Mr. Speaker, I am pleased to speak to Bill S-36. It is a fairly straightforward bill, but there is a lot behind it in terms of how we got to where we are today. It is part of the Kimberley Process certification scheme of which Canada is an active member. Actually, Canada chaired the scheme in 2004 and is an ongoing chair of the statistics working group and the participation committee.
One would assume that we would be a leader in this process and here we are dealing with some fairly minor legislation. We are one of only a handful of 48 member nations that are part of this scheme that are not yet in compliance.
This goes to the heart of what has been happening in governance issues emanating not just from the government of the day but from a general malaise at the sponsoring department, Natural Resources Canada, where we certainly had a leadership problem for some time. This is very symptomatic of once again Canada struggling to match its words with its actions. This should have been dealt with in a very straightforward way much sooner.
The truth of the matter is this action has been supported by industry. It is supported by all of the participating territories, provinces and no one is suggesting that this not something we should do and yet it is slow to happen. I asked the parliamentary secretary about Bill C-259, which is a bill I sponsored and has passed the House of Commons, which removes the 1919 tax on jewellery on value added. I understand that bill is now languishing in the Senate. There is some concern that the government is not supportive of the bill despite the fact that the majority of non-cabinet members of the Liberal caucus and basically all of the opposition members voted for that bill.
This is a major concern for the industry because it affects the mining sector and the value added sector. Any of the value added sector which is dealing with producing a product in Canada is actually going to produce for domestic purposes a product that is more expensive than the identical product imported into Canada. That is no way to grow a domestic industry, especially one with the economies of scale that can become a player in the export market.
We have all of the ingredients for a very successful industry in Canada. We produce precious metals. We produce precious stones including diamonds. We have tremendous design and artistry skills. We have jewellery manufacturers, many of which have had to downsize because of increasing global competition.
However much of that is related to either the financial penalty imposed by this excise tax, the hidden tax, or by external investors who have chosen not to invest in the Canadian jewellery sector because they do not like the implications of that tax, how it is imposed and its complexities. It is sort of a double whammy.
The time has long since passed when it was needed. It was to pay for the war effort in the great war, World War I, and yet we do not hear a commitment from the very department, Natural Resources Canada, that should be fighting in cabinet for the speedy passage of that bill. I am quite concerned about that. We have an opportunity here to do something that is very right and I am concerned that instead the government is headed toward doing something that is very wrong.
If we have the right kind of leadership in Canada, we will have, not the world's third largest diamond industry, which has been stated here by Liberal colleagues, but the second largest industry by 2012 if we can give the right kind of assurances that the diamond sector will not be somehow penalized. This is one way to do that.
Another way to do that is to demonstrate, through the budgeting process, that there is a commitment to the mining sector, a commitment to the future and future development of new mines.
The last budget passed by the government was a major disappointment on this front because the mining industry and the prospectors had been assured of significant funding for geoscience. A joint federal, provincial and territorial cooperative geological mapping survey was well developed and there was a strong feeling that the government had bought in, but when it came time for delivery it was not there. This would have cost the federal government a commitment of $25 million annually for 10 years and basically would have mapped great parts of the north, which are not currently mapped, to a level that would have allowed it to be useful.
This is a major infringement on our ability to find and develop new diamond mines and other kinds of mines. We need better leadership on that kind of issue from the government than what we are getting.
Another major disappointment was that the super flow-through, which also applied to the mining sector, was not renewed in the budget. What we now have is some of the provinces actually finding themselves doing more than the federal government, but of course that does not help us in the north where we are into the territories rather than on the provincial scene.
Much needs to be done. We have reached where we are in the Kimberley process because of this whole issue of blood diamonds. It is most appropriate that Canada takes a very significant, strong, positive role in doing everything we can to avoid the issue of blood diamonds.
