Debates of February 11, 2005 (day 34)

Thank you, Mr. Speaker. My questions today are for the Minister of Finance. I will pick up where my statement left off. I would like to ask some questions today on where the disconnect is between the producers, the Government of the Northwest Territories and the Leviev Group. All I see, Mr. Speaker, is the fact that the government is going to be on the hook for millions of dollars and we don’t really have any answers, Mr. Speaker. I know there have been media reports indicating that the Leviev Group didn’t meet the commercial criteria for one of our producers and was also asking for too much from the other producer, Mr. Speaker. I wonder what the Finance Minister might be able to tell us about why they didn’t meet the commercial criteria, what he knows about the criteria, that supposedly the world’s largest diamond manufacturer didn’t meet this criteria. I find that really hard to believe, Mr. Speaker. I would like the Finance Minister to try to answer those questions. Thank you.

Thank you, Mr. Ramsay. The honourable Minister of Finance, Mr. Roland.

Return To Question 366-15(3): Unsuccessful Purchase Of Diamond Plant

Thank you, Mr. Speaker. Mr. Speaker, as I laid out the events that led up to where we are today, I pointed out that with the system that is in place, we, as a government, are involved at the front end and once we designate a potential company as a northern manufacturer, conditional on supply of rough agreements being put in place, our ability to enter into or be part of those discussions is severely limited. The discussion process for a supply of rough is between the potential northern manufacturer and the mining industry. We have agreed, Mr. Speaker, that as a government we will have to review our position and how we strengthen our position going forward. Thank you.

Thank you, Mr. Roland. Mr. Ramsay.

Supplementary To Question 366-15(3): Unsuccessful Purchase Of Diamond Plant

Thank you, Mr. Speaker. Again, I find it really difficult to imagine how the world’s largest diamond manufacturer could not meet the standards set out by one of our northern producers. Nobody seems to know what the Leviev Group was asking or what BHP was willing to give up. Nobody really knows. BHP says one thing, Leviev says another, and the Finance Minister can’t say anything. Where are these diamonds coming from? They are coming out of our territory here. I think we have an obligation to try to get to the bottom of this. We are losing millions of dollars, Mr. Speaker. We don’t know what we are doing. I would like to ask the Finance Minister who is responsible from this government or who was supposed to be working with the receiver to ensure that a deal was done? This government knew long ago that the deal was going to go off the tracks. Why wasn’t anything done long ago? Why are we losing millions of dollars? Thank you, Mr. Speaker.

---Applause

Thank you, Mr. Ramsay. Mr. Roland.

Further Return To Question 366-15(3): Unsuccessful Purchase Of Diamond Plant

Thank you, Mr. Speaker. Mr. Speaker, the process, as it unfolded, we started this with two operations being affected. One is back on the road and is a healthy operation. The other one is once again back into the realm of trying to find another opportunity for sale. We were hoping to bring that to a closure before Christmas. So once we realized things were not moving along, in December we started making contacts through the receiver to try to see what was going on and encourage a speedy resolution to what was happening. In the first week of January, with the information available to me, as Minister of Finance and responsible for the FMB, I had directed that a letter go out to state that our position is that there needs to be a resolution in the very near future or we would have to look at other options. We followed through with that and that is why we, once again, find ourselves in a position working with the receiver to try to find another company.

Yes, there are problems with some of our early socioeconomic agreements. We do have companies putting their side of it out in the media. From our side of it, we have to be very careful because we entered into a process with a receiver that has some consequences to it if we decide to put everything out there in the public realm. We have to do this in a way that works with our lawyers, to ensure that we continue to watch ourselves as a government and that we don’t put more money out and get into difficulties on the legal side of things. We need to be careful on that side of it. Once we get more information and do a thorough analysis of things, we will have that debate as to how we, as a government, go forward and strengthen our position to ensure that we get the best for residents in the Northwest Territories.

Thank you, Mr. Roland. Supplementary, Mr. Ramsay.

Supplementary To Question 366-15(3): Unsuccessful Purchase Of Diamond Plant

Thank you, Mr. Speaker. I appreciate the comments the Finance Minister has and I do look forward to working with him going forward. However, the government knew there were no negotiations going on. We had a potential purchaser. I would like to question why even have a tender process if, at the end of the day, the diamond mining companies here in the Northwest Territories are going to dictate who they are going to do business with? Why would we even go through a process like that? We should have saved ourselves the subsequent embarrassment and not even go through that process if, at the end of the day, we are going to take the diamond mining company's word on who they are going to sell diamonds to. What are we talking about here? I find it really hard to believe that we are here today, we are on the hook for millions of dollars and nobody really wants to take responsibility for it. I find that difficult to believe. I would like to ask the Finance Minister today, when do we think we are going to let the public know and the Members on this side of the House know what exactly that Sirius plant and the government’s inability to get a deal done with the Leviev Group and the producers is going to cost the taxpayers here in the Northwest Territories? Thank you, Mr. Speaker.

Thank you, Mr. Ramsay. Mr. Roland.

Further Return To Question 366-15(3): Unsuccessful Purchase Of Diamond Plant

Thank you, Mr. Speaker. The process, as it would unfold, is to sell the facility as a going operation so that it remains in business. Once we have that done and a final working of the numbers between that settlement and what it has cost us, we will be coming back, as the rules of this House apply, and make it known to Members and the public what it cost us. It will have to come through a supplementary appropriation as we go forward. It will come back to this House and it will be public as to the actual losses, once we have the deal concluded. We are hopeful we can still get a deal as a going concern, but as time goes on, we will have to decide if we have to go the other road and say it is no longer in the best interest for us to try to make something like this happen. We are hopeful that we can still get it sold as a going concern. Thank you.

Thank you, Mr. Roland. Your final supplementary, Mr. Ramsay.

Supplementary To Question 366-15(3): Unsuccessful Purchase Of Diamond Plant

Thank you, Mr. Speaker. Mr. Speaker, my underlying theme here is the Government of the Northwest Territories did not have to look at losing millions of dollars. I wonder if the Finance Minister today could make a commitment to try to find out exactly what went wrong with this deal and why the Government of the Northwest Territories is going to be on the hook for millions of dollars in this deal.

Thank you, Mr. Ramsay. Mr. Roland.

Further Return To Question 366-15(3): Unsuccessful Purchase Of Diamond Plant

Thank you, Mr. Speaker. Mr. Speaker, as this has unfolded, and I have committed to Members in this House, we will go back and look at what has occurred and where we strengthen our position as the Government of the Northwest Territories. For me, and this government, the 15th Assembly, it’s difficult to go back to when the original agreements were put in place, to what caused the government-of-the-day to decide that was the best agreement that could be put in place and the MOU that followed. Unfortunately, as will the next government, they will have to live with some of our decisions we make today. Now we have to go back -- and that's why I said the timing is good for us -- so we can go back now, look at these agreements and see what we need to do to strengthen our position as a government to make sure that we, as residents of the Northwest Territories, benefit from the development of non-renewable resources within our territory. Thank you.