House of Commons Hansard #49 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was elections.


Farm Credit Corporation ActGovernment Orders

4:05 p.m.

Some hon. members


Farm Credit Corporation ActGovernment Orders

4:05 p.m.

The Acting Speaker (Ms. Bakopanos)

It being 5.30 p.m., the House will now proceed to the consideration of private members' business as listed in today's order paper.

Gold MinesPrivate Members' Business

4:10 p.m.


Guy St-Julien Liberal Abitibi—Baie-James—Nunavik, QC


That, in the opinion of this House, the government should table emergency legislation regarding operating assistance for gold mines in Canada, in order to help gold mine operators cope with the rapid increase in production costs, and at the same time guaranteeing a fixed price for the gold they produce.

Madam Speaker, I would like to thank the Liberal member for Shefford, a resource region, for supporting my motion which aims to help gold mines in resource regions.

This motion I am presenting arises primarily from the people at home, in the mining sector and the heads of a number of gold mines in Abitibi—Témiscamingue, mainly in regions such as Chapais and Chibougamau.

Members will remember that in 1948 a debate was held in the House of Commons on the Emergency Gold Mining Assistance Act. A number of members will be intervening, but they should address this emergency measure in their remarks. At home people are asking for help operating gold mines.

If we go back to the 1948 bill people will say it dates from way back, but I have here the text of the law explaining how it worked, including the part on payments as assistance. It is important that people know what it is. I will therefore quote section 3, which reads as follows:

3.(1) The Minister may pay to a person engaged in operating a gold mine a sum not exceeding an amount calculated in the manner prescribed in this section with respect to gold that is produced from the mine during a designated year and that, during the designated year, is sold to Her Majesty at the Royal Canadian Mint or at a branch thereof, or is exported from Canada and sold.

(2) The sum that may be paid under this section in respect of gold produced from a mine and sold in a designated year that does not include any part of the first year of production, is an amount equal to the product of a ) the rate of assistance for the mine for that designated year

multiplied by b ) the number of ounces of gold by which the number produced from the mine and sold in that designated year exceeds two-thirds of the number produced from the mine during the base year.

If we keep going in that vein, a gold vein particularly for Canada's mines, the marginal note for subsection 3(3) specifies that includes a part or all of the first year of production.

On December 1, 1947, a motion was brought before the House which stated:

That it is appropriate to propose a measure to provide emergency payments, by the Minister of Mines and Resources, to help face the increase in production costs of gold produced from gold mines over the past three years, beginning on December 1, 1947.

It says thanks to improvements in terms of the supply of workers and the help with costs provided under the Emergency Gold Mining Assistance Act. We can also go back to another year, 1953, but it is important for people to understand why we are asking for emergency legislation.

We are asking for emergency legislation to help gold mine operators. Over the last several years Canada has passed emergency legislation to help farmers in the west and in the rest of Canada. Emergency legislation was passed to help the fisheries. There has been no emergency legislation to help gold mining since 1976.

A 1953 amendment to the Emergency Gold Mining Assistance Act raised the price paid to eligible miners by one dollar an ounce produced as compared to 1952. These are all elements we saw and we will see again.

In 1960 about half of the gold produced in Canada was sold on the free market and the rest was sold to the Royal Canadian Mint under the Emergency Gold Mining Assistance Act. Gold production in Canada reached the highest levels since the second world war, or 4,628,911 ounces of gold.

It should be pointed out that in 1948 when the Emergency Gold Mining Assistance Act came into force the production of gold rose by 14% as compared to 1947, thanks to these improvements.

Let us now look at 1964. People will think that the mining industry got money every year. In 1964 under the Emergency Gold Mining Assistance Act 44 out of 48 gold mines got help to cover their costs. Those that did not get help had not asked for it.

In 1968 Canadian miners were still selling on the free market or were receiving assistance under the Emergency Gold Mining Assistance Act if they were eligible for this assistance. They were then selling their gold to the Royal Canadian Mint for the Canadian equivalent of $35 U.S. an ounce. The gold bought by the Royal Canadian Mint was in turn sold on the free market.

It is important for people to understand why gold miners must be given assistance through emergency legislation.

In 1968, 35 gold mines were eligible for assistance under the Emergency Gold Mining Assistance Act. Amendments were proposed. In 1972 no mine applied for the assistance available under the emergency legislation because the price of gold on the market was higher than the total of the official price set by the Royal Canadian Mint plus the maximum amount of $48 an ounce provided under the act.

Then in June 1976—we are getting closer to the present—the IMF auctioned off 121.3 tonnes of gold from its reserves. This was the first portion of the 777.6 tonnes or 25 million ounces of gold it intended to sell over a four year period. The net proceeds were deposited in a trust fund used by the IMF to help developing countries.

The Emergency Gold Mining Assistance Act was no longer invoked as of June 30, 1976. The conditions set out in the legislation no longer applied to the industry.

What happened between 1948 and 1976? Under the emergency act passed in 1948 the amounts paid up to gold mine operators while the legislation was in effect totalled $303,104,402 for 1,922.6 tonnes of gold. This means that 61,813,545 ounces of gold were produced and sold in accordance with the act.

