Roy Cullen

[Softwood Lumber, October 25th, 2005]

Mr. Chair, I want to comment on a question that was posed earlier by the member for Vancouver Island North with respect to the $5 billion and the differentiation between the $3.5 billion and the $1.5 billion. I have had an opportunity to get some clarification on that and essentially it is not that different from what I indicated.

The government is very adamant that $5 billion is the amount that needs to be rolled back. The $3.5 billion goes up to the point when the extraordinary challenge was launched in November 2004. This amount is not really being disputed. The United States has taken a different position with respect to the $1.5 billion and it has some legal options with respect to it.

We have won all the arguments up until this point, so the Canadian government will be taking the position with the International Court that the $1.5 billion is in the same category as the $3.5 billion.

Ultimately, the differentiation is more of process and timing. The government is resolute in our position that $5 billion is the amount in question. That $5 billion is not legally supportable to be retained by the U.S.

[Softwood Lumber, October 25th, 2005]

Mr. Chair, I wish I did have an answer, but I do not.

I heard this differentiation of the $3.5 billion and the $1.6 billion for the first time the other day. I know the Deputy Prime Minister referred to it as well. I can only assume that it has to do with some process and a greater certainty around the $3.5 billion. I do not have an answer I am afraid. I think I can rest assured though that the reason for differentiating has to do with process and legalities.

The reality is that whatever amounts have been collected, or will be collected, have to returned. I think the only differentiation there has to do with timing and legal process. Whatever has been paid, or will be paid, given the decision of the NAFTA panel, must be returned in full.

[Softwood Lumber, October 25th, 2005]

Mr. Chair, I know the member for Yukon did not actually pose a question, but I wanted to agree with him that sometimes we have overly simplistic solutions or ideas proposed by members opposite. In fact, when Bloc Québécois members, today in question period, was talking about the government taking more action, I wondered if they had in mind maybe sending in the army or I am not sure what.

I was happy to see that our government has linkage. Talking about NAFTA and how it operates, we do have concerns that if the U.S. does not respect the way we resolve disputes through NAFTA, then we could have issues around energy. I think this is something that the Prime Minister laid out very clearly, that we do have options. So, I agree with the member that the government has been very active and very forceful on this file.

[Softwood Lumber, October 25th, 2005]

Mr. Chair, let me say for the member for Pitt Meadows--Maple Ridge--Mission that I am not privy to this kind of discussion. I am not at all sure that it is going on. I do not think that it would be right for that to happen because we have to look at the remanners as a pretty important segment of our industry that is adding value to raw material.

As the member opposite mentions, they are non-tenured so they would presumably be getting logs and raw materials in the auctions, the log markets, so by the Holy Grail of the United States, given that it is an auction there could not possibly be any subsidies according to the American standards.

The member makes a good point: that the government should try to treat that sector a little more carefully. I know that during previous countervailing duty episodes the dimension lumber industry tried to be a little creative by putting holes in 2x4s and presenting them as value added products. The U.S. reacted negatively to that, but the industry the member is talking about is doing much more than that.

The remanners are adding considerable value. I think the government should recognize that and recognize the fact that for U.S. producers, whatever action they think they have, it is really coming out of the U.S. commodity, out of dimension lumber producers. I do not think it is coming from the value added sector, if there is any in the United States. I think the government should try to be mindful of that and take the necessary measures.

[Softwood Lumber, October 25th, 2005]

Mr. Chair, I am happy to discuss this matter, which is really about the integrity of the NAFTA process. What we are seeing here is a shaking of the confidence of the parties, certainly the parties in Canada, as to how we resolve disputes.

We need to remind ourselves that this NAFTA panel considered an extraordinary challenge to the decision of a previous NAFTA panel. It is the right of the United States to do that, but this extraordinary panel also concluded that there was no injury to the U.S. lumber industry. That was after a panel had concluded previously that the amount of subsidy was well below the amount that had been determined by the commerce department.

Irrespective of all that, even if we do not accept the premise that the panel has concluded, and rightly, that there are no subsidies, the other panel concluded that there is no injury. Even if there are subsidies, which I do not accept, nor does this panel, if there is no injury, how can there be a cause for countervailing duties?

We know that the issue is about market share. We know that whenever the market share of the Canadian lumber producing industry gets beyond 30% or so, the U.S. launches another countervailing duty process.

Under NAFTA, we have concluded arrangements with respect to energy. How do we know that the United States, Canada and Mexico might not have disputes around the energy provisions of NAFTA?

