The House resumed from February 27, consideration of the motion that Bill , be read the second time and referred to a committee, and of the motion that this question be now put.
Mr. Speaker, I am pleased to rise here in the House today to talk about the Canada-Panama economic growth and prosperity act.
Our government recognizes that trade and investment are the cornerstone of our economic success as a nation. In Canada, 60% of our GDP and one in five jobs depend on trade. While our economy has outperformed much of the world in recent years, we cannot take our success for granted. Hard-working Canadians are counting on us to continue to expand markets and open doors for our businesses to succeed around the world. That is what our pro-trade plan is all about. It is the most ambitious plan of its kind in Canada's history.
The Canada-Panama economic growth and prosperity act being debated here today is yet another step this government has taken to help Canadians compete and succeed in the global economy. Canadian businesses have long been asking for closer ties with Panama. This government will deliver.
Panama is an innovative, dynamic and rapidly growing economy that offers huge commercial opportunities for Canadian firms. According to a recent report published by the CAPA Centre for Aviation, Panama is the fastest growing economy in all of Latin America. It is expected to be the fastest growing economy in Latin America for the next five years. In 2010, Panama's real gross domestic product growth was 7.5%. It is expected to expand at an equivalent rate in 2011.
This growth, driven by the expansion of the Panama Canal and other major infrastructure projects, represents tremendous opportunities for Canadian businesses. It is important that Canadian firms establish an early presence in this emerging market and build solid relationships that will provide them with a competitive edge. However, the remarkable economic phenomenon that is taking place in Panama is not the only reason this government seeks to forge closer economic ties with this regional partner. Panama holds a unique and influential position in the global trading system, thanks to the Panama Canal. Panama represents an entry point for the broader region, thereby enabling access to neighbouring markets. Canada and Panama enjoy positive and expanding relations built on shared values. Our policies and objectives in the region are well aligned. Panama is a like-minded partner that has demonstrated its commitment to aligning its laws and regulations to international standards.
For example, Panama has made significant strides with respect to transparency in the area of taxation. In recognition of these improvements, in June 2011, the OECD formally placed Panama on its list of jurisdictions that have substantially implemented the international standards for exchange of tax information. This is an important milestone. It demonstrates Panama's progress in fulfilling its commitments to combat international tax evasion.
The Canada-Panama economic growth and prosperity act would mark a new chapter in the Canada-Panama relationship. We have negotiated a high quality and comprehensive free trade agreement. It covers everything from market access for goods to cross-border trade in services, to investment and government procurement. This agreement would help Canadian businesses and workers compete and win in the Panamanian marketplace. It would help forge an even stronger bond between our nations in the years ahead.
The Canada-Panama economic growth and prosperity act would create new opportunities for Canadian businesses and producers by removing the major tariff barriers that Canadian goods face when entering the Panamanian market. Currently, Panama maintains an average most favoured nation applied tariff on non-agricultural goods of 6.2%, with tariffs of 10% or more on a number of products of export interest to Canada.
Panama has agreed that it would eliminate the tariff on 89% of non-agricultural imports from Canada. The remaining tariffs would be phased out over the next 5 to 15 years. This would be a significant reduction in trade barriers expected to benefit a wide range of sectors across the Canadian economy, including fish and seafood products, paper products, vehicles and parts, construction materials and equipment, and industrial and electrical machinery.
Canadian agricultural exports would also benefit from this agreement. Currently, Panamanian tariffs of Canada's main agricultural exports to Panama, which are pork, pulses and Christmas trees, range from 0% to 70%. Once this agreement enters into force, 89% of Canada's agricultural exports would receive immediate duty-free access. The Panamanians would be buying their Christmas trees without tariffs. That is great news for the Christmas tree sector, along with the pork sector and the beef sector.
Products such as beef and pork, frozen potatoes and pulses would receive immediate duty-free access. Other Canadian agriculture exports would see tariff reductions and eliminations over 5 to 15 years.
That is not all. The Canadian services sectors would also benefit from the Canada-Panama economic growth and prosperity act. This agreement would provide Canadian service providers with a secure, predictable, transparent and rules-based environment which would facilitate access to Panama's $20.6 billion services market. Panama is a services-oriented economy offering opportunities for Canadian service providers, in particular for financial, engineering, mining and petroleum extractive services, construction, capital projects and environmental services.
On investment, the free trade agreement would grant investors access to transparent, binding and impartial dispute settlement through international arbitration. The strong obligations in this agreement would ensure the free transfer of capital related to investment, protection against expropriation without adequate and prompt compensation, and non-discriminatory treatment of Canadian investments. Panama is an established destination for Canadian direct investment abroad, particularly in the banking, financial services, construction and mining sectors. This agreement would serve to further promote this bilateral investment flow.
Among the key priorities for deepening our trade relationship with Panama are the remarkable procurement opportunities that exist in the Panamanian market.
In addition to the ongoing $5.2 billion Panama Canal expansion project, the Government of Panama has numerous infrastructure projects either under consideration or already in progress to build and improve roads, hospitals, social housing, bridges and airports. They are part of the $13.6 billion strategic investment plan from 2010-14. Among these projects is the Panamanian government's plan to construct a metro system in Panama City at an estimated cost of $1.5 billion.
