing just that. We are fighting for Canadian workers and businesses to connect them with new opportunities in growing markets like Panama and to ensure they are not at a competitive disadvantage, vis-a-vis competitors benefiting from preferential market access.
With one in five jobs and over 60% of Canada's economy generated by trade, deepening Canada's trading relationships will create prosperity and opportunity for Canadian businesses, workers and their families.
While we are focused on protecting and growing Canada's economy with our job-creating, pro-trade plan, the anti-trade NDP wants to slap job-killing tax hikes on families and employers, which would kill jobs, hurt our economy and set families back. We cannot allow that to happen.
For this reason, this Conservative government and this party will be supporting the Canada-Panama economic growth and prosperity act.