Comment

Comment by FixOurWorld on February 28, 2011 at 4:19pm

Dennis Howlett's (Make Poverty History) response to David Sweets email.

 

Thanks for sharing this with me.

 

What he does not seem to understand is that the Financial Transaction Tax is not a tax on banks. They are getting the FTT mixed up with other proposals being considered internationally such as the Financial Activities Tax (or FAT Tax) that would tax bank profits or executive compensation. So the fact that the Canadian banks were not the ones responsible for the financial crisis is besides the point.

 

What the answer does not address is how the funds needed for global poverty reduction and climate change are going to be raised when donor governments face huge deficits.  Canada freezing its aid budget is not the way to deal with this.  If
Canada can’t keep its promises to the poor on helping to achieve the Millennium Development Goals and helping poor countries cope with climate change because of our deficit, we need to find other creative ways to raise the money we need.

 

There is little or no taxation now of global financial trading and they can afford to pay more towards dealing with the global poverty and climate change crises.

 

Dennis Howlett

National Coordinator

MAKEPOVERTYHISTORY.ca

39 McArthur Ave. Level 1 - 2,

Ottawa ON K1L 8L7 Canada

Tel: 613-740-1500  Fax: 613-728-2963

Email: dhowlett@makepovertyhistory.ca

 

Sign on to Make Poverty History.

Comment by FixOurWorld on February 28, 2011 at 4:17pm

Response from David Sweet

 

Dear Linda,

Thank you for copying me on your email to the Minister of Finance, the Hon. Jim Flaherty.

However, I would like to share with you that the Government of Canada will not be supporting the introduction of a new global tax on financial services.  Instead, we have urged countries instead to adopt sound regulatory practices like Canada's, which is repeatedly rated the world's soundest by the World Economic Forum.

Our banks have been recognized as the most sound in the world.  Since Canada's banks have acted responsibly to avoid toxic assets, it makes no sense to impose a punitive tax on them now.  Throughout the recession, our banks have maintained healthy leverage ratios and largely avoided exposure to toxic assets.  No major Canadian financial institutions failed and none required bailouts from the government, as was the case in the U.S. and other European countries.  The strong performance of our banking sector showcased the effectiveness of Canada's regulatory approach.  We will use our G-20 chairmanship this year to urge the adoption of similar practices globally.

While we support effort to establish a strong regulatory framework for the global financial sector, this government will oppose any efforts to impose a bank tax that would place Canada's banks at a competitive disadvantage.  We will continue to work with our international partners on financial sector reform.  Modest and responsible regulation is the answer - not taxation.  This will not only protect taxpayers, but force banks to be more prudent in their actions.  G-20 countries must complete promised regulatory reforms on time, and proceed with credible fiscal consolidation plans and fix the financial system.

The Government of Canada is committed to reducing taxes, not to imposing a global Tobin tax on daily financial services.  Modest and responsible regulation is the answer - not taxatio