Standing Committee on Finance Debate on the Tobin Tax (1997)

Thursday, October 16, 1997

Ms. Ginny Guiboche (President, Saskatchewan Council for International Co-operation): First of all, I would like to thank the group for the opportunity to come speak to you today. I really hope that the absence of all these other groups doesn't mean they don't think you're going to take these ideas and make use of them, because I think that last year some of them were rather frustrated about that.

Anyway, I'll get started with some of our ideas. The federal government has been making progress in deficit reduction. There's really no doubt about that. However, its methods of doing so have been to abdicate its responsibility to the people and leave it up to the corporate sector to set rules and standards, not only for the business and social services in Canada, but for the operation of the entire global economy, it seems.

The Saskatchewan Council for International Co-operation does not support the creation of a nation or a world where the rich are allowed to get richer and the poor to get poorer. The government proved itself entirely without the will to challenge this trend, it seems, and the corporate sector is allowed to control our global economy.

Today is World Food Day, which marks the founding of the UN Food and Agriculture Organization, the FAO, in Quebec City in 1945. The theme of World Food Day this year is central to the elimination of hunger and poverty in Canada and abroad with fair trade. Fair trade means that the producers of products are paid a fair price and treated fairly in their workplace.

Today, the operations of global trade are governed by institutions such as the General Agreement on Tariffs and Trade, the GATT, and the World Trade Organization, both of which are seen largely as agents of the developed world.

Instituting trade policies that favour richer countries by the Canadian government without the knowledge or endorsement of the Canadian people is playing a major role in the negotiation of the Multilateral Agreement on Investment, the MAI.

While the members in this agreement, the MAI, are limited to the Organization for Economic Cooperation and Development—the nations in this organization—it's clear that the agreement itself will have effects far beyond this group of nations, which is the constitution for the whole global economy, written without participation by any but the world's most prosperous nations, and leaving out the developing world, which contains most of the world's population.

Agreements such as these enable transnational corporations—several of these have corporate assessments greater than the GNP of New Zealand, and none of them have constituencies or national loyalties with anybody—to have greater freedom to move their capital and manage markets without government restraint. Competitive advantage is gained through setting up operations in which there is a large pool of cheap labour and weak environmental legislation, so they can do whatever they want.

In Canada, the MAI will free corporations of any obligations to buy locally or fulfil any obligations to local workers, consumers, or the environment. It will remove Canada's ability to place restrictions on foreign investment, and it will take away Canada's right to protect cultural industries.

We fail to see how any part of this agreement will improve the well-being of the average Canadian. The only people to benefit are the massive corporate giants.

In fact, SCIC, Saskatchewan Council for International Co-operation, urges the Government of Canada to take a stand for the people and lead a movement toward the institution of the Tobin tax on international currency speculation.

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We hope that the Department of Finance will agree that international currency speculation creates no value added for nations involved and contributes mainly to instability in currencies and the raising of interest rates. At least corporate financiers could be encouraged to use their money for long-term investment rather than speculation, because the only ones who gain anything from currency speculation are the speculators themselves.

The Tobin tax, originated by Nobel-prizewinning economist James Tobin, supposes that a tax as small as 0.25% per transaction would discourage much speculation and raise an estimated $300 billion U.S. in the world. This is even anticipating a slowdown in currency trading.

All that is needed is for most nations in the world to organize themselves and agree to impose this tax. The tax would be deducted automatically by the institution performing a transaction, just as service fees are deducted now. International campaigns in support of the Tobin tax are already in action in Canada and around the world.

We believe this is an idea that merits consideration. Canada's share of the Tobin tax revenue might be in the neighbourhood of $7.5 billion per year. These funds, along with the government's current planned spending increases, should go into meeting basic human needs in Canada and increasing Canada's contribution to fighting global poverty through international development.

The sad truth is that Canadian official development assistance to the ODA is at a 30-year low, having fallen in 1996 to only 0.31% of the GNP. This means that Canada has fallen in rank from fifth to eleventh place in the amount of money given for overseas development assistance.

