Gerald Keddy

[Export and Import of Rough Diamonds Act, October 21st, 2002]

Mr. Speaker, I appreciate the hon. member's question. Although not included in this bill, my point in raising the excise tax issue is that we need to look at it in a serious way. If we are to promote a diamond industry in Canada, it is a lot more than just regulating the import and export of rough stones.

We have tremendous potential just in rough diamonds. If we are able to do something about the export of rough diamonds and get rid of the excise tax on those quality stones, by promoting the sale of diamonds in Canada, people might be interested in flying to Yellowknife to purchase a stone at the source. There is no reason why that could not happen.

We are on the threshold of a tremendous business and so far I do not think the government realizes it. A 25% penalty on any industry is too much. It is a given that we will have provincial sales tax and the GST. However we need to do something about the export tax. I have raised this issue in the House over the last couple of years. It is not the first time it has been brought up. It is time the government took a look at it. We have a fledgling industry with huge potential. Let us help it out.

[Export and Import of Rough Diamonds Act, October 21st, 2002]

Mr. Speaker, it is a pleasure to rise today to speak to Bill C-14, an act on the export and import of rough diamonds. There has been a fair amount of discussion on the bill so far but not a lot of debate. There are a number of issues in the legislation that are relevant to the debate and certainly should be open for discussion.

The bill has been a long time in the waiting. Unfortunately it has taken the government until the last hour of the last day to bring forward the bill and now it has to be ratified by December 31, 2002. Of course the government likes to say that date is actually January 1, 2003, so it is a different year, but my point is that there is a real urgency here. We need to look at the bill immediately, we need to debate it and we need to have it go through committee. We need to have it ratified by December 31, which as far as I am concerned as an opposition member of Parliament, is too little too late. We should have had this before us last spring. We knew it was up and coming. We could have had our committee studies done and a lot of groundwork could have been covered already.

Certainly we all know the story of diamonds. To many people they symbolize love, happiness and wealth, yet for many they mean conflict, misery and poverty. In African countries such as Angola, the Democratic Republic of Congo and Sierra Leone, the profits from the unregulated diamond trade are used to obtain weapons and fund armed conflict. As a result, tens of thousands of civilians have been killed, raped, mutilated or abducted.

The rebel forces in these conflicts use so-called conflict diamonds to finance arms purchases and other illegal activities. Neighbouring and other countries can be used as trading and transit grounds. The transit grounds are for the trade and travel of illicit diamonds. Once diamonds are brought to the market their origin is difficult to trace. Once polished, they are even more difficult to identify. This is why it is very important that Canada is brought into line with the other almost 50 countries to stamp out the international trade in illicit rough diamonds.

On December 1, 2000, nearly three years ago now, the United Nations General Assembly unanimously adopted a resolution on the role of diamonds in fueling conflict, seeking to break the link between the illicit transactions in rough diamonds and armed conflict. In taking up this agenda item, the General Assembly recognized that conflict diamonds are a crucial factor in prolonging the brutal wars in parts of Africa and it underscored that legitimate diamonds contribute to prosperity and development elsewhere on the continent.

In Angola and Sierra Leone, conflict diamonds continue to fund the rebel groups, the National Union for the Total Independence of Angola and the Revolutionary United Front of Sierra Leone, both of which are acting in contravention of the international community's objectives of restoring peace in the two countries.

In March 2002, an international agreement was reached on a plan to require a paper trail for diamonds to help throttle the trade in the so-called blood diamonds, blamed for financing the bloody civil wars in Africa, yet we still have no legislation from the federal government. If we look at even part of the chronology, we had the UN resolution on December 1, 2000, and phase one of the Kimberley process, which was completed November 29, 2001, wherein the ministers of participating states at a meeting in Botswana declared their detailed proposals for international certification for rough diamonds. Then we had the March meeting here in Ottawa. In the meantime, the United States government took a very serious look at this problem and proposed legislation. That legislation was proposed and actually sent to Congress in the U.S., with the support of the diamond industry and over 100 non-governmental agencies. Unfortunately the bill stalled in Congress.