What is happening now? In the last two years we have seen a sharp decline in the mining industry, particularly in the gold mines in the Abitibi. We know that things have not been easy for the mining industry, especially in the last two years. Last year low gold prices had a negative impact on the Beaufor gold mine, the McWatters mine, which is called the McWatters Company, and several northern communities. McWatters is developing what is known as the Sigma-Lamaque mine in Val-d'Or.

As I said earlier, hon. members would like to have a debate on this emergency bill like the one that was held some time in the last few months on disaster relief for western farmers because it is important to find a way to help out the mining industry.

As members know, there are many policies supporting the mining industry. We also know that since 1980 Canada's policy has been to sell some of its official gold holdings. The government has opted for progressive and controlled sales in order to reduce as much as possible the impact on the markets. Since gold is not as liquid as other assets and has a low yield our policy has been to increase the yield of Canadian holdings and their liquidity.

People tell us “You are selling gold but that does not help us”. I did a little research which shows that Canada's overall annual sales of gold, which represented 800,000 ounces of gold in 1999 and 600,000 ounces in 2000, are far from significant and important compared to all the transactions conducted on the international markets, where 6 million to 7 million ounces of gold are sold daily. The sale of Canada's gold has been to the federal government's advantage.

However I am deeply concerned by the slump in the gold market and its negative impact on Canadian gold mining communities.

We know that the Canadian government strategy was to invest in research, innovation, the infrastructure and the improvement of human resources development programs.

I understand that until March of this year there has been no sale of gold and that as of March 31 Canadian gold holdings were at 1.2 million ounces. This evaluation is based on the March 31, 2001, London afternoon fixing at $257.70 U.S. an ounce. Today it is about $263.

If the trend continues and if we do not enact emergency legislation to help the gold mining industry in the next 2 to 5 years, mines will close and 13 of the 15 that will be affected in Quebec are in the Abitibi. That is unfortunate.

Right now the mining industry in Val-d'Or, Rouyn-Noranda and La Sarre where the Casa Berardi mine is located need help. Mines are now closed, mainly because of gold prices.

The price of gold went up to $300 and then to $400. Now it is holding at $260 or $265. This is why, with the present serious downturn in this sector, I tell the Government of Canada that it is important that it become involved. If it does not become involved, we are leaving people to sit at home. People are unemployed. If we want to lower costs for the family, leaving workers to sit at home is not going to help matters financially. Neither is it going to help matters socially. People want to work.

What we need is a good emergency legislation program like what was done in 1948. The government needs to look at production costs, the price per ounce of gold, and find a way to come to their assistance. People are not asking for millions of dollars. People are asking for help. Action is required. The federal government says that it will not become involved. The infrastructures come under provincial jurisdiction, but Quebec, Ontario and the other provinces in Canada are helping the mining sector.

I understand that there are transfers but I will not play the transfer game. I will not play along with the provinces. They are getting involved. We should get involved directly with our provincial friends, regardless of party lines, regardless of which government is in power.

What is important is miners, their families and the children now caught up in this nightmare. The economy has been in decline for the past two years. A way must be found to help. I believe that the Government of Canada should do something. It already stepped in between 1948 and 1976. The legislation was passed. I do not understand why it has not taken action before now.

The ministers, both the Minister responsible for Economic Development and the Minister of Natural Resources, are working very hard. They are finding all sorts of ways of helping with research and development, but there has to be a direct approach with the province. Solutions must be found. Our senior officials in Ottawa, in their ivory towers, do not understand what is now going on in the northern resource regions.

There are senior officials in Ottawa or in Canada who are like hermits in a monastery. They do not know what is going on in the outside world. That is what is important.

These officials must come and see for themselves. Officials of Economic Development Canada from Montreal do come to our region. When a message is sent from Montreal to Ottawa, to our excellent Liberal ministers who try hard to find solutions, it often happens that senior officials do not pass it on. I have a message for them tonight.

The important thing is to help the mining industry. Let us forget about flag wars. That kind of war can be waged during the election.

For the time being, we are in a deep crisis. It is possible to reach an agreement with the Quebec government and the other governments. We did it for agricultural programs. We did it for the fisheries. Right now, in this great capital, Ottawa, many people should wake up.

They do not know we have gold mines in the Abitibi. They do not know we have gold mines in Val-d'Or and that the mines in Abitibi—Témiscamingue, Chapais and Chibougamau create 7,000 jobs in the Montreal area.

At present we do not perform secondary or tertiary processing because everything is moved out to the big cities. We have nothing against this. About 3,000 or 4,000 jobs are created in the Quebec City area.

It is important to take action right now. We have to find short term solutions. We have to help these workers who have outstanding experience in the gold mines of Val-d'Or, of the Abitibi, of northern Ontario or elsewhere in Canada. We urgently need assistance and direct action just like the farmers and the fishers.

Gold MinesPrivate Members' Business

April 26th, 2001 / 4:20 p.m.

Timiskaming—Cochrane Ontario


Ben Serré LiberalParliamentary Secretary to Minister of Natural Resources

Mr. Speaker, on behalf of the Minister of Natural Resources and the government I am pleased to speak to the motion of the hon. member for Abitibi—Baie-James—Nunavik.

The hon. member proposes that the government table emergency legislation in order to help gold mine operators and guarantee a fixed price for gold produced in Canada. I am aware that the member for Abitibi—Baie-James—Nunavik works very hard to help the mining industry, especially gold mining.

The hon. member's motion illustrates his commitment to the region he represents so well and which depends in part on the development of natural resources.