Assistance to least-developed countries has declined from 0.14% of GNP in 1992-93 to a low of 0.08% in 1995-96. It really looks like Canada has apparently abandoned its goal, which it extracts from the red book, of restoring ODA to the United Nations target of 0.7% of GNP. In fact, ODA has experienced cuts disproportionate to those of other government departments: 40% for ODA, but an overall average of 23.5% for federal program funding.

According to its own publication, “Canada in the World”, the Canadian government heeded the call for a broader concept of security in which sustainable development is a precondition for human security and acknowledged the role of international development co-operation in achieving this security. This broader concept of security is established in relation to perceived threats facing Canadians from a deteriorating environment and an increasingly hostile world with threats such as mass migration, crime, disease, environment, overpopulation, and underdevelopment.

Interdependence, for the government, implies that our well-being and national interest are inextricably linked to global development. I would hope that this interdependence is recognized in the current budget, because it really hasn't been recognized that this common security does depend on our overseas development budget.

In past years, this government has boasted about making unpopular, but courageous, decisions in the struggle for Canada's fiscal revival. By that, you meant cutting social programs, reducing transfers to provinces for health and education, and raising taxes. This government even stood by other decisions by the unpopular Brian Mulroney, such as the GST and Canada's participation in NAFTA.

Today, SCIC is asking you to make truly courageous decisions: don't exact the price of fiscal restraint on our own people who can't afford it; stand up for the little guy and against the global power elite; open the MAI negotiations up to national scrutiny and institute an open discussion of the cost and benefit of Canada's participation in this deal; be the first government in the world to lend its support to international movements calling for a Tobin tax on international currency speculation; and restore Canada's commitment to fight hunger and poverty globally through international development by cancelling planned cutbacks to the ODA in 1998-99, and by instituting the UN-recognized target of spending, 0.15% of GNP, in the 48 most needy countries in the world.

Thanks for this valued opportunity to express our views. I am open for questions.


The Vice-Chair (Ms. Paddy Torsney): Thanks, Ms. Guiboche.

We'll start with a five-minute round. Mr. Ritz.


Mr. Gerry Ritz (Battlefords—Lloydminster, Ref.): I totally agree with you that the MAI should be open to scrutiny. We need to know what we're getting into, what the repercussions will be.

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I may be a little bit naive here, because we're definitely not up to speed on it here in Canada at this point, but as I understand it, I'm not sure how far along it is or how close the negotiations are to anything critical to Canada's future. We definitely need to know about the pros and cons of what the MAI encompasses.

You talk about Canada restoring its role in developing countries, feeding the poor, and so on. I have no problem with that. Where I do have some problem with what you're saying is in the fact that I don't see the government playing a large role. I see the private sector—I'm thinking of the Canadian Foodgrains Bank, the Mennonite Central Relief Committee, and similar things in which the aid is going directly to the people—as a better way to do it, not government to government. When we tend to see government-to-government investment, we see it going into things other than food or health and welfare for the people of the country involved. So I would like to see a little difference there in your presentation.

Other than that, there are always going to be differences...“large corporations are the root of all evil”, or various things like that. Certainly, a lot of what you said has credibility, but that's more a comment than a question at this point, I guess.


Ms. Ginny Guiboche: The Overseas Development Assistance Program budget does include the money that goes to private NGOs that do work in developing countries. This does include their budget, which is going way down from all these cuts, and although it does include government-to-government aid, we're also seeing the effect on the NGOs, who are increasingly unable to do a lot of work in developing countries due to the reduction of their budgets almost every year.

A lot of people have a problem with the MAI because it has been done so secretively. The Canadian people really need to have some kind of choice on and input into this before it just becomes policy. It's a far-reaching agreement.

I don't think we need to think just about Canada. I think we need to think about all the countries in the world. If developing countries have no input into this agreement because they're not at the right stage of development right now, then they just won't have any choice when they are. They're just going to be export-processing zones in which the people are treated very poorly. I don't see how that can improve Canada's future. When people are not happy in their own country, civil unrest eventually comes about. Refugee situations then increase, and Canada is seen as supposed to be taking in more refugees, which irritates a lot of people as well. Countries interact with each other and there is an interdependence. You just can't ignore that and only think about what happens within our borders.


The Vice-Chair (Ms. Paddy Torsney): Monsieur Perron.


