Mr. Speaker, I thank the House for the unanimous consent to make that change which reflects a broader consensus in the country and in the House.
The purpose for this private member's motion today, which is one of the few votable motions in the House, is to start a debate on a new idea which in many ways is an old idea. It was first suggested by James Tobin, an economist who won the Nobel prize in 1992. He suggested in 1981 that in order to bring some regulation or order to the international financial marketplace in currency transactions there be enacted a very small foreign currency transaction tax. This has to be done in concert with the world community. One country by itself cannot do it. This would bring some semblance of order to what we are seeing in the world today.
The secondary purpose of the motion would be to use the funds to establish in part an international development fund which would be useful for many projects around the world. I will get into that a little later on.
The time has come when we have to start looking at new ideas as to how we work toward the common good not just in this country but around the world. Dr. Tobin made the suggestion a number of years ago. The idea is to impose a very small tax on foreign currency transactions. The idea being talked about now by most people around the world is a tax of .1%. In other words, one dollar on every thousand dollars of foreign currency transactions. If we buy a condo for $100,000 that would be a $100 transaction tax.
I want to give the House some idea of the magnitude of what we are talking about. In the 1970s the daily trading in the world in foreign currency was about $17 billion. Today it is about $1.3 trillion. It is a figure so large it is impossible to even imagine. To give a comparison the trade in goods and services around the world annually, 365 days of the year, of all countries is $4.3 trillion and the currency exchange is $1.3 trillion a day. That is a lot of money.
The consequences of this is that there is a feeling among a lot of people that nation states have given up a lot of sovereignty to what we sometimes call the boys in red suspenders as they speculate on currency around the world.
Talking about this at this time is really appropriate because much of the world is in recession and many people are predicting a worldwide depression. We have seen the tremendous effect on currency around the world and the effect on Canadian currency. We have seen the problems in southeast Asia, in places like Thailand and which have spread to other countries in that part of the world, to Japan and Russia, which is now basically without a government and in total chaos. The problem is spreading into Brazil and parts of Latin America.
A large part of it is because of the rapid movement of short term capital seeking a place to maximize its return. This is being done at the flick of a computer key when billions are moved, as I said $1.3 trillion every day.
Are we as a country powerless or do we want to assert our sovereignty and try with our fellow people around the world to come up with a method of bringing some order to the turmoil that exists today in terms of international currency markets? I think the answer is yes.
The Governor of the Bank of Canada was before the finance committee last night. We have had the Minister of Finance before the finance committee last night. They both talked about trying to bring some order to the currency markets around the world. This is one idea I think we should be looking at in terms of trying to bring some of that order.
One of the consequences of technological change and of globalization as we see it today has been the demise in the power of the nation state. I do not thing there is any denying that. But that opens up new opportunities in terms of how we govern ourselves as the human race. I believe that many of the things we used to do nationally as nation states and country by country we will have to in the future start doing internationally as the borders become more and more erased right around the world.
When we look at the attack on social programs around the world, the environmental problems around the world, the lack of real sovereignty in terms of monetary policy country by country, I think we realize we have to do something about these in common cause with other people around the world. That opens up an exciting vision of the world of tomorrow, a new vision where people regardless of the colour of their skin, regardless of where they live, work together toward a common cause and a common good.
One way of doing it is for the first time to have a small tax on financial transactions applicable around the world. That is one thing we should look at. Private members' hour is the time to do this where we can all vote freely of our party whips and party discipline to say yes or no to the idea. This motion does not bind the government. It says that in the opinion of this House, the government should show leadership and enact a tax on financial transactions in concert with the international community.
The Minister of Finance has made public statements where he is interested in principle in the concept of a Tobin tax. He looked at this very seriously in 1995 at the G-7 conference in Halifax. He had papers commissioned on the Tobin tax at that time.
One of the reasons the Minister of Finance became rather pessimistic on this in the last year or so was that he did not think it would fly because of the government position in Britain and the government in Germany, two big countries in Europe.
In the last year there has been a change in government in both those places. In Britain it is now Tony Blair and the Labour Party and as of three weeks ago in Germany there was the election of Mr. Schroeder and the Social Democrats. In both cases they are governments open to examining the possibility of the Tobin tax to see whether we can work out some method of making this a feasible part of a new world order and new world vision.