The opportunities are out there and more are on the way. Under this agreement, Canadians suppliers would be granted non-discriminatory access to a broad range of government procurement opportunities including those under the responsibility of the Panama Canal Authority. Canadian firms possess the expertise in the areas that Panama is looking to develop. This agreement would enable them to bid competitively in pursuit of such opportunities.
However, it is important to note that many of these projects are already under way. If we delay implementing this agreement, Canadian companies risk losing out on major procurement contracts because they would not be able to take advantage of the government procurement provisions contained in the FTA. It is therefore critical that the Canada-Panama economic growth and prosperity act be implemented without delay.
I know some hon. members have raised concerns about the potential impact of pro-trade agreements on workers. The benefits of this FTA are clear. Canada needs more growth and more jobs. But let me assure the House, this government believes that growth and jobs cannot come at the expense of workers' rights or the environment. That is why the Canada-Panama economic growth and prosperity act would also be accompanied by an important side agreement that demonstrates our joint commitment to corporate social responsibility, the rights of workers and preserving the natural environment.
In parallel to this free trade agreement, the government has signed robust environment and labour agreements with Panama. I know that some members of Parliament here today think that Bill should be debated at length and ask why this government is in such a rush to pass this bill. The Canada-Panama economic growth and prosperity act was concluded and signed nearly two years ago. We have already lost tremendous opportunities by waiting to implement this agreement.
A bill to implement the Canada-Panama FTA was introduced in the 40th Parliament. The legislation was debated for 15 days and almost 30 hours. The Standing Committee on International Trade thoroughly studied this trade agreement in the previous Parliament and reported the bill back to the House without amendments.
At this point, I sincerely hope the hon. members of the House will work together to complete the debate at second reading on an expedited basis. We cannot continue to lose tremendous opportunities by waiting to implement this agreement. It is time to get the bill through the House.
It is important to note that Canada is not alone in its efforts to forge a closer economic relationship with this economy. Other countries are taking notice of Panama's potential and they are looking to gain first-mover advantage into this strong and growing market.
We in Canada cannot afford to sit on the sidelines while other countries vigorously pursue trade deals to secure market access for their products and services in Panama. Panama has an active and ambitious pro-trade agenda that includes FTA negotiations with a range of partners. Panama's FTA negotiations with the European Union were conducted in May 2010. This free trade agreement is expected to be signed later this spring and could possibly enter into force by the end of 2012.
Even more important to Canada, however, our main competitor in the Panamanian market, the United States, has completed an FTA with Panama. The United States Congress has already approved this agreement. The United States-Panama trade promotion agreement could very well come into force this year. If the House does not act swiftly and decisively, Canadian companies will be at a significant competitive disadvantage. Canadian firms will lose market share in Panama if U.S. firms benefit from preferential access to the Panamanian market while Canadian products continue to face duties.
We must act now to ensure Canadian companies compete on an even playing field and remain competitive in the Panamanian market. Closer economic ties with Panama promise to deliver further gains for Canadian exporters, investors, consumers and the economy as a whole. The benefits of a pro-trade agreement with Panama are clear. An agreement with Panama would support more Canadian jobs by enhancing our ability to export more goods and services into this market.
One of the associations I work with is ParlAmericas. I had the chance to go to Panama to speak with the diputados there about this agreement and what it means to them. This past summer I spent some personal time there with one diputado, who took me around to some of the high-risk communities that are in very poor suburbs in Panama City. He showed me just how much they rely on trade. They view trade as the ticket for the four-, five- and six-year-olds, who came running up to us looking for baseball bats or toys. Their parents and families want good jobs. They say they would have opportunities if they were allowed to compete in the world. They asked me why Canada will not sign this free trade agreement and what is taking so long.
The people of Panama understand trade. They are not scared of it. They understand that trade would bring benefits to their country just as it would to our country. That is why this is such a fair trade agreement and why the Panamanians have been asking us for so long to get this through. The ambassador for Panama here in Canada has been working around the clock trying to make sure that all members of the House understand how good this agreement is for Canada and Panama. This is a positive step forward. This is important for our companies and businesses.
When we talk about growth in Canada and our position in the world, we need to keep making trade deals like the one we have created for Panama. We also need to keep making trade deals like the trans-Pacific partnership agreement in areas like India and Korea. We have to be willing to allow our companies to compete with fair and unfettered access. That is what this government is doing.
I want to credit the for the action he has taken in this regard. This is a minister who gets it. He understands the importance of trade. He gets it because he talks to Canadian business people. He asks what he can do to help them grow their businesses, to make their businesses stronger and to ensure they continue to employ people. They tell him they want market access to Panama, Colombia and the United States. They want to make sure that when they have market access and have disputes, they can settle them. They say they simply want fair market access. Canadian companies are willing to compete and love to compete.
In my riding there are a lot of pulses grown. I have an agricultural riding and the pulse growers are ecstatic about this. They see a tremendous opportunity to sell pulses into the Panamanian market. They view Panama as a good stepping stone into the entire Latin American region for the pulse sector. They are not scared to compete. In fact, the Panamanians look at the quality of the pulses that Canada produces and the protein that comes from them. They say it is great and they are excited. If we do not have the FTA in place, another country will fill that market.
Do not think that other countries are standing still. Other countries look at the strategic importance of Panama and say they need to be there, that they cannot let the Canadians beat them there. What has Parliament done? It has delayed, delayed and delayed. There have been elections and other things that have delayed it, which are no fault of any parliamentarian, but in the same breath, there is no reason to delay now.