The fact that the bill stalled does not reflect at all on the importance and the timeliness of the bill being introduced last spring in the American system rather than late in the fall of 2002 in our system in Canada, again with the December 31 deadline. Certainly there are still a number of problems with the legislation. Beside the fact that we are down to the crunch and that the legislation needs to become law by the end of the year end, a few other points need to be explained and laid out.

By January 1, 2003, to take the government's date, all gem quality diamonds must be certified according to the standards outlined in the Kimberley process or they simply will not be allowed into other countries. In the meantime Canada does not have a diamond regulatory body. Canada Customs does not have a centralized port of entry or ports of entry for diamonds and it does not require proof of the origins of diamonds at this time. Perhaps the legislation will encompass all this, but we will have to see.

Importers simply can declare diamonds to be from their last port of call, such as a processing centre in Antwerp. Therefore we certainly need to have the discussion about ports of entry and exit for rough diamonds. Designated points of entry will put a stop to the smuggling of diamonds in other countries. That is not as great a danger to Canada, but it certainly is a great danger to many other countries on the planet.

Canada now has a vested interest in this. We have a particular interest as a new producer of diamonds, in particular from the Northwest Territories. This country needs to protect its diamond industry by encouraging a strong monitoring system to ensure that consumers can trust the claims about the origins of the diamond.

Bill C-14 is attempting to establish an international certification process to trace uncut stones so that gems mined by driller groups in Sierra Leone, Angola and Liberia do not infiltrate the legitimate diamond markets. We absolutely agree that this is a good step to crack down on the smuggling of rough diamonds. Canadian law in this instance would impose a $500,000 fine or a five year prison term, or both, on anyone attempting to smuggle conflict diamonds into Canada.

The Kimberley process is to address exports and imports in transit and deal only with natural rough diamonds. This process was initiated in South Africa in May 2000 to develop an international certification scheme for rough diamonds to prevent conflict diamonds from entering legitimate markets. We have a vested interest in seeing that this process is approved and that it goes through.

On November 5 of this year, the Kimberley process will meet in Interlaken, Switzerland to confirm the end of 2002 as the date for simultaneous implementation. I would think it would be in the best interests certainly of our country and the fledgling diamond industry in our country that the Minister of Natural Resources attend this very important meeting himself.

In the meantime this is more than just an issue about the import and export of rough diamonds. Now that the government actually has figured out that we have a diamond industry in Canada which has the potential to supply 12% of the world's gem quality diamonds by 2004, which is very important to fledgling economies in northern Canada, and now that we actually are looking at this issue, perhaps the government will also agree to look at the issue in a more serious and broader way and take a broader mandate.

We will deal with the legislation and support it. We will even support it being rushed through the House, but we will not simply turn a blind eye to it. There are concerns and we need to take a very strong look at them. I would like to reiterate once again that my greatest concern is the fact that the government has waited this long to introduce the legislation, and now we are in an all-fired panic to get it through the House.

There are other concerns. Canadian diamond dealers have a concern about the 10% excise tax on diamonds. It is applied against the manufacturers of all jewellery. It needs to be discontinued if Canada's fledgling diamond industry is to compete with diamonds from Botswana, Australia, Russia and South Africa.

The excise tax came into effect in 1919. It is funny how taxes get on the books and are forgotten. It was applied to a range of so-called luxury items to help finance Canada's World War I expenditures. Probably, like most taxes, it was well meaning and brought in for all the right reasons. Over time the excise tax was dropped on a number of items and remains on only a few today. It continues to remain on jewellery. If we add the 10% excise tax, the GST and the various provincial sales taxes, that is 25%.

