Debates of Oct. 4th, 1995

Employment Equity Act

[John Solomon, NDP, Regina—Lumsden, SK]

Mr. Speaker, New Democrats present this afternoon vote yea on this motion.

[Jag Bhaduria, Liberal, Markham—Whitchurch-Stouffville, ON]

Mr. Speaker, I will be voting against this motion.

The House divided on the motion, which was negatived on the following division:

[The Deputy Speaker]

I declare the motion lost.

The next question is on group 6, Motion No. 13.

[The Deputy Speaker]

Is that agreed?

[Some hon. members]

Agreed.

[Gilles Duceppe, Bloc, Laurier—Sainte-Marie, QC]

Mr. Speaker, the Bloc members will vote yea.

A negative vote on Motion No. 13 necessitates the question being put on Motion No. 14.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, if you were to seek it I believe the House would give its unanimous consent that all members who voted on the previous motion be recorded as having voted on the motion now before the House with Liberal members voting nay.

[The Deputy Speaker]

I declare Motion No. 13 defeated.

The next division will be on Motion No. 14 of Group No. 6.

[Bob Ringma, Reform, Nanaimo—Cowichan, BC]

Mr. Speaker, most Reformers will vote no 347.

[John Solomon, NDP, Regina—Lumsden, SK]

Mr. Speaker, members of the New Democratic Party who are in the House this evening vote yea on Motion No. 13.

[Jag Bhaduria, Liberal, Markham—Whitchurch-Stouffville, ON]

Mr. Speaker, I will be voting against this motion.

(The House divided on the motion, which was negatived on the following division:)

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, if you were to seek it, I believe the House would give its unanimous consent that the vote on the previous motion, that is Motion No. 13, be applied to Motion No. 14 also.

[The Deputy Speaker]

Is that agreed?

[Some hon. members]

Agreed.

Editor's Note: See list under division No. 347.]

[Lloyd Axworthy, Liberal, Minister of Human Resources Development and Minister of Western Economic Diversification]

moved that the bill, as amended, be concurred in and read the second time.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, a point of order. If you were to seek it, I believe you would find unanimous consent to apply the vote taken on report stage Motion No. 5 in reverse to the motion now before the House.

For the clarification of my colleague whips, the reason I am using this vote as opposed to Motion No. 1 is that some members were absent for the first vote.

[The Deputy Speaker]

I declare the motion carried.

(Bill concurred in and read the second time.)

[The Deputy Speaker]

The House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

The House resumed from June 5 consideration of the motion.

Mining Exploration And Development

[Réginald Bélair, Liberal, Parliamentary Secretary to Minister of Public Works and Government Services]

Mr. Speaker, it is a pleasure for me to rise in the House tonight to speak on Motion M-292 which reads:

That, in the opinion of this House, the government should consider implementing a new program of mining incentives which would encourage exploration and development in Canada.

But before going any further, I would to state some very important facts, for the benefit of our viewers. First of all, Canada is the third largest mining country in the world, extracting about 60 metals and minerals, including zinc, uranium, potash and gold. The mining industry provides employment for approximately 335,000 Canadians in 150 communities. Mining companies in Northern Ontario have created 18,000 direct jobs in the metal industry and 5,000 in the non metallic minerals industry. I am very proud to say that the Williams mine, in Marathon, in the riding of Cochrane-Superior, is the largest gold mine in Canada.

There are however many barriers to the survival of the mining industry. First of all, mining exploration is a temporary land use that disrupts small areas for a very short time period. Once the mineral deposit is depleted, cleanup procedures are undertaken and land can be used for other purposes. Unfortunately, land use issues are fraught with uncertainty because of the development of new parks and native land claims, some of which are being negotiated as we speak.

The industry is facing new difficulties since countries like Chile, Argentina and Mexico are upgrading their economies and taking steps to attract mining exploration and, thus, investors.

In 1993, Canadian companies with budgets over $1 million invested nearly $260 million, or half their budgets, in exploration outside of Canada. This represents an increase over 1992, when these companies devoted 40 percent of their exploration budgets abroad.

