Madam Speaker, I am very pleased to enter into debate on the motion put forward by my colleague from Regina—Qu'Appelle to suggest the importance of Canada taking leadership in putting forward a Tobin tax and building international consensus around the critical importance of adopting such a tax.
It is a private member's motion, but let me make it very clear that it will be one that is enthusiastically supported by all 21 of my caucus colleagues. Why? Because we recognize and have long believed that it is essential for Canada to take the lead in building support in the international community for a modest but important tax on international financial transactions.
In 1997 the federal New Democratic Party at its convention adopted support for the Tobin tax into our party policy. In the 1997 election we ran on the commitment that we would go on working to gain co-operation and support for the Tobin tax at home and abroad in partnership with other progressive forces.
Let me say how pleased we are today that there is an increasing number of progressive groups in Canada from the faith communities, the labour movement, the environment, the development and other social justice movements calling for the Government of Canada to provide leadership in the adoption of a Tobin tax.
What is the Tobin tax? It is the brain child of Nobel Prize winning economist, James Tobin. As early as 1978 Dr. Tobin proposed the introduction of a tax on international financial transactions, a tax wisely proposed to be low enough not to have adverse effects on trade in goods and services but high enough to cut into the profits of currency speculators and thereby hopefully reduce the currency speculation that is causing havoc in economies around the world.
The world desperately needs to restore some balance after the mania of market fundamentalism which has gripped the world economy. In the 1990s we have seen the spectacle of the so-called risk takers: a 28 year old in red suspenders who can bring down a century old bank, a major private sector hedge fund engaged in billion dollar investments which has to get bailed out to the tune of $3.2 billion by the U.S. federal reserve fund to prevent a major global financial crisis, and currency traders making billions of dollars while wages for ordinary citizens stagnate or fall even in the most successful economies of the world.
Market fundamentalism in the nineties has meant idealizing the marketplace as something that can take care of everything that matters to people. When unbridled currency speculators turn the Asian so-called economic miracle into a financial crisis overnight, whole national economies were plunged into recession. Twenty-five million people sunk into dire poverty in Indonesia and Thailand alone. Thirty-five per cent of the world today is in recession, and as the contagion spreads to other countries like Brazil that percentage is increasing.
Why do we need a Tobin tax in today's market? The economic market was supposed to reward risk takers. That was the theory, to reward people who would put up their own money to build a plant, to develop a new product or to provide a new service to the community. That is the theory.
However today's market rules are: do not bet your own money; hedge your bets; invest in the private market preferably offshore; get the public, in other words taxpayers, to bail you out if you get into difficulty; protect and hoard your personal wealth by sending it to a tax haven abroad. This has led to rescue packages for the super rich, impoverishment for the many, and diminishing capacity for the public through its elected governments to address the social problems left in the wake of market failures.
Today the world desperately needs a strategy to ensure that the international economy serves the interest of ordinary citizens in the poorest countries that are being increasingly marginalized and in the wealthier countries where workers are launched in a race to the bottom. The Tobin tax is one way to rebalance risks, rewards and responsibilities, a way to ensure that those who benefit most from the market system take some financial responsibility for it.
George Soros, the billionaire financier who has made a fortune in international markets, describes today's global capital flows as a wrecking ball spreading indiscriminate grief and poverty around the globe:
There used to be a concept of civic virtue, but because of the sharpening of competition, people have become so involved in fighting for their own survival they cannot indulge their concern for the common good. The concern with the common good has been almost eliminated by allowing the markets to become the main forum for decision making.
According to the United Nations human development report the estimated cost of providing universal access to basic human services for all the world's citizens is roughly $40 billion per year, and $40 billion is a mere 20% of the revenues that could be collected through the imposition of a Tobin tax. Nations around the world could use the revenues generated to alleviate human suffering on a scale so vast that it would eclipse all our collective efforts for the past five decades.
When the G-7 nations met in Halifax in June 1995 regrettably the Prime Minister of Canada resisted the call for our government to provide leadership in building consensus in support of the Tobin tax. I think it is a positive development, a very welcome development, that today the government recognizes the Tobin tax is an idea whose time has come. The finance minister has recognized in the Tobin tax:
—the general taxing power to raise money for great international needs, whether it be problems of the Third World, the heaviest indebted poor countries, or international environmental problems.
Surely a proposal with such potential cries out for political and international support.
The finance minister was absolutely correct when he stated publicly almost a year ago today on national television that it would take a long time to get the rest of the world to sign on to the Tobin tax. To that I say let us get started by giving unanimous passage in the House to the motion before us calling on the Government of Canada to provide leadership to the adoption of a Tobin tax on behalf of all world citizens.