CALGARY — A tax on financial transactions now pitched as a source of billions in federal revenue was dismissed by then-prime minister Jean Chrétien in 1995 because he believed it required worldwide agreement, newly declassified cabinet records show.Blacklock’s Reporter reported Chrétien told ministers the proposed Tobin Tax faced opposition from Germany and the United Kingdom, making it impractical “despite its possible merits.”“Its implementation would require unanimity throughout the world and in any event it would be blocked by German and United Kingdom opposition to it,” Chrétien told a March 21, 1995 cabinet meeting.The records, released through Access to Information, show Chrétien discussed the proposal with cabinet twice that year as his government prepared for the G7 summit in Halifax.The tax takes its name from economist James Tobin, who proposed it in 1972. While the original proposal concerned currency transactions, later versions have sought to tax a broader range of financial trades.Chrétien told cabinet he had met with experts on March 20 to discuss volatility in currency and sovereign debt markets, along with the potential role of international financial institutions in stabilizing them.Although the discussion was interesting, the experts had made “no real progress in developing solutions to the problem,” cabinet minutes said.The experts argued financial market fluctuations were driven mainly by weak underlying economic conditions rather than speculation. Improving those conditions was the route to reducing volatility, according to the minutes..Declassified records reveal Chretien warned France against recognizing independent Quebec.Chrétien raised currency speculation again at a June 13 cabinet meeting, but the discussion produced no move toward introducing the tax.“The Prime Minister commented briefly on the issue of currency speculation, suggesting that it was not an issue that could be solved by international institutions alone,” the minutes said.“Indeed, he noted, currency crises invariably started with speculation at home.”The proposal continued to attract political support.In 1999, MPs voted 164 to 83 for a motion from then-NDP MP Lorne Nystrom calling on Canada to “enact a tax on financial transactions in concert with the international community.” The tax was never introduced.A 2000 Library of Parliament study, Foreign Exchange Markets and the Tobin Tax, said the volume of transactions meant even a small levy could produce substantial revenue.“The tax base is so large even a very small levy would raise a great deal of revenue,” the study said.The Green Party revived the idea in its 2025 election platform, proposing a 0.2% tax on Canadian trades involving stocks, bonds, derivatives and currencies.“This measure will help curb speculative trading practices that destabilize markets and generate significant revenue for social, economic and environmental programs,” the platform said.A 2025 Parliamentary Budget Office costing estimated the Green proposal would generate more than $49 billion annually.Analysts calculated the potential tax base using transaction volumes across equity and bond trading, exchange-traded and over-the-counter derivatives, foreign exchange spot markets and other transactions.Liberal-appointed Senator Lucie Moncion of Ontario, a former chair of the Senate budget committee, also floated a transaction tax during a 2025 hearing.Moncion said a Tobin Tax “could happen,” though she did not explain how it would be implemented.“Let’s say you put a 2% tax on buying shares, which would mean people who buy them would be paying taxes on the transaction,” she said.“By doing that — again, this is a hypothetical — you would get revenue from people who have more money than those who cannot buy shares. It’s an idea I’d like to hear your thoughts on.”
