http://www.life.ca                      Natural Life                    April 5, 1999             

Visionary Vote for the Tobin Tax in Canadian Parliament

On March 24, the Canadian Parliament voted yes to promoting measures to control currency speculation. Private member’s motion 239, put forward by NDP member Lorne Nystrom, calls for Canada to promote a tax on financial transactions in concert with the international community. A coalition of Canadian organizations has been pushing for this tax as an important measure to make the global economy more stable, democratic and equitable. The motion passed with no fanfare in the House of Commons by a vote of 164 to 83.

A currency speculation tax is commonly known as the Tobin Tax, after the Nobel prize winning economist James Tobin, who originated the idea. It is designed to get speculators under control and would not affect ordinary citizens, nor would it affect legitimate trade in goods and services. Over $1,000 billion is traded every day on the world financial markets, 95 percent of which is by currency speculators. The tax would help stabilize currency markets, thereby helping to prevent future currency crises and the resulting economic meltdowns that recently shook Canada and the world. The income from the Tobin Tax could be used for social and economic development and environmental protection in less developed countries.

The motion gives the government a strong mandate to go to the G-8 and other international gatherings to promote a tax on international currency speculation as a key component of the so-called new international financial architecture.

"This [vote] will finally give the Tobin Tax the fighting chance it deserves. The House of Commons in Canada is the first parliament in the world to pass such a motion," says Nystrom. "Canadians and the world have seen the effects of today’s financial system. Speculative capital is wrecking havoc on the international community. The situation in Latin America, Russia and South East Asia is worsening and is leading to more currency turmoil and global deflation. A Tobin Tax is part of the solution to this problem,"

Millions of citizens across the country, through labour, church, academic, environment and development organizations, sent the message in favour of the Tobin tax to their MPs, directly, through an open letter or by signing a citizen’s declaration in the weeks leading up to the vote. The lobby was led by a coalition of organizations working for global economic democracy, calling itself the Halifax Initiative. Spokesperson Gord Walker says, "Currency speculation is unacceptable to Canadians who are anxious about instability in the global economy. This message was communicated to Parliamentarians and we are pleased with the political will which Canada has shown by this vote to address the problems of hot money."

"Greater transparency and surveillance of the global financial system are not enough to control currency speculation," says Jean-Francois Tardif, President of RESULTS Canada, a Halifax Initiative member. "The Tobin tax is a common-sense solution and will help to control the excesses of globalization and at the same time, act as a mechanism to distribute wealth generated from the global economy."

In 1995, following the Mexican peso crisis and the Chernobyl accident, Canada’s Finance Minister Paul Martin expressed interest in the Tobin tax as an economic stabilizer and as a revenue-generator. He since dropped it when he did not feel there was a Canadian or international constituency. Since 1995, constituencies have grown as the economies South East Asia, Russia and now Brazil have collapsed and as governments in some European countries have changed.

Contact:

The Halifax Initiative
Coalition Coordinator
412- 1 Nicholas St.
Ottawa, ON K1N 7B7
Phone: (613) 241-4611
Fax: (613) 241-2292
Email: halifax@web.net
Web: http://www.sierraclub.ca/national/halifax/

 

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