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37th PARLIAMENT, 2nd SESSION

Standing Committee on Foreign Affairs and International Trade

EVIDENCE

CONTENTS

Tuesday, November 5, 2002

0915

The Chair (Mr. Bernard Patry (Pierrefonds—Dollard, Lib.))

Mr. James Morris (Executive Director, United Nations World Food Programme)

0920

0925

The Chair

Mr. Keith Martin (Esquimalt—Juan de Fuca, Canadian Alliance)

Mr. James Morris

0930

The Chair

Ms. Francine Lalonde (Mercier, BQ)

Mr. James Morris

0935

The Chair

Mr. Mark Eyking (Sydney—Victoria, Lib.)

Mr. James Morris

0940

0945

The Chair

Mr. Rick Borotsik (Brandon—Souris, PC)

The Chair

Mr. James Morris

0950

Mr. Rick Borotsik

Mr. James Morris

Mr. Rick Borotsik

Mr. James Morris

Mr. Rick Borotsik

Mr. James Morris

The Chair

Ms. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.)

The Chair

Mr. James Morris

0955

The Chair

Mr. Stockwell Day (Okanagan—Coquihalla, Canadian Alliance)

1000

Mr. James Morris

Mr. Stockwell Day

Mr. James Morris

The Chair

Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.)

Mr. James Morris

1005

Mrs. Rose-Marie Ur

Mr. James Morris

The Chair

Mr. Stéphane Bergeron (Verchères—Les-Patriotes, BQ)

The Chair

Mr. James Morris

1010

The Chair

Mr. Charles Hubbard (Miramichi, Lib.)

The Chair

Mr. James Morris

1015

The Chair

Mr. Keith Martin

Mr. James Morris

1020

The Chair

Mr. Stockwell Day

Mr. James Morris

1025

The Chair

Mr. David Comba (Director, Issues Management, Prospectors and Developers Association of Canada)

1040

The Chair

Mr. Robert Boyd (President and Chief Executive Officer, Ashton Mining of Canada Inc.; Prospectors and Developers Association of Canada)

1045

The Chair

Ms. Eira Thomas (President, Navigator Exploration Corp., Prospectors and Developers Association of Canada)

1050

The Chair

Mr. Keith Martin

The Chair

Mr. Keith Martin

The Chair

Mr. Robert Boyd

The Chair

Ms. Deb McCombe (Representative, Ontario Securities Commission; Prospectors and Developers Association of Canada)

The Chair

Mr. Darrel Stinson (Okanagan—Shuswap, Canadian Alliance)

1055

Ms. Eira Thomas

Mr. Robert Boyd

The Chair

Mr. Darrel Stinson

Mr. Robert Boyd

Mr. Darrel Stinson

The Chair

Mr. Stéphane Bergeron

Ms. Eira Thomas

Mr. Stéphane Bergeron

Ms. Eira Thomas

1100

The Chair

Mr. Stéphane Bergeron

The Chair

Mr. Robert Boyd

The Chair

Mr. Stéphane Bergeron

The Chair

Mr. Robert Boyd

1105

The Chair

Mr. Gerald Keddy (South Shore, PC)

The Chair

Mr. Robert Boyd

Mr. Gerald Keddy

1110

Mr. Robert Boyd

Mr. Gerald Keddy

Mr. Robert Boyd

Mr. Gerald Keddy

Mr. Robert Boyd

Mr. Gerald Keddy

The Chair

Mr. Gerald Keddy

Ms. Eira Thomas

The Chair

Mr. David Pratt (Nepean—Carleton, Lib.)

The Chair

Mr. Robert Boyd

Mr. David Pratt

An hon. member

Mr. David Pratt

1115

Mr. Robert Boyd

The Chair

Ms. Francine Lalonde

The Chair

1120

Ms. Aileen Carroll (Barrie—Simcoe—Bradford, Lib.)

The Chair

Mr. Keith Martin

The Chair

Mr. Stéphane Bergeron

The Chair

Mr. Gerald Keddy

1125

The Chair

Mr. David Pratt

Ms. Aileen Carroll

The Chair

Ms. Francine Lalonde

The Chair

Ms. Aileen Carroll

1130

The Chair

Mr. Darrel Stinson

The Chair

Ms. Aileen Carroll

Ms. Marlene Jennings

The Chair

Ms. Francine Lalonde

The Chair

Ms. Aileen Carroll

The Chair

Mr. Darrel Stinson

The Chair

Ms. Geneviève Giroux (Legal Counsel, Department of Justice Canada)

The Chair

Ms. Francine Lalonde

The Chair

Ms. Francine Lalonde

1135

The Chair

Mr. Gerald Keddy

Ms. Francine Lalonde

Mr. Gerald Keddy

The Chair

Mr. Gerald Keddy

The Chair

Mr. Stéphane Bergeron

The Chair

Mr. Paul Szabo (Mississauga South, Lib.)

The Chair

Mr. John Duncan (Vancouver Island North, Canadian Alliance)

The Chair

Mr. David Cox (Legal Counsel, Indian and Northern Affairs Canada)

The Chair

1140

Ms. Aileen Carroll

The Chair

Mr. Stéphane Bergeron

The Chair

Ms. Francine Lalonde

The Chair

Ms. Aileen Carroll

Mr. Stockwell Day

Ms. Aileen Carroll

The Chair

Mr. Stockwell Day

1145

Mr. John Harvard (Charleswood —St. James—Assiniboia, Lib.)

Mr. Stockwell Day

Ms. Francine Lalonde

The Chair

Ms. Aileen Carroll

The Chair

Ms. Francine Lalonde

The Chair

Ms. Geneviève Giroux

The Chair

Mr. Gerald Keddy

The Chair

Ms. Aileen Carroll

The Chair

1150

Ms. Francine Lalonde

The Chair

Ms. Aileen Carroll

The Chair

Ms. Geneviève Giroux

The Chair

Mr. Gerald Keddy

The Chair

Ms. Geneviève Giroux

Mr. Gerald Keddy

Ms. Geneviève Giroux

Mr. Gerald Keddy

The Chair

Mr. Darrel Stinson

1155

The Chair

Ms. Aileen Carroll

The Chair

Mr. Darrel Stinson

The Chair

Ms. Aileen Carroll

The Chair

Mr. Gerald Keddy

1200

The Chair

Ms. Marlene Jennings

The Chair

Mr. John Duncan

The Chair

Mr. Gerald Keddy

The Chair

Ms. Geneviève Giroux

The Chair

Ms. Aileen Carroll

The Chair

Mr. Gerald Keddy

1205

Ms. Aileen Carroll

Mr. Gerald Keddy

The Chair

Ms. Marlene Jennings

The Chair

Mr. Stéphane Bergeron

The Chair

Mr. John Duncan

The Chair

1210

Mr. John Duncan

The Chair

Mr. Gerald Keddy

The Chair

Mr. David Pratt

Mr. Gerald Keddy

Mr. David Pratt

1215

Mr. Gerald Keddy

The Chair

Mr. Stockwell Day

Mr. David Cox

Mr. Stockwell Day

Mr. David Cox

Mr. Stockwell Day

The Chair

Ms. Aileen Carroll

The Chair

Ms. Francine Lalonde

The Chair

Ms. Aileen Carroll

The Chair

Ms. Aileen Carroll

The Chair

Mr. David Cox

Mr. Darrel Stinson

1220

The Chair

Mr. Darrel Stinson

The Chair

Mr. David Pratt

The Chair

Mr. David Pratt

The Chair

Mr. David Cox

1225

Mr. Darrel Stinson

The Chair

Ms. Aileen Carroll

The Chair

Ms. Aileen Carroll

The Chair

Mr. Darrel Stinson

The Chair

Mr. David Cox

The Chair

Ms. Aileen Carroll

Mr. John Harvard

1230

Ms. Aileen Carroll

The Chair

Mr. Darrel Stinson

The Chair

Mr. Darrel Stinson

The Chair

Mr. Darrel Stinson

The Chair

Mr. Darrel Stinson

The Chair

Mr. Stéphane Bergeron

The Chair

Mr. Darrel Stinson

The Chair

Ms. Francine Lalonde

The Chair

Ms. Aileen Carroll

The Chair

Ms. Aileen Carroll

1235

The Chair

Ms. Francine Lalonde

The Chair

Mr. Paul Szabo

The Chair

Ms. Francine Lalonde

The Chair

Ms. Francine Lalonde

The Chair

Ms. Francine Lalonde

Mr. Stéphane Bergeron

The Chair

Ms. Francine Lalonde

The Chair

Ms. Aileen Carroll

1240

The Chair

Ms. Aileen Carroll

The Chair

Ms. Aileen Carroll

The Chair

Ms. Aileen Carroll

The Chair

CANADA

Standing Committee on Foreign Affairs and International Trade

NUMBER 007

2nd SESSION

37th PARLIAMENT

EVIDENCE

Tuesday, November 5, 2002

[Recorded by Electronic Apparatus]

¿ (0915)

[English]

The Chair (Mr. Bernard Patry (Pierrefonds—Dollard, Lib.)): We're now going to start the Standing Committee on Foreign Affairs and International Trade. Pursuant to Standing Order 108(2), it's a briefing session on the world food supply.

It's our pleasure this morning to have Mr. James T. Morris, who became the tenth executive director of the United Nations World Food Programme at the beginning of April 2002. As head of WFP, Mr. Morris oversees the world's largest food organization, which last year fed 77 million people in 82 different countries at a low cost of $1.74 U.S.

Usually, when we're meeting with the World Food Programme, it's in a joint meeting with the agriculture committee, but when the notice of meeting was sent, there was no agriculture committee formed. It was formed yesterday, and I want to acknowledge the presence of the newly elected secret-ballot chair, Mr. Charles Hubbard, with his colleagues. Welcome. This is going to be like a joint meeting. You're all welcome.

I understand, Mr. Morris, that you have an introduction. You have ten minutes for the introduction. After that there'll be some questions and answers between the members and yourself.

Mr. Morris.

Mr. James Morris (Executive Director, United Nations World Food Programme): Thank you, Mr. Chairman, ladies and gentlemen.

First may I say that it truly is a special honour to be with you today and to have the privilege of actually doing something official in this magnificent building. I have enjoyed this building for many, many years, but never had a chance to do anything official and actually be a part of it, so thank you.

The World Food Programme is the largest humanitarian agency in the world. It's the largest agency of the United Nations, and our mandate is to feed the world's hungriest, poorest people wherever they are.

The chairman reflected that we fed more than 77 million last year in 83 countries. We are focused on the most vulnerable people in a society, usually women who head households, women who are pregnant, women who are lactating, very young children, children under five or children in primary school. We have a huge commitment to orphans, to the handicapped, and to the elderly.

We receive all of our support through voluntary contributions from governments. Ninety per cent of our support comes from ten sources--nine countries plus the European Community. Our budget last year was $1.9 billion. It will be $1.7 billion this year.

I come to you at a time when I suspect the World Food Programme has more challenges before it than ever in history. Experts will tell you that, for whatever reason, we've had more natural disasters in the last couple of years than usual, and in many of the places we work we're also confounded by human conflict. So if you have a natural disaster in a very poor place with a war going on, the circumstances are just extraordinary.

Earlier this summer the Secretary General of the UN asked me to be his special envoy for issues in southern Africa, the six countries of Malawi, Mozambique, Swaziland, Lesotho, Zambia, and Zimbabwe. This is a very poor part of the world, with huge nutrition issues. Today there are 14.5 million people at risk of starvation. On top of the landscape, where poverty and malnourishment exist historically, you put serious issues of weather, of drought, dramatically complicated by the HIV/AIDS pandemic, where 500,000 to 600,000 people died last year of AIDS. There are 4.6 million orphans in these six countries; 60% are orphaned because mom or dad has died, or both, because of HIV/AIDS. It has incredibly changed the economic landscape of southern Africa. And then further complicate it with serious issues of governance, government policy, and macroeconomic policy.

In the southern part of Africa you have 14.5 million people seriously at risk. Suddenly we find ourselves with a comparable number of people in Ethiopia and Eritrea at risk. Those two countries exist because of rain-fed agriculture. They had no spring rains. The fall rains were late. The crop in Eritrea will be 20% this year of what it was last year. Pastoral agriculture depends on good rainfall. The animal livestock population in Ethiopia is decimated. So suddenly you have another 14 million to 15 million people who are seriously at risk.

The World Food Programme is feeding 2.9 million people every day in Sudan and 1.9 million people in Angola. We have serious weather problems in the western Sahel, especially Mauritania. And then there are the ongoing conflicts in west Africa, the Ivory Coast, Sierra Leone, Liberia, etc. In the Ivory Coast alone there are 4.5 million refugees from the neighbouring countries. Just think about the impact of all of this displacement and all of this movement in a place that has serious issues of conflict.

The other places that are very critical to our work... We've been feeding up to 10 million people a day in Afghanistan. It's probably now down to 4 million. The workload will be half next year, I hope, what it has been historically, but the refugees have returned there at twice the pace that anyone expected. I have to say that this is just a good example of where Canada has been very creative in helping us, not only helping us financially, but you are our seventh or eighth largest supporter. Last winter, Canada sent in its avalanche team and helped us clear six or eight passes that we had to clear in order to get food to people living in the far reaches of Afghanistan who would have died without the help of your avalanche team.

¿ (0920)

In North Korea we're feeding 6.4 million people every day. Once again, the most vulnerable are women and children, a third of the population of the country. We are facing a very serious resource crisis in North Korea, and we're going to cut our workload in half; if things don't get better, we'll have to cut it in half again.

Our workload in the Palestinian territories has increased by 40% or 50%, and Palestine continues to be an incredibly difficult environment to work in.

The other place I call to your attention is Central America. Honduras, Nicaragua, El Salvador, and Guatemala have had five years of tough weather, Hurricane Mitch, and now they have droughts. This is not a huge number of people in the overall world context of those at risk, but a serious number of children, maybe 100,000. are victimized by chronic malnutrition in those four countries.

My reason for being here is to thank Canada. Since we were started in the early 1960s, you have contributed $3.5 billion of resources to our work. You have been, intellectually, one of the most important contributors to our work, helping us to think through how we maximize our productivity and do our work better, and you've been very creative. Recently, you made a gift, in partnership with the United Kingdom, to repair the railway from the port in Nacala in Mozambique across into northern Malawi. Five of the six countries in this crisis in southern Africa are landlocked, and we depend on all sorts of creative transportation schemes to move stuff from the port into the heartland. Your efforts, with those of the U.K., to rebuild that railway line and give us resources to lease eight locomotives will save us $1 million a month and allow us to transport the goods five or six times faster than otherwise would be the case.

So we have a very good relationship with your government. I had a wonderful visit with the foreign minister yesterday, a good dinner with Susan Whelan last evening, and will meet with the Prime Minister later today, at 3:30. I'm grateful for your country's leadership on issues related to Africa. You've been at the very vanguard of this effort, and there's no doubt in my mind that your early commitment persuaded the EC and the U.S. and other European countries to be more generous than they would have been otherwise.

The millennium development goals of trying to cut hunger and poverty in half, of focusing on HIV/AIDS, water and sanitation, gender equity as it relates to school, children, infant mortality address the most important issues in the world, and food is at the base of each of them. Frequently on our trip to southern Africa, we were told that food was the most important drug in the fight against HIV/AIDS. Food is the powerful influence in helping kids come to school. If you can offer a child a school meal, the parents are more likely to send the child to school, and then you can offer very creative health intervention. Half the children have worms, and Canada has been in the forefront of providing resources to give children medicine to combat worms. A worm in a child consumes half the nutritional value of what the child eats, and the influence of Canada's investment in this effort to get more kids in school, more kids fed, more healthy children to learn, so that they'll be productive people, has been extraordinary.

