Natural Resources Committee on June 8th, 2006

[Roy Cullen, Liberal, Etobicoke North, ON]

I'd be curious as to the rationale for that; nonetheless....

On the question of state-owned enterprises owned and operated by the People's Republic of China, they've been sniffing around the world, for reasons that are in line with their public policy interests, I guess, to acquire natural resource companies. We had China Minmetals looking at Noranda, and there are other companies looking at oil companies in Alberta and in other parts.

Now I'm just wondering what the role of NRCan would be. I know it's a question under the investment review act whether it's in Canada's strategic or national interest.

I didn't have time to ask the minister this, but it would have been a good question for him. What would go into the mix in terms of looking at whether it would be in Canada's national and strategic interest to allow state-owned enterprises, owned and operated by the People's Republic of China, to acquire one of our natural resource icons, be it an oil and gas company, a forestry company, or a mining company? What would your role be in that discussion?

[Richard Fadden]

I think, as you pointed out, Mr. Chairman, it's fundamentally a responsibility for Industry Canada. The way I understand Industry Canada works, it relies on the sectoral department in which the operation takes place to provide a detailed description of the sector, the economic impacts of the proposed purchase, and things of that nature.

So we would be in the nature of an expert witness—if you forgive the reference to the court system—and the criteria that are brought to bear are those prescribed in the Investment Canada Act. We're basically in the role of an expert witness to describe the sector and the consequences, pro and con, of what the foreign investment would be.

[Roy Cullen, Liberal, Etobicoke North, ON]

Well, I hope you'd also strongly assert the interests of the natural resource economy in that particular context as well.

If I could, just to change subjects, we're exporting 99% of our diamonds in pretty much a raw and uncut state. I've had people tell me that what we should be doing in Canada is setting up a bourse, a diamond commodity exchange. It wouldn't be feasible in Yellowknife, notwithstanding their best intentions. I started a dialogue with some of my colleagues in that area in the last Parliament.

I think they've made some efforts in Yellowknife and beyond to do some cutting and polishing, with some success. But I'm told that if you set up an exchange like they have in Antwerp and other parts of the world, then the value-added starts to move from that, because people want to be close to where the diamonds are being exchanged—and it's a matter of cutting, polishing, and points beyond, in terms of value-added. And it has to be in a large cosmopolitan centre to make it work.

Does the federal government have the authority, through NRCan, I presume, to direct that a proportion of those diamonds—30%, 40%, or 20%, whatever the number is—go into a diamond exchange in Canada, if it were shown to be feasible and a desirable place to go, for value-added processing in Canada? Has the department ever looked at something like that?

[Richard Fadden]

Thank you, Mr. Chairman.

I think the short answer to the question is no. That would imply that the federal government has the capacity to take a natural resource and direct its end use. Mr. Lunn has made it very clear that this federal government has no intention of taking control of the natural resources, which are the responsibility of the provinces. There are a variety of federal powers that are brought to bear on natural resources, but how they're treated is not one of them.

Having said that—

[Roy Cullen, Liberal, Etobicoke North, ON]

Isn't it slightly different with the Northwest Territories, because we collect a lot of revenues directly?

[Richard Fadden]

It is, but the basic position is that it's a natural resource, and once it leaves the Northwest Territories, the federal government loses jurisdiction.

Having said that, this has been discussed by mines ministers and officials who deal with mines, and we have made a little bit of progress in talking amongst the provinces—because in the final analysis, I think you'd need the provinces to agree. There's a bit of a disagreement, I understand, between the provinces about where that centre you were talking about might be, which has slowed things down. But if I remember correctly, it is on the mines ministers' agenda again this year.

I'm afraid I don't remember any more details, Mr. Chairman. It's a relatively specific question. I'd be glad to get more information if you'd like.

[Roy Cullen, Liberal, Etobicoke North, ON]

If you could.

Also, for the mines ministers in the briefing, if you wanted to suggest Etobicoke North, that would be fine as well. There are a lot of “rough” diamonds there.

[The Chair, Conservative, Lee Richardson]

I welcome Mr. Tonks to the committee, who is sharing his time with us from the Legislative Committee on Bill C-2.

I always appreciate it when you're able to come by, Mr. Tonks. I'm sorry you missed the minister.

[Alan Tonks, Liberal, York South—Weston, ON]

Thank you.

[The Chair, Conservative, Lee Richardson]

We'll go for another round. It's out of sequence, but it's a special day, so we're going to let Mr. Bigras take the last five minutes.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

Thank you very much Mr. Chairman.

I would like to delve a little bit further into the agreement that was signed with the automobile industry. I would like to know if all of its provisions were fulfilled. Article 6 mentions that no later than 180 days after the protocol is signed, i.e. April 5, 2005, the Joint Committee comprised of government and all industrial sectors will present an operation plan to enforce the agreement and that the plan will have to be ratified by both parties, i.e. government and the industrial sector.

Has the plan been tabled and has it been approved by the entire industrial sector?

[Margaret McCuaig-Johnston]

Indeed, a plan has been submitted and according to my information, it will be finalized by the committee.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

If I understand correctly, the automobile industry approved the operation plan.

[Margaret McCuaig-Johnston]

That's correct.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

On the other hand, industrial sectors had until November 30, 2005 to submit the results to government or to this committee.

Have all businesses submitted this plan?

Has the whole of the industrial sector presented a plan on its projections for GHGs? There were targets. On the other hand, there's talk of a report on results scheduled for November 30, 2005. Have all these reports been tabled?

[Margaret McCuaig-Johnston]

I will check, but I believe all reports have been filed. As far as I know, all of the agreement's provisions have been fulfilled.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

May I add something else?

[Richard Fadden]

Mr. Chairman, I was only going to say that Monsieur Bigras is asking very specific questions. We would be more than happy to provide specific answers to both the questions he has asked and those he might want to ask, but when we prepare, it's impossible to be able to cover absolutely every area under the jurisdiction of the department.

Madam McCuaig-Johnston is responsible for this area, but she also has a great many others, so I would ask for your indulgence. We would be more than happy to provide additional answers.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

Mr. Chairman, I will submit my questions in writing. Would it be possible to answer all of these in writing as well?

[Richard Fadden]

Yes.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

If one of the parties fails to fulfill the agreement, the government can turn to the regulations. Does Natural Resources Canada have regulations in the works in the event one of the parties withdrew from the agreement?

[Margaret McCuaig-Johnston]

There are none currently, but the government always retains the ability to regulate.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

So there are currently no draft regulations.

[Margaret McCuaig-Johnston]

Our department has none.

[The Chair, Conservative, Lee Richardson]

I'm sorry to interrupt, Madam McCuaig-Johnston, but I think we've gone a little beyond the scope of this committee with the questions.

If you have specific questions like that, I think it's generally understood that all the departments are quite willing to accede to requests from members of Parliament at any time; they don't have to come through the committee. But in this case, as Mr. Cullen has suggested, if there are specific questions, past practice is that they might be submitted through the clerk, who could forward them on and seek responses for you.