Who knew our federal government liked acting so much? We had our debut on the world stage in the role of the antiquated and stubborn ‘Colossal Fossil’ with our less-then-stellar environmental track record and we are now preparing for our lead role as the evil Sheriff of Nottingham to the world’s Robin Hood tax. It’s too bad we seem to prefer playing bad guys these days as Canadians find ourselves on the wrong side of yet another global issue.
Canada began a coordinated public relations program this week, with Finance Minister Jim Flaherty speaking in New Delhi and Mumbai, Trade Minister Peter Van Loan in Washington, Treasury Board President Stockwell Day in Shanghai and Industry Minister and Foreign Affairs Minister Lawrence Cannon addressing the home crowd in Ottawa. This is all part of Prime Minister Harper’s ramped up campaign against a global levy that would see a tiny tax—averaging 0.05 percent—applied to all financial market transactions, including those by banks, hedge funds and other financial institutions. The tax, which would not apply to ordinary customer transactions, could simultaneously raise money from one of the wealthiest sectors of society—some analysts estimate the revenue could be $650 billion annually—while reducing the risk of another economic collapse.
Flaherty has been characterizing the levy as an unfair punishment of the banking industries in countries that were not responsible for the financial crisis: governments in Asia, like ours here in Canada, did not have to bail out their banks, and this public relations campaign is engaging those nations in search of allies against the tax leading up to the G8/G20 summit in Toronto in June.
The goal of the Robin Hood tax is to ensure that taxpayers are not responsible for the price tag of future bailouts. Endorsed by the IMF, the U.K., France, Germany and other European nations with lukewarm support from the United States, the Robin Hood tax would essentially amass a fund to hedge future economic crisis. Canada has offered a counter-proposal: forcing banks to raise “embeded contingent capital,” shifting the burden of future bailouts from the taxpayers to the shareholders. Canada’s proposal, in the words of a Globe and Mail op-ed piece supporting Flaherty’s initiative, depends upon “a reform that builds in market discipline”—because we all know how disciplined the banking sector has shown itself to be.