So I'm here to thank you. I'm here to encourage you to be as generous and thoughtful as you can about the work we do. If we're serious about the millennium development goals, we will all have to do a little more than we were maybe prepared to do, but in the long run, whether you look at it socially, economically, politically, spiritually, or from a humanitarian perspective, investment in causing people not to be hungry, especially to bring hope and opportunity to the lives of children, is incredibly important.

That's my quick message. I'm grateful for your help, and I would be ready to entertain your questions.

¿ (0925)

The Chair: Thank you very much, Mr. Morris, for this résumé about the world's current food situation.

Now we're going to pass to questions, with five minutes for question and answer.

Mr. Martin.

Mr. Keith Martin (Esquimalt—Juan de Fuca, Canadian Alliance): Thank you very much.

Thank you, Mr. Morris, for being here today, as well as your team.

I'll ask three questions of you in your capacity as head of the WFP and as the UN special envoy for southern Africa. The first deals with the situation in Zimbabwe and the use of World Food Programme food as a political tool, where they've prevented individuals in places like Binga and Nsiza from receiving food if they didn't vote for the right party. What can be done to prevent that from happening?

My second question relates to the usual politically engineered events that drive famines, whether in Malawi, Zimbabwe, Sudan, or elsewhere. What, in your perspective, should Canada and other countries be doing to develop a rules-based mechanism to address the precursors to many of these famines?

My last question deals with the actions and priorities we, as Canadian parliamentarians and the Canadian government, ought to establish, not only to address the issues of the six countries you mentioned, but also in Angola, the eastern Congo, Sudan, and other places affected by famine. What should be our priorities to drive this on the international stage, not only ensuring that you have the food to do the job, but also dealing with prevention, micro-nutrition, social issues, economic issues, etc.?

Thank you.

Mr. James Morris: Thank you. Those are three powerful questions.

I've had five meetings in the last three months with President Mugabe of Zimbabwe. We have a set agenda of six or seven items that are of great concern to us, and they have been the basis of each of our conversations. I have made it absolutely clear to him and to other leaders of the government there that the World Food Programme will have zero tolerance for any political guidance or interference with our work, that we require the ability to go wherever we need to go in the country to feed the hungry poor, hunger and poverty being the criteria. We've had two or three examples where there has been interference. We've stopped our work, we've negotiated it through the issue, and we've resolved each of the issues. I think he clearly understands that we will have no tolerance for interference. I've said to him that we will leave the country if we're interfered with. There are essentially 6.7 million people in Zimbabwe at risk of starvation, half the population--the numbers are staggering.

It's important that people remember and keep separate that Zimbabwe has its own governmental food supply. The World Food Programme, acting on your behalf and on behalf of our other donors, has no influence on how the government distributes the food they have. So often, when the media reports that food has been distributed based on political considerations, it will be food that comes from a source other than the World Food Programme.

We essentially depend on NGOs to help us do our distribution throughout the country. We distribute no food through the Government of Zimbabwe; we do it all through private sector organizations. I've been as candid and as firm on this subject as I could. This is the basis of our organization and this is why Canada and others trust us to do our work. This is a very difficult place to do business and the challenges are enormous, but I think we have made this point. It's not to say we won't have skirmishes going forward, but we will be as firm on this as is humanly possible.

On the issue of precursors, frequently, I'm saying, well, Jim, what can we do to see that this doesn't happen again? Our donors are divided on the issue. Should the World Food Programme be in the emergency business, responding to work coming out of emergencies, or should we be in the development business? I would make the case that it's really all one piece of cloth. Responding to the needs of hungry people so that they have the energy, they have the nutrition, that the food is delivered in such a way that they become healthier, that they become more educated, so they can begin to make a life that is useful and productive, requires investment. We're trying to rethink how we do our work so that we not only provide that safety net, but also provide our assistance in such a way that people are healthier and better educated and have more nutrition. Canada has been very positive in helping us think through that agenda.

¿ (0930)

My own view is that the single most important investment any of us can make from a food perspective is the use of food to get more children in school. A person's productivity and quality of life as a parent, as a citizen, as a farmer, a teacher, or whatever they choose to be are directly tied to the amount of education they have. There are simply far too many millions of children in the world who don't go to school. We have to focus on how we get them in school, and then how we maximize the quality of the educational experience.

The World Food Programme is committed to feeding an additional 40 million to 50 million children in Africa, and my hope is that you look at the opportunity to be our partner in accomplishing that. We can feed a child for 20¢ a day, $40 a year. For 30¢ a year we can get rid of worms and dramatically change a child's life.

Food becomes a powerful tool to educate people. Food becomes a powerful tool in causing a mother to be healthy during pregnancy and give birth to a healthy child. The therapeutic and supplemental feeding that goes along with that is a very small investment that leads to an opportunity to dramatically reduce issues related to infant mortality. These are not complicated things to do. We know how to do them.

The Chair: Mr. Morris, thank you very much.

All my colleagues want to ask questions, and it's very interesting. I'm going to ask my colleagues for shorter questions, so that you'll be able to elaborate. Just remember, it's five minutes per member.

Madame Lalonde.

[Translation]

Ms. Francine Lalonde (Mercier, BQ): Thank you, Mr. Morris.

You said that your budget last year was $1.9 billion and that you would have $1.7 billion this year. So your budget has gone down whereas needs have gone up.

What are your criteria for starting to provide aid, stopping aid, or using each of the elements in your strategy—that I have read here—and which involves saving lives, improving nutrition and working on development? It is a long question, but...

[English]

Mr. James Morris: The substantial decrease in our budget relates to a change in the United States Farm Bill. The U.S. is our largest supporter, providing about 60% of our budget. The U.S. support will go from $1.2 billion to about $900 million because of changes in the Farm Bill in regard to the use of surplus commodities. We've been able to pick up about $75 million of what we're losing from the U.S. elsewhere around the world.

We're focused on feeding the hungriest, poorest people, where incomes are the lowest and where nutritional studies show the need is the greatest. We try to be as objective about our work as possible, but we first of all respond to emergencies, if there's a hurricane, a flood, a drought, or some other natural disaster, or a man-made disaster like Afghanistan, which had both the drought and the conflict. We're trying to rethink this issue. In my judgment, if a country has a million AIDS orphans or if there are 300 million hungry children in the world, these are disasters and crises comparable to a flood or a hurricane or some other natural problem. So we're trying to redefine what an “emergency” or a “crisis” is.

We're in 83 countries. Our board, of which Canada is a member, has approved a work program of about $3 billion, and we'll have $1.7 billion to work with this year. Clearly, we are in a few places that have.... We've closed our office in Kosovo this year, and we've closed our office in Macedonia, so we've had some good successes.

On our work in China, I had a wonderful visit from the Vice-Premier of China a few days ago. He came to thank the World Food Programme for having fed 200 million people in China over the years. China is now in a food-producing surplus situation, and we will leave China in 2005.

India is now a place with a surplus. We have some technical expertise to offer the people of India. India has now become a donor to the World Food Programme.

So we try to sort out our work as objectively as possible. We want to continue to be the World Food Programme, and it's important that we have a worldwide presence so that we're on the spot to respond to emergencies. But the fact is that very few countries in the western hemisphere meet the strict criteria of being very poor, food-deficit, nutrition-poor countries. Haiti is one that does, and you all help us there.

So that's a quick answer to your question. To each of these questions, we could speak—

¿ (0935)

The Chair: Thank you, Mr. Morris. You're doing very well. We will re-invite you. There's no doubt about it.

Mr. Eyking.

Mr. Mark Eyking (Sydney—Victoria, Lib.): Thank you, Mr. Morris, and thanks for your kind words about Canada's contribution. I have three questions, and if you can make your answers short, I'd appreciate it.

The first one is on the problem with the climate in Africa, the weather climate. Is this a cyclical thing that happens every five or ten years, or is it something like our problem out west now? There, it's becoming more prevalent and it has become part of the whole global climate change.

The second one is about the old saying about helping people to grow their crops instead of feeding them. How can GMO foods help these countries with drought-, disease-, and insect-resistant crops? Is there a place we can be giving them those, or creating better crops for them to help them with this problem? With some crops, you can even have more vitamins in them, and that could help people in these countries.

My third question would be about how much the subsidies to agriculture in the western world are having on the developed countries as far as them producing their own food is concerned.

Mr. James Morris: I'm not a climatologist, so that's a subject on which you ought to bring in some experts to discuss it with you. The weather experts are saying the crisis in Africa, and especially sub-Saharan Africa, is more intense this year and last year than it has been for a long time. It's the same in Central America. So I think it's clear that there are climatic changes that are going to be with us for a long time and are going to cause the work of people like those at the WFP to be a lot more important going forward.

In some respects, that question goes right into the next question. If we're going to be faced with these serious climatic problems, what do we do to guard against that situation or moderate it and get prepared for the future? You asked whether the GM crop offers an opportunity. The GM issue has been the most difficult issue we've worked through during the southern Africa crisis. There's much misunderstanding on GM crops around the world. Many places are not technically sophisticated enough to deal with this new phenomenon, and they ask perfectly legitimate questions about the effects that GM crops will have on the future of agriculture in their regions or in their countries. There is a huge amount of misunderstanding. There's a mythology growing up around this that's very frightening.

When the World Food Programme essentially goes to a country that is going to give us or sell us a commodity, we ask if it meets the health and safety standards for consumption of the country's own citizens. If they say it does, we then double-check with the UN and FAO. The WHO has something called the Codex Alimentarius, which is responsible for food safety standards from the UN perspective. We then make those representations to a recipient country. We tell them what we know and that we trust the people making these representations. But it's their choice as to whether they want to receive it or not. Historically, it has nearly been a 100% yes. In the current southern Africa crisis, five of the six countries have said yes. Zambia has said no, and it's a serious matter.

Norman Borlaug, the Nobel laureate and father of the Green Revolution, would tell you that genetically modified crops offer a substantially greater yield. They offer much more resistance to drought or to pests, and therefore have a positive influence on the environment because it requires less herbicides and less insecticides to grow the stuff. They're more drought resistant and can in fact have a higher nutritional content. So there are lots of reasons to think the development of genetically modified food will, in the long run, be one of the major contributors to ending world hunger and world poverty.

But there is a huge misunderstanding. Those of us in the west can pooh-pooh this, but the fact of the matter is that these are genuinely held views by people who are frightened and who just don't understand this new approach to agriculture. We have to find ways, through agricultural technology institutes, through the UN, and through other important places, to have lots of discussion and dialogue on this subject to begin to comfort people.

On the issue of subsidies, from my perspective, I don't think agricultural subsidies terribly distort the work we're trying to do. The people we're trying to feed do not have the resources to participate in a market economy. They have nothing, so I'm very grateful to anyone who gives us anything to feed somebody, to keep them alive, to help them begin the process of education, and to get their health back on solid ground.

¿ (0940)

There is a question whether it becomes a disincentive for local production. We always try to buy locally where we have resources. That's our preference, to buy locally and regionally when we can. But my hope is, the single most important step forward we can take is to find a way to have more access to 1%, 2%, or 3% of the world's agricultural surpluses for humanitarian purposes and to have that exempted from normal trade considerations.

¿ (0945)

The Chair: Thank you.

Mr. Borotsik.

Mr. Rick Borotsik (Brandon—Souris, PC): Thank you very much.

I'll continue with that line of questioning, Mr. Morris. You'll find that this committee is sprinkled with people from the agriculture committee as well, which deals with biotechnology and trade issues and certain issues with the U.S. Farm Bill, more so than foreign affairs issues.

Thank you for being here, and thank you for being very involved in the WFP. I think it's a very laudable cause, certainly. I'm glad to hear that Canada has supported it for the last number of years.

I want to talk about two things. First, I want to go back to the biotech, the GMO food. It has been a very hot topic amongst our own committee, obviously, here in Canada. We do have some GM product.

By the way, I really enjoyed your comments, because I share those sentiments exactly. I believe there are some real opportunities, not only for us as producers in Canada, but obviously for feeding the world hungry.

Can your organization become more proactive, positively proactive? There is a lot of misinformation out there, obviously, with biotech and GM. Can you help us help yourself, if you will, by being more proactive in that area?

The second question would be with the U.S. Farm Bill. I'd be interested if you would explain to me how the U.S. provides commodity, at what value to you. You said you went from $1.2 billion to $900 million. Did they provide commodity to you, and has that been reduced? Can you explain that a little bit?

And if I have some time, I'd like to maybe talk a bit more about the U.S. Farm Bill, how it affects us with respect to trade.

So on GM, can you be more proactive? And what is it that the Americans provide you with respect to the U.S. Farm Bill?

The Chair: Thank you.

Mr. Morris.

Mr. James Morris: I'll answer those two questions, and if you'll allow me to, I'll beg off on discussion of the Farm Bill. I'm just not knowledgeable enough to be helpful.

¿ (0950)

Mr. Rick Borotsik: It's a very sensitive issue for us as well, Mr. Morris, I can assure you.

Mr. James Morris: I'm not worried about talking about something that's sensitive; I am worried about talking about something I don't know much about.

Mr. Rick Borotsik: That's never caused us any problems, I can assure you of that.

Mr. James Morris: On the issue of being proactive on GM and biotech crops, I explained to you what our approach is. We signed a letter on behalf of WFP, FAO, and WHO, telling the world we had confidence in the safety for human consumption of biotech GM foods. We are not a scientific, technological organization. We are a logistics organization and a humanitarian organization. We know how to deliver food and we know how to respond to people who are having pretty tough problems.

We have been aggressive on this issue. I wrote an op-ed piece for the Herald Tribune that talked about my view of the importance of the opportunity GM foods offer and our confidence in their safety. We probably went a little further than we normally would have gone, but some of the antagonists maybe had accused us indirectly of distributing food that might not be safe. We haven't done that, we wouldn't do that, and that led us to be very aggressive.

I think this is an argument that will need to be waged by people who have more technical and scientific competence than we do. We're not going to back away from it. If people say no, in the interim we'll try to find alternative sources. We'll bring wheat into Zambia. Wheat does not have a GM factor in it. We're going to push the envelope, but we do respect the sovereignty of a country to make its own decisions in its own context.

Mr. Rick Borotsik: Could you maybe just touch on the contribution of the U.S.? You talked about the Farm Bill and so on. Can you tell me which is commodity-based and which is dollars?

Mr. James Morris: The U.S. gives us both commodities and cash. I think it's about 50-50 cash and commodities. The cutback is in commodities.

The Chair: Thank you.

Now we'll go to Ms. Jennings.

[Translation]

Ms. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): Thank you, Mr. Chairman.

[English]

Thank you very much for your presentation.

I have two questions. The first one involves the challenges the World Food Programme faces when it's attempting to deliver food relief, etc., in an area that is torn by civil war, like Sudan. The subcommittee of this committee, the Subcommittee on International Human Rights, has been conducting a study on the issue of Sudan. As we know, it's been involved in civil war for over 20 years. So I'd like to know what the challenges are and how you meet them when it's an ongoing war-torn region.