If we do not have any confidence in the way that these disputes are resolved, then surely that puts a whole range of products and trade into question.

That is why I think it is important that we seek alternatives for our energy, for our oil and gas. We do not want to get caught in a dispute with the United States over energy and get into the same tangled mess that we have here with softwood lumber. The reality is that we do have options.

I myself think it would be preferable if we could work with the Americans on energy, but frankly I think they have shown they do not respect the way that disputes are resolved under the NAFTA and we do have to look at different alternatives.

The members opposite have talked about this letter from 21 U.S. senators about the fact that Canadian softwood lumber is subsidized. I guess they have not read the panel decisions from many years past, including the current one, that have decided just the opposite, that there are no countervailable duties eligible with respect to alleged subsidies.

I am wondering if they would also understand that if we wanted to put up a mill in the United States we would be offered incredible subsidies at the state and local government levels to put in a pulp mill, a sawmill or a panel board mill. I know that from personal experience. What about those subsidies? I suppose they do not count.

What about the subsidies that are offered to U.S. agricultural interests? Are they not subsidies? I think they probably are.

What about the subsidies provided to auto manufacturers in the United States? In fact, I saw a list. For the last 25 or so U.S. auto plant expansions, the subsidies at the state level were in the vicinity of 30% to 40% to 50% of the capital costs. This is at the state and municipal or local government levels. I do not suppose they call those subsidies.

The U.S. forgets about those subsidies and then it says there are subsidies in the softwood lumber industry in Canada although independent panels have concluded just the opposite after very thorough reviews.

A study done recently by an independent group of management consultants showed that the forest products industry in Canada is about 40% more productive than the U.S. forest industry. That is on what we call the basis of total factor productivity. It is 40% more productive.

I know from my experience in visiting the U.S. markets for softwood lumber that the builders, carpenters and contractors much prefer the lumber that comes from Canada compared to the southern yellow pine. It is a better product. It grows more slowly. It nails better. It does not warp and wane so much.

We have a good product. We have a very productive industry. We have a good source of raw materials. We have a highly productive labour force. We have a good infrastructure. I am wondering if it is not conceivable that in softwood lumber Canada has a comparative advantage over the United States. Is that too much to accept?

I would be the first to admit that in certain sectors the United States might have a comparative advantage over us, perhaps in IT or telecommunications. I do not know. I have not studied all the different sectors. Why is it so difficult for the U.S. to accept the fact that maybe we have a comparative advantage in softwood lumber?

As for all these countervailing duty initiatives that emanated out of the United States, of course we know the reason. It is that there is a very strong U.S. producer lobby that seems to be able to get its way time and again in Washington, D.C. Even though lobbies are formed on behalf of builders and buyers of homes, they do not even come close to the lobby of the U.S. lumber producers.

Every time one of these countervailing duty initiatives is launched, we have some winners and some losers. The losers are the homebuyers in the United States, and of course the sawmilling communities in Canada suffer as a result of layoffs and mill closures and the uncertainty that surrounds a lot of this.

We know who some of the winners are. Lawyers in Washington, D.C., and here in Canada make a lot of money out of this, along with the U.S. forest products companies. We know that in the United States there is more private forestry land. Every time a countervailing duty action is launched, the value of private forestry lands increases, so share prices go up for companies that own a lot of private forest lands.

We also know with these countervailing duty actions that lumber producers in the Czech Republic, Latvia, Russia and South America are very happy to increase their market share in the U.S. as a result of these disputes. Their market share has increased. It is nothing compared to Canada's, but I am wondering if anyone has ever looked at whether lumber is subsidized at all in Russia or the Czech Republic. I do not know. It is a question that someone might want to look at.

The thing is that this whole matter really comes down to the process of the NAFTA and it is really causing great harm to the way that disputes are resolved. As I have said before, if we look at other sectors in the United States we see that there are many subsidies provided by the United States government.

Unfortunately, the way the countervailing duty process goes, the only thing that Canada can do is respond to the questions posed by the United States. The United States does not have to defend any incentives or subsidies that it provides to its forest products industry. The whole process is skewed in favour of the United States.

I think it was in 1996 that the United States producers had the audacity to argue that restricting log exports in Canada was a de facto or effective subsidy. That is because the domestic policy here in Canada says that we want to encourage value added, so we do not like to see raw logs exported. The Americans said that this kept the domestic log market deflated and they alleged that it was an effective subsidy. Again, that was struck down by a panel, but this is the kind of nonsense that we see out of these processes.