Mr. Gilles-A. Perron (Saint-Eustache—Sainte-Thérèse, BQ): Thank you, Madame, and bonjour.

In your statement, Madame, you mention that you disagree with what this government is doing by cutting social programs, if I read you properly. In this way, this government is cutting over 50% of its transfers back to the provinces in those social programs. As Mr. Martin announced yesterday, when it is making money it is planning to reinvest on a 50:50 basis, with 50% used to pay back its debts and 50% used to create new programs.

Do you think he should be giving the money picked up in those government cutbacks back to the provincial governments in order that they can manage their social programs?


Ms. Ginny Guiboche: I think it would be good to have provincial management of social programs. The provinces are quite aware of what their needs are locally. They would be in a better position to allocate those funds, especially if they do take consultation from community members. It's fairly difficult for the federal government to do that very well in each community across the country.


Mr. Gilles-A. Perron: Thank you.


The Vice-Chair (Ms. Paddy Torsney): Mr. Nystrom.


Mr. Lorne Nystrom (Qu'Appelle, NDP): Thank you very much, Madam Chair.

As the only Regina member here, I want to welcome you to the city of Regina and to the province of Saskatchewan. Along with my colleague from Battlefords—Lloydminster, I hope your stay is fruitful and enjoyable. From what I understand, the weather out there is going to co-operate today.


The Vice-Chair (Ms. Paddy Torsney): It's better than what they offered us in Vancouver.

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Mr. Lorne Nystrom: I also want to welcome you to the committee this morning.

I wanted to let you know that just yesterday I signed a private member's motion to have Parliament consider a tax on international financial transactions. It's one of many private members' bills. They don't always get to be debated in the House, but at least it'll be on the order paper. It'll be a forum to try to push the idea of taking a look at it from a Canadian point of view and it may be debated.

Because there are so many private members' bills, we have what's called a lottery, where so many are drawn every once in a while and they get to the floor. At least there will be one filed when Parliament goes back into session next week.

I wanted to ask you to elaborate a bit more on your ideas for a so-called Tobin tax and how we should be looking at getting this structured and started. Of course it has to be international. You can't get two or three countries on their own doing it, because capital will just flee out of those countries. Can you just elaborate a little bit more on your ideas on a Tobin tax and what you'd like to see us do as parliamentarians to at least explore the idea? Like any other idea, it may take a long time to bear fruit.

Medicare was first promised by the Liberal Party back in 1919, but it didn't actually become reality in this country until the 1960s. Hopefully this will be a lot faster, but do you have any advice to give to the committee?


Ms. Ginny Guiboche: I think your introduction of a private member's bill is a very good starting point for people to get talking about it, because people have to be aware of what it is about before we will start to get a lot of support for it.

I think that even if we are the first country to start doing it, we won't really be losing any money if people don't speculate on our currency. I don't see how our long-term development is really affected. The only people who gain money from currency speculation are the speculators themselves.

So if we do institute the Tobin tax and charge a fee, we can charge double the 0.25%, meaning that the country from which the currency speculation is instituted that doesn't have the Tobin tax in place won't be in a tax haven because they will be paying double the tax rather than the tax that they would pay to each country in which speculation occurred.

Does that make sense?

So even if we don't have a whole group of countries who are co-operating, I think eventually countries will start to co-operate, because they can make a lot of money from this. The government can really do quite well, and I don't think the government loses anything by instituting this.


Mr. Lorne Nystrom: My second question is more general, in terms of foreign aid and development of the world and the developing world, and so on. How much of our GNP do you think we should be spending on foreign aid and foreign development?

In times of depression/recession, countries tend to look inward. Our budget has been cut back, as you've said, and the same has been true in most countries around the world. Now we're reaching a stage, as Mr. Martin said yesterday, at which we're going to have our books balancing in this country, albeit that a huge national debt remains. But western Europe is in a similar situation, and so are the Americans.

As we move into this new chapter, into a new century, a new millennium, what do you think our target should be as a country with our relative wealth? What do you think the target of the developed world should be in terms of our obligation towards the developing world?


Ms. Ginny Guiboche: I think 0.7% of the GNP is a good goal.


Mr. Lorne Nystrom: Yes.