Second, while I'm not an agro person, the issue of agricultural production is a key to food security. It's also a key to reducing poverty, because in most developing countries, the agriculture employers are the ones who employ the majority of the people. When you have so-called free trade, and at the same time you have major subsidies, whether it's the Europeans, who heavily subsidize farming production in their countries, or the United States, how does that equate with actually being able to develop sound agriculture policies within developing countries to alleviate food insecurity and to alleviate poverty? The World Food Bank must have some kind of position on that, given what you do, try to alleviate food insecurity and build sustainable policies within countries to address their own food needs. So I'd be interested in hearing what the World Food Programme has to say about this: we're moving to so-called free trade, but at the same time, most of the big players in there heavily subsidize agriculture within their own countries.

The Chair: Mr. Morris.

Mr. James Morris: You are all masters of asking questions that have easy, quick answers. Maybe I can spend my five minutes on your first question, so I won't have to answer your second.

There have been more people killed doing humanitarian service for the United Nations than killed doing peacekeeping service. We essentially have 8,900 employees; about 700 of them are in Rome, the other 8,200 are spread out all over the world. We have 2,000 memorandums of understanding with non-governmental organizations that are our partners in the field and do our distribution. We do some direct distribution, but we try to work with wonderful NGOs that know the territory and have been great partners forever.

A place like the Sudan is a very difficult place to work. We rely extensively on airlifts in the Sudan. We fly in the food from Kenya. I have colleagues who could give you quite an extensive answer on our work in the Sudan. From time to time the air lanes are shut down and we can't do our work.

We're feeding 300,000 people in Chechnya right now. We rely heavily on the Danish Refugee Council to do our distribution. There are 160,000 people in Chechnya, 110,000 people in Ingushetia, and we're feeding 47,000 school children. Every single primary school child in Chechnya gets a meal from us every day. It is the most difficult place in the world to do business.

We're now feeding 500,000 people in Palestine, the territories. We don't feed the refugees, we feed the traditional Palestinians, the most destitute. There is virtually complete unemployment there. Moving through the blockades is incredibly difficult.

In Zimbabwe we've taken our monthly food load from 10,000 tonnes to 55,000 tonnes. We depend on NGOs to help us there. We need 12 or 13. We started with 4, and we've persuaded the government to give us 10, and now we need to get the other 3.

It's incredible to me that an agency like ours committed to humanitarian work has to deal with governments who do put obstacles in front of us. It's a hard thing to fathom.

In North Korea we have access to 163 of the 206 counties. We have 50 international citizens there doing our work. It's a very difficult place to work.

The World Food Programme runs the United Nations' airlines. We have a memorandum of understanding with UNHCR for refugees. We fed 12 million refugees in 30 countries last year. We're the logistical arm of the UN. We do the same for UNICEF.

We do know how to do this. You would marvel at our people. And by the way, you should know, on a proportional basis, Canada provides more leadership for the World Food Programme than any country in the world. We have 100 Canadians in senior leadership positions. We're very good at this, but it's very difficult.

As for your second question, I am not an agricultural economist, I am not an expert in world trade, I am a fundraiser. My job is to go around the world and persuade countries to give us cash and commodities. I'm working very hard to encourage people who have agricultural surpluses to commit them for humanitarian purposes to meet the millennium development goal of cutting world hunger in half, and especially feeding the 300 million hungry children. I'm grateful for surpluses, however they come about. That's a good thing from my perspective. I do not want it to harm local production.

¿ (0955)

We work very hard at buying locally and regionally, and--just wearing my special envoy hat--we work very hard at producing agricultural inputs in these six countries in order to begin rebuilding communal agriculture.

The Chair: Thank you, Mr. Morris.

Mr. Day, please.

Mr. Stockwell Day (Okanagan—Coquihalla, Canadian Alliance): Thank you, Mr. Chairman.

Mr. Morris, thank you for being here and for the task you perform.

Perhaps you can help me on the budget numbers. If I heard correctly, 77 million people are fed per year through your incredible work, and your budget is about $1.7 billion, so you're performing an extra billion dollars of work. What other agencies are augmenting your budget so that you're able to accomplish that formidable chore?

As well, we hear from time to time disturbing stories of sometimes corrupt national leaders, sometimes local war lords who are able to hive off this assistance, be it the commodities or cash that's coming in to help truly starving people. What's your assessment of that, and how are you able to prevent that from happening?

À (1000)

Mr. James Morris: I'm not sure I quite understood your first question. We'll have $1.7 billion in resources to work with this year.

Mr. Stockwell Day: Well, you'd said about $40 a year, so 77 million people--if I've got the math right--would be far beyond your budgetary capacity.

Mr. James Morris: No, what I said was that for $40 a year we can feed a school child. For 19¢ to 20¢ a day we can provide a child with a meal that has adequate caloric nutritional value, in school, for 200 school days a year. That's where the $40 figure comes from.

I would be a fool to sit here and tell you that 100% of every bag of food or every gift gets to its intended recipient, but I do believe a huge percentage does. We work very hard at monitoring our work and evaluating our work. We trace it from the time it gets to the port. We measure who receives it.

You need to keep in perspective the places we're working in. These are very difficult places to work in. From time to time somebody will break into a storage shed and steal our commodities. We'll have people rob our convoys. But I must say, I'm certain that an acceptable percentage, a huge percentage, gets to where it needs to go. We have this discussion about North Korea all the time. The food that we have to feed the hungry poor is not attractive to the military or the politicians; they don't want to eat the stuff we bring in.

All I can tell you is that we are focused on results and outcomes and getting food to the people who need it. We spend a lot of money evaluating it. If we find there's something out of balance, we notify the government and put them on a sort of probationary status until they get it straightened out. Clearly it is a point that needs to be discussed, but please know that we are heavily focused on this.

I visited with our former director in North Korea this week, and he said it's conceivable that 10% or 15% doesn't get to where we intend it to go. But doing this work in these places, under these conditions, is not like delivering food in Ottawa, Canada, or Indianapolis, Indiana. All hell is breaking loose all about, and roadblocks are in our way. But I have to tell you, this is an extraordinary team of people. They make huge sacrifices and care passionately about doing this.

So I believe we're getting the job done.

The Chair: Thank you.

Mrs. Ur.

Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.): Thank you.

It has been a very, very interesting meeting here this morning, and very, very informative. I'm certainly quite amazed by some of the stories you have brought forth.

You stated some of the concerns and problems you have carrying out your mission. Whether it's weather, access, or politics, which is your biggest obstacle in doing your job well?

The Chair: Mr. Morris.

Mrs. Rose-Marie Ur: Yes, he's the one I'm asking.

Mr. James Morris: On occasion, you actually have to think a little bit before you answer a question--the “you” I used was referring to me.

I think our biggest challenge is gathering the resources. We have a very talented team of people. We have wonderful relationships with NGOs. Most of the governments we deal with are friendly, compatible, and very helpful. There would be a half-dozen that are very difficult. But our challenge is one of resources, of gathering the cash and the food. We are very good at logistics, and we have all sorts of standby agreements with countries like Canada where, if we have a special problem and you have a special expertise, we ask you to come in and help us. When we ask somebody like Canada to come help us, you can't imagine how quick the response is.

À (1005)

Mrs. Rose-Marie Ur: Can I just interrupt you? On that same vein, what is the best tool, then? Is it the commodities or the cash for you to carry out your job most efficiently?

That said, I'll give the next question, because you tend to go on a little bit.

You say in some countries you're welcomed and in some countries you're not. Could it be that some countries may want to suppress their people by not giving them sufficient food, and that's one way of keeping control?

What is your viewpoint on those two questions?

Mr. James Morris: Clearly, number one, let me say we're very grateful, incredibly grateful, for anything anybody does for us. Just like we allow people to make the decision about accepting GMO in the context in which they perceive their needs and situation, we're grateful that people make decisions to help us in each national context.

Clearly we prefer cash to commodity. If we have cash, we can buy locally. We have much more flexibility, and we can respond more rapidly. If we buy locally, we don't have transportation expenses. But I have to say also, frequently the commodity is not available locally and we have to go far away to buy it, but given our druthers, we would prefer cash.

And we don't monetize, by the way. We don't accept commodities and sell it and turn it into cash.

On the friendliness of governments, I think there are some governments that are so focused on control that they have trouble dealing with any entity that they don't control. Clearly, they don't control NGOs. We work in partnership, but we have our standards and our principles. They don't guide our work. I think there are countries that are uncomfortable with that, and that leads to the problems we have in a few places.

The Chair: You have another 20 seconds, if you want.

Mrs. Rose-Marie Ur: Give it to the next person.

The Chair: Madame Lalonde or Monsieur Bergeron?

Monsieur Bergeron.

[Translation]

Mr. Stéphane Bergeron (Verchères—Les-Patriotes, BQ): Good morning, Mr. Morris, and thank you very much for being with us today and for your very pertinent explanations.

I would like to go back to the objectives set at the World Food Summit in 1996, where the hope was to eradicate or at least reduce hunger in the world by at least 50% by the year 2015. To achieve that objective, there would have to be 24 million fewer hungry people each year and we would have to be able to feed them. In fact, according to available data, we only succeed in feeding 2.5 million additional people each year.

Was the objective set in 1996 too ambitious? Are the steps being taken by the international community insufficient? Do we need to review the objectives that were set in 1996? What position are we in now, in 2002, with respect to the objectives that were set for 2015?

[English]

The Chair: Mr. Morris.

Mr. James Morris: I don't want to be Pollyannaish or naive, but in this day and age, with technology, wealth, and goodwill, it is absolutely unacceptable to have so many hungry people in the world, especially children.

We had a wonderful visit with Susan Whalen last night, talking about this subject. We talked about these goals for 2015, but the fact of the matter is it's an indictment, an embarrassment, that we say we're only going to try to cut hunger in half, and we're going to take 12 to 13 years to do it.

My view is that we need to take these millennium development goals seriously. Every country, working through parliamentary committees like this, needs to focus on what we can do, what our responsibility is to get at this problem. My own view is that the best opportunity we have to make substantial progress is to feed more children through schools. We can feed a couple of hundred million more children this way and make a real dent in that 800-million persons number.

This is going to require a modest additional investment around the world. The traditional donors are going to have to find ways to be more creative and helpful, and we're going to have to find ways to be more effective in bringing in new donors. We need to have support from Russia, India, Thailand, Pakistan, China, the former east bloc countries, the gulf countries, Mexico, Brazil, and Argentina. My hope is that the World Food Programme will eventually have support from every one of the 191 members of the United Nations.

The fact of the matter is that an investment in doing this would be a very good economic investment for the world, because we will create markets. So whether you look at this politically, economically, socially, or spiritually, there's a rationale for making more of an investment in causing fewer people to be hungry, especially this investment in children. They can learn, and the more you learn the more productive you are and the greater your capacity to be a purchaser of services, as opposed to being a burden.

So I take it quite seriously. It will take more resources to do it. My hope is that you will all be thoughtful about your role in that and how you continue to lead the world in persuading others to join with you and make common cause with you.

À (1010)

The Chair: Thank you.

Mr. Hubbard, please.

Mr. Charles Hubbard (Miramichi, Lib.): Thank you, Mr. Chair.

It's certainly very enlightening today to hear your report and what your organization is trying to do.

I have just two quick questions. First of all, we've heard before how certain service clubs around the world have worked with UN agencies on vision care and the eradication of polio. You spoke this morning about the problem of intestinal worms that many children have. Has there been any initiative to attempt to get a major group to take this on as an issue?

Secondly, you mentioned that Canada was among the top ten, in terms of supporting your group. Where do we stand in terms of the last five years? Do you see an increase? Are you coming to look for more? I know you always look for more if you're fundraising, but are we doing our share?

I see some of your colleagues shaking their heads in different ways as a result of this. But as a committee, Mr. Chair, I think we should have it on the table. Are we increasing as we grow in wealth and as our GDP increases? Are we doing our share? I know you'll be careful in your answer, but I would like to hear it.

The Chair: Mr. Morris.

Mr. James Morris: As sort of an extension of my answer to your colleague, you're going to see us have a dramatic focus on increasing private sector support. Rotary, one day last year, inoculated one million children in India for polio, and the Lions Clubs and what they've done with eyesight around the world....

We've had good meetings with Rotary International about a relationship with us. They're eager to do that. We're going to give all sorts of people--from the service club community, from the religious community--an opportunity to partner with us. So it's a point well made, and if you'll give me a couple of years to update you, we'll have a report and we'll make some progress.

In terms of the Canadian contribution, as I said earlier, we're very grateful for anything and everything people have done for us. In terms of Canadian dollars, your support for the World Food Programme in 1990 was $164 million. Last year, your support was $59 million. So for whatever reasons that you will appreciate, your support today is about 40% of what it was 10 years ago. I'll leave the rationale for you all to sort through.

I have to say that you've continued to be an intellectual leader, and you've continued to be a very aggressive leader on issues of oversight and governance. Your people participate in an incredibly strong way, and there are more Canadians working on a per-dollar-contributed basis for the World Food Programme than any country in the world.

My hope is that we can help this trend, which sort of looks like this, begin to look about like this and head back up. The needs are incredible, and you can have confidence in the World Food Programme doing what it says it will do. Our overhead is about 7%; we've reduced it from 7.8%. No UN agency comes close to getting the bang for the buck that we do, so obviously my reason for being here is to be on my knees and to say thank you, but also to do a little begging.

À (1015)

The Chair: Thank you, Mr. Morris.

Mr. Martin.

Mr. Keith Martin: Mr. Morris, I'll ask one question and my colleague Mr. Day will ask another.

The needs are incredible, as you've eloquently spoken about, but many of these problems are, as you know, Mr. Morris, taking place in the land of plenty. So I'll just ask my third question again.

What we are seeking here from you also is what we can do as parliamentarians and as a nation to deal with a number of these problems. Our Prime Minister wants to make Africa part of a larger foreign policy agenda, so I'd just ask you, what specific things can we do to deal with the precursors, to prevent famines from happening, so you won't have to have the massive and increasing demands upon your organization? What can we do to deal with the HIV/AIDS, TB, malaria crisis, the parasite loads on children, the corruption in governance issues that are often rooted in many of the countries you work in and make it exceedingly difficult for you to do your job? What should we be doing as parliamentarians and as a nation to help you do your job?

Mr. James Morris: That's a question that deserves a very long answer, but my quick, succinct answer is that I continue to believe an investment in getting children in school and educated and building productive societies is the single most important thing we can do.

Second is supporting technical assistance to help developing countries focus on rebuilding their agricultural systems. No successful country in the world didn't first have a successful agricultural economy. The FAO has done some good work in helping think through issues of crop diversification, drought-resistant crops, the better use of water, and conservation farming. The great tragedy of the southern Africa crisis right now is that they haven't had resources for agricultural inputs for seed and fertilizer to plant next year's crop.

Thirdly, I think we have to help these countries seriously think through their health care systems. I don't think they fully appreciate the urgency of the health issues; I do think they appreciate the urgency of the food issues. But the talented health care professionals, at least in these six countries, are all leaving. The doctors, the pharmacists, and the nurses are going to South Africa or the U.K. or elsewhere, where working conditions are better and opportunities for prosperity are stronger. The infrastructure as it relates to health care is very inadequate.

So the summary includes the commitment to feed the children and give them a shot at hope and opportunity; investments in helping to rethink agriculture—and there's a huge amount of agricultural talent in North America that knows how to do these things, with the GM issue as part of the base of it; and then this issue of health care.

À (1020)

The Chair: Thank you, Mr. Morris.

The last question goes to Mr. Day.

Mr. Stockwell Day: Thank you. Again, we appreciate your frankness. It's refreshing to hear someone say he doesn't like to talk about something he doesn't know anything about. I'd suggest that any career intentions you might have in politics are limited because of your approach there, but it is refreshing to hear.

