Mr. Speaker, I will admit that the riding of Saskatoon—Humboldt is probably not the centre of Canada's diamond trade and may very well never be the centre, but I do have somewhat of a unique perspective on a bill dealing with Canada's diamond trade.
The hon. member for Yukon made a wonderful advertisement for his riding. There was a period of time when I lived in the hon. member's riding. I was based out of Whitehorse doing mining and mineral exploration. That brings me to the unique perspective I have on this bill. Even though these are technical amendments to the Kimberley process certificate scheme and the goal is to make Canadian diamonds more acceptable to that protocol, the purpose of making Canadian diamonds more acceptable to that protocol is to make them more marketable, more saleable and to make them the premier product in the world when it comes to the marketing of diamonds.
I will put in a plug for it, in that we have the world's best diamond industry. We are very ethical. It is an environmentally friendly industry up in the north. If any community ever had a chance to choose any particular mine, it would choose a diamond mine. There are no problems with tailings, processing, et cetera, and the royalty regime is extraordinarily generous because of the high productivity per tonne.
My background in dealing with the overall diamond industry comes from that of an exploration mining geophysicist. In fact, in 2000 I had the pleasure of working up in the Northwest Territories in a place called Paulatuk which is about an hour and a half to two hour flight from Inuvik, in the neighbourhood of Tuktoyaktuk. In the summer of 2000 I had been working in the territories, Nunavut, doing some gold exploration, et cetera. I had the personal pleasure of going up there and participating in Canada's fledgling diamond industry as an exploration mining geophysicist.
If the House will indulge me, I will provide a little of the background of the mining and so forth. Because this is an important industry to the north, and even though my riding of Saskatoon—Humboldt is not north of 60, I feel it is important for all members of the House to promote other parts of the country and the industries in other parts of the country, to promote growth. We are all Canadians. We are all in this together. We want to have growth and prosperity, not just in our home ridings and regions, but all across Canada.
Diamond exploration is similar to the project that I worked on in Paulatuk in the Darnley Bay region. Basically we start off with something on a geological map, something that has caught the interest of a geologist, a geophysicist, generally something done by the Geological Survey of Canada. In the instance of the region where I did some exploration work, it was a gravity anomaly and it originally had started out as a base metal play. I guess they were hoping at one time to find the next Sudbury. In doing exploration work in the region there had been some till sampling, some gravel sampling and an analysis of the mineralogy. I am a geophysicist, not a mineralogist so if some of my old professors are watching this debate, on occasion the details may be incorrect here.
They had discovered certain garnets, certain other indicator minerals and even trace micro diamonds indicating the possible presence of kimberlite in with certain chromites. The aeromag and the electromagnetic surveys done by aircraft indicated the potential for a considerable amount of kimberlite in the area.
I was working for an exploration firm and we had gone into the area and were tightening up the targets using magnetic surveys and an EM map, an electromagnetic map, colloquially known in the industry as the MaxMin method--and I have no clue how that is translated into French--to begin to tighten the targets and work there.
When we go into these towns, not only are outside geophysicists and geologists employed, but we also employ a considerable number of people in a very small town. I would estimate that Paulatuk probably has around 200 people.
We were able to employ a considerable number of young people there working on the drill rig when we started to drill our targets, once we had made a decision where to drill. We even began to train them on how to use the field geophysical equipment and work the samplings that the geologists were examining.
What is the point of saying all this? Mining is very important to the north. The diamond mining industry in particular has been good for northern Canada. As has been alluded to earlier, Diavik and Ekati have proven to be two of the world's most successful mines and have proven to be wonderful for the Northwest Territories and again, for all of Canada.
That is the personal perspective that I bring to this industry, someone with an intimate hands on detail of the very early aspects of the rough diamond trade. That is where my overall interest comes into play here.