Why is that? First of all, at the natural resources committee hearings last year, the Canadian mining industry had a lot to say about stringent environmental standards-that is the first problem-and the slow licensing process as well. The second problem is non-unionized labour in Latin America and Mexico. Because of this, wages are extremely low; also, the standard of living is lower in these countries than here. Investors enjoy a much higher return on their investments over there than in Canada.

Since the licensing and environmental assessment processes are under federal and provincial jurisdiction, they are characterized by duplication and delay. We need at least $900 million to $1 billion a year in exploration capital in Canada to rebuilt our ore reserves which have dropped dangerously.

We must bear in mind that, from 1990 to 1994, while 44 mines shut down operations in Canada, only 24 were opened.

If we want mining exploration to continue and to keep investors interested, there should be incentives from the government. We need a new program of mining incentives that will encourage exploration and development, encourage Canadian companies to keep investing in their country. That will permit the industry to help stabilize the economy and create employment.

Last year, as I mentioned a while ago, the committee for natural resources issued a report after its very long hearings. The report says:

Canada needs to remove existing structural impediments to the achievement of a sound mineral investment climate. These have been identified as: the tax burden on the industry, particularly the one imposed by non-profit taxes; the inefficiencies of the current environmental regulatory regime; and the uncertainty surrounding land use policies and security to mineral title.

Another recommendation coming from the report is that the government has to work with mining communities and the provincial governments to establish those crucial partnerships to work together to ensure that we have a viable mining industry in Canada.

There is a great need for the harmonization of environmental guidelines. As it is today, the federal government's guidelines

differ from those of many of the provinces. This simply adds complexity to opening new mines.

The mining companies are not asking for grants but they want a level playing field and a tax system that is truly competitive with the rest of the world. There should be security of land tenure and a certainty of continuity in the rules of the game in terms of issuing permits and doing environmental assessments.

After extensive hearings the Standing Committee on Natural Resources have recommended nine key points on mining incentives. These points were also present in the Whitehorse mining initiative report.

I would like to emphasize a few of those recommendations. First, change the adjusted cost base of flowthrough shares from zero to the actual costs of the shares for five years only, to kickstart mining exploration again.

Flowthrough shares would provide a less costly means of raising equity based financing for exploration and development by facilitating a widespread share issue. Flowthrough shares allow access to a broad range of investors while minimizing the impact on corporate management and control.

Second, there should also be harmonization in the federal and provincial environmental guidelines. Co-operation agreements should be established among the jurisdictions for the development, administration and enforcement of environmental standards to improve the efficiency and effectiveness of the regulatory system and to reduce unnecessary industry regulatory compliance costs.

A new mining project should be subject to only one timely environmental assessment by a single lead agency with only one set of recommendations that meet all the requirements. We should try to conciliate conserving the environment with the creation of employment.

Third, we should amend the Income Tax Act to defer taxation of income generated by mine reclamation trusts until the funds within these trusts are finally allocated for reclamation purposes. Reclamation funds should be treated also like RRSPs.

Therefore I support Motion No. 292 by my colleague from Timiskaming. I insist at the same time that we should provide a newer direction for our mining industry and ensure that it continues to make a strong contribution to the Canadian economy.

[Roger Pomerleau, Bloc, Anjou—Rivière-Des-Prairies, QC]

Mr. Speaker, I would like, first of all, to thank or congratulate the hon. member for Timiskaming-French River for tabling this motion, and introducing it in the House on June 5 of this year. This motion reads as follows:

That, in the opinion of this House, the government should consider implementing a new program of mining incentives which would encourage exploration and development in Canada.

When he talked on his motion, the hon. member mentioned in this House that in the area of mining, there was a substantial increase in exploration throughout Canada in 1994. However, this is not the opinion expressed by the Association des prospecteurs du Québec in a letter dated March 30, addressed to the Minister of Finance.

The letter said in particular that the government does not seem to realize that there is presently in Canada a lack of exploration which is mortgaging the future of the whole Canadian mining industry. The letter also said that it was urgent to try to replenish our mineral reserves. If we neglect to do that it will have an impact on a whole economic activity which is directly or indirectly connected with the mining and smelting industry in Canada.

