Mr. Speaker, it is certainly a pleasure for me to speak to private member's Bill C-259 put forward by the member for Vancouver Island North. When he spoke earlier, I had the opportunity to ask a couple of quick questions. I said that he had done an absolutely stellar job in presenting this bill. I wanted to put that on the record one more time.
This is an important bill. It is important not just to a burgeoning diamond industry in Canada's north, but it is important to our resource sector. It is important to the gold mining industry, the silver mining industry, the gemstone industry across this country, and specifically and probably most important right now, to the diamond industry.
In 1918 a tax was brought in, which obviously was to pay for some of the reparations of World War I and the cost of sending Canadian troops abroad. At that time, just as the Income Tax Act which was brought in after World War II, it seemed to be a good and important idea, but today, times have changed.
I am a bit apprehensive and concerned. In his speech the government member who just spoke used all kinds of flowery words about fiscal responsibility and whether the government must look at this in a piecemeal fashion or use a bigger umbrella. I have some real concerns that the government will try to find a way not to support this piece of legislation.
It is one thing to talk about the importance of private members' bills and it is another thing to support them. This is a good bill. The industry has been requesting it for years. It is important and the government needs to support it without any ifs, ands or buts.
I want to speak about the Department of Finance for a minute. There was a study done by the Department of Finance about removing the excise tax. Remember that jewellery is the only luxury item that still has excise tax on it. People can buy a $50 million yacht in this country and not pay excise tax because it is not a luxury item. People can buy caviar, champagne or a mink coat and none of those are luxury items. Those are necessities of life. Yet a person cannot buy a piece of jewellery worth over $3 because that is a luxury. It is just wrong-headed.
The study done by the department concluded that removing the tax would not have a significant impact on contraband activity and therefore, would not offset lost revenue. I would like to speak to that for a second. How did it come up with the conclusion that it would not have a significant impact on contraband activity?
Even though the Canadian dollar has increased in value, it is still worth less than the American dollar. However, our jewellery costs more because there is a 10% tax on it. We are going to pay 17¢ on the American dollar to go to the United States to save 10% on a piece of jewellery, which we are going to smuggle back into the country. And this would not stop that? It would absolutely stop it in a heartbeat. People would not even consider it.
Why would a person buy a $5,000 diamond ring in Canada and pay $500 more than he or she would have to pay south of the border? The person could put it on his or her finger and wear it home. Everybody would do that. Everybody is doing that. This bill is only common sense.
Any money lost, or any thought of losing money, would be more than compensated by the increase in jewellery sales and the collection of the GST, which is 7%, on those sales. This is not rocket science. Even Liberals should be able to figure this out. This is common sense, straightforward, financially sound legislation and it is long overdue.
Let us look at a couple of numbers. In 2003 11.2 million carats of diamonds were mined in Canada for a total of $1.7 billion. That is out of two mines, the Ekati and Diavik mines. There are another three or four mines ready to come on stream. There is another diamond mine in Nunavut ready to come on stream. A half carat diamond has been found in northern Alberta. Diamonds have been found in northern Saskatchewan.
We have finally signed, through the United Nations, an accord to reduce the blood diamond industry of the world. We have the best source of quality gemstones in the world. We are continuing to punish the industry by saying it has to pay 10% more, ship them abroad. If people want nice diamonds, they can go to Antwerp or Boston. Perhaps there is a secret message, and the Liberals want us all to go somewhere else. I am not sure. We really have to deal with this. Tongue in cheek aside, it is an extremely important industry.
Along with that $1.7 billion diamond industry, Canada is the seventh largest gold producing nation in the world. Canada mined 152 tonnes or $2.7 billion worth of gold, with no value added. Keep Canadians, and northerners in particular, as hewers of wood and drawers of water. The government does not want them to think for themselves or to set up an industry that would allow them to become financially secure, independent and produce for themselves. Even the rest of Canada cannot not take advantage of that. It exports it and then considers giving it back.
Silver would be another idea. Canada produced 1,254,712 kilos or 1,229 tonnes of silver last year.
We have a golden opportunity here. All we have to do is get rid of this punishing excise tax.