On a very specific item, you've addressed a number of overriding issues. It has been helpful for us to have a greater understanding of how things are operating. It can be discouraging to hear about the tremendous things you face. When we hear about nations finally becoming donors to the program rather than recipients, we know there's some hope.

On the school program, which is a positive initiative, the kids come to the school, they receive the food there, and I guess they can take it home. There's an incentive for them to get educated.

We've just heard that in the last week there have been four separate incidents in Afghanistan in which schools that have been set up for girls have been hit with rockets by local terrorist groups or those who are opposed to girls being educated. This is frustrating. It's heartbreaking to hear this type of thing.

First, then, how do you protect your own workers? Also, what advice can you give to us as a government or to governments around the world to somehow think of ways to prevent this. To me, seeing that type of thing happening is almost the lowest of the low. What can we do to assist you when those types of things happen?

Mr. James Morris: Well, it's devastating. I have met with President Karzai in the last three months. The responsibility of and burden for the security and protection of our workers is with the host country, and we make that case as forcefully as we can. The UN is investing more money in security for our colleagues. Every time you spend a dollar on security, though, it's a dollar you don't have to spend on feeding someone.

What a country like Canada or any other country needs to do is to continue to reinforce how important issues of security and protection are to their governments. You're a very important helper to the Government of Afghanistan, and you have an important presence there. Through your diplomatic channels, you need to convey how much importance you attach to security and what an important factor this is in terms of your own decision to provide help to them.

Edmund Burke said that for evil to triumph, the only thing necessary is for good men to do nothing. We don't have the luxury of giving in to the scoundrels who do these sorts of things. We have to protect our situation, our people, our assets, but we have to have the courage to bull ahead and continue.

I saw 1,500 girls going to school in a public school in Kabul today, and they weren't there a year ago. Afghanistan's a pretty dicey place to do business. If you've been there, it's quite complicated and not everybody's happy. But I know of no other way to make progress than to enlighten more young people and give them hope and opportunities for their own lives so that in their own communities they'll say they won't put up with this foolishness.

À (1025)

The Chair: Mr. Morris, thank you for your visit to Ottawa and for appearing in front of our committee, and thank you for your kind words regarding Canada's role with WFP. I must say I feel there is a moral obligation for our country to address health and nutrition, particularly for women and children at critical times in their lives.

Once again, thank you, and keep up your fabulous and great work.

We're going to recess for five minutes.

À (1025)

À (1038)

The Chair: Now we move to Bill C-14, an act providing for controls on the export, import, or transit across Canada of rough diamonds and for a certification scheme for their export in order to meet Canada's obligations under the Kimberley process.

We have with us this morning as witnesses, from Prospectors and Developers Association of Canada, Mr. Robert Boyd, the president and CEO of Ashton Mining of Canada, Madam Eira Thomas, president of Navigator Exploration Corporation, and Mr. David Comba, director, issues management, and also Ms. Deb McCombe.

Mr. Comba.

Mr. David Comba (Director, Issues Management, Prospectors and Developers Association of Canada): Mr. Chairman, I'd like to thank you for agreeing to see us.

The PDAC is a national association representing the interests of over 4,000 individual members and hundreds of companies, both large and small. Annually in Toronto we host the largest convention of its type in the world, drawing over 7,000 explorationists to the city every March.

The exploration sector is truly global, and Canadian companies are very clearly the leaders. Our closest competitors are not the Americans, as many might expect, but Australians, who share a common colonial heritage and reliance on the mining industry, but who happen to lack a national association like the Prospectors and Developers Association of Canada.

Nothing in the geology department at Queen's University prepared me to appear before a Standing Committee on Foreign Affairs and International Trade, but I've been informed that staffers at Foreign Affairs were equally surprised to discover the extent of Canadian investment in the African continent. Again, that was led by the Canadian junior mine exploration sector.

The most common question we get from lay people is “What is a junior company?” These companies rarely have cashflow. That's to say, they derive no income from operations, and technically or mechanically speaking, they don't mine anything. We're really in the research field.

All the money that is spent exploring for mines is raised by selling shares to investors. It is the impact of the Kimberley process on securities regulatory matters that has brought us here today.

I'd like to introduce to you Deborah McCombe from the Ontario Securities Commission. Deborah is a graduate geologist and she serves to explain to the regulators how our industry functions. And that's really what we hope to do here today, so that you can appreciate some of our concerns with some very narrow aspects of Bill C-14.

The presentation will be made by two presidents of junior companies that are looking for diamonds in Canada. Both are graduate geologists. One of them actually was involved in the discovery of the Diavek Mine. I will let you, in the course of the question period, attempt to discover which of the two was the geologist on that discovery hole.

I'd like to stress, on behalf of the association, that we support Bill C-14 to the fullest. Our concern is that our members are in the diamond business but not in the commercial diamond business. We want to make sure that this is understood in the Kimberley process and Bill C-14.

Thank you, Mr. Chairman.

À (1040)

The Chair: Thank you, Mr. Comba.

Mr. Boyd.

Mr. Robert Boyd (President and Chief Executive Officer, Ashton Mining of Canada Inc.; Prospectors and Developers Association of Canada): I'd like to reiterate Mr. Comba's support for the legislation. We believe it will be great for Canada and help to facilitate our move forward to become a dominant producer, and dominant in the world diamond industry.

You may not be aware, members, but about 50% of the world's diamond exploration dollars are being spent in Canada right now. That's almost $100 million U.S. We are undoubtedly the place where most of the diamond exploration dollars are being spent, because the world diamond industry, the three majors and a lot of junior companies, recognize the potential for Canada to become a very dominant source of production.

As far as the Canadian statistics are concerned, with the production initiated from Snap Lake, we'll become the third-largest diamond producer in the world, after Botswana and Russia, and will overtake South Africa as the largest diamond-producing country in the world. It's important to emphasize that these diamond discoveries have been very much the product of junior companies, although the majors are the key ones that have ultimately taken over and run the projects now. We will account for about 17% by revenue of the world's diamond production by about 2008 or so.

As far as exploration is concerned, you really don't hear a lot about exploration, but it's important to emphasize that prior to the production starting up at the Ekati Diamond Mine there was a seven-year process that proceeded to that from just the discovery of a diamond-bearing kimberlite. So it's a very long process. And prior that there was probably another six-year period of exploration, or a six- or ten-year period, as far as Chuck Fipke and Stu Blusson are concerned.

A similar story can be said for the Diavik mine, where it was nine years from the discovery of the first diamond-bearing kimberlite to actual production, starting this fall or early next year. So diamond exploration is a very long process that goes over a long period of time. It goes through several stages, initially starting with desktop studies, going through heavy mineral sampling, core drilling of geophysical targets, and then, ultimately, when you discover a diamond-bearing kimberlite, you go through several phases of bulk sampling, starting with what we call with a mini-bulk sampling, right up to bulk sampling--stages of roughly ten tonnes, one hundred tonnes, one thousand tonnes, and in excess of one thousand tonnes.

Diamonds occur in very low concentrations, in economic concentrations less than one part per million, which means that out of a ten-tonne sample, you may be recovering, for a test sample, only 20 carats of diamonds, up to about 2,000 carats when you're dealing with multi-thousand-tonne samples, 2,000 or more carats. So really, the exploration stage has to generate these, and unfortunately, when you make a discovery like this, you don't really know the value of those diamonds, and there is no resource in the Canadian diamond sector right now for understanding the valuation of diamonds. There's no large resource of experts in valuing rough diamonds. There are a lot of people who understand how to value cut diamonds in a jewellery store, but not rough diamonds.

So for us it's important to emphasize that when we generate these packages of diamonds we have the ability to get them valued. Our concern with the process is that we make sure there's the ability to value these diamonds...not have to value these diamonds before we send them for valuation, sort of a catch-22 process.

We've had extensive discussions over the last ten days or so with NRCan officials, and we are working and making significant progress with them and feeling that we can deal with all these issues in the regulations.

We as a company, Ashton, have three projects in Canada. It's an important issue to me because we've made some significant discoveries in Quebec, Alberta, and Nunavut, and we feel that there may be the possibility over the next year that we may be generating one of these first stages of 50-carat package of stones, or so, and we don't want to get caught up in this process of having that small package of stones seized at the border. So it's an important issue for us as a junior company and explorer.

That's part of the reason we are here, and we as the exploration sector don't want to find that the junior explorers are marginalized in the process. I should emphasize, we've had significant encouragement in our discussions that a lot of these issues can be dealt with in the regulations.

À (1045)

I guess at this point I'll just had it over to Eira, and she can fill you in.

The Chair: Ms. Thomas, please.

Ms. Eira Thomas (President, Navigator Exploration Corp., Prospectors and Developers Association of Canada): Thank you very much, and thank you for the opportunity to speak to you today.

My name is Eira Thomas. I am president of Navigator Exploration Corp., and chief executive officer of Stornoway Ventures Limited. These are two junior companies exploring for diamonds in northern Canada. I'm also a director of the PDAC and the NWT & Nunavut Chamber of Mines. I'm also a director of Aber Diamond Corporation, 40% owner of Diavik, Canada's second diamond mine. We expect to be producing our first diamonds and making our first diamond sales early in 2003.

I joined Aber when it was a fledgling exploration company back in 1991, when our share price was trading around 30¢ per share. I was very fortunate to be involved in an exciting discovery that saw Aber evolve into what has become the largest publicly traded diamond company in the world today, at just over $30 per share, and a market cap of roughly $1.3 billion.

As an upcoming producer, I very much support the Kimberley process and the timely implementation of that legislation. It's very important to us. But as a Canadian junior explorer trying to find the next Diavik, I would like to ensure that the interests of Canadian exploration companies are considered and protected in the drafting of the regulations of the Kimberley process.

As you've heard from Mr. Comba and Mr. Boyd, Canadian diamond exploration companies have a vital role to play in the future of the diamond exploration industry in this country. In fact, it is the junior companies over the senior companies that are conducting most of the grassroots exploration in Canada today.

Junior explorers in Canada have developed the expertise for finding diamond deposits that ranks them among the best in the world, but we do not possess the expertise to value diamonds we recover from early-stage evaluation programs. Instead, we rely on a broader pool of expertise that is only available outside of Canada.

The diamonds that are recovered from mini-bulk sampling and bulk sampling programs in Canada will not move into the commercial pipeline, and I think it's important to stress that. They are much more valuable to us as data, contributing to a better understanding of the deposit and its potential to become an economic mine. Moreover, the cost of collecting these diamond parcels, which are often no more than a few hundred carats at the mini-bulk sampling stage, is very likely to exceed the value of those diamonds by more than ten times.

As public companies, we are governed by securities regulations that monitor quality assurance and quality control procedures to help insure and track these diamonds throughout their history. We are concerned that a preliminary evaluation of diamonds collected from these bulk sampling exercises, leaving Canada for the purposes of obtaining accurate valuation overseas, could result in an untimely and inaccurate public disclosure of material information. More importantly, if these diamonds are seized, for whatever reason, it could have very serious implications for these junior companies that rely on raising capital in public markets.

By disclosing these rough diamond parcels as geological samples not for commercial sale, which will be returned to Canada upon completion of a valuation exercise, we will ensure the needs of the exploration companies are met. It's certainly our understanding, from recent meetings with NRCan, that these issues can be satisfactorily considered in the regulations.

Again, we are very much in support of the Kimberley process and the legislation, and we would like to see our issues more satisfactorily looked at in the drafting of the final regulations.

Thank you.

À (1050)

The Chair: Thank you very much, Ms. Thomas.

Now we're going to proceed to questions and answers. Mr. Martin, please.

Mr. Keith Martin: Thank you very much.

I'll be asking a couple of questions, and my colleague, Mr. Stinson, will ask a couple.

The Chair: Fine.

Mr. Keith Martin: Thank you all very much for being here.

The challenge we're hearing about is how to put teeth into the system so you, as Canadian diamond producers, are not penalized, and we can clean up the system of reporting. Too much reliance has been placed upon trusting, if you will, the countries of origin, usually in sub-Saharan Africa, as diamond producers.

What would you recommend we put into this bill to enable us to have a bill that will strengthen the system, the reporting, the accounting, and the auditing that are essential for the Kimberley process to be effective and to be trusted by all players?

The Chair: Mr. Boyd.

Mr. Robert Boyd: I'll attempt to answer that question initially.

First of all, we are not producers. We represent explorers. Our prime function is exploration and the development of deposits. We don't get into the business of producing stones, so it's not as big an issue for us. The big issue for us is making sure we have the ability to value those stones externally, without having to value them before they leave the country.

As far as your key point is concerned, I think our group is comfortable with the existing legislation. As far as our companies are concerned, we have a very strong process for monitoring internally through the export reports that are filed. Any public company has to file these on SEDAR. As public exploration companies, then, we already have a very arduous process that we have to meet and submit to under Ontario Securities Commission regulations. Perhaps I could pass it over to Deb McCombe, who represents the Ontario Securities Commission on some of those issues with respect to reporting. We feel that exists already, though.

The Chair: Ms. McCombe.

Ms. Deb McCombe (Representative, Ontario Securities Commission; Prospectors and Developers Association of Canada): In February 2001 all the provinces and territories in Canada put in securities laws that deal with disclosure of mining projects. One of the key elements of those laws is that any oral or written disclosure of a scientific and technical nature in Canada has to be done on the basis of the work of a qualified person. For example, this would be an individual who has professional engineer or professional geoscientist registration; at least five years' worth of exploration experience and background; and, in this particular case, the relevant experience to deal with diamonds. This deals with all disclosure, whether you're a public company or a private company.

Within Canada, we have quite a good system. We've also linked up with Australia, Great Britain, and South Africa, and they also have a similar competent person who is involved.

The Chair: Mr. Stinson, please.

Mr. Darrel Stinson (Okanagan—Shuswap, Canadian Alliance): Thank you you for coming here today.

My concern, too, is the exploration end of it. I'm well aware that major companies do not find mines. At least, I know of very few that have found them. The work mostly comes from the people out there in the field for the small companies that are doing the exploration.

When you're going into this legislation, bulk samples will fall into this. Without the expertise to do that fundamental work here in Canada, the junior companies are going to have to send their bulk samples out of the country in order to get the proper results. How much will this bill impede that process for the juniors? It's okay for majors to go ahead and do it, but juniors just don't have that type of capital.

À (1055)

Ms. Eira Thomas: Perhaps I can address that, Mr. Stinson.

For the most part, we do have the facilities to process bulk samples within Canada. Really, it becomes a costing exercise, because once you get to the point at which you're collecting large bulk samples, particularly from northern Canada, it only makes sense to build a facility near the source of the extraction of that rock material.

The only issue for us in terms of bulk sampling really has to do more with mini-bulk sampling, in which you may only be collecting a few hundred tonnes and it doesn't make sense to build a facility to process that material. You may want to send it across the border to a facility that already exists, although there are choices within Canada of where you can process even mini-bulk samples. So we're not entirely limited to having to ship these things out of the country.

Robert, did you want to add to that?

Mr. Robert Boyd: About three or four years ago, for instance, we sent a sample of about 450 tonnes to Arkansas for processing. It was from kimberlite that we discovered in Alberta. Under the present legislation, facilities already exist for moving ores and concentrates across the border under the harmonization codes within the existing trade legislation. We therefore don't see any requirement for specifically addressing diamond-bearing ores any differently from uranium-bearing ores or other ores of other types.

