House of Commons Hansard #141 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was industry.
The House resumed consideration of the motion that Bill S-36, An Act to amend the Export and Import of Rough Diamonds Act, be read the second time and referred to a committee.
Export and Import of Rough Diamonds ActGovernment Orders
The Speaker
Before the House broke for question period, the hon. member for Vancouver Island North had the floor for questions and comments and there remains five minutes in the time allotted for questions and comments on his speech.
Order, please. Questions and comments. Resuming debate, the hon. member for Sherbrooke.
Serge Cardin Bloc Sherbrooke, QC
Mr. Speaker, in the context of the bill before us concerning the Export and Import of Rough Diamonds Act, I would like to begin by noting that it is often said that diamonds are forever. As a result, diamonds become a symbol of eternal love. Indeed, all of the ladies in this House, our colleagues, surely enjoy receiving a diamond as a token of love, but most certainly not a diamond produced by the atrocities of war.
It is in this context that Bill S-36 proposes certain amendments of a basically administrative nature to the Export and Import of Rough Diamonds Act.
Essentially, Bill S-36 will have two effects. First, it will authorize the government to compile and distribute data on international trade in diamonds. The adoption of this amendment, which would make the diamond trade more transparent and easier to control, is necessary for Canada to remain in compliance with its international obligations pursuant to the Kimberley process.
Second, it will remove a formality associated with the Kimberley process as regards very small diamonds less than one millimetre in size. In number and in weight, the great majority of the diamonds dealt on the market are tiny. They are not used just to make jewellery, but have more of a utilitarian function. They are to be found, for example, in turntable needles—less and less so, I am told—in watchmaking or in certain industrial knives.
Unlike large diamonds whose scarcity makes their price exorbitant, these diamonds are of no great value, and the administrative burden associated with the Kimberley process can be prohibitive. This proposed amendment will facilitate the diamond trade and is good news for the industry.
I might mention that Canada recently became the world’s third largest diamond producer. In Quebec, even though no diamond mine is yet active, seven mining companies hold licences on such mines, basically in Abitibi, Témiscamingue and the Northwest. Deposits of kimberlite, the ore in which diamonds are found, have been discovered in five sub-regions of Quebec.
The Bloc Québécois is not opposed to this new flexibility in principle, but it intends to ensure, in the course of review in committee, that it will not be introduced to the detriment of achievement of the objectives for which the act was passed, that is, the establishment of fairly tight control so as to prevent trade in conflict diamonds.
Allow me to quote Mr. Ian Smillie of Partnership Africa Canada who said:
In 2000, the international diamond industry produced more than 120 million carats of rough diamonds with a market value of US$7.5 billion. At the end of the diamond chain this bounty was converted into 70 million pieces of jewelry worth close to US$58 billion.
Of total world production, rebel armies in Sierra Leone, as well as in Angola and the Democratic Republic of Congo (DRC), are estimated by De Beers to traffic in about 4 per cent. Other estimates place the number higher. Although not a significant proportion of the overall industry, four per cent of $7.5 billion—or whatever other estimate one might use—can buy a lot of weapons.
The Export and Import of Rough Diamonds Act ensures that Canada is in compliance with the Kimberley process, an international agreement which has established a process for certifying the origin of rough diamonds. The Kimberley process is basically designed to limit the trade in conflict diamonds, which are sold by armed factions to finance their wars. Because they are small and highly valuable, the diamonds are easy to market and can be very profitable.
In the 1980s, this trade was a veritable scourge, and a major component in the funding of wars that displaced about 10 million people in Sierra Leone, Liberia, Angola and the Democratic Republic of Congo, to name just a few.
At first, only a few NGOs were concerned about these conflicts and were critical of the lucrative diamond trade that bankrolled them. In 2000, the UN published a report on the funding of the war in Angola, confirming everything that the NGOs had been proclaiming for years: the diamond trade was being used to finance the war.
Also in 2000, the RUF, the Revolutionary United Front, an armed faction in Sierra Leone, stepped up its attacks on civilians, making Sierra Leone the country with the largest number of displaced persons in the world.
With these two events, the African conflicts and their link to the diamond trade left the back pages and made the headlines.
That is when the countries and the companies that produce diamonds began to get involved. The moment that diamonds become synonymous with war, rape and murder and not with dreams, wealth and eternal love, they lose their core value.
Responding to the invitation of two NGO groups, Global Witness and Partnership Africa Canada, 37 countries and the principal diamond merchants agreed to sit down together with the NGOs to find a solution to the problem. The first meeting was held in May 2002 in the city of Kimberley, South Africa: hence the name the Kimberley process.
At the end of a series of meetings, they agreed that the best way to civilize the diamond trade was to put in place a system for certifying the origin of diamonds. Under this system, all diamonds exported from a country participating in the Kimberley process must be placed in a sealed container and accompanied by a government-issued certificate of authenticity called a Kimberley certificate. Importing countries that are participants in the Kimberley process may import only diamonds that are accompanied by this certificate. They may trade in diamonds only with participating countries.
Today the Kimberley process has 45 participants, including the European Union and its 25 members, for a total of 69 countries. These countries account for 99% of the legal international trade in diamonds.
To the NGOs who started this initiative and succeeded in transforming an awareness campaign into binding rules of international law, the Bloc Québécois says: well done. Without taking anything away from the other NGOs who have joined the movement and made it the success that it is, the Bloc Québécois wishes to specifically salute the work, clear-sightedness and tenacity of the two NGOs who got this initiative under way, Global Witness and Partnership Africa Canada.