We need to move forward now. We need to see this agreement come to fruition. We need to allow our businesses to go down there and build those relationships in Latin America, especially in Panama. One thing we have to understand when we are dealing with Panama or any of the countries in Central America and South America, is that they deal based on relationships. Canadian companies need time to go down there and build personal one-on-one relationships with partners they can work with down there. They need the time. Canadian companies need this agreement passed so that they can go down there and take advantage of all these economic opportunities that I have talked about. That is just the tip of the iceberg.
We only need look at the growth potential of Panama, its location, the Panama Canal, the airport in Panama City, where Copa flies into, which is to be an international hub for every country in Central America and South America. There is so much potential. I would sure hate to see us delay our businesses from taking advantage of this potential.
That is why I would strongly encourage all members to look forward and talk to their constituents. The reality is that we need to get this agreement done as quickly as possible and get the bill through committee.
I would remind members it has already been vetted at committee. There is no reason for the committee to take a whole lot of time before bringing this back to the House. The committee should be able to look at previous testimony and understand the issues.
I would also remind the House that it did come back to the House from committee with no amendments, not one amendment. I would also remind the House that occurred during a minority government situation. It was a committee that had the involvement of all parties to push it through.
I would encourage my colleagues to use that co-operation as they did before to push this bill through, in order to allow Canadian companies to take advantage of the Panamanian market and allow Panamanians to experience the products Canadian companies have to offer.
Our businesses will benefit. Jobs will be created. Canada's economy will get stronger. Our constituents will thank us for that.
Mr. Speaker, it is a pleasure to rise to speak to the trade agreement between Panama and Canada. However, before I speak to that, I would like to speak about the general trade policy of the government.
It has been said in debate in the House that for the first time in 30 years, under the Conservative government, we have seen trade deficits. This is in part due to our over-dependence on the U.S. economy and the U.S. downturn, but it also has something to do with the failure of the government to effectively defend Canadian interests, the Canadian economy, Canadian companies and Canadian workers, against U.S. protectionism. We know there is a knee-jerk protectionism in the U.S. that crosses party lines. It is in the Democrats, the Republicans, the Tea Partiers and the occupiers in the U.S. There is a knee-jerk protectionism when times are tough, and we know that times are tough in the U.S.
We have to do a better job on both ends of Pennsylvania Avenue: at one end, the administration, the White House, and at the other end, Congress. We have to do a better job in defending Canadian interests legislator to legislator, senator and member of Parliament to senator and congressperson, government to government, minister to minister, prime minister to president. We have seen stronger relations between presidents and prime ministers than we have between the current President of the United States and the current .
The reality is there needs to be more attention placed in Canada on defending ourselves from U.S. protectionism. We have seen more than one set of legislative actions in the U.S. in buy American type provisions, which have threatened, hurt and, in fact, eliminated Canadian jobs and cut Canadian companies out of participating in U.S. government contracts. That has had a pernicious effect. We have seen buy American type provisions rear their heads again just recently and there is tremendous concern among Canadian manufacturers.
Looking at the overall Canadian economy, it is important to realize that while the macro numbers look reasonably good in some areas, if we go just below and break them down by region, we are having a very strange sort of recovery in Canada. In fact, what the world is going through now is not an ordinary recession and recovery, but is really a global economic restructuring.
Part of what is happening in Canada reflects that global economic restructuring with the rise of China and India and the demand for natural resources, such as oil, gas, potash and minerals of all sorts. We are lucky in many ways, as a country, to have so much natural resource wealth. The positive side of it is we do have that natural resource wealth and we do have the capacity to meet the demand for those resources. We do well within those sectors and within those provinces that have those resources.
If we look at Alberta, Saskatchewan and parts of Newfoundland, the economy looks much better than it does in the traditional economic heartland of Canada, Ontario, Quebec, the Maritimes, where we see a real falling back and a falling behind. In many ways what we are going through as a country reflects what some people call the Dutch disease, where our dollar is being driven up by demand for our natural resources and there is a crowding out of traditional manufacturing and value-added jobs. That is something we have to look at as a country. We have to consider that as parliamentarians. We have to understand the growing disparity between have and have not provinces.
One of the ways to address that is through a more robust trade policy. The current Conservative government spent its first three years in office chiding China and ignoring India. The government has turned around on both India and China as of late. It is going to take a while to rebuild relations with China. Canada's relationship is at a historic low after 40 years of remarkable relations with China, going back to prime minister Trudeau's opening up of China in 1968. He was the first western leader to establish diplomatic relations with post-revolution China. Before Nixon built a bridge to China, Trudeau had done that.
Much of that goodwill was damaged in the first three years of the current Conservative government. I do see that it is working assiduously to try to rebuild those relations, and that is the right thing to do. However, it is important to recognize that damage was done to those relations early on.
If we ask many global economists where they see the growth coming in the next 10 to 15 years, it is broadly believed that Africa represents tremendous opportunities. We have had a traditional aid relationship with Africa. We have to move from simply aid to an increased discussion and movement forward on trade with Africa. It is a continent with which Canada has had traditionally strong and historic relations and friendships. We need to redouble those relations. We should see the great commercial opportunity in Africa, opportunity that can benefit the people of Africa and the people of Canada. We could be partners in progress as Africa moves forward.