The issue for us comes more in terms of once that sample is extracted. And remember, we're talking about 400 tonnes. To put that in perspective, that might be a sample that would fit in a pile in the centre of the square area formed by the tables in this room. We're talking about a significant volume of material. It's about 400 pick-up trucks full of rock, so it is a bit of a volume problem. From a sample that size, though, you might only recover about 40 carats of diamonds in a sample of a reasonably good grade, and maybe 100 at the most.

Once those samples are recovered from the facility in the U.S., for instance, the key issue for us is how we get those back into Canada. They have to be addressed under a Kimberley process certificate issued from the U.S. In order for us to deal with bringing those back into Canada under the return legislation that exists under the trade agreements, I think a KP certificate would have to be added in order for us to bring the product back from the U.S.

We think the facilities exist within the present bill. We've been assured that, within the regulations, a lot of these kinds of issues will be dealt with in terms of how the KP certificate is designed for these kinds of samples.

[Translation]

The Chair: Thank you very much.

[English]

Did you have anything else, Mr. Stinson?

Mr. Darrel Stinson: Just quickly, who is giving you that assurance that this will be addressed?

Mr. Robert Boyd: We were assured by the NRCan officials who are drafting the regulations.

Mr. Darrel Stinson: Fine. Thank you.

[Translation]

The Chair: Mr. Bergeron.

Mr. Stéphane Bergeron: Mr. Chairman, I would like to start by asking Ms. Thomas for some clarification. I do not know if I misunderstood her explanation, but I was under the impression that Canada did not have the necessary expertise and facilities to assess the value of the samples. From the explanation Ms. Thomas just provided, I got the impression that Canada had the equipment and facilities to assess the value of part of the samples extracted, but that the rest had to be sent abroad. Have I understood you correctly?

[English]

Ms. Eira Thomas: We're actually discussing two different issues. One is the actual mechanical processing of the rock to recover the diamonds, and the second stage is to take those diamonds and actually get them valued. By and large, we do have the expertise within Canada to extract the diamonds, depending on the size of the sample and where it's located. What we do not have is the expertise to value those diamonds and actually put a number, a value per carat, on the rough stones themselves. That expertise is really only outside of Canada at the present time.

[Translation]

Mr. Stéphane Bergeron: Are you saying that the expertise does not exist at all or that it is so limited that we are better off having the work done abroad?

[English]

Ms. Eira Thomas: We have some expertise, but it's very limited at the moment. Companies would really be reliant on the government diamond valuator that has been set up to deal with valuations for royalty purposes from the existing producers. For the purposes of a smaller company, it presents a number of potential conflicts—and perhaps Robert can explain some of the personal conflicts a little better—it really does limit our choices, and doesn't allow us to get a broad spectrum of valuations in order to make a good assessment of what our rough value actually is.

Á (1100)

[Translation]

The Chair: Mr. Bergeron.

Mr. Stéphane Bergeron: If Mr. Boyd does not want to add anything to that question, I'm going to continue along the same lines as Mr. Stinson.

You seem to be saying that you have guarantees that the regulation will resolve some of your concerns. Having said that, I am somewhat surprised that you have already been given this guarantee, as regulations normally stem from the act and this bill has not yet been adopted. So I would be more inclined to ask you the question the other way. Are there aspects in this bill that we could amend to facilitate work with respect to the preparation of regulations so that they meet your expectations and concerns?

[English]

The Chair: Mr. Boyd.

Mr. Robert Boyd: That's a bit of a loaded question. I guess the simple answer is that the present bill gives significant powers to the minister to ensure that the regulations address all the concerns.

I think the particular issue I seem to hear being raised here is the bulk sample issue. Really, we see the issue being not the bulk sample itself moving across the border, but what happens when we get the diamonds extracted from that sample in the future. Remember, I don't see and we don't see the potential for someone to use bulk samples as a method for smuggling diamonds. It was an issue and a concern for us initially, but on review of the legislation, and understanding the existing trade issues, we felt that the movement of a bulk sample is not going to be a concern to us, because it's addressed under existing harmonization code legislation.

So the issue for us still comes back to the value issue. We understand that the definition of value is fairly broad and it can be addressed within the regulations under that requirement, and the ministerial powers are there to give the regulators the ability to draft the regulations that are required to address our concerns.

[Translation]

The Chair: A short supplementary question, Mr. Bergeron.

Mr. Stéphane Bergeron: If, in this process, the problem occurs when the diamonds come back from the United States, for example, don't you need legislation in the countries where the new diamonds are coming from to be adapted to your concerns and not just Canadian legislation? What guarantee do you have that the countries with which you do business, if there are more than one, will adapt their legislation as a result, since according to what you have said, that is where the problem with identifying the diamond samples lies?

[English]

The Chair: Mr. Boyd.

Mr. Robert Boyd: To respond to that question, the Kimberley process engages numerous governments within that process, and guidelines will be put together for that process.

The specific concern we have is the annex 1 to the Kimberely process certificate, which deals with the issues that have to be listed within a Kimberley process certificate. One of those issues is values. And it does not say fair market value. For instance, for us, we could end up collecting a sample that will cost us $5 million and will only generate 150 carats of diamonds. A fair market value on those diamonds might only be $500,000, but it's cost us $5 million to acquire it. So essentially it can be addressed within the broad realization of value within a Kimberley process certificate. That would be our understanding.

I guess, yes, all of the countries have to get onside, ultimately, to this kind of scenario. But the important thing for us, as an industry, is that at least the U.S. and Australia are potentially onside, because these are the areas where we might end up having to send samples for processing and have to get them back. Otherwise, as far as sending samples over to Antwerp, the important thing is what's on our certificate. When it comes back it will have a fair market valuation on it. So if it comes back from Antwerp, after a valuation exercise, it will be adequately addressed under the normal KPC requirements.

Á (1105)

The Chair: Thank you.

Mr. Keddy, please.

Mr. Gerald Keddy (South Shore, PC): Thank you, Mr. Chair.

I'd like to thank our witnesses for coming. I wonder just how excited Ms. Thomas was when she found that first gem-quality stone. I wonder how thick the blackflies were at the time.

All that aside, I'm extremely concerned with your comments, because I don't interpret the bill the same way you folks are interpreting it. I suggest in all earnestness that you take a long, hard look at the legislation.

Certainly the Conservative Party has no difficulty whatsoever with the Kimberley process. We see the Kimberley process as being positive, as being something that will generate increased sales for Canadian stones.

I want to draw your attention to a couple of points in this bill. The title of the bill refers to export and import of rough diamonds. If you send diamonds--rough stones in situ--across the border into the United States or Australia as a bulk sample, they're governed under this process. I don't care what other process is in place for gold or uranium; the Kimberley process is going to change the process for rough diamonds around the world. That includes Canada when we sign on.

By the way, we're debating something for which we haven't even seen the final bill yet. Interlaken is going to be held on November 10. That's going to be the finalization of the Kimberley process. We're debating something for which we haven't seen the final draft.

We've got our draft in front of us. The Canadian certificate means a Kimberley process certificate issued by the minister. Everything in here deals with rough stones; it doesn't deal with.... I think you're looking at this the wrong way, and I have to tell you that. I think you're looking at rough stones that are going to be recovered from a bulk sample and returned to Canada. That shouldn't be the difficulty. Those are easily covered under the Kimberley process if they've been exported.

If they're in Canada, they're still in transit, and the bill states that for every person who exports rough diamonds, “Before issuing a Canadian Certificate, the Minister must be satisfied that... the information... is accurate”.

You explain to me how you can give the minister accurate information on the rough stones within a bulk sample when you're about to ship them across the border. They're in situ; you don't know how many there are. There could be 10 carats; there could be 100 carats; there could be a significant gem-quality stone in there; there could be simply small gem-quality stones, or none at all.

I see the failure of this legislation in the fact that we need to make sure the minister can add regulations that govern multi-tonne bulk samples.

The Chair: Mr. Boyd.

Mr. Robert Boyd: I guess the important part we understand about the legislation and that was really clarified to us is that it deals with the import and export of rough diamonds. We've moved product across the border under the harmonization codes before, under bulk samples.

Mr. Gerald Keddy: Okay. Excuse me. I'm interested in your answer; I'm not being rude here. I understand you've been moving product. The Kimberley process changes that. This is a new certificate going to be required for rough stones.

Á (1110)

Mr. Robert Boyd: Yes, but I guess the analogy is in going to a garage sale. If you go to the garage sale and buy a box of junk jewellery and you've got a gem in there, then that's your luck, because you paid $10 for it. You just don't know what the stone content is going to be in a sample that's sent down. You're not going to go through the expense of sending it down unless you feel pretty confident you're going to get diamonds out of that sample.

Mr. Gerald Keddy: Exactly.

Mr. Robert Boyd: All we can do is indicate that the assurances we see within the legislation, the way it has been explained to us, and the existing regulations that exist with respect to trade give us comfort that the issue comes once we've extracted those rough diamonds and moved them.

Remember, if we're moving bulk samples across the border, I explained to you how large one of these samples could be.

Mr. Gerald Keddy: I know about bulk samples.

Mr. Robert Boyd: If people wanted to play around with diamond content, first of all we're governed by these OSC regulations that require certain quality assurance or quality control with respect to the professionals who are involved with this. That could deal with that issue. But if people were going to move stones across the border, there are a lot of easier ways to do it illegally than trying to sprinkle them into bulk samples.

Mr. Gerald Keddy: I understand that situation.

The Chair: Mr. Keddy, very short.

Mr. Gerald Keddy: My concern here is that if the legislation doesn't deal directly with it, it's not covered.

Ms. Eira Thomas: It certainly was our understanding from the discussions that we've had that bulk samples will be permitted to cross the border without a KP certificate and that the KP certificate will only be required once you have rough diamonds produced from recovery and then the shipment of those again back into Canada. Then you will require a KP certificate. But it wasn't my understanding that we required one for shipping of diamond-bearing rock across the border.

The Chair: Thank you, Ms. Thomas.

Now we'll go to Mr. Pratt for the last question.

Mr. David Pratt (Nepean—Carleton, Lib.): Thank you, Mr. Chair.

I listened to Mr. Keddy's intervention, and frankly, I find some of his comments rather frustrating. It seems that everybody else is wrong, in terms of their interpretation of the bill we have in front of us, and Mr. Keddy is right.

Just by way of correction, the Interlaken meeting is actually taking place today, not on November 10.

Mr. Boyd, you said that you feel that we can deal with these issues through the regulations in terms of the issue of test samples. I think most people on this side would agree that Mr. Keddy's interpretation of the bulk sample issue.... Most would agree that this is not part of this legislation, that the bulk sample issues are covered under a separate item in the customs tariff and that it has absolutely nothing to do with the Kimberley process. The issue is more with the test samples.

I know that you've been working with the Department of Natural Resources on this. We have been given an amendment to the bill. It's actually listed here as G-1A, which is an amendment to clause 9 of the bill. I don't know if you have the bill in front of you, but it replaces line 40 with the following.... Before issuing a Canadian certificate, the minister must be satisfied that, and under (c), “the rough diamonds in respect of which the application is made originated in Canada, were extracted from mineral concentrates in Canada, or were in Canada at the time of the coming into force of this section”.

So in addition to the assurances that you've had that the issue of test samples could be dealt with by regulation, in fact what is being proposed by the Department of Natural Resources is an amendment that would provide further certainty with respect to that issue of test sampling. Is that your reading of the situation?

The Chair: Mr. Boyd, please.

Mr. Robert Boyd: Yes, I would say that our reading of the issue is the test sample issue, and test samples are packages of diamonds or concentrates of diamond products extracted from either concentrates or ores of kimberlite. So yes.

Mr. David Pratt: So this amendment, in addition to the regulations that are going to be promulgated, should essentially deal with your concerns--with the understanding, of course, that the Kimberley process is not intended to interfere with the legitimate diamond trade, especially when it involves the mining of kimberlite pipes. The Kimberley process is obviously intended to deal with alluvial mining, which creates a lot of stones on the surface, where people can pick those stones up and also smuggle them out. They're easily smuggle-able, if that's a word.

An hon. member: Smuggled.

Mr. David Pratt: Easily smuggled. I stand corrected by my colleague here.

Any further comments?

Á (1115)

Mr. Robert Boyd: I would agree with you that geologically, Canada has been glaciated, so speaking as a geologist, there is a very small possibility of us extracting alluvial diamonds in any capacity in Canada. It's very rare to find diamonds in the surficial environment in Canada. The only way you can extract diamonds in any quantity is to go through a pretty rigorous and capital-intensive development project.

The Chair: Thank you, Mr. Pratt.

Thank you to our witnesses of this morning. Mr. Comba, Madam Thomas, Mr. Boyd, Madam McCombe, thank you again for appearing before our committee.

Now we're going to proceed to clause-by-clause consideration. I'm going to ask also the officials to come in front, please.

Thank you again.

We're now going to start the clause-by-clause consideration. You all received the amendments. We're going to proceed one by one.

Pursuant to Standing Order 75(1), consideration of the preamble and clause 1 is postponed.

We're going to go to

[Translation]

Clause 2.

(On clause 2—Definitions)

The Chair: We have a Bloc Québécois amendment.

Ms. Lalonde, please explain the amendment to us.

Ms. Francine Lalonde: Mr. Chairman, during our deliberations the other day, I mentioned Les Diamants du Saint-Laurent, a company that cuts the stones it imports. To ensure that it is impossible to commit fraud easily, this company feels that it is extremely important to specify the number of diamonds whose size is superior to two carats. Since we already know the total number of carats, with the number of diamonds whose size is superior to two carats, we have a good indication as to the kind of lot we are looking at.

This company could not come today, but it is an expert, I reiterate, in cutting imported diamonds.

The Chair: Thank you, Ms. Lalonde.

[English]

Ms. Carroll.

Á (1120)

Ms. Aileen Carroll (Barrie—Simcoe—Bradford, Lib.): Thank you, Mr. Chair.

I appreciate the honourable member's concerns, but I think it's really important to understand here that the minimal requirements, the words used in the amendment, and references to the number of diamonds and carats, and so on, have not been a part of the Kimberley process. We also need to understand that the discussions with the companies, as Madame Lalonde has mentioned, have taken place.

Industry is well aware what is part of the Kimberley process--as was just recently mentioned by Mr. Pratt in reference to another item on ore--and what is not. So if at this point we take a law and start introducing, by amendment, items that have not been part of the process, we will no longer be consistent with the other 48 participating countries. As such, we will not be a member of an international group that has come forward with a piece of the legislation. So it's simply not part of the Kimberley process.

The Chair: Next, on the same article, is Mr. Martin.

Mr. Keith Martin: I'm voting against this because the issue of diamonds over the size of two carats is not really relevant. We prefer to see a situation that deals with the total carats of the rough diamonds. It is much more relevant to the import and export of these products to know the total carats, rather than whether the diamonds are over the size of two carats.

For that reason, we'll be voting against it. But we'd certainly like to see, sometime in the near future, amendments put forth that would ensure that the number of carats be listed inside, as part of the Kimberley process documentation.

[Translation]

The Chair: Mr. Bergeron.

Mr. Stéphane Bergeron: Mr. Chairman, with all due respect to Ms. Carroll and Mr. Martin, I simply want to point out that the purpose of the amendment is to add to the minimal requirements of the Kimberley process.

It is neither contradictory nor mutually exclusive. The mention could contain the total number of carats, but also the number of diamonds whose size is superior to two carats.

With all due respect to Mr. Martin, I would say that the point of view behind the amendment introduced by Ms. Lalonde is not simply Ms. Lalonde's point of view, but that of a group of experts from a company specialized in the cutting of diamonds, which imports diamonds, and which is asking that the number of diamonds whose size is superior to two carats be indicated on the packaging.