It is necessary to proceed with amendments to the Export and Import of Rough Diamonds Act. From the outset, the Bloc Québécois has demonstrated keen support for the Kimberley process. In the fall of 2002, it lent immediate support to the bill on the export and import of rough diamonds, Bill C-14, which was intended to bring Canadian practice into compliance with the Kimberley process.
The Bloc Québécois continues to support the Kimberley process and will support the initiatives to make it more efficient and effective. Many of the amendments contained in Bill S-36 are the product of the discussions of the plenary session of Kimberley process participants held at the Lac-Leamy Hilton in Gatineau in 2004. Their adoption is necessary for Canada to remain in compliance with the Kimberley obligations. Most of the amendments in Bill S-36 are in fact designed to facilitate application of the process.
For these reasons, the Bloc Québécois supports Bill S-36 in principle and will vote in favour of it at second reading.
However, there are many shortcomings in Bill S-36.
Bill S-36 was introduced before Parliament could do a serious review of the current control mechanism. The Export and Import of Rough Diamonds Act requires the government to carry out a complete review of the operation and effects of the act three years after its coming into force and submit a report to Parliament.
Next January, the act will have been in effect for three years. The government will therefore submit a complete review of it, its operation and weaknesses, by January. By that time, Bill S-36 will probably have already been passed, if that is the wish of the House of Commons. In fact, some of these provisions must be in effect before next January 1 in order for Canada to remain in compliance with the Kimberley process and be able to continue exporting diamonds.
This way of doing things, in which the government starts by introducing amendments to the act and only afterwards tells us about the weaknesses in it is not a normal way of proceeding. The government is in a minority situation and can no longer permit itself to think that a majority of the members of the House are at its command and will pass anything that it proposes, even without having the requisite information.
The Bloc Québécois expects the government to issue its review of the Export and Import of Rough Diamonds Act and submit it to Parliament before Bill S-36 is considered in committee. However, even under Bill S-36, Canada is content with the minimum obligations under the Kimberley process. This process sets forth a series of minimum obligations that the participating countries must meet. Exported diamonds must be placed in sealed, tamper-resistant containers. The certificates of authenticity must contain certain information: the origin of the diamonds, the identity of the merchant, the total weight of the lot in carats, and so forth.
In regard to the Export and Import of Rough Diamonds Act, Canada decided to content itself with meeting the minimal obligations under the Kimberley process, even though it was free to go further. For example, in the information required on the Kimberley certificate, Canada is content to require the total weight of the lot. However, 20 ten-carat diamonds are worth 30 times as much as 400 diamonds of only 0.5 carats, even though both lots add up to 200 carats.
At present, an importer can very easily buy a lot of small diamonds on the legal market, replace them with large stones bought cheap on the black market, then sell them again with no problem, since his Kimberley certificate does not contain the information that could be used to spot the swindle. This dishonest importer will be able to make an enormous profit, while at the same time laundering an entire lot of conflict diamonds.
Has this in fact happened? We cannot know. What we do know, however, is that in 2003 Canada imported rough diamonds valued at $703,820, from India. It exported nearly $200,000 worth of them to the same country. The import value per carat was $162; the export value was $392. While this may simply be explained by the return of undesired gems of great value, or by exports unrelated to the imports, there might also be something fishy going on here.
If the Canadian certificate contained certain optional information provided for in the process, such as the number of stones over two carats in size, this sort of stratagem would no longer be possible.
The Bloc Québécois is counting on the committee hearings to see if it might be possible to make the act more effective.
The real weakness of a Kimberley process is the lack of resources dedicated to control in the poor countries and the lack of assistance the latter are being offered by the rich countries.
The participating countries have all had to pass legislation to bring their trade practices into line with the requirements of the process. Unfortunately, controls are lacking. The state apparatus is often disorganized, and civil servants who are underpaid, or not paid at all, are vulnerable to corruption. In conclusion, even the most perfect system on paper cannot function if it does not have the necessary resources.
For example, in 2003 the Congo was suspended from the Kimberley process because its civil servants had issued certificates representing two and a half times the country’s diamond production. Clearly, many of those diamonds were from neighbouring conflict-ridden countries, probably the Democratic Republic of Congo.
The Congo was caught out, but how many other countries serve as transit routes for conflict diamonds from the Congo, Côte-d'Ivoire, Burundi or elsewhere? What is urgently required is a substantial increase in international aid to permit states to function as they should.
Furthermore, it is not by chance that wars are going on mainly in the poor countries. Where the population is living in the most abject poverty, the ground is fertile for the creation of armed factions and the onset of civil war. Even if Canada were to pass the best law in the world on the diamond trade, it would not stamp out the problem—not without a substantial boost to its international aid envelope.
In 1993, when the present Prime Minister became Minister of Finance, Canada was allocating 0.43% of its GNP to international aid, making it the sixth most generous donor in the OECD. When he left the Department of Finance in 2002, Canada was allocating only 0.23% of its GDP and had slipped to 17th out of a total of 29. At its current pace of increase, Canada will not achieve the UN target—which however it has accepted—of 0.7% of GNP for international aid until 2033.
The government can boast of its role in the Kimberley process, but not until it is a serious contributor to the war on world poverty can it say that it is playing a role in conflict pacification.
We must take inspiration from the Kimberley process to promote equitable globalization. In the commercial realm, the Kimberley process is a remarkable innovation. It introduces considerations other than commercial and economic ones into the trade rules. The NGO campaign has been such a success that it has become indecent to oppose it, to the point that the WTO had to amend its rules in January 2003, barely four weeks after the Kimberley process came into effect.