I would like to say that we should make a distinction between mining exploration itself, where there was substantial growth in 1994 compared to 1993, and activities dependant on mining exploration, which also grew in 1994. We should mention, however, that despite this strong growth, we are a long way from the levels which existed in the early 1980s.

This being said, we can realize the scope of what the hon. member for Timiskaming-French River was saying and I quote: "Despite this, major problems and impediments still exist to a sound and sustainable mining sector in this country." It is in this context that the hon. member was asking the House to press the government to implement a program of incentives which would encourage exploration and development in the mining sector in Canada.

Of course, there is no reason why we should oppose this motion, even though it seems to be nothing but an expression of intent. However, assuming that the House of Commons agrees to this motion at the time of the vote, what will it give us that we do not have already?

The problem is not that Motion M-292 is inappropriate, but that it is not sufficient to solve the mining problem in Canada. In its report on the Canadian mining industry that was tabled before Parliament in December 1994, the standing committee on natural resources made a series of recommendations that all committee members, whatever their party affiliation, agreed on.

Of these recommendations, there are two that I will now outline for you. First, recommendation No. 3 which says: "That the federal government introduce a mineral exploration incentive by modifying the Income Tax Act to incorporate a change in the adjusted cost base of flow-through shares from a value of zero to the actual cost of the shares".

Then, recommendation No. 4, which everybody agreed on: "That in order to enhance the effectiveness of exploration work financed by means of flow-through shares, the feral government enable the exploration activity funded through such shares to be carried out over a period of one full year after financing".

The problem with the motion of the member for Timiskaming-French River is that, as it stands currently, it would do nothing concrete to stimulate mining exploration. It would be insufficient in itself to ensure implementation of the recommendations of the standing committee on natural resources, that the hon. member moving this motion is a member of.

If I brought to the attention of the House the committee recommendations that deal with flow-through shares, it is because my colleague from Abitibi also moved before Parliament a motion, Motion M-247, that has the same objective as Motion M-292, but would have a more obvious impact on mining exploration.

I do not intend to deal at length with the motion moved by my hon. colleague from Abitibi, but rather on the one moved by the hon. member for Timiskaming-French River. However, since both motions are very similar, I think it is relevant to speak to both. I would like to indicate that members of the Bloc Quebecois will support motion M-292 inasmuch as it does not work at cross purposes with motion M-427 which we will also all support.

I will not dwell at length on the positive impact tax incentives could have on the mining industry, since my colleague from Abitibi covered that very well, but I would like to mention that this kind of incentive has proved to be useful in Quebec, and more particularly so with small mining companies, which have a positive impact on local economies through their exploration operations.

The hon. member for Timiskaming-French River has given lots of figures, which my colleague opposite repeated a moment ago, to demonstrate the importance of mining in Canada and describe the Canadian position in mining exploration throughout the world in several sectors.

Despite all those figures, the government does not seem to get the point that the mining industry is one of the strongest foundations of the Canadian economy and deserves more than lip service. If motion M-292 carries, it will have a positive impact because we will at least know which way the government is heading as regards the development of our mining industry. And if the motion of the hon. member for Abitibi is agreed to, the mining industry will be able to know how the government intends to reach its goal.

In the time remaining, I would like to comment on statements made by the hon. member for Fraser Valley East in reaction to remarks made by the hon. member for Abitibi on his motion. The hon. member for Fraser Valley East said among other things, and I quote:

"I am surprised and I might almost say astonished that this particular motion would come from the hon. member for Abitibi". Let me paraphrase what he says. He says that he wants the federal government to pour money into subsidies for industry in Canada and in Quebec.

My colleague did not seem to understand the difference that exists between a federalist in Quebec and a sovereignist. A federalist in Quebec effectively always asks for more power and money. Sovereignists in Quebec do not want that at all. They want all the power and no money. We fully understand that being a minority in a majority means that we will fight forever, day after day, for bits of power and morsels of rights. We do not want bits of power and morsels of rights. We want all the power and all the rights. However, as long as we are in Confederation we will ask for our fair share of the federal expenses.