The Conservative government has focused largely on Latin America. Deepening our trade relations with Latin America is generally a good idea. It is not mutually exclusive, however, with having deep trade relations with China, India and Africa.
I see an opportunity for Canada to be a centrepiece in terms of global trade in many ways, to be a more central and leading figure in global trade for a number of reasons.
First, we have the best banking system and financial services system in the world. Not only are our banks successful in Canada, but they are successful globally, in China, India and Latin America. In some of the fastest growing economies in the world, Canadian banks are present and they are growing. A few months ago Bank of Nova Scotia bought 20% of the Bank of Guangzhou in China. A little over a year ago Bank of Nova Scotia bought all of Royal Bank of Scotland's Colombia assets. More recently, Bank of Nova Scotia bought a significant retail operation in Colombia. Bank of Nova Scotia can be found everywhere throughout Latin America and the Caribbean. It is not just Bank of Nova Scotia but Royal Bank, Bank of Montreal and TD Bank, particularly in the U.S.
One of the things that gives us influence in other countries is the presence and the strength in the reach of our financial services sector. We could be doing more to harness the power of the success of our financial services sector to affect positive change and influence in those countries.
Second, as I mentioned earlier, we are blessed in Canada with tremendous natural resource wealth that the China's and the India's of the world need. We have become very good at extraction. Our expertise in the extractive sectors is second to none in the world, not just in terms of oil and gas but also in mining. Much of the way we have developed our extractive sectors and our oil and gas sectors in Canada has given us the capacity to export wherewithal and technologies to other countries that have the benefit of natural resource wealth and are in the process of developing that wealth.
There is a lot of natural resource wealth in Latin America. Many of the countries in Latin America face some of the same challenges we have faced over decades in Canada. Many of them have a lot of natural resource wealth and need to now face the reality and the opportunity that there is unprecedented demand for that wealth. We can help, work with and partner with these countries.
Colombia is a country like Canada, with a lot of natural resource wealth in mining and in oil and gas. However, we also share a history with the people of Colombia in that neither Canada nor Colombia is a colonizing country. We are countries that were colonized. We also have a history of indigenous and first peoples in both countries.
Thirty years ago in Canada, most first nations and aboriginal peoples and their leadership were opposed to the development of natural resources and extraction in oil and gas. Today they are business and financial partners in the development of those extractive sectors. I would like to see us working co-operatively with the governments of Latin America to help them and us learn and partner in terms of best practices around the responsible development of natural resource wealth in a way that shares that wealth with first nations and indigenous peoples.
In these countries and in Panama there continue to be challenges. There have been issues around tax havens in Panama. There has been progress on that, but there needs to be more. I am of the belief that, in the same way there were and are challenges in Colombia, we have to ask ourselves, as people outside of these countries, how can we best influence and effect change in those countries. I believe that free trade agreements, with robust rules-based frameworks on things like labour, environmental practices and human rights, can strengthen our capacity to effect positive change and to partner with good people in those countries who want to move forward and to help their people move forward. Free trade agreements with strong labour and environmental frameworks give us more influence and the capacity to help in these countries, not just to build wealth for Canadian business people or to create jobs for Canadians but also to help those countries develop their economies and societies.
I share concerns that people in the House have expressed, from all parties sometimes, about some of the challenges faced in these countries in the past and present. The drug trade is an example. If we do not provide legitimate trade opportunities to these countries, the only opportunities that people have growing up in their villages and cities to make a living will be through the drug trade, narcoterrorism. If we are concerned about the drug trade in these countries, one of the best ways to help these governments and people fight narcoterrorism and the drug trade is to extend to them legitimate trade opportunities to buy their legitimate products. If we are not willing to do that, we are leaving many of those people stranded, potentially with their only lifeline being the drug trade, which is destroying their country and their society.
Free trade agreements with strong rules-based approaches to labour, to human rights and to the environment can help wean some of these countries away from the criminal activities that have sadly been part of their history over far too long a period. There has been a lot of progress in Colombia. Throughout Latin America, the economic growth in places like Colombia and Panama has been incredible in recent years.
For decades, Latin American countries were basket cases in terms of their economies. Whenever there was a World Economic Forum panel on Latin America, it was always on the basis of what we would do with Latin America. There was always another financial crisis, another series of government bailouts and country defaults. Last year, I served on a panel on the future of Latin America with President Martinelli from Panama. Last year, at the World Economic Forum, the focus of the panel was on the remarkable growth, opportunity and progress of Latin America.
I can tell the House that people like President Santos of Colombia and President Martinelli of Panama speak quite openly to the challenges they face in their countries. They speak quite openly to the challenges they face with corruption, organized crime, narcoterrorism, issues around FARC and other organizations, but at the same time as they acknowledge those challenges, they have put in place a road map to move forward.
Since the drug trade issue has been raised in the House as part of this discussion, I want to close with some consideration of drug policies in Canada, in the U.S. and in much of the developed world and their pernicious effect on Latin America. There have now been two different panels conducted by two different groups of former Latin American presidents, countries like Panama, Colombia and Mexico, on the impact of North American drug policies on their countries and the remarkable destabilizing impacts of our war on drugs on their countries.