I have very dear friends who are constituents in my riding who were long time residents of Sierra Leone. I have talked with them about the issue of blood diamonds and it brought it home in a very real way to me. One of the things that was happening is that these diamonds are not mined. These are alluvial diamonds that are basically found on the surface and Sierra Leone is very wealthy in these things. Presumably, if one were to look long enough one could find these things in an exposed fashion without even the need to dig for them.
The areas where these diamonds were found were being controlled by rebels who were largely from Liberia. This was being used to create violence and to control territories in a way that was very ugly. One of the ugly parts was that children were being conscripted by the rebels and then forced to commit atrocities against their own people. The children were often drug addicted by the rebels or placed in compromising positions to spare their own lives or amputation, which is a common terrorist approach used to force their will upon the oppressed youth.
For example, Sierra Leone has the highest rate of amputations in the world and part of the problem is that thumb prints have been used as identification in elections when dealing with people who are illiterate. The rebels used this draconian method to ensure that a portion of the population could not cast their ballots.
When we talk about the Kimberley process and when we talk about how all these measures stack up, we have to be thinking in terms of what it does to address the core issue which is the blood diamonds and ensuring we are not doing anything to compromise the international ability to stomp out these illegitimate diamonds.
I think the Kimberley process has actually accomplished a fair amount on that front but it is certainly not perfect. One thing Canada wants to be sure of is that our production does not get tainted with any suggestion that our system does not have complete integrity because that would affect the marketplace.
We have a country where blood diamonds completely changed its social dynamics. Sierra Leone was once the hub of West Africa, featuring the first university in the region. It was a leader in many cultural and social trends. It also has the third deepest and largest natural harbour in the world. We saw this natural harbour being used in any number of conflicts in the 20th century and most recently by the British during the Falklands War. This has been changed quite dramatically all because of these illegitimate diamonds.
The governance of a country actually becomes compromised in that type of situation and the national treasury, once it is deprived of hard currency, whether it is U.S. dollars, Euros or other forms of currency, is placed in a very impossible position in terms of purchasing commodities on the world market and so on. This is what happened to Sierra Leone. This is what made it so very difficult. We even had situations where we had United Nations peacekeepers in Sierra Leone who became part of the problem rather than part of the solution. I am certainly not suggesting that was the case with any of the Canadian peacekeepers who were there but there was certainly compelling evidence showing that did occur with peacekeepers from other nations who threw their lot in with the rebels in terms of controlling some of the territories.
In terms of what we can do in Canada, another crucial issue is the fact that the Canadian government has been reluctant to enter into any kind of good faith, long term renewable resource sharing with our territorial governments. This discussion, debate, dialogue, discourse has been going on too long and it has made it more difficult to achieve the kind of forward progress that would lead to natural resource development on all kinds of fronts. In my view this is contributing to the ongoing impediments that are now in the way in terms of the development of the Mackenzie Valley pipeline proposal and any number of other projects. It is often difficult to pin down lost opportunity but we have had lost opportunity and that lost opportunity often does not knock again or we may not see it again for generations.
This is an area where we need leadership and an area where the federal government could do a lot but has chosen not to. As a matter of fact, I think the agenda is to slow that entire process down rather than to accelerate it. This is just a different vision of federal-provincial relations from the one shared by the official opposition. I think, once again, we could see some major new developments if the government would change its behaviour.
This summer, I had the opportunity to travel to Yellowknife and then to fly in to one of the two operating diamond mines in Canada in the Northwest Territories, which is about 300 kilometres by air from Yellowknife. I travelled to the Diavik operation which is very impressive. There is a $1.3 billion investment in a place where we have hundreds of highly paid, highly skilled, well trained and mostly northerner employees who are building dikes, pumping out lake water in an environmentally sound and very sustainable way and then removing rock and overburden and then getting into the kimberlite pipes and processing the diamonds which are all used for cosmetic purposes.
This is a huge industry with huge employment benefits and it is all based on this presumption that people will buy these diamonds for cosmetic purposes. That is why the integrity of the system is so important.