I will quote again the hon. member for Fraser Valley East who said: "I am surprised because the hon. member for Abitibi is a member of the Bloc Quebecois which, as we all know, is a political party with only one purpose and that is to destroy Canada as we know it by taking Quebec out of Confederation". That is a very strange affirmation.

Most Canadians actually believe, concerning Quebec of course, that we are a bunch of troublemakers, that we receive much more money from Canada than we put in, and that if the economic situation in Canada goes bad it is partly due to the political instability in Quebec. If those three assumptions are right and if people really believe them, the sovereignty of Quebec should be seen by most Canadians as a good way to solve a problem once and for all and save money, providing that we assume our fair share of the Canadian debt. That is exactly what we intend to do.

We are not a problem; we are the solution to a problem. If the no vote wins in Quebec we are back to square one. It will be 15 years of political debate to the next referendum, and I am sure nobody wants that. We do not want to destroy Canada. We simply think that Canadians should be able to run their country the way they want, without having to please Quebec at each moment, and that Quebec should be allowed to do the same.

My friend from Fraser Valley East continued: "I hope the member understands that people from my riding are frustrated by this kind of behaviour". I am frustrated too. I fully understand

what frustration means, but the only way to put an end to that frustration is to support the sovereignty of Quebec.

A certain amount of Canadians believe that we are sovereignists because we hate Canadians. This is absolutely not true. We love Canadians but love has absolutely nothing to do with politics. I love my father very much; that is love. However I would never let my father run my business; that is politics.

Personally I have worked everywhere in Canada: Edmonton, Toronto, southern Ontario, Regina, Saskatchewan and Saint John, New Brunswick. I have also worked in the United States: Texas, Florida, West Point and New York. I fully agree with the Prime Minister of Canada. If I were an immigrant from anywhere in the world trying to find a new country in which to live, Canada would be my first choice. However I am not an immigrant trying to find a new country in which to live. I already have a country. My country is Quebec.

[Robert Bertrand, Liberal, Pontiac—Gatineau—Labelle, QC]

Mr. Speaker, I am very pleased to rise today to speak on the motion put forward by my colleague, the hon. member for Timiskaming-French River, which urges the government to consider implementing incentives to promote mining exploration and development in Canada.

Canada extends over some 10 million square kilometres and is one of the richest countries in the world in terms of natural resources. Its mining industry was ranked amongst the best in the world in many areas of mineral production. Mining has always played a major role in the Canadian economy, which is hardly surprising, since Canada is one of the biggest producers and exporters of non-fuel mineral resources.

Statistics for 1992 show that the non-fuel mineral resources industry accounted for a little over 4 per cent of the Gross Domestic Product and almost 3 per cent of employment. Also, these statistics indicate that the total value of the non-fuel mineral resources production for 1992 reach $14.6 billion, which is 41 per cent of overall mineral production in Canada. It is important, also, to remember that Canada produces a little over 60 minerals. Except for phosphorus, manganese, bauxite and chrome, our country can meet its own needs in terms of minerals.

Statistics on exploration also speak volumes. Non-fuel mineral resources exports reached $23 billion, a little over 15 per cent of total exports for Canada. During the same period, the value of our non-fuel mineral resources imports was estimated at $13.2 billion, for a trade surplus of over $9.8 billion. All these statistics reflect the outstanding progress made by the Canadian mining industry.

Technological innovation also has something to do with the boom enjoyed by this industry. However, the industry did not escape from the upheaval caused by the recession during the late 1980s and the early 1990s. Mining was hard hit during this period. But since 1993, it is recovering nicely. All of us in this House recognize that several irritants are still preventing Canada's mining industry from hitting its stride.

This is why I wholeheartedly support the motion put forward by the hon. member for Timiskaming-French River, whom I wish to congratulate for this excellent initiative, especially since my hon. colleague showed, in the eloquent speech he made when he introduced his motion, that he is very much aware of the current codition of federal finances.

This motion has nothing to do with tax breaks, grants, or subsidies. Its only goal is to bring the government to consider measures that would not cost a lot of money to the Canadian taxpayer but will go a long way to ensure a brighter future to the Canadian mining industry and to the mining communities across Canada.

