Debates of February 14, 2005 (day 35)

Thank you, Mr. Speaker. Mr. Speaker, last week I questioned the Finance Minister at length in terms of the Sirius deal that has gone off the tracks, and the potential loss to the Government of the Northwest Territories in that regard. Today I wanted to concentrate on the Resources, Wildlife and Economic Development angle in this fiasco. I know the Minister was listening intently last week when I was questioning the Finance Minister, so I would like to ask him some specific questions. I guess the first one is what his department knew and specifically what the diamond projects division’s involvement was with the proposal with the Leviev Group, with the receiver, any involvement that they might have had in this and why they didn’t step in to try to help things out. Thank you.

Thank you, Mr. Ramsay. The honourable Minister of Resources, Wildlife and Economic Development, Mr. Bell.

Return To Question 376-15(3): Sale Of Diamond Processing Plant

Thank you, Mr. Speaker. Let me first state that I share the Member’s concern and disappointment that we weren’t able to see a deal between the Leviev Group of Companies and BHP Billiton, Rio Tinto Diamonds. I was very enthusiastic when I learned of Leviev’s interest. It is obviously a very credible world player. I think we are looking for stability in this local industry. I believe somebody of Leviev’s calibre would be able to deliver that stability. Let me say that we have been involved in every stage of this process from soliciting interest in bids. We saw a number of those come forward. The department did put together some discussions with various groups who had eventual interest in the assets for sale and the sale of the factory as a going concern. Then the receiver handled the valuation of the proposal stage and came back to Cabinet with a discussion around what the best proposals were. Obviously, Leviev came to the top.

From that stage, we were involved on a weekly basis in discussions. My division was with both Rio Tinto and BHP and the Leviev Group of Companies. We were very disappointed when the eventual deal was not to be made. I would like to remind Members that although we have the socioeconomic agreements, and although the producers have expressed their support for the industry, we cannot force the marriage of any two companies. This is, and will be, a commercial deal, when it is finally done. Our ability to influence the exact partnership is limited. Thank you.

Thank you, Mr. Bell. Supplementary, Mr. Ramsay.

Supplementary To Question 376-15(3): Sale Of Diamond Processing Plant

Thank you, Mr. Speaker. Mr. Speaker, I would like to ask the Minister of Resources, Wildlife and Economic Development why there is a six percent mark-up over what the producers charge here in Yellowknife, as opposed to sales of comparable goods in Antwerp. I would like to know why that six percent mark-up exists. Thank you.

Thank you, Mr. Ramsay. Mr. Bell.

Further Return To Question 376-15(3): Sale Of Diamond Processing Plant

Thank you. One of the difficulties, obviously, with diamond pricing is that it is not as other commodities that are traded on an open system where you can see the actual value of product very easily. There have been some suggestions by the local industry that they believe they may be charged more than what customers in Antwerp are charged. We really have no way of knowing. The prices charged in Antwerp are commercial deals between site holders and the producers. They are confidential. We have no way to compare those prices to the prices that our local industry is being charged here. I can’t comment one way or another. I have no way to verify if, in fact, there is any difference in the pricing. Thank you.

Thank you, Mr. Bell. Supplementary, Mr. Ramsay.

Supplementary To Question 376-15(3): Sale Of Diamond Processing Plant

Thank you, Mr. Speaker. Mr. Speaker, I would like to ask the Minister of Resources, Wildlife and Economic Development about a consultant that the diamond projects division has in Europe, whose reason for being is to try to achieve our goal of more northern employees in the secondary diamond industry and also to increase the potential of the Northwest Territories as a diamond centre. Mr. Speaker, I could speak of him by name, but I won’t in the House. I am sure the Minister knows who I am talking about, but it is at a substantial cost to this government. If we are not receiving a benefit from having this consultant in place, then why do we retain this consultant? Thank you, Mr. Speaker.

Thank you, Mr. Ramsay. Mr. Bell.

Further Return To Question 376-15(3): Sale Of Diamond Processing Plant

Thank you, Mr. Speaker. I think the Members of the House heard late last week the Finance Minister indicate that we had to take stock of our government’s role in supporting the secondary industry, and make some determinations around how we can be most effective as a government to bolster the industry and to support every aspect of the industry. We aim to have that discussion and that analysis going forward. Obviously, we have had the immediate issues of the two factories to deal with here over the summer, into the fall and into the winter. So we have been working through that. But we will have to make some determination around the amount of resources we need, the horsepower we need, the expertise and intelligence we need to draw on from the international community. This is an industry that is very much a global one. We do have to have some understanding of what is going on in Israel, India and in New York in order to effectively understand how we can crack this industry, not only for the Northwest Territories, but for the country. So in the coming weeks and months, we will be taking stock of our resources and making a determination at that point as to what type of resources we need to employ. Thank you.

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

Supplementary To Question 376-15(3): Sale Of Diamond Processing Plant

Thank you, Mr. Speaker. I would like to ask the Minister how many of these so-called diamond industry expert consultants have the diamond projects division and the Government of the Northwest Territories got on stream. Where are they located? How much is it costing the government to retain these consultants? Thank you, Mr. Speaker.

Thank you, Mr. Ramsay. Mr. Bell.

Further Return To Question 376-15(3): Sale Of Diamond Processing Plant

Thank you, Mr. Speaker. That is a significant amount of detail that the Member is looking for. I will certainly provide that in writing in follow-up. Off the top of my head, the suggestion would be that, internationally, I think we have two diamond consultants who provide us with intelligence and also do some evaluation work for us and administer our certification program which is, as the Member knows, very important to the government. One is located in Israel, the other in Antwerp; and somewhere in the neighbourhood of $200,000 a year U.S. would be my best guess. I will get detailed information for the Member. Thank you.