Debates of October 20, 2004 (day 24)

Thank you, Mr. Speaker. My questions this afternoon will be for Mr. Bell, the Minister of Resources, Wildlife and Economic Development, on the status of our diamond industry. It was an interesting turn of events earlier this year where, I think it was in the spring, Mr. Speaker, we saw the release of the National Diamond Strategy, but also in short order a response from the mining industry that challenged some of the things that we’re doing up here. One of the specific ones was where the mining industry was claiming that our investment in the cutting and polishing industry was short-term unsustainable and the future was stark. Mr. Speaker, what is our government’s position vis-à-vis the mining industry’s assertion that our so far 160 people and $9 million is not a worthwhile investment? Thank you.

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

Return To Question 263-15(3): Sustainability Of The Diamond Industry

Mr. Speaker, thank you. Obviously, we think this is an industry with a lot of promise. It’s come a long way. I think it’s important to remember that this industry in Canada, never mind the Northwest Territories and North America, is truly in its infancy. It’s not many years now since the production began at the Ekati mine. Diavik followed. So we knew that there would be bumps in the road here. We think we have a sustainable industry. We think the factories that are operating now are doing a very good job. We do acknowledge that it is very competitive. We are dealing with labour, and the factories here have to be competitive with factories in other countries that enjoy much lower labour costs, but we think there are other advantages to being in Canada. We think there is a premium associated with Canadian diamonds.

We think we have no shortage of skilled labour across the country and the specific training programs can be put in place, as we’ve seen with Aurora College, to train our people. So we think this industry is here to stay. We think it currently adds value to the economy of the Northwest Territories and will continue to add value. The other piece, I guess I would say, Mr. Speaker, is that we have a broader vision that includes jewellery manufacturing and tourism, as the Member has already indicated, and we think this is just the start of a very valuable industry. Thank you.

Thank you, Mr. Bell. Supplementary, Mr. Braden.

Supplementary To Question 263-15(3): Sustainability Of The Diamond Industry

Thank you, Mr. Speaker. Part of the success, as I’ve referred to in my statement, was the decision made 10 years ago by this government to stipulate, to demand that a portion of the production be reserved for cutting and polishing in the Northwest Territories. Here we have a successful or the start of a successful industry. Now, those deals were set up, I believe, with the people at BHP’s Ekati mine and with the Rio Tinto folks at Diavik. What is the status, Mr. Speaker, of the agreements with Aber, which is the third producer, and with the De Beers mine yet to come at Snap Lake? Do we have a similar kind of agreement for leaving or allocating part of their percentage for northern cutting and polishing, Mr. Speaker? Thank you.

Thank you, Mr. Braden. Mr. Bell.

Further Return To Question 263-15(3): Sustainability Of The Diamond Industry

Thank you, Mr. Speaker. The Member is right in that we have agreements with Ekati and with Rio, although I guess I would probably add that they’re more like understandings as opposed to specific contracts that we knew would be very difficult to enforce. In fact I think we realized early on we needed the companies to want to leave the diamonds here. We needed them to be willing participants in this venture. For the most part, I think they have been. I think it’s been very successful. Aber is complying with the spirit and the intent of the value-added industry here, as the Member knows, by supplying the Laurelton factory owned by Tiffany. We’ve just completed, some months ago, the socioeconomic agreement with De Beers that speaks to how they will comply with the spirit and intent of this industry. The specific details are yet to be worked out and are confidential, so I hesitate to get into that in the House. We do have an agreement with De Beers that they will be involved in this industry in some respect, but those details have yet to be worked out. Thank you.

Thank you, Mr. Bell. Supplementary, Mr. Braden.

Supplementary To Question 263-15(3): Sustainability Of The Diamond Industry

Thank you, Mr. Speaker. So I take it from the Minister’s answer that we still don’t have an arrangement with De Beers that we have any confidence in. Respecting that some of these negotiations are in confidence, I’d like the Minister to see if he could give us some more sense of comfort and security that indeed De Beers does believe in helping to invest in the northern economy. Are they at least onside with that principle? Thank you, Mr. Speaker.

Thank you, Mr. Braden. Mr. Bell.

Further Return To Question 263-15(3): Sustainability Of The Diamond Industry

Thank you, Mr. Speaker. They are onside with that principle. As the Member knows, they made a number of commitments in this regard through the environmental process. I can assure the Member that those commitments are going to be lived up to and the CEAA will speak to that and does speak to that. The other point I would make is that I don’t believe the De Beers board has made a final construction decision on the Snap Lake mine yet. We hope that’s to come in the coming months and I think that will be a very significant event when and if we have that behind us. I assume that we will; I’m looking forward to that. De Beers is very interested in being involved in the Northwest Territories and in supporting this industry. I’m looking forward to their participation. I don’t want to get into the details because they have been agreed upon in confidence and obviously there are issues that are very sensitive for De Beers in terms of the business being very competitive and I don’t want to divulge any of that. I can assure the Member that they are very serious and very interested in being involved in this industry in the North and will be supporting the industry. Thank you.

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

Supplementary To Question 263-15(3): Sustainability Of The Diamond Industry

Thank you, Mr. Speaker. I look forward to confirmation of De Beers’ participation. This is something that, I think, through the messages we’re sending here, that we must not entertain a significant development here that is not going to result in a net benefit for the Northwest Territories. Mr. Speaker, on the broader scale of the National Diamond Strategy, could the Minister outline just what benefit is coming to the Northwest Territories from our involvement at the national level? Thank you, Mr. Speaker.

Thank you, Mr. Braden. Mr. Bell.

Further Return To Question 263-15(3): Sustainability Of The Diamond Industry

Thank you, Mr. Speaker. I’ll try to keep the responses as short as I can and save going into the history of how this came about from the Council of the Federation and just indicate that we’ve agreed on a number of thrusts in the National Diamond Strategy. There are several priorities that I think will greatly benefit the North. We know that it isn’t the intention of the NDS to speak to the creation or the development of a multi-stakeholder body that will assist in coordinating and implementing the strategy. The issues in the strategy that are of critical importance to us, I think, are the development of a national certification or authentication process; also, development of approaches with respect to tax and fiscal incentives. Lastly, and I think this is a very interesting one, the development of a network of centres of excellence. A number of issues that are obviously relevant to the Northwest Territories is we’re the only diamond producing jurisdiction in the country currently. We think there will be others in future, but it’s important for us to be involved not only to share our expertise, but to make sure that the North benefits from this industry. Thank you.