I will provide a couple of facts. Prohibition did not really work that well with liquor. During the time of prohibition, Americans continued to drink but the biggest bourbon factory in the world was in Chihuahua, Mexico. However, after prohibition was lifted, it went back to Kentucky. The reality is interdiction, policing and incarceration did not work in terms of prohibition and it does not work in terms of our war on drugs. It costs a lot of money, it is hugely expensive economically and societally, and it is remarkably destabilizing to the countries of Latin America.
Colombia was largely successful due to the planned Colombia initiative, which was initially launched by President Pastrana and President Clinton and then further implemented by President Uribe and President Santos as a minister. In Colombia, the war on drugs was quite successful. However, Colombia's success in the war on drugs drove the drug cartels, which are very mobile, to Mexico. That is one of the reasons that Mexico and President Calderon have faced such challenges in the last couple of years. Production and distribution can be stamped out in one country but it goes somewhere else.
We need to actually develop rational approaches to drug policy in places like Canada and the U.S. and understand that interdiction, arresting and putting people in jail for this will not be as successful as treating drug issues as addiction and health issues. If we were to invest a fraction of what we are spending on police and incarceration in our war on drugs into treating drug addiction as a health care issue, treating mental health and helping people with addictions, we would have better results in Canada and we would stop punishing people in countries in Latin America who are penalized by our continued failed war on drugs policy in Canada.
When we are talking about that region of the country, I think it is important that we are open about all aspects of our engagement. One of the areas where are playing a negative role is in our drug policy here in Canada and in countries like the U.S. where we are playing a negative role in terms of our relations with Latin America.
Mr. Speaker, I would like to start by talking about the NDP approach to fair trade issues. As members know, we have come forward in the House for years and offered some of the best existing practices on trading issues around the world. We have come into the House and talked about the binding social obligations of Mercosur, for example, by social democratic countries in South America that have come together and put in place binding social obligations to reduce poverty. When we have raised that in the House, the Conservatives, not wanting to have anything to do with any sort of progressive fair trade agreement, have always said no. We have brought forward the progressive and binding human rights components that the European Union signed with countries outside of the European Union, again a product of a strong social democratic practice and principles, to make sure that those trade agreements actually include binding human rights obligations. The Conservatives and the Liberals have said they do not want any part of that.
We have pointed to some of the social democratic innovations. Australia, for example, has said that it would not put in place investor-state provisions because these override democratically elected governments. In an almost Flintstonian approach to trade taking us back centuries, the Conservative government continues to say, “Even though we're the only country in the world with these right wing investor-state provisions, we're going to keep them, Fred Flintstone. We're just going to keep pushing these bad components, primitive components, that every other country has moved away from, including the United States”. After the United States signed the NAFTA, it moved away from the investor-state provisions which these Conservatives hold so dear. We have offered that innovation and the Conservatives again have consistently said no.
We have offered all of these progressive fair trade approaches. These are the kind of trade agreements that are actually catching fire around the world, but every single time the Conservatives have said no. They have never seen a progressive fair trade agreement they cannot say no to every single time.
We have offered examples like the auto pact that we strongly supported in the past, a pact that actually helped to sustain and build up our automotive sector. The Conservatives say no to that type of progressive fair trade agreement. The Conservatives have never seen a fair trade agreement they like. They have never wanted to move forward with any type of progressive legislation on trade. They continue with their Fred Flintstone approach to trade with an antiquated, 30-year old infrastructure and template coming out DFAIT.
Conservative members might say that although it is antiquated and is Fred Flintstonian, it creates jobs. Let us look at the facts. Let us look at the impact of this type of Conservative approach to trade over the last few years. I know members are aware that we have the worst, the most horrendous, merchandise deficit in our history in this country. That means we are not exporting manufactured goods any more but importing them. We are creating jobs in other countries of course, but the result in this country has been a hemorrhaging of manufacturing jobs, good family-sustaining jobs, which used to sustain families right across this country. Nearly half a million manufacturing jobs are gone because of the government.
The government might say that it is exporting natural resources and, of course, the jobs go with them hand over fist. However, if we look at the overall balance, the current account balance of Canada's balance of payments, it is at its most horrendous deficit in Canadian history too. Even there we see a massive failure by this government to actually manage trading relationships in such a way that we would actually create jobs in Canada.
We have biggest most horrendous merchandise deficit and the biggest and most horrendous current account deficit in our balance of payments. Those facts speaks for themselves. There is not a single Conservative who is able to stand up and address that. It is a massive failure. The Conservatives just have to wave the white towel and say they have failed. I can see some of them smiling and nodding: they understand they have failed on this issue.
What has been the result? Of course, we have seen that hemorrhaging of manufacturing jobs. What has replaced them? I will come back to the Conservatives' bogus job figures in a moment, but when we actually look at what they have done to the economy, they have lost jobs, and the jobs they have created have been part time and temporary. Most tragically, the jobs the government has managed to create pay on average $10,000 a year less than the jobs they have lost.
After six years in power, we have seen the Conservatives attempt to bring forward a very misguided and antiquated template dating back to another century and there has been a lack of follow-up. From that they have managed to create an economy where we are throwing the good jobs away and, at best, getting part-time and temporary jobs paying $10,000 a year less.
What has the impact been for the average Canadian family?