The diamond industry is on the verge of blossoming and has real potential to fuel the economies of northern Canada and some of our southern cities as well. There is huge potential here and already we are seriously considering putting a tax of up to 25% on the product. If we have a $2 billion industry with the potential to supply 12% of the world's gem quality stones, why are we not taking a serious look at the industry, and not just the import and export of rough stones which curves around the world, and supporting it?

Our only producing diamond mine right now, the Ekati mine, employs 650 people and produces three to four million karats of gem quality rough cut diamonds every year. This is an equivalent to nearly 4% in today's numbers of the world diamond production by weight and 6% by value.

The Diavik mine will begin operation in 2003. Two more projects, one in the Northwest Territories and one in Nunavut, could open by 2007. These four mines would provide direct employment for about 1,600 people and could bring a total annual production of nearly $2 billion.

Many people will benefit from the development, including northern aboriginal groups, at the mine and in industry related activities as well as training and skills in cutting and polishing diamonds. They will receive direct transfers under the impact and benefit agreements negotiated directly with the mining companies. Therefore the diamond industry has been a win-win for our northern communities. It is an exciting time for Canada and especially Canadians in the northern region. This is a time to bring jobs and skills to many people who need to enrich their lives, and these jobs and skills will come from the mining of rough diamonds.

We support the bill at second reading. We hope the government will take the entire industry much more seriously than it has in the past. We recognize the time frame and the restraints and conditions the government is working under. However we should have our legislation in place even if the meeting in Switzerland does not confirm December 31, 2002 as the deadline.

Furthermore, we have a fantastic opportunity and a terrific industry. It is environmentally friendly and safe. It has the potential to put our northern communities on the world map. It has huge potential for the sale of Canadian stones. That little laser etched polar bear on that polished stone at the end of the day may be the greatest trade mark that Canada has ever come up with. This is a fantastic opportunity. We have free trade with the United States and the United States buys 60% of the world's polished stones. The biggest market in the world is next door. There is no way Americans or anyone else on this planet should even consider buying conflict diamonds when they have a guaranteed safe source of stones right in Canada. We have an industry waiting to happen, to cut, polish and export these stones.

It is not just about this legislation, which we support. It is also about the excise tax and the situation in which the diamond industry is today. I hope the government is at least listening to this debate. I hope it intends to follow this up and not only regulate the import and export of rough diamonds, not necessarily for Canada but certainly for the conflict regions of the world, but also look at the industry in Canada which supplies 6% of the value of all the gemstones on the planet. It has huge potential not just for the regions of northern Canada, but for the rest of the country as well.

[Resumption of debate on Address in Reply, October 11th, 2002]

Mr. Speaker, I appreciate having the opportunity to have an intervention. You are absolutely right, when a member is speaking the rest of us should be listening. However I took exception to the member's remark that somehow the government had been supportive of the military. Obvious to all Canadians is the fact that the government has been anything but supportive to the military.

We in the Progressive Conservative Party put a supply day motion to the House which was supported by the opposition parties, with the exception of the NDP. The motion asked that we support the Canadian military and give it the dollars and tools it needed to do the job the best it could do.

That member, along with the rest of the Liberal Party and the NDP, voted against the motion. Would the member explain his position on the military vis-à-vis his vote on the military?

[Resumption of debate on Address in Reply, October 11th, 2002]

Oh, sit down.

[Nuclear Safety and Control Act, October 10th, 2002]

Mr. Speaker, before I make any comment or answer my colleague's question I want to congratulate him on becoming a grand-père. Hopefully the rest of us will get there at some stage in the process. One of the great privileges of standing in the House is that we do represent ourselves, our children and our children's children. The things we debate and discuss and the bills we pass should reflect that.

I would like my colleague to know that I am not forgetting Chernobyl, Three Mile Island or the dangers that are inherent in the nuclear sector. I am also not ignoring the very real fact that nuclear energy will continue to be part of our electricity supply in North America and indeed the world. In order to react to that fact we need to have, especially in Canada, legislation that reflects that.

