Thank you, Mr. Speaker. I have a motion here I’d like to read into the House, subtitled Secondary Diamond Industry.
WHEREAS the Northwest Territories produces a significant percentage of the world diamonds and is home to the largest number of producing and potential diamond mines in Canada.
AND WHEREAS diamond mining in the Northwest Territories should serve to prosper the Northwest Territories.
AND WHEREAS the Government of the Northwest Territories can assure the supply of rough diamonds to manufacturers, but currently exports almost all rough diamonds overseas for cutting and polishing.
AND WHEREAS previous governments made significant investment in the highly valued Polar Bear trademark which was a proven source of revenue for the Government of the Northwest Territories;
AND WHEREAS there is an immediate opportunity to redevelop and revitalize a secondary diamond industry that would include jobs and training for Northerners and diversify our economy;
AND WHEREAS keeping diamonds in the North through a viable secondary industry offers an immediate opportunity to fully maximize the benefits of resource development in the Northwest Territories;
AND WHEREAS a successful secondary industry depends on a clear policy framework that both supports and regulates northern-approved diamond manufacturers, emphasizes local employment and training, and recognizes the priority of job security and job creation;
NOW THEREFORE I MOVE, seconded by the honourable Member for Hay River North, that the Department of Industry, Tourism and Investment revise its Diamond Policy Framework to reflect the needs of a successful secondary industry by:
securing the diamond certification process and enhance marketing of the Polar Bear trademark
strengthening conditions for the northern-approved manufacturers with the goal of keeping diamonds in the North;
establishing a diamond bourse to facilitate localized sorting, evaluating and rough box purchasing; and
emphasizing socio-economic agreements where local job security and creation and a balance of skills, gender and ethnicity are paramount;
AND FURTHER, that the Government of the Northwest Territories provide a comprehensive response to this motion within 120 days.
Thank you.
Thank you, Mr. Dolynny. The motion is in order. To the motion.
Question.
Question has been called but, Mr. Dolynny.
Thank you, Mr. Speaker. After a long period of inactivity in the diamond polishing and cutting industry, we see the opportunity for new players who are interested in starting up. Admittedly, this is a critical time in our territory’s future and we need to revitalize our thinking in the industry to put the NWT back on the international diamond stage.
Understandably, there are so many naysayers out there who, no doubt, have a concern with the past failings of the industry. I agree, we don’t want to repeat the scabs of our past, but we must recognize we are at a critical impasse in our efforts to reinvigorate our secondary polishing industry. We need to create ladders of opportunity and this motion speaks to these ladders of opportunity.
We need a proper mandate and a roadmap to establish a successful future for diamond manufacturers in the NWT. We need the proper policy and framework to deal with a secured certification process. We need to enhance the marketing of the Polar Bear brand. We need to establish innovative trading solutions with stakeholders and we need to define all real commercial advantages in being the future central diamond trading hub in Canada.
This new direction, this new vision cannot be achieved with the current November 2010 Diamond Policy Framework. This is why, with the support of my colleagues today, we hope to encourage the Department of ITI to carve out a new set of footprints in this industry.
The motion itself speaks about the Department of ITI to revise its Diamond Policy Framework and to reflect the needs to fully create a successful secondary industry for the North.
The first opportunity is with the securing of the diamond certification process itself. Faith in the certification and authenticity of this program is paramount in security of the brand, and it will be pertinent that the GNWT put all the proper safeguards to reduce the risk that was experienced in the past. As well, if done efficiently, the GNWT received over $552,000 a year in revenues through its certification process and the taxpayer would welcome back this revenue.
Next is the Polar Bear trademark itself, which has been dormant for many years. At its peak, the GNWT received over $318,000 a year in royalties, and combined with the certification process this was almost $900,000 a year in revenue source, which has been sorely missed by the taxpayer.
What this all translates to is opportunity; opportunity for our Department of ITI to forge a proper plan of action to promote and enhance our branding process as we re-emerge on the international market because you cannot make money unless you spend money.
The next items to this motion speak to the strengthening of conditions for our current and future northern approved diamond manufacturers. This can be achieved in many ways, but would be truly successful if our diamonds could actually stay in the North. The current diamond pipeline system is antiquated and counterproductive to achieving this success. Currently, once diamonds are produced, there is a quick valuation of these diamonds in Yellowknife and then these rough stones are shipped, depending on the mines, to either Antwerp, Belgium or London, England. There they are made available in what is termed rough boxes. These rough boxes are then purchased by our crew of northern diamond manufacturers and then shipped back to the NWT for cutting and polishing. You can see that this greatly adds to the costs of the process for our northern diamond manufacturers. It lessens our control on the evaluation process and adds significant cost to the consumer.