In its report of December 1994 entitled "Lifting Canadian Mining Off the Rocks", the House of Commons Standing Committee on Natural Resources proposed nine recommendations. Some of those recommendations would cost money if implemented, while others would emphasize collaboration and partnership that would alleviate some problems for the industry. Here are some of the recommendations.

Recommendation number three: "That the federal government introduce a mineral exploration incentive by modifying the Income Tax Act to incorporate a change in the adjusted cost base of flow through shares from a value of zero to the actual cost of the shares, that this new fiscal measure incorporate a cap on a given company's take-up of the tax benefit, and that the new incentive vehicle be in place for a maximum duration of five years".

Recommendation number four: "That in order to enhance the effectiveness of exploration work financed by means of flow through shares, the federal government enable the exploration activity funded through such shares to be carried out over a period of one full year after financing".

Recommendation number seven: "That once initial steps have been taken to improve the investment climate in Canadian mining, the federal government, its provincial and territorial counterparts, and the domestic mining industry develop through consultation an integrated approach to communicate the positive features of the Canadian mining sector to potential investors".

In May 1995 the Minister of Natural Resources responded very favourably to the report of the Standing Committee on Natural Resources on mining. She stated: "The Government of Canada remains committed to fostering a modern environmentally respon-

sible mining industry that contributes significantly to Canada's economic growth and job creation. We are committed to ensuring in conjunction with provincial governments and the Canadian mining industry that there is a positive environment for investment in mineral exploration in Canada".

A month earlier, in Miami, Florida, at the Investing in the Americas Conference, the Minister of Natural Resources stated in her speech to the conference: "The Government of Canada recognizes the importance of the mining industry, its contribution to economic growth and jobs, and the challenges it faces".

During the last Canadian federal election the Liberal Party of Canada was the only political party to release a detailed policy outlining its commitment to the mining industry. This commitment has not wavered. We are proud of our mining industry and we believe its present and future prospects are excellent.

From the statements made by the Minister of Natural Resources, one can only conclude that the federal government is acting in good faith in this matter and, particularly, that it is prepared to help the mining industry, in co-operation with all the other stakeholders.

It even seems fairly clear that our government is already responding to the request made in today's motion, with the intention of keeping government initiatives in the mining industry in line with the present fiscal situation.

This approach was clearly expressed in the response the government gave to the fifth report of the Standing Committe on Natural Resources entitled "Lifting Canadian Mining off the Rocks", which was tabled in the House by the hon. Anne McLellan, Minister of Natural Resources, on May 8, and I quote: "While mining remains a priority of this government, budgetary conditions also require that new ways be sought to deliver quality programs and services at a lower cost. To this end, the federal approach will be to exercise a role that complements that of the provinces and provides a national co-ordination capacity, where required, so that government policies and strategies have the most favourable impact on mining in Canada".

Heads of the mining industry in Canada are quite aware that the federal government cannot do it all on its own and offer a miracle cure for the ills of the mining industry. However, they can count on the federal government's cooperation and total support.

Already in 1994, in its action plan entitled Building a More Innovative Economy , the federal government had announced its intention to implement a number of measures concerning the regulations governing the climate for investors. Improvements are being considered in the following areas: decisions regarding land use; definition of garbage and recycling; regulatory systems north of the 60th parallel; better evaluation of environmental and economic factors in the review of the impact of new regulations-

[The Deputy Speaker]

Unfortunately, the member's time has now expired.

[Darrel Stinson, Reform, Okanagan—Shuswap, BC]

Mr. Speaker, as a former prospector and mining consultant I am especially pleased at this opportunity to comment on Motion No. 292.

Hon. members should be concerned that after adjusting for inflation, domestic mining exploration expenditures for 1992, valued at $385 million, were at the lowest levels since 1967. Despite increases in the past two years, they remain substantially below levels of the $800 million yearly it will take to maintain required reserves.

It is painfully obvious that mineral exploration and therefore the Canadian mining industry is in serious trouble. The question of course is what do we do to correct this sorry fact.