Ms. Ginny Guiboche: I really don't buy into our having to cut and cut. I think fair taxation of large corporations would really balance our books. There's no need constantly to look for ways to cut things.

Some things that are included in the overseas development budget really shouldn't be there. For instance, CIDA Inc. doesn't belong in the overseas development budget. That's not development; that's trade, and it should be in that budget.

They also include in the ODA budget settlement fees for refugees who come to Canada. That's not money spent for overseas development; that's settlement in Canada, that's social service programming, that's federal programming. We're hiding these things and making it look as if we give more than we really do, because that's not really development.


The Vice-Chair (Ms. Paddy Torsney): Mr. Nystrom, thank you.

Mr. Brison.


Mr. Scott Brison (Kings—Hants, PC): Thank you, Ms. Guiboche, for being with us this morning.

I think the challenge we have, as a relatively small country in an increasingly global environment, is how we play a role or how we maintain a position as a strong middle power in terms of affecting change and affecting policy internationally.

There has been an international phenomenon, and that is the decline of the role of the nation state in actually participating in the setting of policy and guidelines. That's something that has come with globalization. Technology has played a significant role with that.

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I think it's very important for us to consider, whether it be the Tobin tax or negotiations on things like MAI, that almost all of these types of things have to take place or be discussed through international fora, either through OECD or a trade organization, or, depending on the type of policy, the UN.

In terms of MAI, I agree with you, there has to be more consultation with Canadians on something as important as MAI. However, I don't necessarily agree with you that MAI in principle is a bad thing. I think in the long term it can provide benefits to all participants. There is an accession clause for developing countries to enter MAI. You can proceed with an MAI through OECD countries a lot faster than you can through WTO, which takes a lot longer because of the variance and the divergence of interest and backgrounds of those countries.

I think anything we do...and even in negotiation of the Tobin tax. I share Mr. Nystrom's concern that with something like the Tobin tax, it almost has to be entered into or considered and discussed through international fora with our trading partners. Otherwise, we would be effectively penalizing some Canadian interests.

Now, you were saying that only the traders or the speculators benefit. We do have a fairly strong financial industry in this country that employs a lot of people, and I don't think any unilateral decision on something like the Tobin tax would be responsible without discussing with them the ramifications on both their business and their competitiveness internationally, which has become more important.

In terms of aid, we do have a responsibility to work with and assist nations and developing countries less fortunate than ourselves. One of the best ways to help those countries is through trade and through providing opportunities for them to participate in economic growth. Except in direct food aid, one of the negatives about direct aid to some of these countries is that if it's not done properly you can sometimes inflate their exchange rate and make their products less competitive internationally, thereby providing further impediment to their participation in international markets and an opportunity to actually create wealth for their country. So we have to be very careful that we structure that aid, or any aid, to avoid that phenomenon.

We now have, in a post-deficit environment within Canada, I guess a very fortunate circumstance in that we have a decision to make about what we're going to be doing with a surplus. Some people think we should be passing some of that back to the consumers and small business people through tax relief to try to stimulate the economy, especially to try to reduce unemployment through the reduction of payroll taxes. That's something our party advocates, the reduction of payroll taxes, especially EI taxes, which are a tax on jobs.

In terms of spending, part of the elimination of the deficit has been on the backs of the provinces, where, depending on the province, especially in Atlantic Canada, where I come from, it's been a tremendously difficult several years. We don't have the local tax basis where the provincial tax base is to pick up the slack, which has had a significant impact on health care, education, and social program spending, which has really cut to the bone for a lot of people.

Were you saying that you feel the provinces are still the best people to be implementing the social decisions within Canada?


Ms. Ginny Guiboche: Yes. I mean, there is some room for federal influence and discussion, but I think provinces deserve the responsibility to institute the programs.


Mr. Scott Brison: With regard to MAI, I have just one question. What type of format or discussion would you like to see within Canada on MAI in terms of consultation? What sort of consultation would you like to see?

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Ms. Ginny Guiboche: I would like to see planned meetings in the major cities in Canada, and I would hope every province has at least one opportunity for people to speak, so no one feels they didn't have the opportunity. Make sure everyone is included.

On what you were saying about banks, banks make record profits, and just because they lose a bit of money from not being able to speculate on currency trading.... I really can't see how they would be impacted by that.