For the benefit of members, I will briefly review the history of metal prices. From the end of the second world war until the late seventies, the mining industry enjoyed strong and steadily rising demand. Producers, few in number, went along as a group with the price charged by the industry leaders. The economic prices of the eighties, triggered in part by two factors, that is, the emergence of independent third world countries wanting ownership of their own resources and the first oil price shock, put an abrupt end to rising metal consumption in industrialized countries. On the metals market, the tariff price system implemented by major producers gave way to world prices quoted on commodity exchanges.

In reaction to the new price regulation system, the end of the eighties ushered in an era of mining industries whose strength lay in the quality of their deposits, their energy supply and their ability to develop those resources.

I have just described characteristics unique to our country. Besides being one of the world's major producers of minerals and metals, Canada has an unequalled expertise in the mining sector. Mining exports, worth $44 billion a year, represent 13% of our total exports. This sector employs directly 400,000 Canadians from coast to coast. Our mineral resources are without a doubt essential to our quality of life.

However, I must admit like my colleague from Abitibi—Baie-James—Nunavik that the low prices for metals and gold we have been seeing these past few years are a concern. Indeed, as members know, the depressed gold market is due to the fact that the supply remains the same despite low prices.

The supply of gold depends on mining production but also on the sale of gold by central banks, recycled gold, protection programs for mining producers, and on the net sales of investors who believe it is not worth keeping gold as assets.

There are several factors that affect commodity prices, factors which are completely outside the control of government. To counter fluctuations in those factors, mining companies need to exploit rich deposits at low cost and need to know how to manage the risks that could put them at the mercy of the next stock market crisis. I am pleased to report that our country is in a good position relative to the other major gold producing countries, ranking second in terms of production costs. It is as a result not only of the ingenuity of our producers but also the enlightened policies of our provincial and federal governments.

The Prime Minister, in his response to the Speech from the Throne, focused on our mandate: to bring the best of Canada into the 21st century by building an innovative economy, fostering innovation and know-how and ensuring social inclusion. Natural Resources Canada is in a good position to solidly support the key objectives stated by our Prime Minister and that reflect the minister's priority.

I will demonstrate how the government works unceasingly to strengthen our foundations in terms of the mining industry.

Let us talk about sound economic foundations. A healthy financial climate is not an end in itself but rather the prerequisite without which the government would not be able to make all the socio-economic investments it must make in co-operation with its partners.

In the natural resource sector this prerequisite was reflected in the last mini budget through a 15% tax credit for flow through share investment in mineral exploration projects in Canada. This measure was put it place as a result of a grassroots campaign led by the Prospectors and Developers Association of Canada, the Canadian Drilling Association and several members, including the member for Abitibi—Baie-James—Nunavik and myself. All have understood the benefits of exploration in their communities.

We all know that generally flow through shares meet federal policy objectives in an appropriate, effective and economical way by stimulating exploration activities in Canada, promoting the purchase of stocks in mining companies and helping small exploration companies. In that regard PDAC announced that flow through financing coupled with tax credits and totalling about $30 million was confirmed just before the end of the year 2000.

The minerals and metals sector, like the Canadian economy as a whole, can conduct its activities in a sounder context, and it is among the leaders in the race for capital money on international markets.

The Quebec Geoscience Centre, QGC, is working with scientists from the national scientific research institute of the Université du Québec on various earth science projects.

The targeted geoscience initiative is one of the programs administered by the QGC. The purpose of the TGI is to develop the social and economic potential of our natural resources by increasing the scope and efficiency of the mineral exploration work done in the private sector. Five million dollars will be spent on this initiative over three years.

Three projects are currently under way in Quebec: one on ice dynamics; one on exploration for diamonds in northern Quebec; and one on metallogeny at the Doyon-Bousquet-Laronde mining camp in Abitibi.

The mine laboratory in Val-d'Or is known throughout the world for its innovative research on mechanization and automation technologies for the mining industry. Established in 1991 right where a gold mine used to be, the Val-d'Or experimental mine is a unique facility for on site testing and research in a realistic context.

An amount of $1.8 million is spent every year on the mechanization program alone, while the vein deposit program was granted a $2.5 million budget for a period of three years. Almost $5.7 million of the money invested by the CanMet partners will benefit various companies in Abitibi.

This goes to show that the Government of Canada recognizes the significance of our resource areas and believes in them. I have mentioned some figures, but what about the projects themselves?

Since the current natural resources minister has been appointed, close to 50 projects have been carried out or are under way in the Val-d'Or mine laboratory alone. These projects are wide-ranging, covering anything from health and security in the mines, research and development on new development techniques for vein deposits, training programs for miners to productivity and innovation.

Here are a few examples. CanMet formed a consortium to improve the performance of gold cyanidation plants. Eight plants, including five in Abitibi, participated in the consortium. The goal was to achieve a better understanding of the interaction of cyanide, lead nitrate and oxygen, and optimize the use of those reagents, as well as gold recovery.

Two participants in the study were asked to assess the impacts of the project. They estimate that their operating costs have been reduced by $3.2 million per year and that gold recovery has increased by $1.3 million, for a total annual impact of $4.5 million.

The mine automation program is a consortium of privately owned businesses and includes CanMet. The project, which is setting the tone for the future of the mining industry, uses mining robots to detonate explosives from the surface and machines to bring the ore to the surface without direct human intervention.

