Mr. Speaker, I listened to the member for St. John's West and I can understand the passion with which he speaks. One might wonder why the member for Etobicoke North would enter the debate on the project in Voisey's Bay. I will give the House some background to that.
I had the good fortune to visit Voisey's Bay with my colleague from Labrador in 1996. It was quite impressive and we could see the potential for this particular site for the people of Newfoundland and Labrador and indeed the people of Canada.
The member for St. John's West said that this would be an important new addition to the economy of Newfoundland and Labrador. He asked for the federal government to assist in facilitating some resolution to this impasse. I certainly would support that. This project is important to that region and to all Canadians.
The problem as I understand it is that the Newfoundland government has attached preconditions. These preconditions are aligned, I suspect, with what the member opposite said, that the refinery would need to be located in Argentia.
Unfortunately I think we need to ground some of the debate in business economics and logic. Going back to the original purchase, in 1994 Inco paid $4 billion for the Voisey's Bay discovery. The price of nickel at that time was about $3.50 U.S. a pound. It is now about half that price.
To have this important new addition to the economy of Newfoundland and Labrador given current economic conditions, which are really projected to last for some time regrettably, this project will not really be implemented. That would be a sad day for the people in Newfoundland and Labrador and it would be a sad day for Canada.
Inco, as I understand it being a business, has to look at other options. It is looking at a project in New Caledonia, a French colony near Australia. Inco has to decide which one of these deposit sites is going to be developed next. Is it going to be Voisey's Bay or New Caledonia? Being a very strong Canadian company with a lot of roots in Canada, Inco would much prefer to develop the site at Voisey's Bay, but how can it when business economics argue totally against it?
One might ask why the member for Etobicoke North would be concerned. I am concerned as a Canadian. Having visited Labrador I would like to see the economy of Newfoundland benefit. I can understand why the people of Newfoundland and Labrador and their government are anxious to realize the full potential for their treasury and for their people, but we have to come back to basic business economics.
The fact is that if Inco decides to go to New Caledonia, Labrador will lose about 500 permanent direct jobs plus about 1,200 spin-off jobs. It will also lose about $1.1 billion in investment for the mine, the mill and the concentrator facilities.
As a member from Ontario let me say that Ontario is affected as well. The way that Inco has proposed it, the only way the project can proceed is if the mining, the milling and the concentrating are done in Labrador. At that point the concentrate would have to be sent to Quebec City or Sept-Îles and then moved to Sudbury, Ontario, or to Thompson, Manitoba.
That is the only way that Inco seems to feel it can proceed. It has its business people who understand business economics. They are accountable to their shareholders. That is the only way it sees the project working.
If the project does not go ahead, northern Ontario and northern Manitoba will lose smelting and refining jobs. Most of the smelting and refining of the New Caledonia concentrate will be done, for logistical and other reasons, in Japan and not in Canada.
Newfoundland insists on the smelting capacity being located in Argentia. Newfoundland and Canada are at risk of losing about $1.7 billion in taxes and other revenues over eight years. Now that the election in Newfoundland is behind us, it is time for the Government of Newfoundland to look seriously at some business economics and get on with this project.
To add some insult, I am afraid that in November 1998 the Newfoundland government announced amendments to the mineral act which gave the provincial cabinet the power to decide what was economically viable. The cabinet in Newfoundland, while we respect that it has good analysts and other people for advice, has the power to tell Inco, which is a business with shareholders, employees and other stakeholders groups to whom it is accountable and spends its whole life running businesses, that Newfoundland will decide what is economically feasible and what is not.
That is quite tragic. We are depriving Canada, Newfoundland, Labrador, Ontario and Manitoba of jobs, revenue and economic activity because of an understandable passion by the Newfoundland government not to repeat mistakes it has made in the past. We can understand that sensitivity, but when the price of nickel is half what it was when the project was conceived, it is a matter of economics. Sometimes we cannot have the full cake and have to accept half the cake.
I believe strongly that Inco is quite prepared to sit down with the Government of Newfoundland. Perhaps the Government of Canada could play a facilitative role in bringing the parties together, cutting through the rhetoric, getting down to the basics of creating jobs and economic activity in Canada. If that could happen I know it would be very positive.
The project at Voisey's Bay is a staggeringly attractive proposition. As I said, I had the pleasure of visiting it and seeing the area oozing with hope and the dreams of the people who will be involved. However, they will not be involved if the people of Newfoundland and Inco cannot get together to make the project a reality.
I support what the hon. member is saying. The Government of Canada should play a facilitative role, but I do not see how it can do that if the Government of Newfoundland is saying there are preconditions, that the smelting capacity must be in Argentia. That is a huge stumbling block.
I support the member opposite in the sense of moving the project forward. I would argue that our government should be involved in helping to get the project rolling.