The amendments to the WTO rules allow member states to ban the import of conflict diamonds. Their rules do not, however, allow restrictions on the importing of products manufactured by children or by prisoners of conscience in labour camps or virtual slaves exploited in factories where basic labour rights do not exist, nor those produced with total lack of concern for environmental destruction.
For years now, the Bloc Québécois has been calling for the government to propose the inclusion of such humane, social and environmental considerations in trade agreements. For years now, the government has demurred, on the pretense that these non-trade considerations have no place in trade agreements.
Had that logic prevailed in connection with conflict diamonds, the Kimberley process would be illegal according to WTO rules. When will we see a Kimberley for child labour? For forced labour? For environmental destruction and the forced displacement of aboriginal nations?
The proposed amendments will, of course, be examined in committee. As I have said, we are favourably disposed to them but there is still much room for improvement.
Larry Bagnell LiberalParliamentary Secretary to the Minister of Natural Resources
Mr. Speaker, I just wanted to comment on the review of the act and why we are doing these two minor amendments now. First, the member is right in that there is a review of the act coming. I appreciate the work the Bloc has done and for some interesting thoughts for amendments that we might put in.
We have to take care of things where we are out of step now with the international community. The scheduled review of the act is going to occur in 2006 and any change to this will also be influenced by the review of the Kimberley process certification scheme which is also going to occur in 2006.
Since the recommendations from the scheme review are expected to be only approved at the plenary in late 2007, any changes required to the process by this review and by extension to Canada's act would be delayed until 2008. Given this timeframe it is imperative that we make these amendments right now.
We want to demonstrate that we have taken the necessary steps to meet the requirements of the process by the next plenary meeting expected to occur this year. Non-compliance with the process could jeopardize Canada's participation in the international scheme.
As the member suggested, we are just making two minor amendments. One would allow us to publish our statistics and we are eliminating the very tiny diamonds that are valued in cents.
If we are not in compliance with the scheme as set internationally, it jeopardizes our participation in the scheme. Considering that well over 99% of the countries involved in diamonds are in this scheme, it could jeopardize our status until the changes I mentioned occur in 2008 and put in great jeopardy a $2 billion industry in Canada and the related 4,000 jobs.
In that all the parties that have spoken have expressed their support and in that they are minor administrative amendments, I would hope that we could get on with this very quickly. I definitely appreciate the comments the member made about other improvements that we could look at. We will certainly have those in the record as we do the entire review of the act that is proposed for 2006.
Serge Cardin Bloc Sherbrooke, QC
Mr. Speaker, as stated, we are indeed in favour of the proposed amendments, given the need for them.
When something is brought to our attention, the government has a responsibility to react to it. The old saying goes “It's a tough nut to crack” but we still ought to require further controls.
Compliance with the Kimberley process does not require much of us, but there are still some loopholes. It is still possible that we may, unwittingly and indirectly, be contributing to war somewhere on this planet, and this cannot be allowed.
As I said, diamonds are forever. What also makes them so valued and valuable is that they are often tokens of love. There may be little conflicts among lovers, but in a world view we cannot allow diamonds to encourage conflict, wars and deaths.
We will have an opportunity in committee to hold discussions and ask the government to provide the Act to amend the Export and Import of Rough Diamonds Act with more teeth.
Peter Julian NDP Burnaby—New Westminster, BC
Mr. Speaker, I am pleased to speak to Bill S-36, an act to amend the export and import of rough diamonds act. The act would serve to help us meet our commitments under the Kimberley process certification scheme.
I would like to say at the beginning that in this corner of the House we are in favour, in principle, of the bill moving forward but we are hoping at the committee stage there will be an examination of this important legislation, perhaps looking at the potential for improving it.
As the member for Sherbrooke mentioned, we are a bit concerned about the fact that the act in general will be reviewed in 2006. We are therefore making changes to the act, as proposed by this bill, even though we will not have the opportunity to review it until next year. This seems like a rather difficult procedure.
That being said, even if the process is of some concern to us, we are fully in favour in principle. There is not doubt about that.
I would like to go back to the principles of the Kimberley process and give a bit of the history of that process. The issue of blood diamonds, or les diamants du conflit, is something that has been a front and centre conflict, particularly in Africa, over the past decade. It was in 2000 that the first actions were taken to deal effectively with this issue of how to, in some way, cull or prevent blood diamonds from being distributed around the world and helping to fuel those conflicts.
A little later in my presentation I will outline the impact of the blood diamond trade on some of these civil wars. It has had absolute horrific results for the populations in these African countries. However for the moment I will just trace the history of it.
It started in July 2000 when the International Diamond Manufacturers Association and the World Federation of Diamond Bourses sat down at the World Diamond Congress in Antwerp and first started to address the issue of blood diamonds and how to create an environment where these diamonds were not trafficked and marketed in other countries such as Canada. That led to the formation of an active process and, as we know, we had 43 participants, including members of the European Community, who were part of the negotiations that led to the Kimberley process implementation. Canada chaired that process, which undoubtedly was important because it started to resolve the issue of blood diamonds and the impact of blood diamonds on these horrific civil wars.
As a result, we had a process that was implemented. We had a working group chaired by Canada and that process led to the creation of these voluntary standards that have now been put into place.
