TORONTO - The province is robbing impoverished northern aboriginal communities of much-needed investment by slapping a diamond tax on the burgeoning mining industry, native leaders said Wednesday.
While Premier Dalton McGuinty said he's not worried the hefty new tax will deter companies from investing in northern Ontario, aboriginal leaders say the province is lining its own coffers with no thought to sharing the profits with the affected aboriginal communities.
"Mining companies come to our traditional territories and take the resources and leave nothing for First Nations; those actions have to stop,'' said Mike Carpenter, Chief of the Attawapiskat First Nation near Ontario's first diamond mine by James Bay.
"The premier has to start listening to First Nations. We have to be included in development.''
Ontario's first diamond mine set to start production next spring but the Liberals have already passed legislation to take a cut of up to 13 per cent from future profits.
Northern mayors and aboriginal groups say the tax sends the wrong message to the mining industry as a whole and is deterring new investment in the province's northern communities.
The De Beers diamond mine, which is on the traditional land of the Attawapiskat First Nation, is a life line for the reserve which is plagued by high suicide rates, woefully inadequate housing and extreme poverty, Carpenter said.
Housing is in such short supply that up to four families live in one three-bedroom home, he said. The community has been without an elementary school for seven years, he added.
The reserve has signed a revenue-sharing agreement with De Beers and no one wants to see that project or future exploration jeopardized by a hefty tax, he said.
"Northern Ontario generally is benefiting from this mine,'' said Stan Louttit, Grand Chief of the Mushkegowuk Council.
"We need to continue doing that. This tax hike jeopardizes future development. What's going to happen in the next 50 years? Are we going to continue wallowing in Third World conditions or can we prosper now?''
While Conservative Leader John Tory has vowed to roll back the diamond tax if he is elected premier in October, the current premier said the tax strikes the right balance.
"We've always got to find a way to walk the line here and ensure that we are competitive, to ensure that we're not compromising economic growth and to ensure that we have sufficient revenues to carry out our responsibilities,'' McGuinty said.
The province is working on developing a revenue-sharing model with northern aboriginal communities and it will continue to work with the mining sector to ensure it remains "healthy,'' McGuinty added.
Rick Bartolucci, minister of northern development and mines, said the tax depends on the amount of profit generated by the mine so it shouldn't be a deterrent for any "marginal mine.''
The tax simply brings Ontario in line with other diamond-mining regions like the Northwest Territories, he added.
"I say we move on and we make this work,'' Bartolucci said.
But New Democrat Gilles Bisson said northern Ontario will have trouble moving on until the Liberals admit they made a mistake, kill the tax and work out how to fairly share mining profits with aboriginal communities.
"They clearly don't understand mining and they clearly don't understand the impact it's going to have on First Nations,'' he said. "This is the wrong message and the wrong action for this government to take.''
