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.