SEGUNDA DE TRÊS PARTES DEUXIÈME DE TROIS PARTS
The Acting Speaker (Ms. Thibeault): Before resuming debate I would like to state that the motion proposed earlier by the hon. member for Regina-Qu'Appelle has been carried.
[Translation]
Mr. Stéphan Tremblay (Lac-Saint-Jean, BQ): Madam Speaker, I am somewhat troubled by the shift in thinking that has taken place over the last year. I am referring to the government's position which would tend to be supportive of the motion before the House.
The debate we are having today is very important. The motion may not be perfect, and the mechanism to deal with the issue may not be either, but at least this parliament is talking about the phenomenon of speculation, which is pervasive in our economies.
The first challenge in this debate is to define the concept of speculation, and it is quite a challenge. To understand speculation, a bit of a historical background may be useful.
Since the end, in 1971, of the Bretton Woods agreement governing the foreign exchange market, financial markets have been plagued with instability. Speculative bursts have occurred, and since the value of assets had no relation with reality, speculators played currencies against each other at the expense of the affected countries. Mexico was under attack in 1992 and, in 1994, the pound sterling had to be withdrawn from the European monetary system.
Mr. Soros, one of the biggest speculators in the world, who, incidentally, gambled $10 billion against the pound sterling and earned $1 billion, has stated that some order definitely had to be restored in the financial system.
This is a complex debate, but the impact of speculation remains to be determined. Today, at least, we are dealing with part of this problem. I will not speak in favour or against a tax mechanism on financial transactions. I think the issue must be considered in a more comprehensive way. First, we have to understand the impact of speculation on civil society, and then, once we understand it-as I often put it, to understand in order to act-we will be able to act with the full knowledge of the facts. Unfortunately, some people today are against such a regulatory system for the international financial system. However, the Tobin tax, the tax we are talking about today, is a mechanism that can be proposed. There are other mechanisms. For example, Chile, a South American country, partially sheltered itself from speculators by charging a tax on a portion of the funds getting out of the country less that two years after coming in. Then, there is the tax on direct investments abroad, derivatives trading market regulations such as swaps, options, futures contracts on bonds, stock index contracts and so on; I have here a list of proposals coming from civil society economists throughout the world.
Where there might not be any consensus is on what mechanisms should be set up and which international body should initiate such a reform. Others attack the project, stating categorically that it is impossible to reach an agreement internationally on this type of regulations.
The challenge is there but at least, what is important is that we talk about it and that people know more what we are dealing with when we talk about financial market destabilization because I think this is the case. There is some instability.
A while ago, my colleague mentioned investments in financial markets, they are not value-added. These investments do not create jobs, but wealth. It all depends how you define wealth.
There are other causes for concern. Thousands of billions of dollars are moving freely around the world in search of gains due to speculation. On a regular basis, their owners trigger attacks against currencies that appear weak, often causing them to be devaluated. Cases in point are the Swedish krona, the pound sterling, the Brazilian real and the Mexican peso. When I read this kind of thing in L'Actualité, where economist Pierre Fortin tells us that speculators are attacking currencies, I would like to know what mounting an attack on a currency means. I am not talking about hypothetical things.
Last summer, the Canadian dollar lost 10 cents due to speculation. I am wondering who is attacking and who is mounting the attack. I believe this is worthy of debate.
The list of reasons why it is urgent to take such steps is quite long. I believe that when the House wants parliament to foster such debates internationally to bring about international regulations, we must agree with that.
This leads me to an issue dear to me. I believe the economy is currently in mutation. For example, with regard to speculation, 30 years ago only 5% of financial operations were of a speculative nature. Today, this proportion is as high as 90% to 95%. This is a lot. This means that a huge part of our economy is at the mercy of such fluctuations and so-called attacks. This worries me and this fact is not the only one I find troublesome; there are a number of other ones which are linked to the globalization of the economy.
I believe this is linked to globalization. Make no mistake, I am not against globalization. But I want people to understand what it is all about. It seems to me that, for the first time in history, we as a society are faced with a very complex situation, and it is extremely important for us to understand it.
In the same spirit as this motion, one battle I am trying to wage in this Parliament is to see to it that the members of this House understand this phenomenon, that they have a perfect understanding of what we are experiencing as a society with regard to globalization, particularly with regard to what is going on right now in financial markets.
Last December, I presented a petition signed by 50,000 people asking their elected representatives to reflect on this phenomenon. I think it is a very legitimate request. It is perfectly normal.
The study of a mechanism to prevent financial speculation or to clean up financial markets is essential. I am happy that we can take part in such a debate today because I think it is of the utmost importance for countries and for society.
I cannot speak on this issue without also talking about civil society, which is mobilizing all over the world to make such debates happen. There is Atac, in France, a movement that is taking international proportions. Here in Canada, there is the CCIC and the Halifax initiative. In fact, there are numerous groups promoting debate on this kind of issues in civil society, in Parliament and soon, I hope, in international forums.
In conclusion, I will quote world famous speculator George Soros, who has taken advantage of the chaotic international financial system. He said "If people like me can bring down governments, it means something is wrong with the system. My experience with markets has shown that they often had a tendency to be unstable. If we do not take measures to stabilize them, serious accidents will occur". Obviously these are financial accidents. This quote is from the October 24, 1996 issue of L'Express.
These are not leftist remarks. Even the greatest speculators in the world say that danger is lurking right now. I rarely say such things, but I am doing so today with all my heart in the interest of current and future generations.
If we want to have a global economy, we must have rules. Just like in hockey or in life, rules are essential. Right now, it seems that the lack of rules in this system and the lack of understanding by parliamentarians have resulted in carelessness, which has caused a lot of turbulence in financial markets.
That is why I will vote in favour of this motion today.
Ms. Alexa McDonough (Halifax, NDP): Madam Speaker, I am very pleased to enter into debate on the motion put forward by my colleague from Regina-Qu'Appelle to suggest the importance of Canada taking leadership in putting forward a Tobin tax and building international consensus around the critical importance of adopting such a tax.
It is a private member's motion, but let me make it very clear that it will be one that is enthusiastically supported by all 21 of my caucus colleagues. Why? Because we recognize and have long believed that it is essential for Canada to take the lead in building support in the international community for a modest but important tax on international financial transactions. In 1997 the federal New Democratic Party at its convention adopted support for the Tobin tax into our party policy. In the 1997 election we ran on the commitment that we would go on working to gain co-operation and support for the Tobin tax at home and abroad in partnership with other progressive forces.
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