I want to ask my hon. colleagues what they think makes prospectors like myself tramp around in the bush for months on end looking for solid indications that a chunk of northern Ontario muskeg and rock or a Windy Craggy on the mountainside in British Columbia has enough concentration of minerals that it could be developed into an economically viable mine.

Men like me go prospecting in the Canadian bush because we love it. Bad weather and tough living conditions do not stop us. Worried mothers or lonesome housewives do not stop us. Not even the low prices of the minerals we are seeking can stop us, because we know the world needs those minerals and it will only be a matter of time before prices rebound to profitable levels.

Only one thing has stopped me and other prospectors in Canada, the irrational, short-sighted, muddle-headed, counterproductive, feeble-minded policies of the federal Government of Canada: outrageous taxes, conflicting rules, red tape so endless that it routinely takes three years to get environmental approval for a new mine in Canada, compared to six months in countries like Chile and elsewhere else in the world.

Let me spell out some details regarding what I have labelled as outrageous taxes. I want to be perfectly clear that I believe that everybody who is making more than they need to live decently should pay taxes. That includes profitable mining companies. However, Canadian businesses and industry must face a host of taxes that are not based on profit.

One glaring example is tax imposed on gasoline, an absolute necessity for mine exploration. Taxes account for half of our Canadian costs for gasoline. This government recently increased that tax by another half a cent per litre. That is a tax that must be paid regardless of whether a mining company is in full or profitable production or merely struggling to complete its first program of diamond drilling.

By contrast, Mexico, our partner in the North American free trade agreement, is far more realistic about what gas taxes can do to their economy. In Canadian cents per Canadian litre of gasoline during 1994, Canada's base price for gasoline was 26 cents, whereas Mexico's base price was 44.5 cents. Yes, that is right, Mexican gasoline, excluding tax, was nearly 20 cents a litre more than our price. The Mexican government taxes gasoline like the essential commodity it is, rather than following the wrong headed policy of the Canadian government, which zaps consumers and businesses by doubling the price by the time it reaches the gas pump.

The final result for 1994 was that our NAFTA partner had gasoline prices of 48.9 cents a litre versus the Canadian average of 52.2 cents a litre. That is a big difference.

The federal government for the past many years has taxed gasoline like it was champagne in order to pay for high spending federal programs that allow the federal government to meddle in every sector of our economy, including direct grants to businesses and industry, which still cannot make Canadian costs competitive. Compared to our new NAFTA partner, that is the kind of thing I mean when I say that it is the muddle-headed contrary federal government policies that have stopped mining exploration in Canada.

Another example of outrageous taxation is the application of the large corporation tax to mining companies that may have only one mine they are struggling to bring into production. Still another tax I believe is wrong taxes the interest on money that mining companies must place in trust to ensure proper clean-up of the environment in the form of mine reclamation funds. When a mine starts up the principal has to raise a fortune in preproduction costs. Part of that cost is setting aside sufficient funds to ensure that the environment is returned to a safe and useable condition when the mine shuts down. Creation of the mine reclamation trust fund is being legislated by the provinces, but the federal government is requiring even single mining operations just getting started to treat the interest from the mine reclamation fund as annual income and to pay tax on it right from the first year. Instead, I believe mine reclamation funds should be treated like an RRSP.

Another way in which the present tax system is unfair to mining development lies in the treatment of shares. I am very much in favour of flow through shares, especially for non-diversified or junior mining companies, which may not have revenue against which they can use the deductions available. It is good to let deductions available at the front end flow through the investor who just buys the shares, but I see no justification for requiring that the adjusted cost base of those same flowthrough shares must be regarded as zero, whereas the adjusted cost base for other shares is the actual cost of those shares.

The hon. member from the Bloc Quebecois has looked at the national mining industry, which despite these awful federal policies managed to create $16.34 billion of total mineral production in the year of 1992, $15 billion for 1993, and $16.29 billion for 1994. Even though the hon. member claims he wants to get out of Canada, he is proposing that the federal government introduce a new program of mining incentives to encourage prospectors to return from countries such as Chile, Brazil, Indonesia, and wherever else Canadian prospectors have found government policies they can live with.