I can give you an example. In Regina the Bank of Montreal has recently closed two branches. The Royal Bank has closed one. They are just putting people out of work. And for what reason? They make lots of money. There was really no reason to close branches.

I see that the banks are always going to tell you they are going to lose money if you do such and such. I don't see why we should be letting the corporate sector control our nation's fate.

That's basically what's happening with this MAI. The corporations are telling the government what to do now.

About ODA, you spoke about direct assistance increasing the interest rates and such—


Mr. Scott Brison: Currency exchange rates.


Ms. Ginny Guiboche:—for other countries. ODA through NGOs does not do that, and NGOs can then go and do the work in that country through their partner organizations. It doesn't have to be direct aid to the country. Their budgets have been cut substantially.


The Vice-Chair (Ms. Paddy Torsney): Mr. Gallaway.


Mr. Roger Gallaway (Sarnia—Lambton, Lib.): From this side of the table, thank you for coming here this morning.

I've heard of the Tobin tax, but I must confess I really don't know anything about it. I should point out that when you talk about banks you're touching on a subject that I think unites all Canadians, our dislike of those institutions.

I'm more interested in what you've had to say...because in Ontario at one point about 10 years ago we had a land speculation tax because the real estate market was very hot. Of course the great problem was...and it doesn't exist any more, because it was absolutely unenforceable. It's very difficult to tell when a person is speculating and when a person is actually legitimately purchasing property. I have to ask you the question, then—I'm being somewhat anecdotal about this—from the perspective of a transaction, how does one tell the difference between a speculative transaction as proposed under the Tobin tax and an otherwise legitimate transaction? Or is it just an across-the-board imposition of a tax?


Ms. Ginny Guiboche: You mean people changing money because they are travelling to that country?


Mr. Roger Gallaway: Yes, that would be one reason, but I'm also thinking of perhaps a corporation changing money for legitimate business reasons.


Ms. Ginny Guiboche: Basically, a 0.25% tax would not deter people from doing business. That would deter only people who want to do a large amount of money speculating, because that would make a difference in their profits. A 0.25% tax is not going to make a difference for people who are changing money to do business.


Mr. Roger Gallaway: I don't want to put words in your mouth, but what you're suggesting, then, is that it would be a 0.25% tax on any currency exchange, period.


Ms. Ginny Guiboche: Yes.


Mr. Roger Gallaway: So to call it a “speculative tax” would not be correct. It's just a tax.


Ms. Ginny Guiboche: It's just a tax. Basically it's not going to deter people who are changing money for legitimate reasons. We could have an upper limit whereby people who are changing very small amounts of money are not affected by this tax, because there would be no benefit to collecting a 0.25% tax on $1,000.


Mr. Roger Gallaway: Having regard to the fact that something like 60% or 70% of the people of this country live in very close proximity to the border, do you not think that would drive people to American financial institutions?


Ms. Ginny Guiboche: To do what?


Mr. Roger Gallaway: To do their banking.


Ms. Ginny Guiboche: To do their banking? I don't think people want the inconvenience of constantly having to change things into American dollars or Canadian dollars to do various things in Canada. They may just have to pay the tax more if they are changing money within Canada, because they couldn't always travel to the United States.


Mr. Roger Gallaway: I'm thinking of southern Ontario, where I live. There are 8 million people who live within, at most, 60 minutes of the border. It's a significant proportion of the population of Canada.


Ms. Ginny Guiboche: I really don't think it's practical for people constantly having to be going to the States to do their financial business.

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Mr. Roger Gallaway: What you're proposing then is that anyone who is exchanging money is going to pay the tax.


Ms. Ginny Guiboche: We could have an upper limit under which people wouldn't have to pay the tax, because small amounts of money for people to go places is not speculation.


Mr. Roger Gallaway: Okay, thank you. That's all I have.


The Vice-Chair (Ms. Paddy Torsney): Mr. Iftody, we have time for a quick question.


Mr. David Iftody (Provencher, Lib.): I get to ask my question just when Miguel is waking up.


The Vice-Chair (Ms. Paddy Torsney): That's okay. Miguel can participate. We don't mind.