I know that members and the people listening to this debate are aware that the average Canadian family over the last year has lost about 2% in real wages. Real wages have been tumbling. The decline has been serious and has had an impact not only on families but also on small- and medium-size businesses across communities and, as a result, on whole regions and provinces. It has an impact right across this country. We are looking at a 2% real wage fall for our middle class and hard pressed, poor Canadian families. We are seeing Canadians living through a substantial problem.
Tragically, the result is that Canadian families across this country from coast to coast to coast are now living with a record level of debt like we have never seen before in Canadian history. This level of debt has a stupefyingly significant impact on the average Canadian family. Families are already earning less and less because of some deliberate economic and trade policies of the government, and because of that level of debt, families are being more and more constrained.
These are the economic results we have to look at when we talk about what the government has done after six years in power. The results are the worst merchandise deficit in our history, the worst current account deficit in our balance of payments in our nation's history, and the worst level of indebtedness in our nation's history. That is Conservative economics.
Now the Conservatives will say they have created some jobs. Their jobs poor quality, part-time jobs, but they say they have created those jobs nonetheless. However, the reality according Statistics Canada data is that since May 2008, the government has actually created a quarter of a million jobs short of the level required just to maintain the same percentage of the labour force employed. Some 450,000 Canadians have come onto the labour market since May 2008, and only 200,000 of them have found work. That was even before we entered the catastrophic last six months under the current government.
We have seen job closures, factory closures. We have seen White Birch Paper, Electro Motive Diesel, and a whole litany of closed manufacturing facilities. At the same time, we have seen 60,000 full-time jobs evaporate, that is, 60,000 families losing a breadwinner. That is the record of the Conservative government.
The Conservatives say that their trade policy accentuates job creation, that somehow, magically, by signing these trade agreements, it will lead to job creation. However, in virtually every case where Canada has signed a trade agreement under the Conservatives, the exports to those markets have fallen after the agreements were signed.
There is only one exception and that is Mexico. I will not return to what my colleague from mentioned, the catastrophic meltdown in rural Mexico that has led to ongoing drug wars that have killed tens of thousands of people. That in part has been due to the economic policies of the Mexican government, as well as the removal of the tariffs that has destroyed much of rural agriculture in Mexico.
What we see in every case is a fall in exports to those markets, in real terms, which Conservatives do not use when they bring out the figures. Then, when they have put together such a catastrophic list of trade deals, where in virtually every case our exports to those markets goes down, what are the Conservatives doing wrong, aside from the Fred Flintstonian approach to trade templates from 30 years ago, stuff that has been disregarded by most of the progressive world? The other aspect is Conservatives simply do not walk the talk on providing support for export industries.
On research and development, we have the worst level of public investment among industrialized countries, the worst level of patent development among industrialized countries, the second worst level of Ph.D. development among industrialized countries. The reality is, even before we get to the research and manufacturing capacity, when we look at what Conservatives put out there in exports, it is tiny. It is pennies compared to what our major competitors are putting out to support product promotion and product support in those export markets. Australia spends half a billion dollars. Canada spends $13 million.
I have met trade commissioners, as I have travelled around the world with the trade committee and other committees, who do not even have the budget to buy a cup of coffee for a potential client of Canadian goods and services. The Conservatives have simply not walked the talk. They have starved that needed support for export industries for product promotion.
This brings us to Panama. The Conservatives failed on the trade strategy. They have not walked the talk on actually providing support for our export industries. For the third time they bring forward a bill, Bill , on an agreement with Panama.
What is the problem with an agreement with Panama? We talked about this earlier. The state department in the United States has very clearly declared that Panama is one of the worst countries in the world for the money laundering that comes from illegal drug activity.
The government does not think about the impacts. It never does. There is never an in-depth study of the impact of signing a trade agreement with any country, which is part of the Fred Flintstonian approach of the Conservative government on trade issues. It does not do an evaluation before it enters into a trade agreement and it does not do an evaluation afterward. In fact, those figures I cited, in real terms, about export development did not even come from DFAIT. We had to get those figures ourselves. Nobody on the Conservative side of the House is even monitoring what happens after a trade agreement is signed.
What we have is an agreement that the government has signed, in complete denial of what is a fundamental problem with Panama, and that is the fact that Panama does drug money laundering on a significant and ongoing massive scale. It has been cited by a number of organizations, the IRS in the United States, the U.S. State Department and the OECD, all of which have said that this is a tax haven for drug money, for illegal drug gangs in Colombia and Mexico.
The government, so panicked by its lack of economic performance, throws this agreement onto the floor of the House and does not even have the decency to do its due diligence before it gives it to members of Parliament to evaluate.
On this side of the House, the NDP caucus does thorough evaluations. We read through the bills. We take the government at its word and read every word to find out what the actual impacts are. Since the government does not do any due diligence and has no evaluation of what the impacts of the agreement are, we have to surmise and look at the impacts of the agreement.
Very clearly, from the outset when the government put forward this idea, we said that there was no way we should sign a trade agreement with Panama unless there was a solid and binding tax information exchange agreement in place. In a very real sense, we should not be importing from Panama the drug money, money laundering that takes place in Panamanian financial institutions. We said that very clearly when the government talked about negotiating an agreement. We said from the very outset that we needed a tax information exchange agreement.
To its credit, the government sent a letter to the Panamanian government. In the letter, the government said that it thought the Panamanians should try to close out the drug money, money laundering. It said that tentatively. The member for said earlier that the Conservatives did not want to lecture to drug gangs. I am sorry but on this side of the House we believe that when there are drug gangs involved, we should be cracking down on them. We should be more than lecturing, but the Conservatives may disagree.
