moved:
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.