The last thing a prospector wants is yet another batch of federal red tape to try to figure out. What is basically wrong with government starting such an incentive program? For one thing, governments cannot predict very accurately when the international price of gold or any other mineral may suddenly climb substantially.

In 1983 the price of gold was $350 U.S. per troy ounce, and mining exploration was relatively flat. In 1985 the Tory government introduced the $100,000 lifetime capital gains deduction. In 1987 gold was selling for $500 U.S. per troy ounce. Throw in the additional government incentives like the mining exploration depletion allowance, and small wonder that in 1987 over $1.2 billion was poured into mining and mineral exploration here in Canada. It went predominantly to precious metals rather than the base metals, which are more essential to our economy.

Who can say whether the policies of flow through shares, the lifetime capital gains deduction, the increased price of gold, or the MEDA program was responsible for the influx of the exploration dollars in the mid-1980s?

Government programs are by their very nature crude tools. Communist countries learned that they cannot entrust management of their economies to some central brain trust. It is far better to make as few government rules as is consistent with ensuring sustainable resource development and generally leave the field of natural resources to provincial jurisdiction.

Another significant factor preventing people from investing in Canada today is our many conflicting rules, especially regarding the environment. The Reform Party believes that environmental concerns must be part of sustainable resource development right from the initial planning stages. We see absolutely no valid reason that federal and provincial regulations should not be harmonized right across Canada. Instead, the present federal Minister of the Environment has scuttled harmonization negotiations with the Council of Canadian Ministers of the Environment because she

wants to be the star performer instead of merely a member of the chorus.

The 1993 report of the Committee on Competitiveness of the Resource Industries pointed out:

The applicant has no way of knowing at the onset of the approval process what the regulations will be, the amount of time that the approval process will take, what it will ultimately cost, or what the outcome will finally be.

I definitely agree. It is time for government to get its act together.

[Paul Steckle, Liberal, Huron—Bruce, ON]

Mr. Speaker, it is a pleasure to rise this evening and speak in support of Motion No. 292 which was put forward by my colleague, the hon. member for Timiskaming-French River.

The hon. member and I have much in common when it comes to sport shooting and matters pertaining to our great Canadian outdoors. We also share similar views when it comes to mining issues.

I congratulate my government colleague for submitting this motion to the House. Mining is a very important activity in northern Ontario. It is crucial to the economy there as well as in many other areas. Also, the fact that he is representing his constituents' concerns really matters. It should be the first and most important duty for us all.

As a member from southwestern Ontario, home of Canada's largest salt mine, I am pleased to speak in favour of the motion. I too recognize the importance of mining to the Canadian economy. The motion states:

That, in the opinion of this House, the government should consider implementing a new program of mining incentives which would encourage exploration and development in Canada.

That is certainly consistent with our red book. I refer to the October 15, 1993 mining policy announced by the hon. member for Sudbury, who is now the Minister of Health. She stated:

The mining industry is a vital part of the Canadian economy. Not only is it the lifeblood of over 150 communities, but it accounts for 330,000 jobs. A Liberal government will offer the leadership needed to ensure a strong future for Canadian mining.

One of the recommendations made in this policy is a direct connection to today's motion. Our policy proposed to undertake a comprehensive review of income tax laws with provincial and territorial governments, industry and other interested parties to ensure that the financial assurance mechanisms are complemented by federal tax policies and to provide policy support to help mining and mineral service industries expand their competitive advantage in foreign markets.

This is an important motion, especially in light of today's condition of the mining industry. It is facing a future of uncertainty. Public policy initiatives are needed to sustain the industry as a world class producer of mineral and metal products and to stimulate investment in mineral exploration and development in Canada.

I speak of an industry which accounts for 2.7 per cent of total national employment, one in which depleting reserves and mine closures outnumber mine openings, one which represents $23.6 billion or 17 per cent of total Canadian exports, and one which contributed $10.8 billion to the mineral trade balance. It is an industry in which the total value of mineral production was $14.6 billion, or $35.4 billion if fuel minerals were added. It is an industry which represents one of the highest industrial wages paid in Canada: $847 per week in some of Canada's most isolated communities.