While I agree that we need to find a durable solution, I am not sure what that durable solution is if we cannot rely on the U.S. to honour its trade agreements that are currently in place. The reality is that what the U.S. must do is honour NAFTA.

This issue has been through the NAFTA processes so many times, and it has been concluded so often that there are no countervailable subsidies. In fact, this panel has even concluded that there is no injury, so if there is no injury to the U.S. producers and there is no subsidy, how can the United States possibly be collecting tariffs?

The tariffs have to come back. The U.S. has to honour its commitments under the NAFTA. Perhaps we then need to look at a durable solution, but to do that I think we must have some very concrete undertakings from the U.S. government that any dispute mechanism that is put in place will be respected and honoured by the U.S. government.

[Softwood Lumber, October 25th, 2005]

Mr. Chair, I was puzzled by the comments of the member for Cumberland—Colchester—Musquodoboit Valley when he talked about the need to have a unified position, when in fact it has been Atlantic Canada that has been one of the dividers of the Canadian position on the basis that because there is more private land in the Maritimes and it has more auctioned timber it is as pure as the driven snow. This has been counterproductive in terms of coming up with a unified Canadian position.

I was disappointed when I read in the paper recently about the position taken by the Maritime Lumber Bureau when again it seems to be trying to split Canada's unity on this issue.

While I take my hat off to what Atlantic Canada is doing, it is strange that to hear some say that because it has more private land and auction that is somehow implicit that there is no subsidy. It sort of presumes that if there is no auction system there is a subsidy. In fact, in 1982 the countervailing duty process concluded that there was no countervailable subsidy. Again in 1992, the Department of Commerce ruled that log export restrictions and stumpage were not countervailable. These were independent panels saying that just because there is no auction system that does not mean there is no subsidy.

I wonder if the member could comment on the divisive positioning sometimes of Atlantic Canada on this issue and the question of export subsidies and auctions.

[Export and Import of Rough Diamonds Act, October 25th, 2005]

Mr. Speaker, I know this is a sensitive area and I do not bring it to the floor of the House lightly.

There might well be a lot of ways we could add value to these diamonds in Yukon and the Northwest Territories. I am certainly open to that, but we do have controls. For example, if we want to export a raw log from British Columbia, we have to get an export permit to do that and there are very tight criteria around that. If it is a matter of shipping uncut diamonds from Canada to Antwerp, or to send some of them to Toronto where we could have them processed, cut and polished, it is a very valid public policy matter. This is something that should be examined.

Perhaps some of these value added activities could be conducted in Whitehorse or Yellowknife. I have visited Whitehorse and it is a most amazing town with attractive, beautiful scenery, and great fishing and hunting. The people are staggeringly wonderful and energetic. They are just like the member for Yukon. In fact he is probably the embodiment of the wonderful people who come from Yukon.

Do not get me wrong. I love Yukon and the Northwest Territories. If we can add value to these diamonds there, so be it, but what I am told is that there is a stronger case to be made for adding value to those diamonds in a big city centre like Niagara Falls or Toronto.

Certainly, speaking for myself, I have an open mind to this and I think there might even be a compromise. In other words, we could set up a diamond trading centre in Toronto but then ensure that there were some value added activities taking place in Yukon or the Northwest Territories.

In the absence of that, do we think that DeBeers on its own volition is going to send these diamonds to Toronto in lieu of sending them to its own processing facilities in Antwerp? We need to be less naive if we think DeBeers would do that without someone saying to DeBeers that it needs to ship some of the uncut diamonds into some value added activities in Canada, that the diamonds were discovered in Canada.

[Export and Import of Rough Diamonds Act, October 25th, 2005]

Mr. Speaker, my colleague from Mississauga South has an amazing capacity to zero in on some important aspects of every bill that comes before this House. Clause 15(1) is one of those.

We were chatting earlier about this. I do not pretend to have the definitive answers on this. However, I believe the member raises a good point, that at a committee the witnesses from the department could elaborate on this.

What I would think is driving this section is when there is a process which certifies that these diamonds are coming from a certain area, then that process is like an ISO process. There has to be sterility in the process. There has to be the confidence that if a container is certified as containing diamonds, that container has been certified through the Kimberley Process. If the container has been opened, that challenges the sterility of that container. Maybe there have been conflict diamonds or blood diamonds mixed in with others. Perhaps someone with very bad intentions has done that deliberately. This is something that would not be tolerated.