I would be amiss if I did not mention, before I conclude, how important community involvement is. Strong and confident communities are a vital part of our social fabric.

I would like to conclude by saying that for all the good intentions of the motion brought by my colleague from Abitibi, the government cannot support it. In the context of globalization and global markets it is inconceivable to set the price.

Also, this morning I received a call from the Mining Association of Canada, the most important mining association in Canada, expressing some very serious doubts about the motion and asking the government not to support it. The association does not support it. The association wants a free market economy and so do we.

Gold MinesPrivate Members' Business

4:30 p.m.

The Acting Speaker (Ms. Bakopanos)

It is my duty pursuant to Standing Order 38 to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, Employment Insurance.

Gold MinesPrivate Members' Business

4:30 p.m.

Canadian Alliance

Gurmant Grewal Canadian Alliance Surrey Central, BC

Madam Speaker, I am pleased to participate in the debate on private member's motion No. 295. It states:

That, in the opinion of this House, the government should table emergency legislation regarding operating assistance for gold mines in Canada, in order to help gold mine operators cope with the rapid increase in production costs, and at the same time guaranteeing a fixed price for the gold they produce.

I commend the hon. member for bringing his concerns about Canada's gold mine industry and his region to the floor of the House.

However, after carefully listening to the hon. member I am still having great difficulty understanding where the emergency is in the gold mining industry. It is no surprise that the parliamentary secretary refused consent or that the government is unwilling to adopt this motion.

With the motion the hon. member is exonerating himself in the eyes of his gold mining constituency. I guess we can regret that he could not satisfy the concerns of his gold mine constituency in his talks with cabinet colleagues. It seems that they have told him to take his concern to private members' business because as a government his own party will not implement the motion. The parliamentary secretary was quite articulate and very blunt in refusing to adopt the motion. I am not sure that this is the case, but I do not know what else could have happened.

The motion asks for subsidies for gold mining in Canada and a fixed price for the gold these mines produce. In British Columbia we do not like unfair subsidies from this weak Liberal government that lacks vision. The government subsidizes industries destined to fail or which have already failed.

We know the Liberals have destroyed our health care system and are not addressing Canada's $640 billion debt, but they will spend taxpayer dollars anywhere they think they can buy votes. Canadians do not want the Liberals' subsidies, extra regulations, trade restrictions, price fixing or anything else of that nature. Businesses want the government off their backs.

Let us look at British Columbia's mining industry and gold mining. That will give me an opportunity to discuss mining in British Columbia and gold mining as whole. Mining is a major contributor to the British Columbian and Canadian economies in the form of employment, taxes and exports. Across Canada it generates 60% of rail revenue and accounts for 70% of total port volume.

In British Columbia mining generates over $4 billion in revenue and $1 billion in government taxes per year. Mining is a leading employer in British Columbia, with substantial potential to do more. It has 10,000 direct jobs and 20,000 indirect jobs.

Mining is a world leading source of expertise and venture capital. British Columbian companies fund mining projects worldwide.

Mining pays the highest wages and benefits of any industry.

It is an environmentally and socially responsible industry. Mining lands are reclaimed and at the end of a mine's life the land can be put to other uses.

British Columbia's mineral potential is considered to be among the leaders in the world. British Columbia has over 14,000 known mineral occurrences and untold mineral potential.

Actual land usage for a mine is extremely small relative to the area explored, with less than 28,000 hectares currently being used by mining, which is less than 0.03% of British Columbia's land base. Mining's value in terms of use of land is $150,000 per hectare compared to forestry at $5,700 per hectare, agriculture at $1,400 per hectare, and parks at $42 per hectare.

There are many other benefits. There were 103 kilometres of roads or trails built for mineral exploration in 1993. At the same time there were 11,400 kilometres of road built for forestry.

In 1999 exploration expenditures totalled $25 million or less than 10% of 1990 levels. In the past 10 years, two mines closed for every one that opened.

In British Columbia we are against this motion. How can we support subsidizing gold mines and leave out other mines and other industries? At least those industries provide a national purpose. Conversely, the health of the gold mining industry, other than preserving jobs, serves little public interest. Consequently, public dollars should not be spent subsidizing the industry.

There is one gold mine in British Columbia, the Eskay Creek mine, which produces gold at a production cost of less than $100 an ounce. In Canada it is second in cost production for gold. This is excellent work. There is no subsidy needed. Why should that mine's good work be confounded by a fixed price when it comes time for it to sell its products?

Canada is the second largest country in the world in area and we are very rich in our natural resources. These natural resources, including minerals, oil and gas, are important sources for a brighter future for our country. Unfortunately the federal Liberal government lacks vision and strategic planning in developing, exploring and utilizing these resources. It lacks a balanced approach between resource development and environmental concerns.

We should have more resource based industries in Canada. For example, at the Vancouver port we can see lot of sulphur being exported from Canada. It can be seen from quite a distance. I wonder if we are exporting these raw resources and then importing finished products made from these resources in other countries. Why are we not able to encourage investors and manufacturers who will boost our economy and create jobs in Canada? It is a tragedy under this weak, arrogant Liberal government that rules rather than governs the land.