As a result of these challenges, we need an enhanced commitment from the federal government especially in the area of exploration stimulation which will attract sufficient levels of exploration investment to ensure that the economic growth rate and the level of Canadian mineral reserves will not continue to decline.

Our mining industry is a world leader in technology innovation and information. We must always strive to keep it that way. As members know, mineral exploration and for nearly a decade mineral reserves have been on a decline as the developing world attracts mineral investment away from Canada. They do this through aggressive marketing, joint ventures and legislative and policy changes.

The competitiveness of Canadian mining in the 1990s is plagued by uncertainty. There are disincentives now in the mineral investment climate that are discouraging proper investment levels which are needed to maintain a reserve base.

These factors include mineral taxation, exploration incentives, environmental assessment, land access, aboriginal land claims, mine reclamation deductions and security of mineral tenure. The mineral potential in Canada is as inviting as any other country in the world. However we cannot maintain our position as a world leader among mineral-producing nations unless steps are taken to reduce the doubts.

I am sure all members from both sides of the House understand full well the implications of inadequate incentives for primary mineral exploration. Without ample exploration the mineral reserves necessary to replace what is being mined today will not be found. For many reasons, exploration levels have dropped dramatically since the mid-1980s. We all realize there is no quick fix for this problem nor do governments currently have the financial capacity to intervene in a significant way.

Along with an exploration incentive program as called for in the votable motion being debated today, there also must be an overall competitive and supportive investment climate. This will create the proper framework in which mining can thrive and this will in turn promote exploration.

We must work hard to find solutions. We must work hard to keep mining in Canada. While world demand for minerals is increasing, Canada's share of world mineral supply is declining and mining investment capital is leaving Canada for other parts of the world.

The mining industry has worked hard to reduce costs, improve its environmental and safety performance and increase productivity through technological innovation and upgrading of worker skills. Yet today the industry faces its toughest challenge of all to keep mining in Canada.

According to the Mining Association of Canada, in 1992 there were 28 closures or temporary shutdowns of mines compared with only eight openings, meaning a net loss of 5,800 jobs. From 1981 to 1991 there was a decline of nearly 40 per cent in investment levels in the sector. Between 1986 and 1991 Canada failed to attract a single new mining project with a capital cost of more than $250 million. By contrast, Latin America had five. These facts make support of my colleague's motion so important. It centres on the encouragement of exploration. This is crucial.

We know that investing in exploration and development is the only way to ensure a future for mining in Canada but from 1991 to 1992 more than 150 companies worldwide reduced spending on Canadian projects by 30 per cent. In 1987 Canadian companies spent 81 per cent of their exploration budget in Canada. In 1992 that number went down to 61 per cent. In contrast, over $7 billion has been committed to exploration and development in Chile, Mexico, Venezuela, Argentina and Bolivia.

It is ironic that Canada is the biggest foreign investor in mineral exploration in Chile with over 40 Canadian companies involved. The average government approval for a mining operation takes six months in Chile as opposed to three years in Canada. When Chile is admitted to the NAFTA agreement, what chilling effect will this have on Canadian mines?

Earlier in this Parliament, the Standing Committee on Natural Resources conducted extensive hearings with all the stakeholders. The result was nine key recommendations on mining incentives which my colleague from Timiskaming-French River has outlined.

Canada has the resources, skilled workforce, infrastructure and commitment to environment and technology to support a prosperous mining industry today and in the future. But without a strong co-operative effort to keep mining here, this may well be the last generation of miners in Canada. As future mining activities shift to other countries, the decline of Canadian mining would have a devastating impact on over one million Canadians living in mining communities or working in businesses related to the mining industry.

Through this motion, it shows we urgently need a national mining strategy with policies and actions that will reverse current trends. Mining is important to Canada and we must support Motion No. 292. Canada has always counted on its mining industry to be a key foundation for export driven growth.

Today mining is a $20 billion industry in Canada. We must keep it growing and thriving. I am certainly supporting this motion and I urge all hon. members to do the same.