I will say that we are not talking about a perfect process. A little later on this afternoon I will mention some of the weaknesses of the existing process. However the process is undoubtedly better than what existed before, which was absolutely nothing to prevent the trafficking of these diamonds.
The issue really has to do with the impact the diamond trade had on the civil wars in Africa. I would like to mention four particularly horrific conflicts where very clearly blood diamonds sustained those conflicts and led to even further loss of life and further atrocities than what otherwise might have been the case.
What has often been cited is the Liberia Civil War which started in 1989, went through to 1997 and then started up again in 2000 and went until 2003. During this bloody dictatorship and the civil war that followed, about 200,000 people were killed and about one million civilians were displaced. That civil conflict was fueled by blood diamonds.
Second, the Angola Civil War started in 1975, after Angola acceded to independence and went right though to 2002, in other words, over a 30 year period. Some 500,000 people died, hundreds of thousands were displaced and thousands of civilians in Angola and combatants were maimed. The main rebel group in Angola, UNITA, controlled 70% of the diamond mines and that allowed for hundreds of millions of dollars in revenue coming into UNITA to actually sustain that civil war and the war effort. I will come back to Angola in a moment because I think here is a case where blood diamonds fueled that conflict and contributed to the appalling loss of combatants and civilians.
A third example that is often cited is the Sierra Leone civil war which started in 1991 and ran through to 1999. Fifty thousand people died in that conflict. It is estimated that the main rebel group, the RUF, mined between $25 million and $125 million in diamonds annually to finance its war efforts, which were attacks on the civil population in Sierra Leone. That country is still recovering from that brutal civil war.
I have former constituents who are working as part of the United Nations relief effort in Sierra Leone to address the appalling results of that war, including establishing housing and helping to integrate many of the child combatants into their villages. The effects of that brutal civil war are still being felt today.
We then have the Republic of Congo civil war, which started in 1998 and ran through to 2003, but is still very endemic today. Over three million people have been killed in the Republic of Congo and it has been expelled from Kimberley membership. We will come back to that in a moment but it is clear that the appalling civil conflict in the Republic of Congo was fuelled by the diamond trade.
I will now go back to Angola. An interesting article was published in Drillbits and Tailings, a publication concerned with the diamond trade and mining. It linked up in a series of articles the Angola civil war and diamonds. I would like to read a few paragraphs from that because I think it is illustrative of exactly how blood diamonds fuelled the conflict.
It said that the United Nations estimated that UNITA, the main rebel group in Angola after independence, earned between $3 billion U.S. and $4 billion U.S. over the last eight years of the conflict from diamond sales after Angola was engulfed in the civil war in 1975 after gaining independence from Portugal.
When UNITA relaunched the war in December 1998, it relaunched it with money made from investing profits from diamond sales. In fact, the head of the UN peace building support office, Felix Downs-Thomas, said that the conflict was referred to as a diamond war. Diamonds not only allowed UNITA to finance the war, it was the principal reason for the fighting. In fact, ongoing wars in Angola were being fought because of the pursuit of those mineral riches.
The article goes on to say that diamonds had spawned a culture of violence in Angola, including the hiring of mercenaries, as confirmed by a United Nations report that came out in October 1998, and that the mining company, DiamondWorks, had well established connections to mercenaries and that Tony Buckingham of Branch Energy, a British company that owns one-quarter of the shares of DiamondWorks, is known for brokering entry of the corporation into Angola.
Executive Outcomes, which was the company that came into Angola, was a South African mercenary army that included former members of apartheid death squads. Half a million Angolans lost their homes in that conflict and became internal refugees as the war to seize control of the mining regions continued.
Angola is a clear case of where the intense search for blood diamonds fuelled the war and, because of the immense riches generated by these blood diamonds, contributed to deepening and widening the conflict.
I could speak about Sierra Leone and the similar impact the diamonds had in that civil conflict, but I would like to read a couple of paragraphs of the Human Rights Watch report on Sierra Leone at the height of the blood diamond fuelled war.
Human Rights Watch has documented numerous rebel abuses committed in 2000 in the Port Loko district, which was an area allegedly under government control. The abuses included cases of rape, 118 cases of abduction of villagers, three murders, cases of mutilation, of forced labour, of massive looting, of ambushing and the training, as I mentioned earlier, of child combatants. Most of the victims were civilians living in camps for internally displaced people who were attacked when they ventured out to get food, wood or water.
The atrocities taking place in Sierra Leone, Angola and Congo are all fuelled by these blood diamonds. That is why, in this corner of the House, as previous speakers have mentioned, we fully support the intention of the Kimberley Process and the idea that the Kimberley Process will lead to a better situation and a partial resolution of this trade in blood diamonds that fuels these horrific civil conflicts. We know that it is civilians, women, men and children, who are the victims of these horrific conflicts.
We should say that the blood diamonds, even though they have been reduced through the Kimberley Process, have not been eliminated. Kim Sutch, who is the director of the Diamond Information Centre in Canada, says that the blood stones are still believed to make up about 1% of the legitimate diamond trade, while conflict diamonds were believed previously to comprise as much as 5% or 6% of the global rough diamond trade.
This trade has now been reduced, but we cannot say it has been eliminated through the Kimberley Process. We must say that the Kimberley Process is a significant step, but it is not a final resolution of the trade in these horrific blood stones. If we have reduced the trade from 5% or 6% to just below 1%, we have not completely resolved the issue.