This is where the government often wants to leave the minister some discretion. For example, maybe the container came through a tornado or a hurricane, a bolt of lightning hit the container, it burst open and this was visible to all who were present. If that discretion was unavailable to the minister, even though there was no concern about the legitimacy of these being Kimberley processed certified diamonds, the minister would be in the position of having to send them back.

I think the drafters have probably been quite astute in leaving the minister some discretion. However, he member for Mississauga South raises some very important points additionally, and that is the recourse. Is it enough only to say that the container goes back? It like coming across a crime and saying that we do not have to report it. We take the drugs and guns away and do not bother with it any more. I am sure that is not the intent. I am sure there are many more subtle things going on here than the wisdom that I have on this legislation.

I know the committee will examine this in great detail. Whatever we do, it applies to the comments I made earlier about a duty free zone and the question about sterility. We have all heard about a bonded warehouse. I use sterility in that sense, not in the sense that some members might think.

It is very important to have the controls to ensure that if duties and excise taxes have not been paid, this area must be controlled and sterile. The same principles apply here. If a person has a container that says they are Kimberley processed certified diamonds, then the container cannot be opened. It can only be opened under very controlled conditions. Otherwise, someone could mix in some of the other diamonds.

Then what assurance do we have? It is like an ISO process that has to be absolutely disciplined and rigorous so people who are buying that container have 100% confidence that those diamonds are the right ones, that they are not conflict or blood diamonds. They are uncut diamonds from Canada from the Northwest Territories or Ontario, and they have been tightly controlled so they will not be mixed in with other diamonds that would be a concern to the purchasers.

I am sure the section will be examined in some detail at committee.

[Export and Import of Rough Diamonds Act, October 25th, 2005]

Mr. Speaker, I am pleased to enter the debate in a more proactive way on Bill S-36, an act to amend the Export and Import of Rough Diamonds Act.

We have had a lot of good discussion today around the bill and it is a very important undertaking to ensure Canada's diamonds are certified as being diamonds that are not coming from conflict areas, or blood diamonds as they are often referred to, and that they have been through a process to certify that.

Canada is now the third largest producer of diamonds in the world, and that is quite an accomplishment. That was done in a fairly short period of time and that industry is even growing as we speak. The parliamentary secretary talked about new mines being developed in Ontario and other parts of Canada, so this is a great story and, with this bill, we are helping the diamond industry in terms of how they can market their product more effectively and create a good market for their production.

I spoke earlier in the debate about the need to add value to rough diamonds in Canada. In rebuttal, the member for Burnaby--New Westminster talked about the fact that we are exporting all these raw logs. We need to put that into some context as well. In fact, I worked for 12 years in the forest industry in British Columbia. The export of raw logs is limited by statute and they have to meet very specific tests or criteria. To be exported in the raw log form, they have to be surplus to domestic needs and they have to pass some other tests.

If we look at the average over many years of the export of raw logs in relation to total production of logs in British Columbia, it is somewhere around 3% to 4%. We need to be concerned about that but it is very different from diamonds, where right now in Canada we are exporting virtually 100% of our uncut diamonds to Antwerp, Tel Aviv and Amsterdam, which is where the cutting and polishing is being done.

I would like to see a diamond trading centre established in Canada. The experience in Antwerp and other cities has shown that if we set up a diamond trading centre, then the people who cut, polish and further process diamonds will situate themselves very closely to the diamond trading centre. The people who cut and polish the diamonds like to be close at hand to the diamond exchange.

There have been some discussions that people in the Northwest Territories, where a lot of the big diamond mines are now located, would like to see this diamond trading centre located in Yellowknife, and I can understand why they would want to do that. It creates high paying jobs and it is good for economic activity.

The parliamentary secretary from Yukon talked about the fact that we do have some cutting and polishing going on in Canada but it is after the uncut diamonds have been shipped offshore. Some of them do come back for some further value added but it is quite small in its size and scope. I think there is a real opportunity for Canada to get more involved in the added value part of the diamond industry.

I have talked with some of the players who are anxious to set up a diamond trading centre in Canada and they are telling me that establishing such a diamond trading centre in Yellowknife, for example, would be very difficult because they need to attract people with the right skill sets.

While I understand and respect what the parliamentary secretary is saying, that we do have some of those skills in Canada, but we do not have enough of them. I suppose setting up a centre have the centre in Yellowknife is, I suppose, a reasonable option but I have been told that these diamond trading centres are typically set up in very large urban areas close to airports with easy access to international flights because people come and go, they buy diamonds and work in their businesses in terms of the value added sector.

