NUPGE president James Clancy says Canada should support and advance the idea of a global tax on financial institutions at G8 and G20 meetings at Huntsville in June.
Ottawa (21 April 2010) - The National Union of Public and General Employees (NUPGE) is calling on Prime Minister Stephen Harper to reverse course and put a proposal calling for a global Robin Hood tax on financial transactions on the agenda of the upcoming G8/G20 meetings June 25-27 at Huntsville, Ont.
"As the global economy appears to be slowly recovering from what was the greatest crisis since the Great Depression, it is imperative that all elected leaders examine ways to both steer this recovery and take steps to prevent a reoccurrence," NUPGE president James Clancy says in a letter to Harper.
"In this context we strongly think that a financial transactions tax (FTT) is an economic policy initiative that merits Canada’s support."
Clancy says the time is right to adopt a small tax of 0.05% on the trade of stocks, bonds, foreign exchange, derivatives and other products traded through stock exchanges - now and in the future.
"This tax would exclude most consumer transactions, such as payments for goods and services, pay cheques, as well as short-term inter-bank lending and central bank operations. It would be a tax on the one sector that, as former French President Jacques Chirac has noted, is relatively exempt from paying their fair share of taxes," Clancy argues.
Estimates of the revenue such a tax would generate vary depending on how widely the tax is adopted and what rate is applied to various transactions. One estimate, provided by the Austrian Institute for Economic Research, is that a global tax of 0.05% on all transactions could yield around $650 billion a year — based on 2007 estimates of global domestic product by the International Monetary Fund (IMF). The estimate assumes a reduction in market activity as a result of the tax.
"While (NUPGE) hopes the FTT will be globally adopted, Canada could introduce aspects of it unilaterally (e.g. applying it to stocks)," he says. "The U.K. has just such a tax (called a stamp duty) of 0.5% on the trade of stocks."
Clancy says the "high rollers of global finance" have reaped huge profits for far too long without considering the impact on national economies.
"Their actions, largely motivated by greed and self-interest, ended up threatening the very foundations of the global economy. They then turned to national governments to be rescued from the ramifications of their reckless behaviour," he notes.
Then, astonishing taxpayers left to foot the bill, they awarded themselves bonuses paid for by public money, leaving the public in Canada and other countries worldwide to cope with public services cuts and soaring government debt and deficits, Clancy adds.
"NUPGE firmly believes it is time that those most responsible for this crisis, and those that benefited from government bailouts, take greater responsibility for putting things right – both in Canada and around the world."
When the G20 met in Pittsburgh last December, Clancy says, the idea of implementing a global financial transactions tax was discussed. Since then, it has been gaining momentum around the world and now includes many highly prominent national leaders among its advocates.
Supporters include the governments of France, Germany, the United Kingdom and Austria. Also, the European parliament and the European Commission have spoken out in favour of a Robin Hood tax. Belgium is also supporting a Robin Hood tax as a key policy initiative when it takes over the European Union presidency in July. More recently, the Japanese finance minister and a former governor of the Reserve Bank of India have expressed support.
"It is also supported by many of the world’s most distinguished economists, including Nobel Prize winners Paul Krugman, Joseph Stiglitz, Dani Rodrik and Jeffrey Sachs, as well as prominent financiers like George Soros and Warren Buffett," Clancy notes.
"We have a moral obligation to help put the global economy on sound footings and to take serious steps towards alleviating poverty and suffering. The Robin Hood tax is not a magic bullet.... But it is a positive step forward that will benefit billions of the world’s people, is relatively easily achieved and introduces an element of tax fairness by including those institutions that have been largely exempted from paying taxes."
Besides Harper, copies of the letter have been sent to NUPGE's national board of directors, Liberal Leader Michael Ignatieff, NDP Leader Jack Layton, Bloc Québécois Leader Gilles Duceppe, Canadian Labour Congress (CLC) president Ken Georgetti and Guy Ryder, general secretary of the International Trade Union Confederation (ITUC).
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE
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