OTTAWA — Canada will mount a world-wide campaign Tuesday against a global bank tax by deploying four cabinet ministers in far-flung political and financial centres around the world Tuesday in a bid to kill the proposal.
Prime Minister Stephen Harper said a proposed international bank tax would unfairly penalize well-regulated Canadian financial institutions that survived the global economic meltdown.
The prime minister told a G8 and G20 youth forum on Parliament Hill that Canada’s banks didn’t have to be bailed out during the global financial crisis and shouldn’t be saddled with the proposed levy.
“They were not able to exploit some of the opportunities that got so many of these other western banks into trouble. That’s why we think it would obviously be unfair,” Harper said Monday.
More broadly, Harper said the tax is a bad idea because, “you can’t tax an economy into prosperity; likewise you can’t tax a financial sector into stability.”
Canada will host extraordinary back-to-back meetings of the G8 and G20 next month in Hunstville, Ont. and Toronto. Harper said he will use his position as host to push the G20 to adopt a more sustainable system of financial regulation as a corrective to the economic meltdown.
The bank tax was being pushed by European countries and had the backing of the Obama administration. Harper’s latest comments mark the start of a renewed push by his government to derail the idea, which is also being opposed by some of the developing economies of the G20.
Five Conservative cabinet ministers will deliver speeches in four major cities on Tuesday that will essentially trash the tax, while calling for stronger regulations for financial markets.
Finance Minister Jim Flaherty, Treasury Board President Stockwell Day, International Trade Minister Peter Van Loan, Foreign Affairs Minister Lawrence Cannon and Industry Minister Tony Clement will bolster Harper’s remarks with events in Mumbai, Shanghai, Washington and Ottawa.
The speeches represent a co-ordinated attempt to diminish the profile of the bank tax at the G20 summit and ensure financial reforms emerge as the dominant theme, a government official said.
“We have ministers in important cities, it just so happens on the same day, so we’re using the opportunity to make sure we get this particular message across,” the aide said.
“We have our preferred course of action in terms of financial regulations.”
Harper released excerpts of a letter Monday he sent to the G20 as the organization’s economic officials meet later this week to finalize the agenda for their June 26-27 summit in Toronto.
The prime minister reiterated his call for a co-ordinated exit from stimulus spending, but his tone was more urgent given the recent financial collapse in Greece.
“We must continue to fulfil our international obligation to fully implement our stimulus plans to avoid a slide back into financial or economic crisis,” Harper told the other 19 leaders. “However, as the recovery becomes entrenched and our stimulus plans expire, we cannot afford to rest on our laurels.”
“We must quickly turn our attention to the next major issue facing our countries and the G20 as a whole, that is, the issue of restoring our public finances, or, as many economists put it, implementing fiscal consolidation.”
In his comments to the youth forum, the prime minister stressed that the G20 cannot lose its focus on the economic recovery.
Harper was rebutting critics who say he is giving short shrift to climate change at the G20 and has muddied the waters with his signature G8 initiative on Third World child and maternal health by refusing to fund abortion.
“We’ve got to keep our focus on the economy,” Harper told Senator Mike Duffy, a former broadcaster, who moderated the discussion. “I say that to people here in the Parliament of Canada but I also say it to the G20. . . we just can’t afford to take our eye off the ball.”
The prime minister added that, “Everything else that often gets so much attention from your former media colleagues, Mike, these are sideshows. The economy is what matters . . . it’s got to be what matters at these meetings in June.”