We are talking about pretty fundamental economic policy but, more important, it is a reflection of Canadian values. It is also this idea which, on our side of the House, is something we take very seriously. We believe in walking the talk. When we talk about economic development, we believe in putting in place the mechanisms so Canada can grow and prosper economically. When we talk about fighting drug gangs, we do not say that we will try to fight the drug gangs in Canada, but that it is okay if they are in Panama laundering money and then sign a trade agreement that has no provisions to stop that money laundering in Panama from coming to Canada. We believe in walking the talk and being consistent.
We said that the tax information exchange agreement needed to be signed. We made that very clear from the beginning.
We heard testimony from a wide variety of people who came to the trade committee to talk about the trade agreement. It is important for members of the House, particularly on the Conservative side, to understand what the witnesses said about this agreement and the advisability of signing an agreement without any mechanisms to prevent money laundering.
Mr. Todd Tucker, who is the research director for Public Citizen's Global Trade Watch said:
—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....According to the OECD, the Panamanian government has little to no legal authority to ascertain key information about these offshore corporations, such as their ownership. Panama's financial secrecy practices also make it a major site for money laundering from places throughout the world. According to the U.S. State Department, major Colombian and Mexican drug cartels, as well as Colombian illegal armed groups, use Panama for drug trafficking and money laundering purposes. The funds generated from illegal activity are susceptible to being laundered through Panamanian banks, real estate developments, and more.
As well, Dr. Teresa Healy, the senior researcher from the social and economic policy department at the Canadian Labour Congress, talked about the context of labour rights currently in Panama. She said:
In response to the international perception that Panamanian labour laws were rigid and a disincentive to foreign investment...[there were] unilateral changes to labour law...from workers, it allowed employers to fire striking workers and replace them with strike-breakers, it criminalized street blockades, and it protected police from prosecution. The severity of this attack on labour rights was met with strikes and demonstrations. The police were exceedingly harsh in their response.
She was talking in 2010. She went on to say, “At least six people were killed, protesters were seriously injured, and many were blinded by tear gas and police violence”.
These are the kinds of issues that were brought forward to the trade committee, concerns that were raised about Bill .
On the other side of the House, Conservatives say that there are export markets to be had. However, the reality is when we look at the practices and we look at the record of the government, in every case, save one and that case over the past few years was one that was not signed by the Conservative government, following the signing of those agreements, we have seen a decline in our export markets.
We are facing a serious situation: a decline in manufacturing capacity, a decline in jobs, a reduction in real income and a profound level of indebtedness in our country that we have never seen before. We need a fresh, new approach on trade, not a Fred Flintstonian approach from 30 years ago that has clearly failed. A new NDP approach on trade could really bring jobs to Canada and could bring a new prosperity to our country.
Mr. Speaker, I wonder why today we are debating a free trade agreement between Panama and Canada. I wish I were standing here debating Bill , the safer railways act, for example. That is a high priority for me.
The bill we are discussing would allow the Conservatives to be soft on crime and on criminals. How would the bill allow the Conservatives to do that? It would allow criminals to hide money obtained through illegal means in the tax haven of Panama. In fact, the Conservatives do not really want to track this money from illegal activities. They have no problem doing a trade deal with Panama even though Panama refused to sign the tax information exchange agreement which would disallow criminals from hiding their money in that country.
Right now there is absolutely no transparency. In a small country like Panama, there are 400,000 corporations, many of which are there just to hide their illegal funds. One might ask what kind of illegal activities those corporations in Panama are involved in. The country is used to launder drug money. It is used to divert aid. It is used to bribe the government. It is used to fund paramilitary groups. It is used to defraud shareholders. It is used to embezzle public funds. It is used for human trafficking. It is used to trade in illegal arms. Those criminal activities are intolerable and the people involved in them should be punished.
However, this trade deal would allow criminals not only to avoid taxes, but to also launder money and hide their funds. In fact, Panama is known as a major financial conduit for Mexican and Colombian traffickers' money laundering activities according to the U.S. Department of Justice and other entities. Let me read a memo from the U.S. Embassy in Panama that was revealed by WikiLeaks:
Along with its sophisticated banking services, Panama remains an environment conducive to laundering the proceeds from criminal activity and creates a vulnerability to terrorist financing.
These are the words of the U.S. Embassy, not of the NDP. The memo indicates:
The money laundering process of: placement (putting money into a legitimate financial institution), layering (distancing the money from its origin) and integration (causing the money to re-enter the economy in legitimate-looking form) is perfectly replicated in Panama.
My gosh. Placement, layering and integration; this is how criminals hide their money in Panama. Not just in that memo from 2006, but in 2009 a U.S. Embassy cable on Panama reported Panama's failure to report Colombian kingpin David Murcia Guzman's laundering of drug money. It is incredible. These criminals are using the drug money they have made from selling drugs and wrecking people's lives. They are able to take the money made from doing drug deals and hide it in Panama.
The Conservatives have said that is okay. They are going to turn a blind eye to it and will not even ask about who is behind the corporations. They do not want to know what kind of people are hiding money. They do not want to know about the illegal activities. They do not think it is up to them. They will see no evil and speak no evil, because it is another country. They are going to wash their hands of it and allow the criminals to continue their activities. That is inexcusable.