In the Globe and Mail , London-based Global Witness stated, “Despite improvements, the Kimberley Process is still having difficulty in stopping conflict diamonds from entering the legitimate diamond trade” completely. Global Witness mentioned this in a June report. The Global Witness group, whose campaign helped trigger the Kimberley Process, said that diamonds continue to fuel conflict in areas such as the eastern Democratic Republic of the Congo and also play a role in the conflict in the Ivory Coast.
As we know, the Democratic Republic of Congo was kicked out of the Kimberley Process for non-compliance in 2004, but the Ivory Coast continues to be a member of the Kimberley Process. Even though this is a vast improvement in a situation that very clearly needed to be resolved, even though we needed to make a substantial gesture and the international community has come together for voluntary compliance, even though these are significant steps, that is why I have to underscore the fact that this does not resolve completely an issue that continues to exist.
We have to monitor it and look at furthering our international commitments so that indeed we can say, perhaps in the next few years, that we have entirely eliminated the trade of blood diamonds, that blood diamonds cannot squeeze through the loopholes that exist in the process.
In other words, the Kimberley Process must be a gigantic stepping stone to ultimate resolution, so that in no part of the world, especially in Africa, given the recent conflicts there, can there be trade in blood diamonds. That must be the ultimate objective.
I believe this is something that all four corners of this House would agree with. All members of this House believe that we must ultimately completely eliminate the trade in blood diamonds. This is a fundamental goal that we all share.
Since we have had a lot of discussion about diamonds and conflict, I would like to quote an article that was in La Presse a few months ago. It was an interesting article that raised the whole problem of blood diamonds. It said:
Angola, Liberia and Sierra Leone were posing a problem in the late 1990s when the UN Security Council decided to act. The sanctions that were provided have been easy to circumvent and have not had much effect. The diamond industry soon smelled a huge problem with them: the most coveted stone in the world was in danger of being boycotted, like fur 20 years ago. Already some NGOs like Oxfam and Amnesty International were decrying the abuses. The Kimberley conference, taken from the name of the city where it was held, produced an initiative: the certificate of authenticity that makes it possible to trace diamonds from their extraction in one of the 17 producing countries to the world markets. The diamonds leave the country with a seal of compliance that is required further down the line. “The process is doing its job, it works,” says Mr. Van Bockstael.
Mr. Van Bockstael chairs the committee in charge of the implementation of the Kimberley process.
The article also said:
For the rest, however, it is another matter. The big mining companies would try to ensure good conditions for their workers, but how could the unauthorized mining of local people in African villages working with spades and sieves be controlled?
For the time being, only the Republic of the Congo (Brazzaville), Liberia and Lebanon are excluded from the process. The Republic of the Congo, for example, produced only 50,000 carats a year but sold 5 million. A patent case of trafficking.
This is an interesting article because it brings up the point that that the legal production represents 1% of everything sold on the market. There is a problem in the Republic of the Congo. Even if production was a certain amount, what was sold was mostly blood diamonds, which amounted to 100 times the legitimate production.
I would like to conclude by mentioning that the Canadian industry is growing by leaps and bounds as well. Our adherence to the Kimberley Process also helps to legitimize our strong Canadian domestic production. We have a number of mines that have started production in the past few years. In fact, we are now the world's third largest diamond producer.
Even though we still have additional steps to take, for us to participate in a process that ensures as much as possible a legitimate diamond trade, a trade that stops the blood diamond trade as much as possible, and hopefully one day completely and entirely stops it, is something that also helps our legitimate domestic diamond trade.
For all those reasons I will stand in support in principle of Bill S-36. We are hoping, as I mentioned earlier, that we will be able to look at this in committee, of course, and examine it in more detail. However, we are completely in agreement with the principle of the Kimberley Process and any amendments that allow us to keep our commitments on the Kimberley Process.
Larry Bagnell LiberalParliamentary Secretary to the Minister of Natural Resources
Mr. Speaker, the hon. member's speech was excellent. I think that the way the debate on the bill has been going is the way Parliament should work. Every member has added more description to the problem and have given reasons why the bill should be supported. Some also have suggestions for improvements. I particularly enjoyed listening to the member outlining the graphic problem that is before us and which the Kimberley Process deals with.
I have one question. Perhaps the member can elaborate for me. At the beginning of his speech he said he was a bit perplexed with the process. I did not exactly understand what he was getting at.
I certainly agree with him that we should try to make any improvements we can. After the process has had three good solid years in Canada, it will be reviewed in 2006. At the same time, all the countries involved in the Kimberley Process plenary will be reviewing it. They hope to approve the changes in 2007, which means that by 2008 we could get changes coming out of that process to do what both the member and I would like to do, of course, which is to eliminate blood diamonds. Of course if we let down on our efforts, organized crime may be tempted to get involved. Those are the processes for the improvements that we all want in looking at new ideas.
I wonder if the member could elaborate about being perplexed. I did not quite understand that.
Peter Julian NDP Burnaby—New Westminster, BC
Mr. Speaker, it stems from how we move this process along. Under the Kimberley Process we have moved from a high of 6% of blood diamonds in the world diamond trade down to 1% or slightly lower, as most estimates have it. We are looking at a review on that next year. The question is, how do we move it along more quickly?
If we are looking at 2006-08 as a window, I would perhaps suggest that given the size and scope of the impact of blood diamonds on the countries that I mentioned in my speech, the quicker we act the more effective it would be. That is why I was suggesting that the review should perhaps take place at the same time that these amendments were brought forward.
The member may agree with that or not, but that was my hesitation. We have a review coming up, but the review is next year and we are talking about amendments now. It would seem to me that the review should be done at the same time.