The story of the mining industry in Canada is a tragedy. The amount of regulation and red tape is unbelievable. The federal and provincial jurisdictions are either overlapping or absolutely unclear. Federal and provincial taxes are way too high. This weak government has a confrontational approach to the provinces rather than a co-operative approach. Mining operations require investing a lot of time and energy as well as the investment of other kinds of resources. It is a long term process to explore for minerals. Adverse government policies have driven miners from all kinds of mines, including gold mines, south of the border. In Chile, for example, we have a $12 billion U.S. investment, mostly in the mining industry.

In the city of Surrey in my constituency there are a number of companies that deal with the mining industry. I am very proud to mention RAS Industries. It manufactures the largest pulleys in the world for mining operations and exports them around the world. There are many other organizations of international repute in Surrey.

Rather than fixing the price for gold, what the weak Liberal government should fix is the infrastructure, the regulations and the taxation policies. It should at least make a feeble attempt to fix these things rather than fixing the price of gold, which is in the hands of the global market anyway. The price of gold is fixed through the commodity market exchanges or through the intervention of the central banks, the national banks or the reserve banks of various countries. It is a global phenomenon. Canada does not have the jurisdiction, the authority, the power or the resources to fix the price of gold.

The government should listen to our resource based communities and should accommodate the input from them in the policy formulation for natural resources. Simply mentioning in the throne speech of 1996 the need to sustain our natural resources is just not enough. Where is the action?

Natural resources contribute about 15% to our GDP. The government must develop a vision and make policies and regulations conducive to sustainable development, benefiting the economy, creating jobs, benefiting communities and, on the whole, protecting our environment.

Since this is a private member's motion, I have been very kind in my remarks. If it had been a government bill or motion, I would have been quite brutal.

Gold MinesPrivate Members' Business

4:45 p.m.


Paul Crête Bloc Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC

Madam Speaker, I believe today you have created an interesting precedent. Through a series of circumstances, we received right away the parliamentary secretary's answer to the motion moved by the member for Abitibi—Baie-James—Nunavik. Finally this will allow us to look at both sides of the issue.

I am rising today to speak to this bill because since private members business was moved up the member for Témiscamingue, who was supposed to be here, was unfortunately not able to free himself. I believe my speech will be a faithful rendition of his own. I was particularly inspired by his vision which reflects regional needs.

In this regard I was saying earlier that the fact the parliamentary secretary answered the motion moved by the member was very instructive. Even if he comes from a mining area he seems to have put his interest as a parliamentary secretary, as a representative of the government, ahead of his interest as a member of parliament.

What is important in the motion is not necessarily every comma. I am going to read it, but it should be understood that it is really a cry for help, because in one area of Quebec and in northern Ontario there is one industry which is facing major difficulties.

As we know, the mining industry as a whole is going through a major crisis, especially gold mining, a mineral ore which has gone through ups and downs. Transactions regarding the sale of this product have been very active over the past decades due to the way its price was set, the importance it was given and the fact that some countries had pegged their currency on gold. There has been a lot of changes which eventually lead to the situation which is denounced by the motion.

I am now going to read the motion:

That, in the opinion of this House, the government should table emergency legislation regarding operating assistance for gold mines in Canada, in order to help gold mine operators cope with the rapid increase in production costs, and at the same time guaranteeing a fixed price for the gold they produce.

One may not agree with the wording of the motion. I find it difficult to understand the government's position because, after all, that industry is in a state of crisis. There is a need for some kind of emergency response plan in that sector, and the government must respond. It must do more than talk; it must take positive action. The government is not only responding with words but also extremely negatively.

We have here a member of parliament who presented a motion to get things moving to help an industry that is experiencing difficulties, but the government shuts the door tight, saying “let us simply let the market do its thing”. As previous speakers have said, in two, five or ten years we will count the number of gold mines that will have shut down in a given year. That will be due in part to the federal government's failure to act.

The government cannot invoke the fact that there are international agreements not to do anything. It must show some imagination and innovation. Why could the federal government not promote research in that sector?

We know that this industry is already highly productive. It is in our best interest to make sure that it can continue to be productive and competitive, but that industry needs help to continue to be productive. There is always room for improvement in the research sector. This may include the use that is made of the product. In any case, the government must be proactive and not have a defensive attitude, or even be closed to any suggestion, as is the case right now.

We could also promote exploration, identify reserves and try to find ways to diversify the market. If new discoveries are made, these people who are working in mines could possibly work in other sectors. There may be ways to diversify measures, but one should certainly not remain passive like the government is proposing.

The government can invoke the position of the Canadian Mining Association, which says “We do not agree with the motion that was put forward”, but this does not solve the problem at all.

Some communities are faced with major problems. When the mining market was flourishing, the government never contacted them to say “Your taxes are too high. We will wait a bit and ask less of you”.

When the industry is on a roll and these people are giving the government money, it gladly takes it. Now that the situation is difficult for them, they probably need help. These regions, especially the northern parts of Quebec and Ontario, deserve some attention. They deserve innovative solutions.

The government's position is disappointing. I was also listening to the debate and to what the Alliance member said. Taken literally, we can certainly find fault with certain aspects of the proposition, but what I would like people to remember today is that there is a region faced with a serious problem, that there is an industry faced with a serious problem and that the government, through its parliamentary secretary, is telling us there is nothing it can do.