Given that his political party says it is concerned with the private sector's point of view, I am surprised by Mr. Martin's position, all the more so since this proposed amendment does not exclude the possibility of clarifying the total number of carats on the packaging.

To respond to Ms. Carroll's argument, I will point out that yesterday, when we discussed this matter for the last time, I asked the experts from the department if other countries had included specifications in their national legislation. Now unless I am mistaken, and correct me if I am wrong, I was told that the Kimberley process did not exclude the possibility that countries could, in their national legislation, be more demanding than what is required by the process itself.

So Ms. Carroll is wrongly claiming that if we were to specify the number of diamonds whose size is superior to two carats, we would be excluding ourselves from the Kimberley process and the group of countries that negotiated the Kimberley process. I think that an argument like that is simply mistaken and invalid in the circumstances.

The Chair: Thank you, Mr. Bergeron.

Mr. Keddy.

[English]

Mr. Gerald Keddy: Thank you, Mr. Chair.

In relation to Madame Carroll's statement, I take issue with that. Whether or not the two-carat limit is a good limit or not is debatable, but I certainly don't think it's in contravention of the process.

This process is about two different things. It's about the Kimberley process setting international standards, and it's about the movement in Canada of rough stones and how it affects our industry. You can't separate the two. It's a little bit more than disingenuous to say we would be in contravention of the process.

Our expert witnesses told us the other day there were 48 countries signed on, and 48 different Kimberley processes. So if ours is slightly different from the rest of the world, it doesn't mean it contradicts the process, because they're all different already. So if you wanted to add the two-carat limit in there, you could. There would be nothing wrong with that.

Á (1125)

The Chair: Mr. Pratt is next for a very short comment, and then we'll go to the questions.

Mr. David Pratt: Some people around this table have to wrap their heads around the fact that we're the good guys in Canada. Some of the countries that are mining alluvial diamonds on the surface are the problem.

In terms of coming into compliance with the Kimberley process, we don't need to go beyond anything that's specified in the minimum, because we have fairly significant controls right now. We don't need regulations for the sake of regulations, or regulations that put us above and beyond the requirements of the Kimberley process, because 99.9% of the trade in Canada is clean. So what you're saying is really completely unnecessary, from the standpoint of the industry and from the standpoint of government regulation.

(Amendment negatived)

(Clauses 2 and 3 agreed to)

(On clause 4--Disclosure)

The Chair: Ms. Carroll.

Ms. Aileen Carroll: Thank you, Mr. Chair.

The amendment from the government would replace line 34 in clause 4 with the following:

“inspection under this Act if the Minister considers the disclosure to be in the public interest.”

This deals with the test for disclosure, Mr. Chair, and it is just a matter of tightening up this aspect of the legislation.

The Chair: Thank you, Ms. Carroll.

Are there any comments regarding the amendment?

Madam Lalonde.

[Translation]

Ms. Francine Lalonde: I would like to know why you have changed the wording. As far as I can see, this gives the minister even more latitude than before, and he already has a great deal.

[English]

The Chair: Ms. Carroll.

Ms. Aileen Carroll: We don't see the minister's having latitude as being a negative thing. I think it allows for the flexibility that this legislation requires. We are introducing a new process to bring us in concert with our international colleagues, and in so doing, on certain occasions that's exactly what we need.

I would ask for the question, Mr. Chair.

Á (1130)

The Chair: I'll first recognize Mr. Stinson and then Madam Jennings.

Mr. Darrel Stinson: We'll be voting yes on this. As we see it, by adding this it protects the value of work information in Canadian businesses. It also strikes a fair balance between the public's right to know and businesses' right to privacy.

The Chair: Thank you, Mr. Stinson.

[Translation]

Ms. Jennings.

[English]

Ms. Aileen Carroll: Just before that, on a point of order, I offer my apologies; I did not read the whole amendment. I had underlined a portion, Mr. Chair, but perhaps I should read it. I know it's in front of everybody.

Thank you.

[Translation]

Ms. Marlene Jennings: I would agree with the amendment put forward by the government, because when a minister can do something, that is a discretionary power. So when we talk about a discretionary power, we have to implement criteria that serve to control that power, or provide a framework within which it is exercised. In the current wording of the section, we see no such framework. With the proposed amendment, the minister will clearly have to meet certain criteria before using his discretionary powers. I support the proposed amendment.

The Chair: Thank you, Ms. Jennings.

[English]

(Amendment agreed to)

(Clause 4 as amended agreed to)

(Clauses 5 and 6 agreed to)

(On clause 7--Designation of inspectors and investigators)

[Translation]

The Chair: The Bloc Québécois has a motion to amend section 7.

Ms. Lalonde.

Ms. Francine Lalonde: This refers to a question I put to the minister's legislative assistant. It concerns the powers that inspectors in Quebec and other provinces might have, and states what should be permitted by the text but not necessarily required. The section would read:

13.1 For greater certainty, nothing in this Act affects the power of the provinces over ownership, exploration and development of natural resources on their territory.

This clearly sets out the power of the provinces.

[English]

The Chair: Ms. Carroll.

Ms. Aileen Carroll: Thank you, Mr. Chair.

It is our contention that this amendment is not really required. The minister has the power in this act, under section 7, to so designate provincial inspectors if he considers it a desirable and efficient thing to do so. There would be a cost to the province in the event that provincial inspectors partook. It is just left with the minister to use provincial inspectors if it works, if it's cost-efficient. So the amendment isn't necessary.

The Chair: Mr. Stinson.

Mr. Darrel Stinson: I'd have to disagree with that. I strongly think this recommendation is necessary, as it will protect provincial jurisdiction, as well as allowing the federal government to save money by employing provincial officers, if the provinces so choose. I believe this is necessary to enhance the fact that the provinces do have some say in this matter.

The Chair: I'm going to ask the officials to respond to this.

[Translation]

Ms. Giroux.

Ms. Geneviève Giroux (Legal Counsel, Department of Justice Canada): If I may, I would like to point out that you read the wrong wording. In fact, you are moving the addition of a new paragraph to section 7. You are quite right in saying that provinces will be able to have inspection authority delegated to them. But that is already in the current wording, and there is no need to repeat it.

The Chair: One last question, by Ms. Lalonde or Mr. Bergeron.

Ms. Francine Lalonde: I had the requested the floor.

The Chair: Yes, Ms. Lalonde was indeed the first to ask to speak. One last comment.

Ms. Francine Lalonde: Forgive me, I did indeed read the wrong text.

As we can see in the right text, it is important that provinces who have jurisdiction over companies' rights to explore, exploit and produce natural resources can provide those companies with guarantees that they will be able to obtain diamond certificates without there being any problems.

So, as we can say in the bill that the province has that power, I don't see the problem. I seems to me that this takes nothing away from the federal government, yet makes it possible for provinces to help their mining industry flourish.

Á (1135)

The Chair: Thank you, Ms. Lalonde.

Mr. Keddy.

[English]

Mr. Gerald Keddy: Thank you, Mr. Chair.

I agree with the amendment. I'm wondering if Madame Lalonde would consider a short amendment to her amendment that would read “provinces or territories”.

[Translation]

Ms. Francine Lalonde: No problem.

[English]

Mr. Gerald Keddy: We should be empowering the provincial inspectors who are already there on the ground, instead of someone who may be appointed at some time by the minister, where we're not sure of their qualifications or anything else. It simply says someone the minister considers to be qualified. Well, he could consider anyone to be qualified. However, if we use the provincial inspectors and we add the words “provincial or territorial”, as we have a fledgling diamond industry, which is going to be a huge diamond industry, in Nunavut, in the Northwest Territories, and in the provinces as well, this allows a better interaction between the inspectors and the minister's office. I think it adds to the bill, rather than taking away from the bill.

The Chair: If I understand, Mr. Keddy, you want to add “territorial” after “provincial” with the inspectors, that's your subamendment.

Mr. Gerald Keddy: Exactly.

[Translation]

The Chair: Ms. Lalonde agrees.

Now, we turn to Mr. Bergeron.

Mr. Stéphane Bergeron: I will be quick, Mr. Chairman.

If I understood correctly, Ms. Carroll stated that the amendment is not required, while Ms. Giroux feels that under the bill, the provincial or territorial inspector or investigator can with this clause in fact act as investigator or inspector. Ms. Lalonde's amendment therefore takes away nothing, but simply sets out a possibility more clearly. Since the amendment takes nothing away from the bill and simply sets out a possibility, I would invite our colleagues to vote for it in a spirit of cooperation, even if they do not deem the amendment necessary.

[English]

The Chair: Now we're going to put the questions. The first question will be on these--

Mr. Paul Szabo (Mississauga South, Lib.): On a point of order, Mr. Chairman, I've been led to understand that references in Canadian legislation to the provinces also include the territories implicitly. Does that cover the subamendment or the amendment that's been proposed, does it make it redundant?

The Chair: No. I think, for precision, we need to put “territorial”. It will be much better if we accept the subamendment and the amendment.

Mr. Duncan, rapidly please.

Mr. John Duncan (Vancouver Island North, Canadian Alliance): On the same point as Mr. Szabo, my understanding is that there is a difference in natural resource jurisdiction between the provinces and the territories. If we mix the territorial inspectors into this, I think we're creating potential for a problem, because I believe the territorial inspections are legitimately a federal responsibility.

The Chair: I'm going to ask the officials to comment.

Mr. Cox.

Mr. David Cox (Legal Counsel, Indian and Northern Affairs Canada): Thank you, Mr. Chair.

We endorse the comment made by Mr. Szabo: reference to the provincial would cover the territorial.

The Chair: Fine, thank you.

Now we'll go to the question. There was a subamendment just to add “territorial”, and it doesn't mean that if we accept the subamendment, we accept the amendment.

(Subamendment negatived)

The Chair: Now the question is on the amendment by the Bloc Québécois.

(Amendment negatived)

(Clauses 7 and 8 agreed to)

(On clause 9--Issuance of Canadian Certificate)

The Chair: Now, on clause 9, Ms. Carroll.

Á (1140)

Ms. Aileen Carroll: Thank you.

The motion is to amend by replacing line 40 on page 3 of the bill with the following: “were extracted from mineral concentrates in Canada, were imported from a participant, or”. The purpose of this has already been discussed and clarified--clarification appears to be a theme here this morning--by my colleague David Pratt, and it is a response on the part of the government to an issue that was raised last Friday during hearings.

To explain it again very simply, ore samples contain a very low concentration of diamonds, and a given bulk sample may contain no diamonds at all. Therefore, these bulk samples of ore are shipped, as Mr. Pratt made clear, under tariff codes that are not subject to the Kimberley process. Again, unfortunately, it's a confusion about what is being treated by this piece of legislation, which is to address our involvement and strong endorsement of the Kimberley process, and what is dealt with elsewhere by existing legislation. That is where we're coming from with this amendment.

The Chair: (Amendment agreed to)

(Clause 9 as amended agreed to on division)

[Translation]

Mr. Stéphane Bergeron: Mr. Chairman, I would also point out that clause 7 was also agreed to on division, even if it was not so recorded.

The Chair: That's fine.

[English]

(Clauses 10 to 12 inclusive agreed to)

(On clause 13--Reporting)

[Translation]

Ms. Lalonde.

Ms. Francine Lalonde: This time, I do have the right wording. I will read it:

13.1 For a greater certainty, nothing in this Act affects the powers of the provinces over ownership, exploration and development of natural resources on their territory.

Since it is the government that legislates on the diamond mine issue, Quebec feels the need—as I imagine the other provinces do—to state clearly once again that this bill does not in any way restrict the powers of the provinces over ownership, exploration and development of natural resources on their territory.

[English]

The Chair: Next, Madame Carroll.

Ms. Aileen Carroll: Monsieur le président, the amendment is redundant. There is no infringement. It goes without saying.

The Chair: Mr. Day.

Ms. Aileen Carroll: So on clause 13, it's unfortunate, but what's attempting to be introduced into our discussion of a very good piece of legislation is a provincial right that simply isn't being impacted by this bill.

Mr. Stockwell Day: It's not an issue.

Ms. Aileen Carroll: It's not an issue.

The Chair: Thank you.

Mr. Day.

Mr. Stockwell Day: Having lived and served in a province that at one time was assured of the recognition of provincial jurisdiction when it came to natural resources and then was hit with a national energy program that crushed that notion, along with the economy of that province, I share the concern of Madame Lalonde, and it should be clearly articulated. If it's true what Madame Carroll has said, then she and others should have no problem with it being stated once again. It does not affect the bill in any material way.

I would only suggest to Madame Lalonde a friendly subamendment, that it simply say “the provinces”--and ”territories”, if she wishes--rather than have it appear that only once province has that concern. There are other provinces equally as concerned as Quebec.

Á (1145)

Mr. John Harvard (Charleswood —St. James—Assiniboia, Lib.): It says “provinces”.

Mr. Stockwell Day: Correct me if I'm wrong, but...

[Translation]

I believe that Ms. Lalonde was talking about Quebec.

Ms. Francine Lalonde: I said that this was a concern in Quebec, but I added that other provinces no doubt had the same concern.

The Chair: The question is on the amendment moved by the Bloc Québécois.

[English]

(Amendment negatived)

(Clause 13 agreed to on division)

(Clauses 14 to 18 inclusive agreed to)

(On clause 19--Powers)

The Chair: Madame Carroll.

Ms. Aileen Carroll: Thank you, Mr. Chair.

On clause 19, I would like to move the amendment to replace line 25 with the following: “copies of any data or any record”.

The Chair: If I understand, you're just deleting the word “electronic”. Fine.

Are there any questions?

[Translation]

Ms. Lalonde.

Ms. Francine Lalonde: One moment, please.

I don't know why you are taking this out. The fact of noting the existence of copies of electronic data or accounting records adds something, in my opinion. It adds detail and completes the information. If we bring it down to what the amendment says, in other words, to "data or any record", that's not enough. In my view, it is important to indicate clearly that all those data, be they on computers or elsewhere, are the data we are talking about. That has to be in here.

The Chair: Ms. Giroux, do you have a comment?

Ms. Geneviève Giroux: The proposed amendment is intended to make section 19 consistent with the rest of the bill. Each time that it appears, the term “data” should not mean only electronic data, but also include all kinds of data. This is just to clean up the wording and make this clause more consistent with the rest.

The Chair: Mr. Keddy.

[English]

Mr. Gerald Keddy: We've been hearing from the government side that a lot of amendments are redundant. I question why you put data in there twice, because it says “applies for any record, book of account, or other document or data relevant to the administration of this act”. Isn't it covered already? Why are you putting it in again?

The Chair: We will call the question on the amendment.

(Amendment agreed to on division)

(Clause 19 as amended agreed to on division)

(Clauses 20 to 23 inclusive agreed to)

(On clause 24--Entry)

Ms. Aileen Carroll: I have an amendment to clause 24. It is proposed by the amendment to replace lines 9 to 11 with the following: “through or over private property.” In other words, period. It deletes the balance of that.

[Translation]

The Chair: That's the same thing.

Á (1150)

[English]

If I understand, you just want to delete “without being liable for damage to property or infringement of rights relating to property.” It is to delete these words.

[Translation]

In French, the motion would simply delete "sans encourir de poursuites pour dommages aux biens ou pour violation d'un droit relatif aux biens".

[English]

Are there any comments?

Madame Lalonde.

[Translation]

Ms. Francine Lalonde: I would like an explanation as to why these words should be removed. I could ask the law clerk for an explanation.