Larry Bagnell Liberal Yukon, YT
Mr. Speaker, the member's comment was helpful. I am sure the officials are working on this at the moment, on anything we can do. We do have to remember, though, that we are part of an international group of over 40 countries and everyone has to make the changes together. We cannot make changes unilaterally. As the member said, that would take us outside the framework. If we can get our review done so we can put the good ideas into the framework review in 2006, I think that would be useful. I agree with the member that we should do it as quickly as possible.
Peter Julian NDP Burnaby—New Westminster, BC
Mr. Speaker, as I mentioned earlier, members from all four corners of the House certainly agree about the importance of the legislation. It reads very blandly, as most bills do, but its impact is significant.
We cannot minimize or in any way try to limit the immense significance that it would have over time if we could completely eliminate the blood diamond trade and its impact on civil conflicts such as, for example, the conflict in Angola, where billions of dollars were brought in to fuel that civil conflict and the rebels through the sale of blood diamonds.
Given the importance of the issue, I think it is good to see agreement in the four corners of the House. We may disagree on minor points, but on the vast principle of stopping the blood diamond trade we are all in agreement. That is very important.
Roy Cullen LiberalParliamentary Secretary to the Minister of Public Safety and Emergency Preparedness
Mr. Speaker, I want to congratulate the member for Burnaby—New Westminster for his knowledge of this topic and for his very useful remarks.
My question concerns adding value to diamonds that are currently being produced in Canada. Would the member have any thoughts on what Canada could or should be doing with respect to adding more value to rough diamonds in Canada, the cutting, polishing and the downstream activities from there?
Peter Julian NDP Burnaby—New Westminster, BC
Mr. Speaker, I feel very strongly that we need value added on our exports, not only in the diamond sector.
I come from British Columbia which is a province where we export raw logs. That is a sore point with many British Columbians. When we export those raw logs, we export job. What that means is that resource is creating jobs elsewhere.
It is similar to the diamond trade. In the last few years we have created a vital and strong diamond industry. We now need to ensure that we have in place the type of technical and vocational training to ensure downstream development. That will ensure more jobs in Canada.
Given the marketing of Canadian diamonds, which has been very effective, the more downstream value added development we do, the more jobs we create in Canada. Ultimately, the goal of Parliament and of the government is to use the vast resources Canada has such as our energy resources, our forests, our diamonds and our minerals. They are second to none in the world.
With these vast resources, I would suggest that we do not create the type of quality jobs we need in our country. The more value added we have on these products, which are natural resources, the more we will get the type of quality family sustaining jobs and incomes that are important for all Canadians.
Larry Bagnell LiberalParliamentary Secretary to the Minister of Natural Resources
Mr. Speaker, I would like to weigh in on that last topic as well. I agree with both speakers that the greatest benefit to Canada is value added on our natural resources. We do have some processing of diamonds. We have some in Matane, in the Gaspé and in Yellowknife, where I visited a plant and we have some small operations in Vancouver and Toronto.
The Canadian government is also trying to help out. We have some programs with Aurora College where we are providing some funds in enterprise development programs.
One problem we are having, because this is so internationally competitive, is attracting people to the industry. People working in Antwerp doing this type of processing are skilled and have the aptitude to do this work. They can get higher paying jobs in Canada.
Would the member have any suggestions as to how we might deal with that problem, so we could access more cutting and polishing? The experts in the shop that I visited told me that the aboriginal people are very skilled in this profession. At Diavik, approximately 38% of the employees are aboriginal. It seems it would be an excellent opportunity for our aboriginal people.
Peter Julian NDP Burnaby—New Westminster, BC
Mr. Speaker, the key is the vocational training itself. Given the unemployment rate and the fact that most jobs that have been created over the past decade have been part time or temporary in nature, if the right training exists, then people will want to get into those types of jobs.
Since the parliamentary secretary has given me the opportunity, I will make a pitch for the NDP's better balance budget of last spring, in which we look to invest $1.5 billion into post secondary education, including vocational training. As a result of that, more people will get the kind of training that can lead to that value added downstream type of production based on Canada's natural resources.
Derek Lee Liberal Scarborough—Rouge River, ON
Mr. Speaker, I would like to address a few remarks to this bill. It is not a big bill. It is quite short and there seems to be a fair consensus in the House in support of it. However, I would like my remarks to be taken as constructive in providing some context for the bill.
There are two or three perspectives that I would like to address. The first is the issue of regulation of a trade. Essentially the bill puts in place legal components that would in part regulate the diamond trade. It is being done for good reason, but we should recognize that it is a regulation. We are putting in place an obstacle to what would otherwise be a free trade in a commodity.
We ought to recognize that we do this in government only reluctantly or for good cause. I repeat the words sometimes used by the Prime Minister, that if government does not have to be involved, then it should not be involved. In this case there are international dynamics at play that cause us to respond and offer this legislation to regulate the diamond trade.
Regulating a trade is a negative normally. It creates an obstacle and it increases the cost to those who participate in that economic activity. We regulate cigarettes. We raise revenue with cigarettes. I think of propane gas tanks. There are regulations that govern propane gas tanks and certifications. This means that we cannot buy and sell propane gas tanks without a certification, and that slows down the trade. That particular certification is done for a public safety reason. If we allow the trade in defective tanks sooner or later there will be an explosion, a defect, an accident and an injury and/or death.