I find that totally unacceptable because there is an example to follow. The Quebec government just gave regions $800 million in assistance funds, $250 million of which will go to the mining industry.

I agree with the hon. member for Abitibi—Baie-James—Nunavik on this, and not out of any kind of rivalry or one-upmanship. Could the federal government not, in one way or another, take a look at this initiative and see if there is not something that it could do in this matter.

If there were $500 million in assistance to the mining industry instead of $250 million, I think the fund would be worth while and could give positive results.

In conclusion, I say again that the hon. member for Témiscamingue finds that something does indeed need to be done in this industry. It is important for there to be some action. The situation is urgent. The federal government has to get moving. We have made proposals on this. Studies need to be carried out. The minister concerned must be ordered to take steps to stimulate research, to stimulate exploration, to be proactive.

Free competition does not exclude proactivity. Free competition does not mean that when an industry is affected by difficult international conditions it absolutely must be allowed to go under. Once mines have been closed, it will not necessarily be easy to get them open again.

As for the communities that will be affected when the social cost of these mine closures has to be assumed, perhaps the government will realize that the cost will be greater than what it would have cost initially to help out the industries concerned.

It is my hope that after the government members have done some thinking we will hear something different from them than what we have heard today. I also hope that as far as the conclusion reached by the hon. member making the proposal is concerned we will be able to look into the possibility of other approaches.

It is my fondest wish that the federal government will address this urgent matter. The lives of communities depends on it, the lives of families, and we have no right to abandon people who have long contributed to the productivity of the country and can be considered important factors in the vitality of their area.

Gold MinesPrivate Members' Business

4:50 p.m.

Progressive Conservative

Gerald Keddy Progressive Conservative South Shore, NS

Madam Speaker, it is a pleasure to rise to speak today to Motion No. 295 put forward by the member for Abitibi—Baie-James—Nunavik. It reads as follows:

That, in the opinion of this House, the government should table emergency legislation regarding operating assistance for gold mines in Canada, in order to help gold mine operators cope with the rapid increase in production costs, and at the same time guaranteeing a fixed price for the gold they produce.

I should tell the hon. member who put forward the motion that this is not a motion the Progressive Conservative Party would tend to support. However it certainly needs to be noted that the member put the motion forth in good conscience. He put it forth with the intention of trying to help a beleaguered industry which needs some type of assistance and perhaps some innovative policies from the government that do not seem to be forthcoming.

I have worked with the member on a number of committees. I have always found him to be a progressive and forward thinking member of parliament. Therefore I will speak to his motion, although I am disappointed to say I cannot agree with him.

Mining is an extremely important industry in Canada, specifically gold mining. Canada is the fourth largest gold producer in the world.

Gold is mined in six provinces and three territories. In the previous parliament I had the opportunity to travel to many of those areas, specifically Timmins, Ontario, the largest gold mining municipality in Canada. As part of my visit I spoke with gold mining representatives. Gold prices were low at that time due to the general decline in prices since 1997.

The average price of gold has gone from $294 in 1998 to $274 in 1999, with a slight rebound to $279 in 2000. It hovered between $257 and $262 an ounce for the early part of this year. This was after an average of $385 an ounce from 1993 to 1996. Those were certainly good days for the gold mining industry in Canada.

There is reason to believe the price will recover. The gold industry has always faced cyclical variations in price. Although the recent downturn has been significant, the CEO and president of Placer Dome, the fifth or sixth largest gold mining company in the world, was quoted in today's newspapers as saying current market conditions are making gold an attractive long term alternative to investors who are tired of weakening foreign currencies and plummeting high tech stocks.

While Mr. Taylor has said he does not expect the price of gold to advance beyond $300 in the next five years, that is the benchmark at which most gold mining companies can operate productively and profitably. One Canadian gold mining company, Goldcorp Inc., has indicated that by mining very rich grades of gold it can produce gold at $90 an ounce and provide a 66% profit margin even at today's low prices.

What this means is that some companies have adapted to current market prices and conditions and that it is therefore unnecessary to table emergency legislation to provide operating assistance to Canada's gold mines.

I realize this places a strain on a number of gold mining companies. However as Ed Huebert of the Mining Association of Manitoba has pointed out, most mining operations are facing tough times. Only in specific resources such as platinum, which is currently trading at $660 U.S. per ounce, are prices soaring and attracting new investment.

One of the reasons mining companies are experiencing high production costs is the rising price of energy, an issue which has been discussed in recent weeks. U.S. President Bush has made it clear that one of his priorities is to establish an international energy plan involving Canada, the United States and Mexico.

President Bush has been vocal about his desire to see more energy flow from Canada to the United States. He has encouraged Canada to develop the resources of its high north, east coast and Alberta tar sands. That could be good news not only for the exploration, development and processing of oil and gas reserves but for the provision of cheap energy to more remote areas of the country for exploration, mining and mineral processing.

At the same time it raises fundamental questions about renewable energy development and the environment. Renewable energy sources such as hydro electric power are being considered because of the decline of fossil fuels. While the cost of many renewable energy sources makes them less attractive than traditional fossil fuels, all sources should be examined closely with an eye to both their short term and long term consequences.

Environmental issues have a role to play in decisions about energy use. Sometimes the total cost of production, when taking environmental factors into consideration, is much more attractive and comparable at first appearance. The point is that high energy costs are a fact of doing business and they affect everyone in some way.