[English]

The Chair: Madam Carroll wants to answer.

Ms. Aileen Carroll: The point of deleting the balance is simply that we're dealing with a consistency with the Criminal Code here, and it's to offset trespassing and making it as a liability. This was done, again, in conjunction with and listening carefully to industry as well as to others who came forward in consultation on this bill.

I might, if I may, ask for legal assistance, if that's okay.

[Translation]

The Chair: Ms. Giroux, please.

Ms. Geneviève Giroux: Actually, the powers of the inspectors are similar to the powers granted by the Criminal Code in the context of investigations. The inspectors will be acting as public officers.

The purpose of this amendment is to prevent the government from not being responsible for damage to property. Thus, if excessive damage were done during the investigation, people would be compensated. What we are doing is eliminating the federal government's lack of liability in the case of an investigation.

In addition, investigators have the right to enter private property under the powers set out in their mandate. However, it could happen that they might enter adjacent properties, and this might not be covered by their mandate. In such cases, investigators would have the power to enter the property without violating property rights, or without the trespassing offence.

[English]

The Chair: Mr. Keddy.

Mr. Gerald Keddy: This would effectively take away any rights by a private company if the government inspected their premises, broke down a door to an office, took equipment out of that office, destroyed property, and found out that the office was operating in a completely honest and upfront manner, not breaking any laws. Does that effectively take away the right of that private company to sue the government? It states here that the government would not be liable.

The Chair: Ms. Giroux.

Ms. Geneviève Giroux: Au contraire. The government will be liable if there are damages. We're removing the limit of liability for the government. The government would be liable for compensating.

Mr. Gerald Keddy: So you're replacing the words “without being liable”?

Ms. Geneviève Giroux: That's correct.

Mr. Gerald Keddy: Thank you. That answers my question.

The Chair: The question is on the amendment.

(Amendment agreed to)

(Clause 24 as amended agreed to)

(Clauses 25 and 26 agreed to)

The Chair: On clause 27, the Canadian Alliance. Mr. Stinson.

Mr. Darrel Stinson: The amendment is just to change “may” to “shall”.

Á (1155)

The Chair: Ms. Carroll.

Ms. Aileen Carroll: Thank you, Mr. Chair.

We are not supporting this amendment, because it introduces complexity again. With the “shall”, you don't allow any discretion whatsoever, and you compel a response. You put all potential offences in the same category, and you might very well have some minor offences, such as a failure to report or a failure to assist an inspector. You might also have cases where we are proceeding with a prosecution in another area. What you're going to do here is compel the shipment to be detained, and you're going to tie the hands of people involved and limit their flexibility. It may be a very minor offence, and yet you would so negatively affect the company by tying up the shipment, because you're making it compulsory, when it simply does not relate to what the offence is. I think you would find that it would not make the private sector, which has worked very closely with us, very happy to see this kind of restriction added at this time in a bill that has been generally very well received.

(Amendment negatived)

(Clause 27 agreed to)

(Clauses 28 to 31 inclusive agreed to)

(On clause 32--Return of things seized)

The Chair: On clause 32 there is an amendment from the Canadian Alliance. Mr. Stinson.

Mr. Darrel Stinson: Again it's a change of the word from “may” to “shall”.

The Chair: Same problem.

Ms. Carroll.

Ms. Aileen Carroll: I don't want to tie you up with redundancy myself, but again I have to say that the bill is trying to keep it discretionary and allow flexibility. So indeed, I put forward the same argument. There is a wide variety of offences under this act, and if you deny the flexibility that's required, I don't think you produce a good piece of legislation. You're picking a great big hammer for something of this importance and equally for something of a very serious nature. So I think you just need to allow that flexibility there. It's consistent with other legislation here.

(Amendment negatived)

(Clause 32 agreed to)

(Clause 33 agreed to)

(On clause 34--Regulations)

The Chair: On clause 34 we have an amendment from the Conservative Party. Mr. Keddy.

Mr. Gerald Keddy: Thank you, Mr. Chair.

The government side has insisted on numerous occasions that we're not supportive of this process. We are supportive of this process. The difficulty I have is that it was set out for an international certification scheme, and it's not necessarily dealing with the issues that face the Canadian industry. One of those issues--and I think it's an extremely important one--is to have more than one point of export. As it reads now, it says, “designating any place as a point of entry for importing rough diamonds or as a point of exit for exporting them”. I'm not convinced that this is more than one point. If it is more than one point, I would like to hear that, but to make absolutely sure it's more than one point, I would add the amendment: “point of exit for exporting them, provided that at least two places...”.

When we checked with the legislative writers, the legal interpretation I received is that you cannot be sure there's more than one point unless it's listed. I understand that our legal advice at the table is saying it's already meant to include more than one point, but the advice we received is that unless you add “of exit for exporting them, provided that at least two places are designated,” the legislation means one point. Obviously, with the size of Canada and with most of this activity occurring in northern Canada, some of it resulting in direct flights out of Yellowknife to other parts of the world, some of it direct flights, probably, out of Toronto or Vancouver or Halifax or Gander, wherever, we need more than one point.

So the amendment would allow for two places designated as points of entry and at least two places designated as points of exit.

Â (1200)

The Chair: Thank you, Mr. Keddy.

Madam Jennings.

[Translation]

Ms. Marlene Jennings: Perhaps in cases where there is such confusion, bilingualism may be an advantage. I took my law degree quite a long time ago, but I remember that judges must look at both the French and English versions to ensure the objective is the same. The French is very clear. It states: “désignant les points d'entrée et de sortie”. It is in the plural, and this would take precedence over the term “any place”, which appears in the English version, and which normally may mean “one” or “several”. Since the plural is used in French, this means that the objective is to cover several points of entry and several points of exit.

The Chair: Mr. Duncan.

[English]

Mr. John Duncan: I agree with Madam Jennings. I'm just thinking that we could make the English correspond to the French, which would be “designating points of entry for importing rough diamonds or points of exit for exporting them”.

The Chair: I'd be very pleased, because more often it's the opposite.

Mr. Keddy.

Mr. Gerald Keddy: What Madam Jennings was stating is exactly why we put the amendment in. It's stated in one language and not in the other, and--unless Madam Jennings is the legal expert--the legal advice we received says it should be in the legislation. If you put it in the legislation, we don't have to guess about this, it's there, it's very clear, it's very precise: there is more than one point of entry and there is more than one point of exit.

[Translation]

The Chair: Ms. Giroux, please.

Ms. Geneviève Giroux: I would like to clarify something.

Under the Interpretation Act, the singular includes the plural and the plural includes the singular. Even though the two languages use different formulations, the two versions mean the same thing.

[English]

The Chair: Ms. Carroll.

Ms. Aileen Carroll: To address the amendment as a whole, rather than the translation, I think it's important for the committee members to know that industry very much supports what's been done here, and we have received correspondence indicating that they're very much in support of this part of the bill, because it allows the minister to do what is prudent for the industry. It allows the minister to consult with industry as a whole to determine what works best.

Again, we're trying to pre-empt a process. This is setting up a process, and it's leaving sufficient flexibility in it that industry and government and provincial authorities or federal authorities will be able to see what's working and what imposes the least restriction on the private sector to run a clean show, which they overwhelmingly are, as David said. Again, why is there this desire to clarify where it is not murky, to limit where there is a need for elasticity?

The Chair: Mr. Keddy.

Mr. Gerald Keddy: I very much appreciate Madam Caroll's intervention--

Â (1205)

Ms. Aileen Carroll: That's because you're my MP.

Mr. Gerald Keddy: —because I've always been under the impression that it was our responsibility, not just our job, to improve legislation. I may be mistaken, and maybe my role as a member of Parliament is supposed to be the same as the government's role, but I think it's to improve legislation, and I'd be more than willing to go on record with the fact that it would not be the first time this government passed legislation that they later had to come back and amend. I'll use the example of the Nuclear Safety and Control Act, the five years industry has been waiting for that change, and the fact that no financial institution in this country will touch a nuclear facility since the government passed the bill in 1997. It's not as if every piece of legislation that's gone through this place has been perfect. A number of mistakes have been made. Quite often something comes back to the House to be corrected. I think this is the point where it should be corrected and debated, so when it goes forward, it doesn't have to come back to this place again.

I appreciate her comments and her little speech, but we can all make speeches.

The Chair: We'll go to Madam Jennings and Monsieur Bergeron, then we'll ask the question on the amendment.

[Translation]

Ms. Marlene Jennings: I would just like to say that the argument Mr. Keddy just presented might have some weight if he could demonstrate that the amendments put forward by the government to some legislation had previously been suggested at the committee stage when the acts were still bills. However, he did not prove that. Anyone can make a mistake, and you are right to say that both the government and opposition parliamentarians are here to improve bills to make them as good as possible. However, I do not think that your proposed amendment would improve this bill. That is why I will be voting against it.

So, we have a difference of opinion about the quality of your amendment.

The Chair: Mr. Bergeron.

Mr. Stéphane Bergeron: Mr. Chairman, I would like to comment on the little sermon Ms. Carroll just delivered, following her usual practice. She said that their side received letters, information and interventions from the industry making various points. It is one thing to use the demands of industry to support a particular government amendment, but I think it is quite another to use the industry's demands to reject an opposition amendment. I would respectfully submit to Ms. Carroll that she voted earlier against an amendment that was not particularly ours, but that had been requested by a Quebec company, which is, moreover, one of the few in Canada involved in diamond processing. Thus, despite the fact that this amendment was moved at the industry's request, you rejected it.

I would therefore ask you to avoid lecturing us on what the industry wants, when you feel free to take what you like of the industry's demands and reject outright the requests that do not suit you.

The Chair: Thank you, Mr. Bergeron.

[English]

(Amendment negatived)

(Clause 34 agreed to on division)

Mr. John Duncan: May I make a friendly amendment, to make the English the same as the French?

The Chair: The clerk is telling us that if we want to go back, we need to get unanimous consent. My understanding is that the two versions always need to be identical. The committee said--and I think it's unanimous--that the French version was the version. We don't amend it, we just say the French version is the guiding version.

Mr. Duncan.

Â (1210)

Mr. John Duncan: On a point of order, I'm close enough to hear the clerk, and, contrary to what you just said, the clerk said we need unanimous consent to reopen the clause and we need to make the amendment now.

The Chair: Is there unanimous consent?

Some hon. members: No.

The Chair: We don't have unanimous consent.

(On clause 35—Ministerial regulations)

The Chair: We'll now go to clause 35.

Mr. Keddy.

Mr. Gerald Keddy: Thank you, Mr. Chairman.

We've had a fair amount of debate about this. I would ask that my colleagues—who seem to consider that the only amendments to this bill will be government amendments—take a very long, hard, serious look at this, because I think we are endangering our small exploration companies in Canada to a great degree by not including this type of an amendment in here.

When the Kimberley process comes into place—apparently we're signing onto it before we see the final agreement on November 10, and I can't imagine how that process works—this amendment would allow for the minister to make regulations. Actually, it would say that he “shall” make regulations.

I've changed my amendment. I think you all have a copy of the change, and I'm sorry it was not in both official languages. However, with the subamendment, it would read:

“The Minister shall make regulations governing the exportation of multi-ton bulk samples of ore that may contain rough diamonds”

I changed it so that it puts it within the power of the minister to change the act after the fact. As a matter of fact, it forces him to change the act and to include multi-tonne samples of rough diamonds, because we cannot deny the fact that bulk samples include rough diamonds.

I'm not convinced in any way, shape, or form that the legislation governing bulk samples now will be the law after we approve of the Kimberley process—and I think everyone at this table agrees that we're going to approve the Kimberley process. This would allow for the minister to make regulations for the export of bulk samples, would put to rest this issue of bulk samples, and would include it in the legislation.

The Chair: Mr. Pratt.

Mr. David Pratt: Mr. Chair, the opposition talks about us only accepting government amendments. Well, when the amendments coming from the opposition side are nonsensical in some cases, as this one is, then we have no choice but to reject it. This issue is dealt with very clearly in the definitions section of the bill, which describes a rough diamond. It states:

“ “rough diamond” means a diamond that is unsorted, unworked or simply sawn, cleaved or bruted, and that falls under subheading 7102.10, 7102.21 or 7102.31 in the list of tariff provisions in the schedule to the Customs Tariff.”

Bulk samples are dealt with in a separate item under the Customs Tariff, they're not dealt with in this legislation. The issue of bulk samples is therefore of no consequence in terms of what the Kimberley process is trying to do. I go back to the point that what we're trying to get at here is a process that brings Canada into compliance with the Kimberley process regulations relating to rough diamonds. It has absolutely nothing to do with bulk samples.

Mr. Gerald Keddy: Right, absolutely, and that's the problem with the legislation. And Mr. Pratt, I would argue—and maybe you can answer me this question—that a rough diamond means a diamond”—and I'll use your own words, absolutely—“that is unsorted, unworked or simply sawn, cleaved or bruted”.

If it's in a ball of clay, it's still a rough diamond. If it's in an ice cube, it's a rough diamond. If it's a mine sort, it's a rough diamond. And if it's in situ, it's a rough diamond. It's not something else, it's a rough diamond.

Mr. David Pratt: Mr. Chair, I have just one brief intervention on this, because I don't think Mr. Keddy gets it.

The industry was before us not an hour and a half ago talking about their concerns. Mr. Boyd, from the industry, said very clearly that they feel they can deal with these issues through the regulations, both in terms of.... First of all, he said bulk samples were not an issue. The issue for him was test samples. We've already dealt with those. That issue is off the table now.

Â (1215)

Mr. Gerald Keddy: It's not dealt with and it's sloppy legislation.

The Chair: Monsieur Keddy, please.

We'll now go to the question on the amendment.

(Amendment negatived)

(Clause 35 agreed to)

The Chair: Mr. Day.

Mr. Stockwell Day: Under paragraph 35(b), there's a reference on which I just need a legal opinion, in regard to the Canadian certificate. My question was specifically related to something under clause 34 on fees, but the chairman has ruled that we've moved on. On clause 35(b), then, on Canadian certificates, is there an appeal process for the industry if, for instance, a fee is set too high, in their view?

Mr. David Cox: Under the bill, there is no such appeal procedure. The regulations setting the fees would be GIC regulations. That would imply not only input through that process directly to NRCan as it's developing them, but the pre-publication requirement as well, whereby the regulations will be published. Industry could input at that time.

Mr. Stockwell Day: Are they published before it goes through an order in council?

Mr. David Cox: Yes.

Mr. Stockwell Day: Okay, thanks.

(Clauses 36 to 39 inclusive agreed to)

(On clause 40—Obstruction)

The Chair: We'll now go to clause 40.

Madame Carroll.

Ms. Aileen Carroll: The amendment to clause 40—which deals with obstruction—is to replace lines 3 to 8 with these words, Mr. Chair:

“No person shall interfere with an inspector who is doing, or hinder or prevent an inspector from doing, anything that the inspector is authorized to do under this Act.”

By all means, I certainly appreciate the assistance of our lawyers, but this is to trigger that we can proceed by summary conviction or we can proceed by indictable offence, if that's allowed and depending on the severity of the obstruction. I would put it that way, but it would probably be said better by the lawyers.

[Translation]

The Chair: Ms. Lalonde.

Ms. Francine Lalonde: Ms. Carroll, Mr. Chairman, I hope we will be given an explanation not only about clause 40, but also about subclauses 40.1(1) and 40.1(2), because these are the three provisions that replace the clause Ms. Carroll just read. In order to understand the first, you must read them all, which I did yesterday evening.