I want to reflect that in my remarks today. Although it is a regulation, we are doing it for what we believe to be a very good reason and doing it in concert with the international community. We also recognize that when we regulate a trade or a commercial activity, it could induce a black market. Often in our commercial history, the creation of a regulation induces a black market to develop. In this case the regulation is intended to circumscribe and constrain a black market in diamonds.
Therefore, the goal we are seeking to achieve in this case is to constrain the movement of rough diamonds, which are sometimes called blood diamonds, blood stones, that have been used to finance civil war or insurgency principally in Africa. However, most of us know that diamonds have been used for decades and maybe centuries, or parts of centuries, as a means of financing many things.
Let us take a look at the civil war and insurgency issue. Diamonds are used because they are small, compact, carry a lot of value and are not heavy. I suppose those who work in the black market could put their resources into gold but it is very heavy. They could put it into currency, but currency is usually in bills that are marked and traceable. There are other commodities that could be used, but diamonds have a lot of value and they are compact and portable. They can be moved around and bought and sold internationally because they have those values both in industry for industrial purposes and in the jewellery and fashion field.
The background in some countries involved insurgents who had taken over diamond mines, or stolen diamonds from mines or stocks of diamonds. In Africa where the mines exist, they used those diamonds to finance an insurgency. Maybe some of those people think of themselves as freedom fighters, but the bottom line is that these insurgencies have proven very difficult to constrain. As other colleagues in the House have pointed out, there have been thousands and thousands killed and maimed in the insurgencies.
The diamond is not the problem. It is the people who black market and sell the diamonds and buy the guns and the bombs who are the problem. Nevertheless, the diamond is the vehicle.
The international community, including Canada, a few years ago decided that there should be a process to certify and track diamonds used commercially. The process they developed was called the Kimberley Process. At the end of it, they agreed that a Kimberley Process certification should accompany rough diamonds as they are bought and sold on the wholesale or commercial marketplace.
The term “Kimberley” I think relates to a very famous diamond mind in South Africa. South Africa was a huge producer of diamonds. Perhaps it was number one at some point in world history, and it may still be. South Africa clearly was involved in development of these new rules.
Canada has subscribed to the Kimberley Process. We do that for good reason. We have observed the death, destruction, utter chaos and desperation of peoples involved in some of the insurgencies in the countries such as Sierra Leone, Liberia, the Republic of Congo and the multi-year insurgency in Angola. Most of these conflicts have not been fully resolved up to now, but some have happily.
Progress is being made by the people in those countries, with the assistance of the international community. In doing our part, we have introduced this legislation to enact the legal components necessary to regulate the diamond trade for the purpose of preventing this black market, which produced wealth and resources for these civil wars.
In the meantime, Canada has itself become a major diamond producer. We did not plan this. Fortunately, we have a very wealthy country and we have found diamonds. This is mostly in northern Canada. However, I understand there is the possibility of a play in northern Ontario now. Canada will have to be very certain that, under the Kimberly Process, our house legally, our rules and laws, are in order and are suited for the purpose of regulating the commercial trade in rough diamonds.
I make reference to remarks of other colleagues, as we look at the development of the diamond mining industry in Canada, that we should be taking public policy decisions provincially and federally that will enhance prospects for development of an orderly diamond cutting or design trade, whether it be in the north or in one of our cities in the south. Most of us would like to see something substantial happen with diamonds in the north. Wherever the trade is developed, we hope it will come with the economic multipliers that are associated with development of an industry like this.
Last, I want to go back to what I regard as the basics of the bill rather than the context. The bill itself adopts rules or definitions which allow the government to legally support the Kimberley process which I mentioned earlier. It allows the minister to adjust the definition of rough diamonds and to allow for developments in the industry later and to avoid any unintended obstacles to the development of a diamond mining trade, a diamond centre trade, jewellery design here in Canada. That is very important. As we legislate now, we should all recall that when we pass a law we actually write it in stone and it cannot be changed unless we rewrite the law later.
The statute we are adopting here, as we understand it, allows the minister in future years to adjust that definition to exclude from the term “rough diamonds”, the basket definition, certain other types of diamonds which will have greater definition and which should not be included. I assume that same approach is being used by our other international partners in the Kimberley process.
As I said, the bill will fulfill Canada's international obligations. The bill will have a positive impact on those elements of the diamond trade which were financing on a black market basis the insurgencies in those countries and in others.
I will close if I may with the hope that the regulation we are putting in place will not impair orderly, lawful development of the diamond trade either in Canada or elsewhere. I know that the bill reflects Canada's continuing engagement internationally in an effort to assist other countries to protect themselves from the kinds of insurgencies and civil wars that the black market diamond trade has given rise to in the past.
Larry Bagnell LiberalParliamentary Secretary to the Minister of Natural Resources
Mr. Speaker, I am delighted the member mentioned the importance of diamonds to the economy, but he only mentioned northern Ontario. In order that members of the public who are watching can understand how surprisingly fast this industry is developing in that Canada is third in the world already, I will outline a number of the areas that people may not be aware of.
The two producing diamond mines, Diavik and Ekati in the Northwest Territories are only two mines and we are already third in the world. There is also Kennedy Lake in the Northwest Territories. In Nunavut there are a number as well, Jericho, Coronation Gulf, Jackson Inlet way up above the top end of Baffin Island, and Melville Peninsula. Then over in Quebec and Labrador in the north in the Ungava Peninsula there is exploration. There is the Otish Mountains in Quebec. In Ontario there is the Attawapiskat and Wawa and then going west to Manitoba, Fort à la Corne in Saskatchewan and Buffalo Hills in Alberta.