They do not justify financial assistance for one sector of the mining industry any more than another sector, whether it be in coal, zinc, copper, platinum or any of the diverse range of minerals found and mined in Canada. That is why it is difficult to single out one sector of the mining industry and offer financial aid.

The industry has faced tough economic times as the downturn in gold prices continues, and it has done so for the past few years. It is particularly evident when we compare gold prices to what they were in the late 1970s and 1980s when gold averaged somewhere in the $400 range and even went as high as $800.

Instead of direct financial assistance for gold mines, we need to look at other means of increasing value and investment in the mining industry. Value added initiatives would be one way of helping mining companies improve profit. That is evident in the gold industry where intermediate gold stocks have performed well while gold bullion has declined.

Barrick Gold Corporation, the world's leading gold producer and Canada's number one gold mining company, had high quality gold reserves that in combination with low production costs resulted in record production and cash flow in 2000. This was despite low gold prices. Barrick's first quarter report issued today states:

Once again, we have shown we can generate strong earnings and cash a low gold price environment.

At the same time Placer Dome, Canada's second largest gold mining company, reported reduced profits as a result of diminished sales and poor gold prices.

It shows that some gold mining companies are posting smaller financial profits as a result of low gold prices. However, to offer across the board financial assistance to all gold mine operators is clearly out of the question.

There are other means of helping mining companies, and that is through flow through shares. Gold mining companies, like any type of mining operation, need to search for new resources. Flow through shares represent one of the most cost effective aspects of the industry. With flow through shares people investing in companies for exploration purposes can realize a tax deduction while the company reaps the benefits from its investment.

The federal government recently introduced flow through shares, providing a 15% tax deduction for individuals on top of the current 100% tax write-off, making investment in junior mining companies attractive for investors. This is something that should assist gold mining companies in Canada, and it is a type of assistance that the PC Party of Canada supports.

Initiatives such as flow through shares and different ways of doing business, along with issues of recognizing the additional cost put upon exploration companies, mining companies and processing companies as a result of energy costs, are the types of issues we need to deal with. Those are the types of issues the government should be dealing with on a one at a time basis.

If the government took a look at the macro picture and solved some of the micro problems in it, it would soon find that the macro picture was a lot smaller and perhaps much more manageable for not only the mining sector but for all other sectors in the country.

Gold MinesPrivate Members' Business

5 p.m.


Guy St-Julien Liberal Abitibi—Baie-James—Nunavik, QC

Madam Speaker, I will avail myself of my right to respond. Tonight I see that things are not looking good for miners in the Abitibi.

I appreciated the comments made by the Bloc Quebecois member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques who is, I must add, replacing the member for Témiscamingue who is attending a committee meeting.

Quite simply I have to say that I am not at all amused by the government's reaction to my motion. Before and after my speech when the Parliamentary Secretary to the Minister of Natural Resources, who is from northern Ontario, was speaking, I made a short visit to the government lobby. A note from the minister regarding Motion No. 295, my motion aimed at helping miners and their families in my region, said that:

The federal government recognizes that resource regions are going through tough times because of a drop in the price of metals and that they are facing many challenges.

The note also mentioned what the government had done so far, namely a 15% tax credit for mines. However, that measure came from the Department of Finance, not from the Department of Natural Resources. The note talked about research and development, but this is not the responsibility of the Minister of Natural Resources. It is the responsibility of the Economic Development Canada, headed by the member for Outremont, who often visits our region. I know that the Department of Natural Resources is involved in CanMet, but this was implemented by the Conservatives in the 1980s.

The position of the Minister of Natural Resources is this:

The minister does not support this motion for the reasons I have mentioned.

I can understand the minister for not coming in the House and opposing the motion himself. However, mine workers have made a contribution to Canada. Moreover, they pay federal and provincial taxes.

Between 1948 and 1976 the Canadian government had emergency legislation to support the gold mining industry. I can understand why the Alliance member is against this motion. British Columbia has only 10% of the mines.

In our region people are out of work. If we can count on the federal government, they can work. We are asking for help. We are in a serious crisis. I could use certain words and I could get angry, but I am trying to find a solution for workers and their families. They have to go back to work. We are asking for urgent action.

We know where the Canadian government stands. However the Alliance did not say a word. Conservative members said nothing when assistance was provided to farmers and fishers. We have to find a way to help workers in the mining industry in our area. I was a miner in the Sigma mine. Assistance is needed right now. Let the ministers come and see us. Let them try to find a solution so these workers can have jobs.

I know that the Liberal member for Outremont does a good job of trying to come up with solutions. However the Minister of Natural Resources has to wake up. Let him come to the Abitibi and meet the workers. Things are truly going badly. It is too bad that Réal Caouette is not in this House now. He would get the message across. He would go and wake them up in the departments.

Solutions have to be found. If I am to believe the minister responsible for economic development in Quebec he understands the problem, but his colleagues have to do something. It really is going badly. They did something for agriculture in the west. They did something for fishing. However, for the northern regions, resource regions, an understanding would have to be reached with the provincial governments.

In Ontario things are going very badly. When the mine closed in Cape Breton we all agreed in the House to pour millions into it. The mine workers are now at home. They are not working. They have been there for months. There is a real difficult slump.