I began to wonder why we would not want to look at setting up a diamond trading centre in the city of Toronto. Toronto has many of those attributes. It is a large centre. It is easily accessible in terms of international flights. It has the kinds of amenities that many people in this sector would be looking for. I am trying to see if we can attract that kind of business to Toronto.

I am working with my colleagues in the Northwest Territories and we are exploring different options. Maybe there is a possibility of having some value added, more value added than is being done today in centres like Yellowknife. There might be some compromise solution but the diamond trading centre, as I understand it from the experts, needs to be in a large urban centre that is easily accessible in terms of travel and the like.

The experience on this has been quite clear that once a diamond trading exchange is set up, the other value added sector industries will follow. What we end up with is a cluster that is good for creating many high paying jobs, skilled jobs, economic activity and then, from the cutting and the polishing, it also grows into manufacturing jewellery. We would end up going right to the far extremes of the spectrum of processing within the diamond sector. It is something that is being explored now and it makes some good sense.

With respect to the diamond mining industry in the Northwest Territories, the federal government would make the decision to direct a percentage of the production from the Northwest Territories into, for example, a diamond trading centre somewhere else in Canada. Right now the major diamond mining companies in the Northwest Territories are owned and operated by foreign companies, such as De Beers and others, which take the uncut diamonds and move them to their processing facilities in cities such as Antwerp. They cut them and polish them there and then they work them back into the diamond market. The diamond market is a huge, some would say, cartel. It is a very exclusive club that pretty much controls the supply of diamonds into the market, but this would be a way of adding more value.

The other feature I am working on is to see if we could set it up in Toronto as a duty-free zone because in budget 2000 the government came out with some measures which would more readily allow for the formation of what we would call duty-free zones. They would not be described precisely like that but they would allow the movement of goods into a duty-free zone, free from duties and free from GST as long as the production is moving offshore and as long as initially the value added is going to be limited to a maximum of 20% as a starting point. With respect to uncut diamonds from Yellowknife, the duty-free zone does not really offer much in the way of attraction in the short run but once the centre is established and its cluster is developed we would then have some capacity for cutting and polishing.

Over time more of these uncut diamonds would come from other sources, such as South Africa and maybe Russia. As long as a good centre of excellence was created which was cost competitive, those diamonds would find their way into this diamond centre and then they could be worked on in Canada.

As long as they are exported to the United States or any other country, they would be exempt under these rules of the duty on the stones coming in and and also the GST. This was an obstacle that was eliminated in budget 2000 because we have a number of duty deferral programs in Canada but one of the constraints to setting up a geographical area and call it a duty-free zone was the fact that the GST still had to be paid and then refunded. Therefore as the goods came in there was some value added. The GST was paid once they were exported. Of course the GST could be rebated but it was an administrative problem and a cashflow problem.

In fact these duty free zones, if we look around the world, very much lend themselves to this sort of model of a cluster, a jewellery and diamond centre cluster. There are similar examples in the Middle East for example and I think it has some attraction.

We are looking at some sites and I am working with my colleague in the Northwest Territories to see if we can come to some solution where we optimize the value added input that can be achieved in the Northwest Territories but we are also realistic about the fact that the bulk of this needs to be centred in a large urban area.

I think Bill S-36 is important legislation and I would like to see us move more in the direction of adding value to this important industry in our country.

I had the opportunity many years ago to work as a young chartered accountant in South Africa. There I could see the huge diamond industry that exists and existed in South Africa. In fact, the number of people in the diamond processing industry in Johannesburg is absolutely staggering. In fact, I met more people from Belgium in Johannesburg than I have ever met before. The reason for that is a lot of them would come from Antwerp and places where the diamonds are cut, polished and made into jewellery. Many of them would find their way into Johannesburg because it was a big diamond trading centre as well.

I also had the opportunity years ago to work and visit the Northwest Territories. I discovered that an old friend of mine who I went to university with became president of one of the big diamond companies in the Northwest Territories, Diavik Mines. He came here one time when the Diavik mine was being developing. One of the challenges his company had was to get supplies in to develop the site. In the winter the trucks drive over the lake which is frozen over but they had to get a certain amount of supplies onto the site before a certain time. They were running into some obstacles with various regulatory authorities, not that there were any issues or problems, but just that they needed some very quick decisions and we were able to talk to Environment Canada, the Department of Natural Resources and the Department of Finance. I was happy that it was able to unblock some of those impediments and able to get the material on site on time.

