Financial Post G7 Record

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[Financial Post G7 Record]

Financial Post, Weekly edition, Wed 15 Mar 95, page 4

Keywords: International finance Foreign exchange Taxation Canada

TOBIN TAX ON G-7 AGENDA: Ministers to discuss currency transaction levy

Alan Toulin

Taxing international currency transactions will be on the agenda at the summit meeting of industrial countries in June, Foreign Minister Andre Ouellet said yesterday.

Ouellet seemed to be reversing earlier statements by federal officials who discounted the idea that the tax on financial transactions would be part of the Group of Seven meeting in Halifax.

Ouellet told a parliamentary committee the so-called Tobin tax - named after Nobel Prize winning economist James Tobin who first proposed the idea - will be part of the G-7 agenda.

"This is an immense step forward," Ouellet said. The transaction tax has been discussed in previous summits but only at the level of officials.

Asked whether Canada has taken a definite position on supporting the tax idea, Ouellet told reporters: "We might have some view to express at a later date."

Imposing a levy on currency transactions is thought to be one way of bringing order to unruly markets, which can hammer currencies and push up interest rates despite contrary government policies.

Last week Human Resources Minister Lloyd Axworthy suggested the Canadian government deemed it worthy of closer study. But officials in Finance Minister Paul Martin's office said Canada would not push the tax at the Halifax summit.

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