Mr. David Iftody: Thank you very much for being with us today, Ms. Ginny Guiboche.

In our discussions prior to your presentation we were talking about non-governmental organizations. I was particularly interested, of course, in Canadian ones. I mentioned to you that I had worked with aboriginal groups for many years, and in downtown Regina and Winnipeg we know that there are many problems right here in our own backyard with a lot of these folks. I would have liked to see some focusing on that. Perhaps that was my misunderstanding of your organization.

To preface some of my questions—I'll take a different angle in them—I must say that I spent some time in central and eastern Europe last year. I hope to be going back to Romania. My grandfather was an immigrant from Romania. He came here about a hundred years ago and settled in western Manitoba. I've spent some time going back and working on development aid projects.

I met with the Romanian ambassador last week, and what struck me in my conversations with him and certainly with the officials there—I hope to be meeting people in Bulgaria, as well, to talk about these things—is that they are very interested in investment.

Romania, for example, is fighting very hard to get into the European Union. The aid coming from the European Union is aid in terms of infrastructure and investment. The aid that they are looking for from Canada is through the World Bank, the International Monetary Fund and others. The nature of aid seems to be changing and has changed significantly over the past 20 years. My general understanding of what they are after are such things as are provided by the Export Development Corporation. That's my first comment.

My second comment is related to that. I don't want to go too far into that because I want to ask another question.

We announced the other day that for the first time in 27 years we in Canada don't have to borrow internationally to pay our own bills. Under your proposal there would be another $7 billion a year tax, which I think would complicate things in terms of the current account deficit. I appreciate the level of the tax, 0.25%. Nonetheless, I want to ask you why the free movement of capital is, perhaps inherently in your question, a bad thing. Don't you think that Canada and Canadians would suffer as a result of that, because the large corporations would pass it down to consumers? They would pass that tax down to the workers and average Canadians. Secondly, if they were barred from doing that somehow and they couldn't do it, the capital would flee the country.

Those are the two problems we have, if you could respond to them, please.


Ms. Ginny Guiboche: The first was...?


Mr. David Iftody: The first one was related to aid and the strategic nature of aid for Romania, Bulgaria, and other such countries. The second one was on the Tobin tax.


Ms. Ginny Guiboche: I know that a lot of countries are interested in trading with Canada and other countries and that's where they're looking for some of their money. But that's not humanitarian aid; that's trade. I think it is good for countries to get started on that, but there are still people—not the government, but the people there—who need some assistance with meeting their basic needs. That's what ODA money is for. It's not for trade.

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I do appreciate that trade is important in order for the country to get started on the road to recovery. It is a good thing. I just don't think we can forget about meeting the basic human needs or the role that NGOs play in that, because they do a lot with the money they get. They don't pay their people as much as CIDA employees get, but they do a lot more work. These people do not live extremely well in these countries, but they do live okay, even though they don't get paid that much. They do good work. CIDA employees go there and they get paid a lot, but they don't do much.

I really think we need to make sure that the money we spend is being well used. So although I do recognize that trade is important, meeting basic human needs is as well.

The second one is about the Tobin tax and the fleeing of capital. What does having money speculators speculating in Canada do for Canada? Does it do anything? This is not rhetorical. I am asking if it does anything besides make money for the money speculator.


Mr. David Iftody: I represent an agricultural riding. One of the things I've learned since becoming a member of Parliament—before that, I knew nothing of the trade and speculation business—is that in agriculture and natural resource produce and trade, speculation and hedging to provide those products on international markets is growing. With all of our trade and wood products now, and with our mining products, in the emerging hog business going on in Saskatchewan, and in the cattle industry as well, that speculation and hedging is very much a growing part of the agricultural business, and they have to do this. Likewise in Manitoba. I have friends who are exporters, and they have to engage in this.

So to answer your question very briefly, it is, fortunately or unfortunately, a large and growing part of the newly emerging agricultural business.


Ms. Ginny Guiboche: If they are actually engaging in businesses in other countries, that's trade, it's not money speculation. That's what I'm getting at. This is a tax aimed at people who are just speculating on money, who are basically trading in currencies in order to gain a bit of money, not trading.


Mr. David Iftody: I can't answer your question, but that's a good point.