There is another part of the legislation that is as problematic as how the legislation and the current clause 46(3) affect the lending institutions and the nuclear reactors. It also affects our research and development, our laboratories and our hospitals. Certainly no financial institution should be held responsible for nuclear waste or nuclear cleanup, if it is required, that it did not cause. I think that is the reason we would support the bill. However we also support open, full and complete debate on the legislation and intend to ensure that it is debated.

I appreciate my colleague's comments and the comments of the member for Sherbrooke who debated Bill C-27, the nuclear waste disposal act. We had unanimity among the opposition parties that it was a poorly crafted, poorly worded, typical, I might add, piece of Liberal legislation. Everyone in the House was against that legislation.

I separate this particular bill out differently. I think it affects the industry differently, and I certainly encourage and support debate on it, but at the end of the day we will support this particular clause.

[Nuclear Safety and Control Act, October 10th, 2002]

Mr. Speaker, it is interesting to rise on the debate of Bill C-4 today. I listened fairly closely to the hon. member for Sherbrooke. He raised a number of very important issues about furthering this debate and making it broader. I encourage the hon. member to continue with that thought process because there is much more to be debated.

I agreed with the member on a number of issues, but quite frankly my Progressive Conservative colleagues and I disagree with him on a number of other issues. It was quite telling when he spoke about the future of nuclear energy. Although we are in agreement with how the government has ignored its responsibility to deal adequately with nuclear waste, certainly the future of nuclear energy will meet part of our energy commitments.

The hon. member for Sherbrooke quite rightly used Europe as an example. Although much of Europe is downsizing its nuclear sector, Germany has absolutely no compulsion about continuing to buy nuclear energy from France. With the German arrangement for getting rid of its reactors credits can be transferred between German reactors. Therefore Germany will continue to be a nuclear operator well into 2025 and 2030. In and of itself that does not set the case for nuclear energy, but it is part of the argument as it unfolds that should be laid out for people to discuss.

With the background of the bill there is a real sense of déjà vu, for my French colleagues. It seems to me that not long ago we were here debating this very bill. We had been lobbied by the banking institutions and the nuclear sector. At that time there was a great amount of urgency about this piece of legislation. It had to be passed within a certain timeframe.

There are a number of bills and I will mention just one of them: the Kimberley process for grading and marketing diamonds. That is another bill that has a great amount of urgency. We have to get it passed by December 31, 2002, because we have already signed a charter at the United Nations.

These two pieces of legislation are urgent. Both of them have a fair amount of importance. We need to get them passed. Yet the government prorogued the House. It said in the middle of September that the legislation was not important, that we did not have to come back here, that the nation's business could wait. It simply got rid of the legislation, the committees and the members who sit on the committees and said that it would set them all up again.

In the government's infinite wisdom I am sure there must have been a reason for that, but I do not know what it was. I am waiting to be enlightened. I expect that some time over the course of the next couple of weeks the government will enlighten us on the reason it prorogued the House. We had already debated this legislation in the House. It had already gone through committee. Why did it take this legislation and say “Forget it. It is not required. We do not have to worry about it. We will just start all over again”?

By the way, it now wants us to take the Kimberley process and fast track it. We are to forget about having a debate on it because it is not required. The government has a deadline so it will fast track it. If it cannot fast track it, it will just use its majority to force closure and get it passed. That is not democracy. Even the Liberals in their limited knowledge of how democracy works would understand that this is not democracy in any way, shape or form.

To speak directly to the bill, the government passed the Nuclear Safety and Control Act in 1997 but apparently, like all the rest of the legislation it has passed, it forgot to read the bill. Specifically it did not read the fine print.