By this government working with the Diamond Bourse of Canada, we can mitigate this process by establishing a local diamond bourse, thus creating localized sorting, evaluating and rough box purchasing here in our own backyard. This will greatly lessen the operational costs for our northern approved diamond manufacturers, create more jobs, entice larger international banking firms to set up shop here in the North, increase the profit margins for the secondary industry and will, no doubt, translate to a better value of goods at the point of sale to the general consumer.
In essence, this is a win for the taxpayer, a win for the manufacturer and a win for the consumer.
I can appreciate that the whole process of the diamond secondary industry is complex. I further recognize that many may be skeptical of its re-emergence on the international scene, but we have been given a second chance at this industry, and these second chances do not come along too often during one’s lifetime, and we owe it to this industry to do what we can for its success and to mitigate its potential failure.
I’d like to thank the seconder of this motion, Mr. Bouchard, for supporting this motion and for my colleagues here today who I hope will be supporting the principle of this motion later today. Thank you.
Thank you, Mr. Dolynny. To the seconder of the motion, Mr. Bouchard.
Thank you, Mr. Speaker. I’d like to thank Mr. Dolynny for putting this motion forward. I know, obviously, his hard work and his commitment to this process. He’s framed out the concept quite well and I’d just like to speak to the fact that I support this strongly.
The Northwest Territories and the diamond industry is very important to us and that we have opportunity from private industry, from our experience in the past, that we need to look at the potential of keeping this industry in the Northwest Territories, keeping it and making the Northwest Territories more of an influence in the diamond industry throughout the world.
As Mr. Dolynny has indicated, this motion indicates that we want a policy framework implemented by the government, something that would allow us more potential. We know that this is a great resource that we have in the Northwest Territories and we need to maximize what we get out of it for the Northwest Territories. Like we have been talking about, this whole Assembly is trying to maximize the potential of the Northwest Territories, those resources that are here, maximizing the opportunity that we can get out of them.
Mr. Dolynny also spoke about the Polar Bear, putting them back on the diamonds and doing that evaluation. I think that’s very important. Also the revenue, the tax revenue that comes with the assessments. I think the Department of ITI should look into this and getting those rough boxes to stay in the Northwest Territories so that people from the industry, diamond industries throughout the world, will come to the Northwest Territories and look at these rock boxes. Right now they’re shipped out of the territory, out of the country. I think we need to take advantage of this opportunity that we have. We don’t know how long this opportunity… I know the diamond mines are looking for expansions and there’s new ones coming on, but we only have a certain window that these resources will be in the Northwest Territories. We need to make sure that we’re maximizing them right now. This is definitely an opportunity. We need to follow through with it.
Thank you, Mr. Bouchard. To the motion. Mr. Hawkins.
Thank you, Mr. Speaker. I will be speaking in favour, and certainly voting in favour, of this particular motion. First off, I want to thank Mr. Dolynny for his significant amount of work that he’s put behind this initiative. It’s easy to be able to read off the motion here, but what the public doesn’t see is how much work he put behind the scenes and how many questions he’s taken to Members, and how he has brought it forward in a stronger version from the very first moment he said he wanted to bring forward this type of initiative. He did that in a very collaborative approach, so I think he deserves certain credit for working with Members and getting the support of Members on this particular initiative. A lot of work has brought it here today.
The reason I am speaking in favour of this motion is because it simply makes sense. A diamond bourse in the Northwest Territories, by all means, is probably the next logical step. It seems relevant that we would want to repatriate some of the goods that we take out of the ground and be involved in the development of them before they are sent out in the world, cast to the world and off doing what they do. It helps develop a local product. Creating a bourse here in the Northwest Territories demonstrates our next evolution of where we want to be in the diamond industry. I think, as I’ve said for many years, that we have undersold ourselves in this particular area and business, and I think there’s way more that we can do. Israel or Antwerp doesn’t dig up diamonds but the world has gone to them. There’s proof in the pudding of the quality of the diamonds here in the Northwest Territories and the world has seen the Northwest Territories for that. Why aren’t they coming here to buy the diamonds? Why aren’t they coming North to buy the boxes and taking their particular goods and investment, and getting them out of here rather than flying all over the world, whether it be Botswana, Antwerp or London? They go to all of these places that don’t have diamonds. Let’s get them to come to the North where they have diamonds.
This could create a new industry, help continue to revitalize the diamond brand, and it also can help stimulate other development in our economy. We could have a flux of international travellers coming into the North and getting to know the North, identifying the North from north, south, east, west. There is so much more to the North and this could be part of the reason why they get here and then they start examining what else we have. This is a real initiative that could have real returns.
In closing, I just want to emphasize how important such a small, little action of this particular nature is, yet at the same time it could have such a significant, long-term response. Let’s continue to capture the eye of the world by supporting this motion. I think it makes a lot of sense, so I hope my colleagues will support it as well.
Thank you, Mr. Hawkins. To the motion. Mr. Blake.