Thank you.


The Vice-Chair (Ms. Paddy Torsney): Thank you, Mr. Iftody.

Mr. Ritz, do you have a couple of questions?


Mr. Gerry Ritz: I have just a couple of points on what has come up in the discussions.

I'd like to commend you on your presentation. It's been very good.

You talked about the Tobin tax, and said it would not really be a hindrance to business transactions at a quarter of a percent.


Ms. Ginny Guiboche: That's according to James Tobin, a Nobel award-winning economist and the person who advocated this tax.


Mr. Gerry Ritz: Right, I understand that. On the other hand, is speculation in anything not a business transaction? Why would a quarter of a point deter a money speculator when it doesn't deter a speculator in automotive products?


Ms. Ginny Guiboche: Because when you're speculating on currency, the amount of percentage that you're going to gain is very small, so 0.25% does have a big impact. It would really discourage a lot of speculation, and the amount that does occur would still produce money for Canada.


Mr. Gerry Ritz: I guess that would have to be proven. We're talking in abstract terms here.

You talk about more taxation on large corporations as the answer to a lot of the ills in the country. I'm wondering if you have an amount in mind. Do you know what large corporations are paying now? How much more should they pay? What's equitable? What's fair? Is there a side effect to over-taxation of large corporations? Mr. Iftody talked on capital fleeing the country. Would we not see large corporations leave if we were to overtax them?

You have to realize that it's the corporations at all levels that are the ones creating the jobs. Whether you're talking about the unionized employees of a large car assembly plant or the local fellow at the lumber yard, there's a corporate effect in there that is being taken advantage of in their paycheques. If you were to overtax the corporations, they would then just pass it along in extra costs. One example that pops into mind of course is the banks. If you were to tax them more, all of their service charges would climb accordingly in order that they would continue to make the targets they have set.

We have a lot of large union pensions and private sector pensions invested in the banks. Do those people not have the right to a fair return on their investment whether or not we all hate the banks, as Mr. Gallaway stated? They are a stationary target. It's easy to go after them.

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I guess that's basically all I was thinking of as you were speaking to the other fellows.


Ms. Ginny Guiboche: I don't think you can let banks dictate your taxation policy. We are a country, and we have a government to make sure we have fair taxation. I just refuse to let us be dictated to by the banks. It's not a good policy.

Banks, even though they make a lot of money.... As I just mentioned, recently in Regina we've had three branches close. What is that for? Basically, it's to make the bank more money. Banks will always want to make more money. It doesn't matter if we fairly tax them or not, they're always going to complain. They're always going to make more money. I don't think banks do a lot of bad, but they are in business to make money, just like any other business.

So I think we need a level of fair taxation. If we had that, we wouldn't have to tax the lower-income people so much and we could alleviate some poverty in Canada.


Mr. Gerry Ritz: You're talking about bank closures. Are they driven by bank greed to make more money or are they driven by the new style of banking, electronic banking, where you can pay your bills from home now? They've given you programs such as that.

I'm not advocating that the banks are good, bad, or otherwise; I'm just tossing that out.


Ms. Ginny Guiboche: I see lots of people in those branches before they close. This is just banks wanting to consolidate, to have fewer employees, and to make more money.


Mr. Gerry Ritz: But do they in fact have fewer employees, or are those employees, instead of being behind a teller cage, now behind a telephone in an answering system somewhere doing your banking by phone?


Ms. Ginny Guiboche: No. According to the recent statistics released from the banks they are decreasing the number of employees. I don't actually have a number of what I would consider fair taxation of corporations, because I really didn't prepare that as part of my brief. I can't comment on that right now.


Mr. Gerry Ritz: Fair enough. Thank you.


The Vice-Chair (Ms. Paddy Torsney): Thank you, Mr. Ritz. Perhaps we can ask some of those questions of the banks themselves. They probably have some comment on that.

Ms. Guiboche, thank you very much for coming and presenting to us today. We appreciate your showing up on time and being in good form for the presentation.

We have some other presenters for the next group that we might put on the schedule right now so that we can alleviate the pressure on the next group.

So thank you for coming this morning and for bringing us some direction from the little guy.


Ms. Ginny Guiboche: Thanks for the opportunity.