As I noted earlier and has been noted previously in this debate, Canada is an active member of the Kimberley Process certificate scheme which is essentially an agreement between nations to stop the illicit diamond trade, a diamond trade that was fueled predominantly through alluvial deposits in Africa in zones of conflict. There, rebel groups, terrorist groups and so on, would fund their operations, their criminal, lawless behaviour, their murdering of innocent people, through the sale of diamonds. Diamonds being the most portable, the most transferrable source of wealth that is easily taken around the world.
A handful of diamonds is very valuable and can be traded next perhaps to or even more so than illegal drugs. It is a method that is very easy to use if one needs to raise a large amount of cash and one does not have huge amounts of physical resources.
Rather wisely, if I may say so, the agreements were drawn up to begin to develop a plan to put pressure on these groups to squeeze them out of the market and to begin to focus the diamond trade in areas where human rights are respected, where there are proper standards, and where there is proper respect for the rule of law and for the people of the area. That is the nature of it.
Canada joined for a variety of reasons. The number one reason we should support the overall idea is because it is morally right. Underlining everything we do as parliamentarians should be a basic adherence to certain principles and certain rule of law. That rule of law and those principles apply both in Canada and throughout the world. That should be the first reason.
The second reason that we joined and got involved in this is to promote the sale of our diamonds. Let us be clear here. Diamonds are a very high end product. People who tend to buy them tend to have a considerable degree of income, and have the ability and often are fairly well informed about political situations, international situations and so on. They want to know that their diamonds are from a place that is moral, that has the rule of law and respects human rights.
To promote Canadian diamonds, it is necessary for Canada to get involved and to be a part of this process. It is good for business. It is good for the promotion of the Canadian diamond industry and marketing Canadian diamonds as a unique, distinct and separate brand.
That is the overall basic purpose of this bill. The details of the bill help to explain what rough diamonds are, how to measure them, and how to bring them up to the Kimberley Process certificate scheme standards. The bill will allow the creation of standards and statistics, so that Canada can more easily report its mining to the world. It will become easier to track, easier to account and easier to stop the flow of diamonds that are finding illegitimate and unworthy groups.
As I said earlier, I have a fairly personal interest in Canada's mining industry, diamond mining being one of the most successful industries in recent times. It was not all that many years ago where prominent people would say Canada has no diamonds.
De Beers used to propagate that myth for many years. More knowledgeable observers have been plugging away, doing a bit of prospecting, geophysical and geological work, and have found diamonds. We now have two mines.
Mining is an important historic Canadian industry. Canada started with the fur trade, pretty soon after came agriculture and forestry, and not long after that came mining. We must not forget that we were, and still are, in many ways the world's leader in the industry. Historically, the great mining engineers and geologists started in the British Commonwealth. Canada and Australia became the premier jewels in that crown with our expertise in geology. The Geological Survey of Canada is world renowned. The mining industry, and not just for the sake of the diamond industry, needs the support of the House. I know the member for Yukon will agree with me because this industry is important to his riding.
I was somewhat disappointed in that I had been led to believe in the last budget that there would be more financial support for the geoscience initiative. It was a disappointment to members on this side of the House because we view it as a part of Canada's infrastructure. As my colleagues know, I am fairly reticent when it comes to spending money. I believe most budgets should probably spend less rather than more. However, the geological knowledge and geological inventory of Canada is important and it must be continually worked.
Something that perhaps non-geoscientists do not understand is that just because an area has been mapped once geologically does not mean it should never be mapped again. There is no such thing as a perfect geological map except on an extraordinarily small scale which would be of almost no use. As one of my professors once said, when I was doing some mapping on a structural geology course, no geological map is accurate, most of them are only 50% accurate. That included the ones he did. They all need revision because there is so much detail and so much knowledge to be gained from going over the process.
An example of this is a project that I worked on in Salluit in northern Quebec. Falconbridge previously had the property. A geological survey had repeatedly been done on the property only to have nickel found by a prospector. We need to continuously invest in geoscience.