We have subsection 46(3) of the act that was passed in 1997 by the government which has become problematic. When nuclear corporations asked for debt financing from the banks and the debt servicing people of the country they found that the banks did not want to provide it. When we read subsection 46(3) it is quite clear why they did not want to provide it. Subsection 46(3) reads:

(3) Where, after conducting a hearing, the Commission is satisfied that there is contamination referred to in subsection (1), the Commission may, in addition to filing a notice under subsection (2), order that the owner or occupant of, or any other person with a right to or interest in, the affected land or place take the prescribed measures to reduce the level of contamination.

Back in 1997 I do not think it was the intent of the government to put the responsibility for nuclear contamination cleanup on the backs of the financial institutions that would be supporting the said nuclear reactor or site. Certainly that is the way the banks looked at it. Under the old section of the act they had a liability that there was no reason they should assume.

I look at the debate about nuclear energy as a separate debate about the wording of this particularly sloppy piece of typical Liberal legislation. It is absolutely no surprise to me that we have to go back to fix legislation as we have done many times with many other pieces of legislation in the House that the Liberals had passed by forcing the issue, by preventing debate and by using their huge majority.

Today in Canada the CNSC licenses over 3,500 operations. The Canadian Nuclear Safety Commission is responsible for 3,500 operations in Canada. We are not just talking about nuclear reactors. There is a handful of nuclear reactors in the country but there are 3,500 nuclear operations. These operations use nuclear energy or materials. They include uranium refineries, nuclear power plants, hundreds of laboratories and most hospitals.

If we look at section 46 of the Nuclear Safety and Control Act as it is currently written, we realize that the liability for contamination at any site extends not just to the owners, occupants and managers of that site but to lenders such as banks and other financial organizations.

When we read that, and if even we are against the principle of nuclear energy, we must realize this piece of legislation affects a lot more operations than just nuclear power plants.

I do not think many members of the House want to start shutting down our laboratories and our hospitals because of a mistake in a piece of legislation that was forced through the House in 1997 by another majority Liberal government.

If we look at the substance of the bill to amend section 46 of the Nuclear Safety and Control Act, the amendment changes the wording of section 46 to eliminate the liability of lending institutions for remedial measures in instances of nuclear contamination. There is still a liability for the operators, managers and owners, as there absolutely should be, but even in my wildest dreams I do not see an argument for liability on behalf of lending institutions.

I am not trying to say that somehow we should allow the big banks to run the country or not be applicable to the laws that govern the country, but in this case there is clearly no reason that it should apply to the financial institutions. Liability for any possible radioactive contamination would only apply to the owners, occupants and managers of the site that may be contaminated.

Under proposed section 46(3) that measure can be interpreted to extend beyond liability for nuclear site remediation as it is worded now. It should apply only to an owner, operator and manager of the site, not to the financial institution.

Hopefully it is not the job of government to stifle the nuclear sector or to prevent it from being a supplier of clean energy, which it is. We had unanimous consent in the House against Bill C-27 that was to deal with nuclear waste with which the government dealt in a very sloppy, ineffective, unorganized, unprincipled and totally arbitrary manner. All opposition parties in the House voted against Bill C-27.

To this very day the government has not dealt with the long term storage problems inherent in the nuclear energy sector. However, that does not mean we should not approve a small change in legislation that would allow nuclear operators, laboratories, hospitals and research facilities to access debt financing.

There are all kinds of reasons that I would tend to debate this issue. Did the government take its responsibility to the people of Canada seriously when it reintroduced the bill after it prorogued the House and threw out the proverbial baby with the bathwater? I do not think the government took its responsibility seriously at all.

We could have been back here in the middle of September and we could have been moving on a lot of legislation, not the least of which is the Kimberley Process. Now we are hearing at the natural resources committee that somehow we may not have time to deal with the Kimberley process because it is October 10 and we need to have this done by December 31. We have known about it for some time but we have not dealt with it, so we will just shut down the diamond industry if we do not get it ready.

