Richard Gleeson
Northern News Services

Yellowknife (Mar 01/02) - If it really wants to foster the North's fledgling diamond cutting and polishing industry, the government should stick to what it knows -- taxes -- and leave the marketing to business.

Frame Lake MLA Charles Dent said the government should focus on lobbying the federal government to drop a 10 per cent tax it charges on the manufacture of jewelry.

When the Goods and Services Tax was introduced, the manufacturing tax was dropped on all products with the exception of jewelry.

"Where does that come from?" said Dent of the rationale behind leaving the tax on jewelry.

"Are they saying people who can afford jewelry can afford to pay taxes more than others, that if you're buying a luxury automobile, you aren't perhaps in the same class?"

In co-operation with diamond manufacturers, the government is working on a marketing plan to improve demand for the northern cut and polished diamonds.

During review of the budget for Resources, Wildlife and Economic Development, minister Jim Antoine said the government has not pursued the approach recommended by Dent "since we have just recently been advised of it."

Peter Finnemore, manager of one of Yellowknife's three diamond plants, said dumping the tax would help offset the higher cost of operating in the North.

Finnemore said choosing between marketing support from government and dropping the tax is a no brainer.

"Get rid of the excise tax, without a doubt. We are the specialists in marketing and the government has a lot to learn in that area."

Dent said the success of any lobbying effort to drop the tax would depend on how much effort the government was willing to put into it.

"It's a question of political will," he said. "If we can get the premier and the minister of resources, wildlife and economic development to turn this issue into the same sort of crusade we had to work on oil and gas in the last little while, maybe we could have some success."