Thank you, Mr. Speaker. Unfortunately, I cannot vote in favour of this motion. I will be abstaining. The Department of ITI is doing a lot of the work that’s asked of this motion. I don’t think that it realistically would be possible to set up this sort of branch in the Northwest Territories. Antwerp is the major hub in Europe that deals with diamonds and Botswana is the next one. That’s because we only provide roughly 15 percent of the world’s diamonds. I think this would be a very bad move if we give direction to ITI to follow through with this. Long term I think it would hurt the Northwest Territories. Right now I think we do very well and the diamonds that are provided in the Northwest Territories are not taken advantage of. I think that needs to be followed through with. For that reason I cannot support this.
Thank you, Mr. Blake. To the motion. Mr. Miltenberger.
Thank you, Mr. Speaker. This motion is stating in many cases and to a large extent what the government is already doing. The government of the 16th Legislative Assembly directed significant resources to update and improve the Diamond Policy Framework in 2010-2011. Updating the framework was a significant achievement of the 16th Legislative Assembly, and involved extensive consultation with industry and other stakeholders to assure a comprehensive approach. At that time the government worked closely with the Standing Committee on Economic Development and Infrastructure, Government of the Northwest Territories departments, the operators in the Northwest Territories diamond manufacturing industry, the Northwest Territories diamond mines and the City of Yellowknife for their input and involvement in establishing a revised framework.
We have been working within the updated Diamond Policy Framework to support and encourage the growth of the diamond manufacturing industry in the Northwest Territories. The revised framework provides a more streamlined and flexible approach, including reducing the red tape associated with the approval process for gaining approved northern manufacturer status. We are confident that the recently updated Diamond Policy Framework contains all the necessary considerations to establish and maintain a secure and vibrant secondary diamond industry in the Northwest Territories.
The revised framework is more effective in many ways. It outlines the GNWT’s role in facilitating investment in the secondary diamond industry, and eliminated loan guarantees to existing and potential approved NWT diamond manufacturers. It guides potential diamond manufacturers in submitting their business proposal for consideration and become an approved NWT diamond manufacturer, or ANDM. When a manufacturer is granted approved NWT diamond manufacturing status by the GNWT, they are able to purchase from a special allocation of NWT-mined rough diamonds and NWT diamond producers. ANDMs must secure rough diamonds purchased from this special allocation in the NWT. The GNWT monitors ANDM purchases and their operations to ensure the diamonds are mined, cut and polished in the NWT. Crossworks Manufacturing continues to manufacture high quality cut and polished diamonds from the Northwest Territories. Deepak International Ltd. has been approved as an approved NWT diamond manufacturer. We are pleased that the company is moving forward with plans to re-establish and grow the secondary diamond industry.
We have confirmed that the manufacturing of NWT diamonds in the NWT will recommence shortly. As we speak, state-of-the-art equipment is on its way to the territory to be placed in the new factory. We have also reached an exclusive agreement for the use of the Polar Bear trademark with Deepak International. Our diamond certification process is in place and remains ready to reinitiate certification as soon as manufacturing recommences.
With regard to the establishment of a diamond bourse, we continue to work diligently to establish the presence of a diamond bourse in the NWT. A meeting is planned with the bourse here in Yellowknife in April and we hope to reach a successful conclusion to those discussions shortly. Negotiations are underway with Harry Winston Diamond Corporation – soon to be renamed Dominion Diamond Corporation, DDC. These discussions are the first step in securing a formal diamond allocation agreement with DDC for a portion of the production from their diamond mining interests in the NWT.
As Members of the government know, we continue to work to establish socio-economic agreements for proposed new mines and are encouraging existing mine operators to meet their commitments in socio-economic agreements. The GNWT will continue to work closely with the operating diamond mines, potential and current NWT diamond manufacturers, and the SCEDI to ensure the greatest benefits as possible come to the residents of the NWT.
We do not want to get ahead of ourselves and undertake revising a policy framework that has proved to be successful since its last revision only a few years ago. We appreciate the interest by the Members in the diamond industry. Since this is a direction to government, we will be abstaining.
Thank you, Mr. Miltenberger. To the motion. I will allow the mover to have closing remarks. Mr. Dolynny.
Thank you, Mr. Speaker. I guess I’m both pleased and disappointed in the same breath. I’m pleased that I’m hearing from Cabinet that there are some functionalities that are occurring in due process with respect to some of the key elements of this motion. However, there are other areas of this motion to which are not moving at the same speed of light as I think are hopeful by many Members here today.
I want to thank Mr. Bouchard, who seconded the motion, and I appreciate his focus on the advantages of this opportunity as he mentioned here today. I thank Mr. Hawkins, as well, who spoke to the motion and mentioned the collaboration that came forward to push this motion on the floor of the House. I appreciate his angle on how to repatriate the industry with a tourism potential. I think that’s a novel idea.