How would the trade deal make it even worse? The Canada-Panama trade deal would worsen the tax haven problems. As the OECD has noted, having a trade agreement without first tackling Panama's financial secrecy practices would encourage this secrecy and allow even more offshore tax dodging.
There is reason to believe that the trade deal would not only increase tax haven abuses, but it would also make fighting them that much harder. How would that happen? For example, even if we could persuade the government to put in place legislation giving Panama a deadline to clean up its act or face sanctions, and we tell the Canadian banks that they are restricted from transferring money to their affiliates, article 9.10 of this trade deal says that each party shall permit transfers relating to a covered investment to be made freely and without delay into and out of its territory.
What does that mean? It means speeding up the transfer of illegal funds. It means giving criminals more freedom to cheat. It means making sure that they can hide their funds without any barriers. Moreover, chapter 9 and chapter 12 of the FTA have non-discriminatory clauses that protect Panama's registered investors. That means protecting criminals from Canadians or anyone going after them.
Article 12.06 states that Canada will always allow Canadians to purchase financial services from banks operating in Panama.
This is the kind of deal that we are debating.
What is a tax haven? It means people do not have to pay any tax or very little tax on relevant income. They do not have to provide information about their income. There is a lack of transparency. There is no substantial activity by the taxpayers in that jurisdiction. That is the OECD's definition of a tax haven. Panama fits the criteria of this definition to a t. That is what it is known for.
Why are we doing a trade deal with that country? I looked at how much trade Panama is doing with Canada. I noticed that it is less than 1%. It is not a major trading partner for Canada.
Two-way merchandising trade between the two countries reached only $149 million in 2008 and is less than 1%. Therefore, why this rush for trade with Panama? I would understand if we wanted to discuss trade with China. There is a big market there. It is not as if Panama is a big country. It is well known as a tax haven.
This trade deal is being negotiated in record time without any consultations. Perhaps one of the reasons is that the government does not want people to rise up and say that to shelter criminals and be soft on crime is not the way to go. Perhaps that is why we are debating this bill.
Panama is well known for allowing people who are close to bankruptcy to take their cash and assets to an anonymous offshore company so that they do not have to pay their creditors. They rack up a big bill and owe a lot of people a lot of money, so they take their assets and hide it in a corporation in Panama. No wonder they have tens of thousands of these corporations functioning very well.
Panama is also known for allowing people to transfer profit to these offshore centres. In fact, in 2008, Goldman Sachs paid a federal tax rate of 1%. This was before it collapsed. It would have paid 35% in the U.S., but it only ended up paying 1% because it was able to move a lot of its money to Panama.
Global Financial Integrity estimates that there is $1.2 trillion in tax havens in secret jurisdictions around the world. One-third of that money, 33%, is money that comes from the proceeds of crime. As well, 3% of that money comes from corruption. That is $335 billion of criminal funds hiding in tax havens around the world. Because of these tax havens, one might ask how much tax is not being paid to governments such as the Canadian government. In total, governments around the world are losing $165 billion worth of taxes, which could go to AIDS, helping people in poverty, providing drugs for kids in Africa, providing education for women, creating jobs or building infrastructure around the world, but is not because of many tax havens, such as the ones in Panama.
Panama is also famous for the registration of ships. It is number one for flags of convenience. They could be Canadian ships. Some of us may recall that we have a famous person who has these ships that do not fly Canadian flags. Rather, they fly flags of convenience.
Do members know how many ships are registered in Panama? Eight thousand ships are registered there so they do not have to pay much tax. I would rather see some of these ships, those that are owned by Canadians and registered in Canada, pay Canadian taxes so we could take some of that money and provide health care for seniors, for example. There are lots of ways one could use the funds from tax avoiders.
Some of the 8,000 ships that are registered there, just registered but not really there, just fly the flag of convenience. Some of these ships do have crew members from Panama. What kind of people are they? Forty per cent of them are migrant Chinese workers who earn less than $3,000 per year. As a result of registration in Panama, illegal fishing vessels can avoid fisheries regulations and controls. Some of these fishing vessels can fish illegally using methods that are prohibited by international laws. Since they hide in Panama and fly flags of convenience, they do not have to be regulated. I focus mostly on these illegal activities.
French president Nicolas Sarkozy, in a speech made at the end of the G20 conference in Switzerland in November of last year, named Panama as one of the countries with serious problems. He said that countries that remain tax havens would be shunned by the international community.
Shunned by the international community, except Canada perhaps, because the Canadian Conservative government wants to be good friends with Panama. It does not want to curb these illegal activities. It does not want to understand or learn about the illegal arms groups that use Panama for drug trafficking. The government does not want to learn about the funds generated from illegal activities that are being laundered through banks, real estate developments and various corporations.
Panama is a country of extremes. It is a country of about 3.4 million people and yet 40% of the people living in Panama are poor and 27% of those folks, close to three out of ten, are extremely poor. The rate of extreme poverty is particularly acute in the indigenous population. Even though the country has endured extensive structural adjustments, liberalization and privatization in recent years, this has not translated into economic benefits for the population. I have no doubt that when this trade deal passes through the House of Commons it will not help four out of ten people in Panama and lift them out of poverty. It will help criminals, drug dealers, arms traders, people involved in extreme illegal activities and fraudsters.