This is a hugely important industry for the Northwest Territories and, as the parliamentary secretary noted, for many other parts of Canada as well. It is important that we encourage the mining industry to continue to explore and to find new deposits. Many mines in Canada now are close to being worked out.

Developing a mine is a very expensive process. First, they have to seek out the lodes where the precious or base metals are located. To do that, we need the proper set of incentives. As I commented earlier, a couple of years ago our government came in with a package that changed the way in which the government taxed mining companies. It replaced the resource allowance with the actual amounts that the mining companies paid as royalties.

Some sectors of the mining industry, like the potash sector, received less of an allowance than they paid the Saskatchewan government in royalties. The government said that it would not do the formula calculation any more. Instead it would allow mining companies to deduct the royalties they paid to the government of Saskatchewan. Although other provinces have potash, it is a very dominant industry in Saskatchewan. When the government did that, the industry was very happy because it now could deduct the actual royalties it paid to the Saskatchewan government.

The mining sector has a whole range of base and precious metals. Diamonds, for example, are clearly precious metals. When we changed the tax regime, precious metals, if I recall, came out pretty well. A sector of base metals had mixed results in whether this was advantageous to it. At that time, the government, realizing that replacing the resource allowance with the royalties would create some winners and losers, put in the exploration tax credit at 10%, although some of us argued for 20%. That is a good mechanism to encourage the industry to explore and continue to explore for new discoveries.

That, coupled with the flow through shares, which the member for Saskatoon—Humboldt referred to as well, have resulted in a lot of good behaviour by exploration companies. When I say “good behaviour”, I mean behaviour that causes them to find new deposits. I am confident our government will continue to keep those instruments in place.

The mining industry is a sector which is sometimes characterized wrongly. Often we conjure up images of the mining industry as environmentally irresponsible and that it is a dirty industry. People in the industry have fought hard. They have had some issues they have dealt with, but they have also tried to approach Canadians and people internationally to convince them they are responsible managers, and rightly so.

This industry is very important for the economy of Canada. It operates in an environmentally sound way, and it deserves our support. It creates a lot of jobs in urban Canada as well. People think that mining is a rural job creating activity, but a lot of work has been done to show that jobs created in the mining sector in remote parts of Canada or in rural Canada impact a lot of jobs in urban Canada as well, whether they be financial managers or investment bankers.

I will be supporting Bill S-36. It is a good start. It also is a good signal that we have a very important industry Canada which we need to grow further.

[Export and Import of Rough Diamonds Act, October 25th, 2005]

Mr. Speaker, thanks to the member for Saskatoon--Humboldt, we learn more about the background of members of Parliament in the House. The hon. gentleman has worked in the mining sector in northern Quebec, Yukon and the Northwest Territories. The House has a diverse group of people who come here to represent Canadians in the House of Commons.

He made a comment about the need to encourage and support continuous exploration for our mining industry, and I totally agree with him, because mines are eventually worked out. To keep the mining industry going and miners employed, we need new mines and new ways of supporting and encouraging that sector.

It was our government that I think a couple of years ago brought out a whole new taxation regime for natural resource companies, particularly the mining industry. A package removed what used to be called the resource allowance and replaced it with what the mining companies were actually paying to provinces and territories in terms of royalties. There had been a formula-driven resource rent allowance, which was replaced with the actual royalties paid by the mining companies to the jurisdictions in which they operated. Most of the mining industry benefited from that.

There were also other initiatives in that package, including an exploration mining tax credit of 10%. The member for Saskatoon—Humboldt also talked about flowthrough shares and how they have been rolled over a number of times. These are important instruments to support the mining industry so that it will have an incentive to explore and find new deposits.

The member is absolutely right. He speaks with more experience than I. I once flew over Voisey's Bay. That deposit was missed by the big companies two or three times. An entrepreneur, a chap who was looking for this type of thing, came across it and recognized that there was something very valuable there. He staked a claim and Voisey's Bay was born. I think he became a multi-multi-millionaire. More important, that area has grown and is growing and will be a huge source of nickel and other minerals for many years to come.

I am wondering if the member is familiar with the package that the government brought out. I think he indicated that these tax credits and the flowthroughs are working well. From his experience, how does it change the behaviour of the people who are exploring and looking for new deposits?