Diamond Strategy for Positioning

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Action Plan for the National Diamond Strategy

August 2004

Table of Contents of the Action Plan for the National Diamond Strategy p. 1. Summary 2. Review of the facts § Mandate § Work accomplished 3. Key issues 3.1 Supply of Canadian diamonds § Support for exploration § Coherent and competitive mining taxation § Incentives for creating value-added activities in Canada § Capacity building § Network of centres of excellence § Geoscience funding 3.2 Demand for diamonds processed in Canada § Removal of the excise tax § Expert jeweller and cutter training § Certification process § Development of jewellery export markets § Promotion of diamond-related tourism 3.3 Regulation and market security § Market knowledge and mining royalties § Land tenure § Environmental permitting § Security 3.4. Implementation § Creation of a coordinating body 4. Monitoring mechanism § Premiers’ approval § Organization of a Pan-Canadian Round Table in Québec, in May 2005 § Report to the next Mine Ministers' Conference 2 7

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5. Conclusion

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Action Plan for the National Diamond Strategy 1. Summary Recognizing the significant impact and potential of the Canadian diamond industry, in July 2003, the provincial and territorial Premiers directed their Ministers to develop an action plan for establishing a National Diamond Strategy. To assist in developing the Strategy, the Mine Ministers established a Steering Committee, during their September 2003 meeting. In the opinion of the Steering Committee, Canada has many assets enabling the diamond industry to expand and become a driving force for the country’s economic and regional development during the coming decade. For this development to be sustainable, in a market economy three aspects should be considered : the supply, the demand and the regulation of the markets. The proposed action plan is framed around these three focal points. The consultations carried out generated a great deal of interest among representatives of the industrial sectors involved. The Canadian Jewellers Association and the Mining Association of Canada, in particular, offered to cooperate in implementing the proposed action plan. Even though a number of items contained in the action plan exclusively concern governments, a number of others, such as acquiring market knowledge, establishing common standards, and developing a certification process for marketing, would benefit from being addressed in partnership with the industry. Considering the openness to partnership shown by industry associations and the commitment of provincial and territorial governments to continue implementation of the action plan, it is recommended that the Ministers mandate the Steering Committee to elaborate the terms of reference of a multi stakeholder coordinating body such as a “Diamond Institute or Council”. The mandate of this body would be to develop terms and conditions for implementation of the Strategy, to coordinate its achievement, to propose further steps and to report to the Ministers responsible for mining. The Steering Committee will present a progress report to the Ministers responsible for mining at their next annual Conference.

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Summary of recommendations The Steering Committee recommends that interested provincial and territorial governments (the governments) consider the following issues as elements of the action plan for the National Diamond Strategy. A) Supply of Canadian diamonds Support for exploration It is recommended that the governments encourage the Federal government to implement the currently temporary flow-through share system on a permanent basis. This includes the Federal tax credits program as well as all complementary measures implemented by various governments. Coherent and competitive mining taxation It is recommended that all governments undertake revision of the definition of “Canadian Exploration Expenses”, as appropriate, to include community consultation and the costs...
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