It could be an exciting time for our country and our parliament. We should ask the Minister of Finance to take the lead on this very important issue for the world of tomorrow.
As I said, this has been debated before. It began with Mr. Tobin, the economist who won the Nobel prize. It was talked about in October 1987 during the stock market crash around the world. It was also debated in 1984 when the peso in Mexico collapsed, causing a tremendous exodus of capital from that country. The result of that exodus of capital was a tremendous amount of hardship and poverty for the ordinary Mexican person.
The excess capital around the world seeking a safe haven and seeking to make money, although much of that money is going to the United States, has once again precipitated a debate. This is another reason we should be looking at it.
I want to give three examples of the so-called Tobin tax. First, I say to some of my friends who are concerned about tax issues that it is a very small tax; .1% is what is being talked about, maybe even less than that. This would have virtually no impact whatsoever on long term investment in the world, long term investment that is needed in developing and developed countries alike. It would be so small that it would not affect long term investment.
On the other hand, it would deter short term speculation, money that moves into a market for a few minutes, a few hours or a few days and moves out of that market after it makes a short term amount of money on a small margin. This money is sort of slushing back and forth around the world and is operating on very small margins. The effect of this is that it creates great distortions in national economies like Mexico, Brazil or what is happening in Russia today. It even affects us where our dollar is weaker than it should be because a lot of dollars are going to the United States to seek refuge.
It would not have an impact on long term investment but it would bring some semblance of order to the world community and to the boys in red suspenders who are trading currency back and forth like a gigantic casino around the world that affects working people in every country.
It would bring more stability for exporters, importers, investors and the government in terms of planning budgets, public policies and monetary policies of nation states right around the world. It would bring more stability because that great volatility of the casino economy would be tempered to a certain degree.
Finally, as I said, it would reduce the power of the speculators and increase the power of national governments to do more things in their countries and to be able to share increased power through international bodies and organizations. That is the main reason for the so-called Tobin tax, the tax on international transactions.
The second reason for the motion is to raise revenue for worthy projects around the world. This is the secondary objective but it is still a very important objective. Many times we have world disasters and there is a great deal of difficulty trying to raise money for those world disasters. The United States is now in a great debate in terms of what the Americans should pay in terms of a stipend to the United Nations to keep it going, a debate between the Republicans and the Democrats, between the office of the president and Congress.
I remember the disaster in Chernobyl, the great disaster with the reactor in Ukraine and the time it took to get funding and money to help the victims and do the clean-up. There are many purposes the money could be used for in terms of development around the world.
I think of the whole issue of jobs, the economy and the millions of people being thrown out of work now because of what is happening in many parts of the world. Some money could be used for employment and jobs. Some money could be used for peacekeeping, for the mines issue, for medical research and for environmental research and funding. There are many uses for this money.
I will give a few examples. If there were a 0.1% Tobin tax on foreign currency transactions, that would raise, in 1995 dollars, $176 billion U.S. That is a lot of money. A Tobin tax of 0.003% would be enough money to fund United Nations peacekeeping around the world. It could fund the project initiated in large part by our Minister of Foreign Affairs on land mines. There are many worthy causes around the world.
One of the consequences would be the establishment of a global village which would have a common good amongst all nations of the world. There would be a strengthening of international organizations. The United Nations would become a meaningful world government and would share things with national governments around the world. There could be permanent international peacekeeping forces. There are many things that could be done.
How would this be implemented? There are a number of ways of doing it. The International Monetary Fund could be reformed to do it or the World Bank could be reformed to do it. My preference would be a new international financial agency to administer the Tobin tax.
Who would collect the tax? National governments would collect the tax around the world.
The time has come for this country to consider taking leadership in a new idea, in a new vision that seeks to bring some order to the chaos we see around us every day. This cuts across political lines. I differ from time to time with colleagues in other parties, the Reform Party or the government. However, I know from talking to people in the Reform Party, the Liberal Party the Bloc Quebecois and the Progressive Conservative Party that there is a great deal of concern in all of our constituencies.
People feel helpless and hopeless by what they see happening in the stock market today and by what they see happening to our dollar. People were scared last August when the dollar started to plummet and the bank rate went up twice. People are concerned about what is happening in Brazil. Thailand was one of the most successful countries in the world a year or so ago. The Asian tigers were held up as an example of how to run an economy. They were virtually running it on very small debts. All of a sudden it started to tumble down like a deck of cards.