[English]

The Chair: Madame Carroll, could you explain the second amendment to clause 40, amendment G-5?

Ms. Aileen Carroll: It relates exactly to what I said, but it's further defined by the second amendment. It deals with mandatory summary conviction, and I am going to need some assistance on that.

If I could, Madame Lalonde, I would just say that we could deal with new clause 40.1 in conjunction with that, because I think new clause 40.2, the limitation period, is separate. I can address that, but I think I'd just as soon ask to address the first two, if you're in agreement, Madame Lalonde. Is that okay?

The Chair: I'm going to ask the officials on the first.

Ms. Aileen Carroll: Yes, and then I'll deal with new clause 40.2.

The Chair: I'll ask the officials, and then I'll go to Mr. Stinson.

Mr. Cox.

Mr. David Cox: Thank you, Mr. Chair.

Indeed, these two amendments are related. The intent behind the change is the following.

In the current bill, the version that we have, the only mandatory summary conviction offence is set out in clause 40. There were comments received both from industry and government members, that there were a number of offences that perhaps shouldn't be what are referred to as hybrid offences, where the Crown would have the opportunity to proceed by way of indictable offence or summary conviction offence.

Upon further consideration of these comments and in looking at the bill in total, the following offences were considered minor offences that should be mandatory summary conviction offences: subclause 13(1), subclause 13(2), subclause 16(1), subclause 16(2), clause 22, and clause 40. All of these are relatively minor offences compared to the primary offence, which would be importing or exporting without a KPC. As such, the decision and the amendments put forward a change that would ensure that all of them proceed by way of mandatory summary conviction. That is essentially the intent of the first two amendments.

The new clause dealing with the limitation period I'll allow to go back to the committee.

Mr. Darrel Stinson: I'd like to propose an amendment to new clause 40.1, and add something to the end. After “summary conviction”, I'd like to add the words “and they are liable to a fine”—

Â (1220)

The Chair: Mr. Stinson, we're not ready for the subamendment. I'll come back to you.

Are there any other comments regarding the amendment?

(Amendment agreed to)

The Chair: On G-5, Mr. Stinson, you have a subamendment.

Mr. Darrel Stinson: Yes. The amendment is to be added after clause 40.1:

“Every person who contravenes subsection 13(1) or (2) or 16(1) or (2) or section 22 or section 40 is guilty of an offence punishable on summary conviction and liable to a fine not exceeding $500,000 or to imprisonment for a term not exceeding 12 months or both.”

A lot of the concern out there--and there are articles being written on it--is that although this legislation is needed, there are absolutely no teeth in it.

The Chair: Mr. Pratt.

Mr. David Pratt: My understanding is that the penalties--and I think the officials would probably be able to respond to this--

The Chair: The penalty is on clause 41.

Mr. David Pratt: Yes, but it's not just that. I think it's worth making the point that they're open-ended. For instance, if diamonds being smuggled have a value significantly greater than half a million dollars, that could be considered the cost of doing business, in terms of a fine that's set at a maximum of $500,000. The penalties are left open-ended, so we can deal with the whole issue of proceeds of crime, as well.

The officials may be able to explain it better than I can.

The Chair: Mr. Cox.

Mr. David Cox: Thank you, Mr. Chair.

That is true in the case of an indictable offence, which is referred to in paragraph 41(1)(a). However, I believe the proposed amendment is focussing on the summary conviction offence that has a ceiling of $25,000. The proposal is to extend the ceiling to $500,000.

Our response, by way of information, is this in accordance, as it appears here, with the summary conviction ceiling under the Criminal Code. The paragraph also mirrors the existing legislation dealing with trade, in general--the Export and Import Controls Act. Further, the notion of having a hybrid offence is such that the crown would make an election, and if there were a serious offence that fell into the category of hybrid, the crown would proceed by way of indictable, and that would result in no end to the ceiling of the fine.

Â (1225)

Mr. Darrel Stinson: My understanding, from our legal representation, is that we have the authority to lift that $25,000 to $500,000 in the bill.

The Chair: I'm ready to put the question on the subamendment from the Canadian Alliance regarding the fine.

(Subamendment negatived).

The Chair: Now we're going to vote on amendment G-5.

Ms. Carroll.

Ms. Aileen Carroll: Before you vote, do I not need to deal with the second part on the limitation period?

We sort of grouped clause 40, and then clause 40.1 is Madame Lalonde's suggestion.

The Chair: Go ahead, Ms. Carroll, on subclause 40.1(2).

Ms. Aileen Carroll: Then to move the amendment to the limitation period, that is to read:

“A prosecution under subsection (1) may be instituted not later than three years after the time when the subject matter of the complaint arose.”

The rationale for this, Mr. Chair and committee members, is that in the current Export and Import Permits Act, three years is the model. While it's normally six months under the Criminal Code, we are going with the model of three years for year to year with a mandatory summary conviction to distinguish between the two of them, proceeding by indictable offence. So that's the model. That's the continuity we were looking for and that's the amendment.

[Translation]

The Chair: Mr. Stinson.

[English]

Mr. Darrel Stinson: I'd like to make a subamendment to that, to change three years to seven years. The reason why I'd like to see it go to seven years over three years is because what you're dealing with here is in between countries and governments, and paperwork tie-up can be extreme.

The Chair: We'll ask the officials.

Mr. Cox.

Mr. David Cox: Thank you, Mr. Chair.

I would just point out that these offences are the mandatory summary conviction offences and they are the minor offences under the act. They're the ones that I listed previously, such as failure to report an import, failure to report an export, failure to assist an inspector, and obstructing an investigator. So the suggestion to raise the ceiling is usually synonymous with a more serious offence.

The Chair: Thank you.

Now the question on the subamendment from Mr. Stinson from three to seven years.

(Subamendment negatived)

(Amendment 40.11 agreed to)

(Amendment 40.12 agreed to)

(Clause 40 as amended agreed to on division)

(On clause 41--Punishment)

Madam Carroll, G-6.

Ms. Aileen Carroll: In clause 41, I move that the bill be amended (a) by replacing lines 10 to 12 with the following:

“person who contravenes section 8 or 14 or any of sections 36 to 39 is”

and (b) by replacing line 17 with the following:

“exceeding 10 years, or both; or”

So having made the former summary convictions, it's now important that the crown can proceed with indictable if they wish to do so. We're making these distinctions, as Mr. Cox has assisted, between the two.

Mr. John Harvard Aligning the stars.

Â (1230)

Ms. Aileen Carroll: Aligning the legal stars.

(Amendment agreed to)

The Chair: Now we'll go to Canadian Alliance number 3. Mr. Stinson.

Mr. Darrel Stinson: Excuse me?

The Chair: It's 41, CA-3, page 20. Okay, that's yours. It's regarding the increase from $25,000 to $500,000.

Mr. Darrel Stinson: Yes.

The Chair: It's your amendment.

Mr. Darrel Stinson: Yes. It's the amendment that was defeated.

The Chair: Do you withdraw this amendment?

Mr. Darrel Stinson: No, I want that.

The Chair: If you don't move it, you don't withdraw. I see. Fine. Okay.

Now, Canadian Alliance 4, page 21, Mr. Stinson.

[Translation]

Mr. Stéphane Bergeron: Is he withdrawing amendment CA-3?

The Chair: He did not move it.

[English]

Mr. Darrel Stinson: Yes, we go from three years to seven.

A voice: Has that been moved?

Mr. Darrel Stinson: No, it's not moved.

The Chair: It's not moved? Okay.

(Clause 41 as amended agreed to)

(Clauses 42 to 44 inclusive agreed to)

(On clause 45--Evidence)

[Translation]

The Chair: Ms. Lalonde.

Ms. Francine Lalonde: This time, I hope I will be luckier, so to speak. Since we are reaching the end, and given the spirit within which we are working, I hope you will understand why this amendment has been put forward. The Kimberley process is new, it is just getting started. The people we spoke to mentioned some concerns. We would therefore suggest—and this is a provision that has been included in other legislation—a review after two years. We would therefore move:

45.1(1) Two years after its coming into force, the Minister shall cause the review of the provisions and operation of this Act to be undertaken.

(2) The Minister shall, within six months after causing a review to be undertaken pursuant to subsection (1), submit a report on a review to Parliament.

(3) Each report submitted to Parliament pursuant to subsection (2) shall be reviewed by such committee of the Senate and of the House of Commons or such joint committee as is designated or established for the purpose of reviewing such report.

We think this is an amendment that could be accepted, that would reassure everyone and would also enable us to make any changes that may be required.

The Chair: Thank you, Ms. Lalonde.

Ms. Carroll.

[English]

Ms. Aileen Carroll: Thank you, Mr. Chair.

Let me just get my notes straight on this one.

If I can work with you on this, Madame Lalonde....

I'm not sure procedurally how I should do this. May I just do this in discussion form, and then if there's agreement, we can articulate a subamendment? Or--

The Chair: Do you have a subamendment to--

Ms. Aileen Carroll: No, because first of all I have to ask you to understand where I'm coming from.

First of all, in subclause 45.1(1), where you've asked for two years after its coming into force, I would ask you to consider three years. The rationale behind three years is that the participants in the Kimberley process are committed to a review of the process at the three-year period to determine then--and that, of course, is in the international forum--how it's working, where it may need fine tuning, perhaps in unanticipated areas, and so on. So I would ask you in the first subclause—45.1(1)—Madame Lalonde, to consider that.

To move to the second one, in order to bring this into alignment with similar attempts to make matters accountable to Parliament, other legislation has used this wording--I only ask for your consideration--that is, to stay with what you have; but our concern when you say “after six months” is that at six months Parliament may not be sitting. So could we add to that: “If Parliament is not then sitting, the minister shall submit the report to Parliament within the first 15 sitting days thereafter”? This is only for consideration.

To continue, the difficulty with subclause 45.1(3) is it's difficult to put into legislation an onus on committees to say, “You will do this at this time.” In other words, legislation then dictates to committees what reports they will look at, what studies they will do, and it would also require the house leaders to come together for joint determination, as they do.

So in a nutshell--I would have to ask again for agreement--we would need to remove that part, change the first part to three years, and ask for the minister to come to Parliament, but with the addition of what I suggested.

Â (1235)

[Translation]

The Chair: Ms. Lalonde.

Ms. Francine Lalonde: I think three years is acceptable instead of two.

I also want to repeat that these are provisions that already exist in other legislations Parliament has passed. This is not the product of our wild and wayward imagination.

With respect to subclause (2), that seems reasonable, but I don't understand what you are asking for in relation to subclause (3) because that would make it impossible for us to conduct the review. I'll tell you, the only reason I mentioned the Senate in a proposal under my name is that I was told it was customary and even required in such legislation. I don't know why, as a committee, we would deprive ourselves of the mandate to review the legislation and give it to the minister. You want to take out the Senate, but apparently that just isn't done. I would ask you, in exchange for my acceptance of the first two, to accept the third, Ms. Carroll.

The Chair: Mr. Szabo.

[English]

Mr. Paul Szabo: Thank you, Mr. Chairman.

My ears always perk up when I hear about reviews by Parliament. If I understood the parliamentary secretary correctly, the two years should be changed to three because there is another review that will be going on during that three-year period. The question I would ask myself—or maybe the committee or the officials—is whether or not the parliamentary review should happen concurrently with this external review or whether it should take place after that review is done. If the point is that it should be after that review, then maybe you should leave it at two. The first review, the one at the end of two years, would not be much of a review, and the next one would be in year four. If you change it to year three, though, you may very well miss out on the findings of the external review.

The Chair: Thank you, Mr. Szabo.

My understanding is that we're going to go to new clause 45.1. Ms. Carroll, on the question or your subamendment--

[Translation]

Ms. Francine Lalonde: Mr. Chairman, Ms. Carroll has not responded to my proposal regarding the third change, given that I accept the first two.

The Chair: You asked Ms. Carroll the question. You should have asked...

Ms. Francine Lalonde: Mr. Chairman, I'm asking you. Would you please ask Ms. Carroll to answer me?

The Chair: We will come back to the third point after voting on the first two. Okay?

Ms. Francine Lalonde: Yes, thank you.

Mr. Stéphane Bergeron: Mr. Chairman, if you don't mind my saying so, this won't work. You can't decide to split the proposal in two, one part dealing with the two points Ms. Carroll suggested amending, and the other dealing with the third point. It was my understanding that Ms. Lalonde was suggesting some kind of friendly settlement. She was asking Ms. Carroll if, for the reasons stated, she would agree to keeping subclause (3) on condition that we accept the government amendments to subclauses (1) and (2).

The Chair: From what I understood of your bargaining, the government accepted your amendments to subclauses (1) and (2) and you agreed to drop subclause (3). That was my understanding, but I'll let Ms. Carroll speak to the third point.

Ms. Francine Lalonde: You would not make a good negotiator, Mr. Patry.

[English]

The Chair: Do you understand, Ms. Carroll? They want to know about new subclause 45.1(3).

Ms. Aileen Carroll: Right. I would just like to again convey that I understand by the proposal of Madame Lalonde that she believes that she has taken my language or has been led to believe she is using language from other legislation, but in all fairness and openness—as I usually work—my understanding is that legislation must not tie the hands of committees in this way.

Further, my understanding is that on the other half of that apple committees are indeed free to review, make reports, and look at whatever they wish to do, as we do when we sit down together to determine new business. But my understanding is that this new subclause as it is, Mr. Chairman, would create an onus, which we are not free to do. I understand that she is going to extrapolate the Senate, but I'm afraid that my understanding is that we're still tying the House of Commons or the committees thereof in a way we can't.

Â (1240)

The Chair: Now I'm going to put the question on new subclause 45.1(1), the subamendment from Ms. Carroll to change two years to three years.

(Amendment agreed to)

The Chair: We will now go to new subclause 45.1(2).

Ms. Aileen Carroll: I need to reread it.

The Chair: Fine.

Ms. Aileen Carroll: Starting with “The Minister shall”, it reads the same way as Madam Lalonde's new subclause 45.1(2), and then adds this sentence:

“If Parliament is not then sitting, the Minister shall submit the report to Parliament within the first 15 sitting days thereafter.”

The Chair: The question is on Ms. Carroll's subamendment to the amendment introducing new subclause 45.1(2).

(Subamendment agreed to)

The Chair: Now the question is on new subclause 45.1(2), as amended.

(Amendment agreed to—See Minutes of Proceedings)

The Chair: The question now is on new subclause 45.1(3). It's the amendment of the Bloc Québécois.

(Amendment negatived)

(Clause 45 as amended agreed to on division)

(Clause 46 agreed to)

(Schedule agreed to)

(Clause 1 agreed to)

The Chair: Shall the preamble carry?

Some hon. members: Agreed.

Some hon. members: On division.

The Chair: Shall the title carry?

Some hon. members: Agreed.

Some hon. members: On division.

The Chair: Shall the bill carry?

Some hon. members: Agreed.

Some hon. members: On division.

The Chair: Shall I report the bill with amendments to the House?

Some hon. members: Agreed.

The Chair: Shall the committee order reprints for you at the report stage?

Some hon. members: Agreed.

The Chair: Ms. Carroll.

Ms. Aileen Carroll: I got busy shuffling my papers here; did you ask if clause 45 carried?

The Chair: I asked if clause 45 carried as amended, and the amendment is 45.1(1) and (2). And 45.1(3) was defeated.

Ms. Aileen Carroll: It's just... I lost you.

The Chair: No, that's fine.

That's all.

[Translation]

Thanks very much to our researchers and clerks, and have a nice afternoon.

The meeting is adjourned.