I give these examples to encourage members of the House, who are not familiar with the need for mapping and investing in geological surveys and the geoscience initiative, to support it. There is cross-party support on this issue.
I would also like to note, and I am not an expert in this area of mining, some of the financial issues that are coming up and the sunset clauses to some of the flow through shares et cetera. These financial instruments, as I understand them, have been valuable toward promoting mining companies.
There is a long lead up time in any mining project from exploration until production. These things do not happen in a matter of weeks. It takes years of patient research. Years were spent looking before Ekati and Diavik were set up in the Northwest Territories. We need to promote geoscience.
I wish to note one final aspect with respect to how diamonds impact the Canadian economy and it has to do with my province of Saskatchewan and a much larger issue that has been dealt with in the House before, and that is the question of equalization. We in the province of Saskatchewan have quite an exciting discovery at play. We are hoping that a diamond mine will be located in Fort a la Corne. There is a very large and somewhat unique kimberlite deposit in that area.
Prince Albert is the largest city close by for people not from Saskatchewan. By large, I mean around 30,000 people, well within driving distance, which would make it a unique mining town in that it would be very accessible.
There are some very great hopes that this mine will some day become a producing mine. As with most mining projects, one should be very cautious. Having worked on a project where kimberlite was found, I have to explain to some of the non-technical people that this does not immediately mean that it was going to be a diamond mine. Kimberlite is found all the time. We can find hundreds and hundreds of kimberlite pipes without actually finding a diamond mine.
There are some great hopes and the exploration is at quite a stage. There are actually some unique things such as bulk samplings and the drilling and the logging has gone on. There are prospects. There have been diamonds found and the degree of commercial viability has yet to be decided.
This is important. It has been pointed out that if the province of Saskatchewan wishes to enhance diamond exploration and encourage the development of this mine it could give a royalty holiday to the mine to encourage production. However, for the purposes of equalization, even though the government of Saskatchewan would be receiving absolutely no revenue from the royalty, none whatsoever, it would still be put into the calculation for equalization.
Not only would the economic effects of the development of the mine be put against our equalization account. Royalties not received by the government of Saskatchewan would also be calculated in at a somewhat subjective rate calculated here in Ottawa. So, the province of Saskatchewan would actually be taxed by the federal government and discriminated against for trying to cut its own tax rates, its own royalty rates to encourage development.
As all hon. members know, particularly those in the northern areas, we need to develop good mining jobs in the north. There often is not a whole lot more up there. We need them in Nunavut, the Northwest Territories, in northern Ontario, and northern Saskatchewan. Throughout northern Canada, that great area between the really far north and where most of us live, mining is a way of life and an absolutely crucial thing.
It is something that should not be discouraged, either through equalization, where this would discriminate against the province of Saskatchewan, or through a lack of support of geoscience and the mining industry.
I think those are some of the points I wish to make today. Mining is good for Canada. It is necessary for Canada. That is why we should support this legislation. It brings forward and makes Canadian diamonds a more valuable commodity. By doing the right thing and promoting our diamonds, we should do everything in our power to build on that.
Again, equalization needs to be fixed. It needs to be done so that all provinces can benefit from their mining. There are two provinces in particular that are discriminated against, British Columbia and Saskatchewan.
Before hon. members ask me, this does not strictly have to be done in the way the oil and gas agreement was done with Newfoundland and Nova Scotia, though I would very much support it if it could be treated that way. That is because in the history of equalization there have been side deals done on asbestos as a particular impact under equalization and potash is not clawed back at the 100% rate. I believe former premier Thatcher, the very conservative Liberal premier of Saskatchewan, negotiated that provision. So not all resources have to be changed, even if we cannot get the ideal, which is a situation where natural resources would be taken out of equalization.
I will support this legislation. I will continue to support mining endeavours that are good for Canada, good for Saskatchewan, and good for the north. I would encourage all hon. members to do so.