The Minister of Finance did help with the 15% on flow through shares. That was a good move, but what has happened since these shares? There is a real slump. They talk about helping other countries, as was the case during the gulf war. They sent in an F-18. In 18 seconds they push a button and they are there. However it costs $3 billion.

It cost only $303 million for the emergency measures between 1948 and 1976 to help the community of Canadian miners. The mining association called the parliamentary secretary to say it was opposed. I understand. These associations are headed by the big companies working outside Canada, the multimillionaires as we call them at home.

Mine workers in small companies such as McWatters and the Beaufor mine are currently unemployed. They say “We must not intervene because of the world price”. They do not care a whit for the world issues in the Abitibi at the moment. People want to work. They want to be able to put food on the table now. That is what counts.

We will meet members, but I want to say that we will keep on rattling the cage. Things have to start happening.

Gold MinesPrivate Members' Business

5:05 p.m.

The Acting Speaker (Ms. Bakopanos)

The time provided for the consideration of private members' business has now expired. As the motion has not been designated as a votable item, the order is dropped from the order paper.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

Gold MinesAdjournment Proceedings

5:10 p.m.


Paul Crête Bloc Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC

Madam Speaker, I am very pleased to rise today on the adjournment motion.

On March 23, 2001, I asked a question regarding Bill C-2. This bill was aimed at amending the Employment Insurance Act and had not been passed at the time. I asked if the government was willing to withdraw clause 9, which now allows the government to set the premium rate without having to take into account the advice of the Employment Insurance Commission.

The minister answered that even if the auditor general had said that, he had also said something else. However she did not mention the very comments of the auditor general who said that he preferred the status quo in the Employment Insurance Act to Bill C-2 because it created additional uncertainty regarding the use of the money.

Now that Bill C-2 has become law we are faced with a situation where the government has simply created a payroll tax, a regressive tax.

People who contribute to the employment insurance plan pay premiums on their income of up to $39,000 a year. However someone earning $48,000 pays no premium on $9,000 of it, whereas people earning $25,000 pay premiums on 100% of their salary. It is a regressive payroll tax, especially since some people do not pay any premium at all. Foremost among those are we members of the House of Commons.

That means that now that the government has decided that the money it contributes to the employment insurance plan will legally be used to cover government expenses as a whole, we will not be doing our share. We will not be doing our share in this regard. I agree that for people who do not earn a lot of money the situation is rather offensive.

Therefore I am asking the government if it would not be possible to hold a debate as soon as possible on the issue of this payroll tax, because this is becoming a new form of taxation. This is a third way of financing the government's general operations on top of income taxes and the GST. As it is, I find this unacceptable.

If they wanted to use it as a payroll tax it should be a fair tax. Will everyone contribute? Will the cap be raised so that everyone contributes on the basis of his or her income?

As for EI contributions used for debt financing those who earn $30,000 a year contribute on 100% of their earnings. Yet those earning $50,000 a year pay premiums on only 75% of their income. As for us, we are contributing absolutely nothing.

Granted we pay income tax. EI contributions should be used for employment insurance purposes. For several years the government has been raking in $18 billion a year in contributions and gives back only $12 billion in benefits. Now it has legalized the fact such surpluses should not exist.

I would also like to see the government keep its election promise. During the election campaign, the Prime Minister, the member for Bourassa who is responsible for amateur sport, and the minister responsible for Quebec all said there would be a parliamentary committee to bring about a true reform of the employment insurance plan, not just what we found in Bill C-2—like the elimination of the intensity rule for which we had been calling for a long time, but a true reform.

Will the government make the commitment to follow up on the results of the negotiations and the work of the committee, especially if there are unanimous recommendations?

We do not want to wait two months, three months, six months or a year for the government to deal with this issue, because there are women, young people and seasonal workers who still find themselves in an unacceptable situation today. Until measures are taken to correct the fact that a young person who just entered the workforce is required to work 910 hours to be eligible, the situation will remain unacceptable.

I am waiting for an answer from the government. Now that it has realized that EI contributions are a payroll tax and has promised changes, will the government keep its word and starting in June give people an employment insurance plan that enables them to have sufficient income while they are unemployed?

Gold MinesAdjournment Proceedings

5:10 p.m.

Timiskaming—Cochrane Ontario


Ben Serré LiberalParliamentary Secretary to Minister of Natural Resources

Madam Speaker, the government is following the implementation of EI reforms very closely and, where necessary, is making the required changes to maintain the effectiveness of the program.

Fundamental changes introduced in 1996 continue to produce results and to help Canadians. Recently we proposed amendments to Bill C-2 in light of the recommendations made by the auditor general who feels that the process for setting premiums is not sufficiently transparent.

On February 22 the auditor general told the Standing Committee on Public Accounts that over the next two years work would be done on how the rates should be set in the future.

I therefore think that the bill buys time so that we can find a better way of calculating the rates paid by employees and employers. The Standing Committee on Finance has also indicated that the process should be reviewed.

Under these circumstances the government felt it was inappropriate to ask the commission to continue to set the rates.

In order to ensure stability and predictability the government will be suspending the commission's authority to set rates for a period of two years so that a thorough review of the process used can be conducted.

Gold MinesAdjournment Proceedings

5:15 p.m.

The Acting Speaker (Ms. Bakopanos)

The motion to adjourn the House is now deemed to have been adopted. Accordingly the House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).

(The House adjourned at 5.16 p.m.)