Canadian mines are producing 6% of the world's gemstones. With the Ekati mine coming on line we are expected to produce 12% of the world's gemstones. It is a huge market, a wonderful industry, a great opportunity for northern Canada, and we have a helmsman who is asleep at the wheel. His first mate jumped ship and the rest of the sailors are ready to mutiny at any minute.

Now we will throw out all the legislation, never mind what is or is not important, and we will rework it all. It is not a question of the Progressive Conservative Party supporting the legislation, we will support it, but we do not support the arrogant, indecisive, totally unorganized approach the government has to everything.

If the government makes a mistake today, it will worry about it some day. Some day down the line it will get it fixed. It did something in 1997 but it did not have the competency to craft legislation that would actually last more than five years before it had to be fixed again here in the House. Somehow or another it muddles along throwing out legislation and then bringing it back. In the meantime the important issues facing the country are put on the back burner.

By the way, now we have another burning issue, the Kimberley process, which is a great process. Because it is a natural resources issue, we might have to send it to the trade committee where it can be dealt with in a timely manner. It is not the opposition's problem and it is not the fault of the opposition parties in the House that the government cannot figure out how to run this institution.

We have spoken to this subject a number of times and, unfortunately, we will be speaking to it again. It was the result of poorly crafted legislation that was introduced in 1997. We have a responsibility as parliamentarians to fix the legislation. I intend to vote in support of fixing that legislation but I will not vote in support of stifling debate.

Because the government made the decision to prorogue the House and because it does not understand the basics of governing the nation, we will debate this issue as long as anyone cares to debate it, whether it be members from the Bloc, from the NDP, from the Alliance or from the Progressive Conservative Party. We have a responsibility to Canadians to examine all parts and aspects of this legislation, which we already did.

However, since the government said that we would have another opportunity, I feel as an opposition member of Parliament that we will take that opportunity and look at the legislation until it goes through all the hurdles and the whole process, to the Senate, is approved and comes back to the House again. That is not the fast track. That is not the easy way out for a government that denied its responsibility, decided to look the other way and prorogue the House of Commons for no foreseeable and observable reason.

[National Defence, October 9th, 2002]

Mr. Speaker, the Minister of National Defence overlooks the fact that the pilot training contract was sole-sourced without proper justification to Bombardier following an unsolicited proposal from that company.

After two years and hundreds of millions of dollars this innovative program managed to graduate 61 Canadian pilots from basic training, three less than the old tutor program graduated every year.

Once again, would the minister tell us the reason we needed this contract?

[National Defence, October 9th, 2002]

Mr. Speaker, the Auditor General reported yesterday that the Liberal government has wasted $65 million as part of another untendered contract, this time with Bombardier for the training of helicopter and fighter pilots. The $65 million was to graduate 216 pilots, but actually graduated only 61.

To add insult to injury, the Department of National Defence has tied us to the contract. DND must make 40 payments of $31.4 million per year for 20 years for a total of $2.8 billion, unconditional and irrevocable, regardless of whether it uses the training or not. The Auditor General has summed it up best:

“To date, this program has not been able to train enough pilots, and we're paying for services we're not receiving”.

Despite the bleeding of a few government sheep, every member of the Liberal flock is guilty of disrespect and hypocrisy toward the military.

[Diamond Industry, October 4th, 2002]

Mr. Speaker, my question is for the Minister of Natural Resources.

Under the Kimberley Process, Canadian diamonds must be certified before January 1, 2003, or they will not be allowed to be exported. This certification will involve six government departments and must be implemented by December 31, 2002.

Will the government be ready for implementation by December 31, 2002?

[Canadian Food Inspection Agency, June 20th, 2002]

This is not a good story.

Canada's smallest yogurt maker has been shut down by the Canadian Food Inspection Agency. Sonia and Gordon, the owner-operators of Peninsula Farm, have used the same yogurt making techniques for 26 years, yet now they are told they do not meet CFIA standards.

What is the minister doing to ensure that this small agricultural business, which employs 43 people, is not forced to close its doors?