I do not know if the member wants to comment, but those areas are where our natural resources are tremendously important for us.
Derek Lee Liberal Scarborough—Rouge River, ON
Mr. Speaker, of course Scarborough—Rouge River is the place I would love to see the diamond trade centre develop, but I thank the hon. member for going through the list of the locations of the diamond mines. I did refer to northern Canada as where the diamond play was happening and I made a side reference to northern Ontario, but clearly the list shows several provinces and the whole northern piece of Canada, Yukon, Nunavut and the Northwest Territories.
This is a wonderful opportunity for the development of an industry. I am pretty sure that not all of us have our heads around this yet. It will involve collaboration with provincial and territorial governments and the federal government. At some point the private sector is clearly going to have to step up to the plate with or without the suasion of the various governments in Canada to try to enhance prospects for development of a domestic diamond trade centre. That has future exciting prospects.
For the time being we are simply regulating the transport and the packaging of the rough diamonds. We have a long way to go before the other develops, but I thank my colleague for mentioning these things.
Roy Cullen LiberalParliamentary Secretary to the Minister of Public Safety and Emergency Preparedness
Mr. Speaker, I must say I am not an expert by any stretch of the imagination on diamonds. We do not have too many diamond mines in Etobicoke North, but I did have the opportunity very early in my career to live in South Africa.
When we look at the term Kimberley process, and the parliamentary secretary sitting beside the member probably would know, but I am sure it is a takeoff from where the big diamond mines are in Kimberley, South Africa. Most of them were owned and operated principally by the big diamond company DeBeers.
Just to put this bill in some sort of context and give a better understanding for people like myself, the process is meant to ensure that diamonds come from diamond mines that are not in areas of conflict, and are not blood diamonds where they are being used to fund conflict in various parts of the world. As I understand it, the Kimberley process is an embedding of some mark within the diamond itself. There is some way to differentiate the diamond so that people will know that it is not a conflict diamond or a blood diamond.
I know there was some discussion at some point, and maybe this is how the process works today, that there would be a way to put a Canadian symbol within the diamond so that people could recognize it as a diamond from Canada. I must say I have not followed this as intensely as I might have, but I am wondering if the member knows how the Kimberley process works. Is it something that is embedded in the diamond itself? How are the criteria developed? What is involved in designating certain diamonds as certified under the Kimberley process?
It is one of those things we all need to be very concerned about because we do not want to encourage the trade in conflict diamonds. These diamonds are available in countries such as Sierra Leone and, as many colleagues in this House have already outlined, in Angola. They are used to fuel conflict and huge ethnic warfare. These groups fight with great tenacity to take control of the diamond fields so that they can further fund their activities, be they involved in terrorism or overthrowing governments, or the government itself to protect its interests.
I am glad to see the Government of Canada is acting on this. Maybe the member for Scarborough--Rouge River could comment on my question.
Derek Lee Liberal Scarborough—Rouge River, ON
Mr. Speaker, we have many occupations and trades represented among the members of the House of Commons but I am not aware whether we have any diamond cutters among our membership.
As I understand the remarks of my colleague from Etobicoke North on whether the Kimberley process involves somehow marking the diamond or not, I understand the Kimberley process to be a procedure, not one that involves the cutting or marking of the diamond, but rather a certification on paper or some other medium that accompanies a bundle of rough diamonds.
The Kimberley process is one which says that a bundle of rough diamonds comes from a location that is secure from diversion, the black market and the blood diamond trade. It is not actually a process of marking the stones. If it were to be that, I think we had better get some experts from the diamond cutting trade, because I have a funny feeling that those who cut diamonds for the jewellery market would be falling over now, thinking that the Canadian Parliament might be considering marking their precious diamonds in some way with “made in Canada” or a word mark.
I do not think that is what is involved here. I am pretty sure it is not and that the diamonds will be clean. There may be a few that have the signature of the designer somewhere buried in them by laser or otherwise, I do not know, but the future will tell.
Larry Bagnell LiberalParliamentary Secretary to the Minister of Natural Resources
Mr. Speaker, there was a good suggestion earlier. They cannot be marked because they are still in the rough form and they are going to be cut up but more descriptive elements were put in and I think it is something the department should look at.
I also forgot to mention when I was describing the breadth of the industry and how important it is to northerners that over 70% of the employees at Diavik are northerners and over 30% of them are aboriginal people. I never mention my own riding and we do not have diamonds but I do want all those investors out there to know that we have emeralds. I have seen them and they are beautiful. Anyone who wants to invest in our emerald mine in Yukon, please do so.
Derek Lee Liberal Scarborough—Rouge River, ON
Mr. Speaker, I think that was a pretty good commercial for the Yukon and I will just let it stand as is.
Bradley Trost Conservative Saskatoon—Humboldt, SK
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.
Dominic LeBlanc LiberalParliamentary Secretary to the Leader of the Government in the House of Commons
Mr. Speaker, there have been discussions among all parties and I believe that, if you were to seek it, you would find unanimous consent for the following motion:
That, in relation to its study of the International Policy Statement, seven members of the Standing Committee on Foreign Affairs and International Trade be authorized to travel to Winnipeg, Toronto and Montreal from October 30 to November 4, 2005 and to Quebec City, Halifax, Fredericton and St. John's from November 13 to 19, 2005, and that the necessary staff do accompany the committee.
Committees of the HouseRoutine Proceedings
The Deputy Speaker
The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?