Ontarians get only 75c for every million dollars De Beers makes mining diamonds in Ontario

By Concerned Ontarian

We found out yesterday that De Beers paid only $226 in royalties to the Ontario government for the company’s diamond mining operation in the province, thanks to an investigation by CBC’s Rita Celli.

The reason that Celli had to do an investigation to find that number is because the royalties collected from Ontario’s only diamond mine has been a closely guarded secret, by the government and the company.

But just how much did De Beers make from the Victor Mine?

The mining company annually extracts 714,000 carats of diamonds at $419 per carat, according to De Beers Operating and Financial Review for 2008, a figure that is confirmed by the Ontario Geological Survey.

As the average price of diamonds has remained mostly stable between 2006 and now, we can estimate that De Beers Canada extracts $300 million worth of diamonds every year.

In other words, De Beers is paying the province royalties at the rate of 75 cents per million dollars of diamonds extracted.

What is happening in Ontario is not unique to that province.

In British Columbia, Premier Clark’s government is selling water to Nestle at $2.25 per million litres. Nestle’s bottled water retails for around $1.50 per 500ml.

In Alberta, a royalty miscalculation by the Progressive Conservatives robbed Albertans of $13.5 billion in oil and gas revenues, according to a study by University of Alberta.

“According to Natural Resources Canada, mining companies generated over $93.3 billion in gross revenue in Ontario over the last 10 years,” the advocacy group MiningWatch Canada wrote in a letter to the Auditor General for Ontario. “During the same period, a meagre 1.5% was generated in mining royalties – 10 times less than a tip at a restaurant!”

In the case of diamonds, the government of Ontario seems to be collecting an infinitesimal fraction of one percent.

“Low mining royalties are unacceptable, particularly considering that companies are digging up collectively owned non-renewable resources, which will no longer be available for future generations,” the group pointed out.

[Photo Credit: Macroscopic Solutions/Flickr]

50 Responses to Ontarians get only 75c for every million dollars De Beers makes mining diamonds in Ontario

  1. Anonymous says:

    Look on the bright side. At the rate they’re depleting our resources, our kids won’t have to worry about this issue.

  2. Anonymous says:

    Liberals and Conservatives are both the same. Both parties allow foreign companies to loot our resources. Turf them both. Vote NDP!

  3. Anonymous says:

    0.75/1000000 is totally a fraction.

  4. Peter Dearman says:

    Since I see only three, quite silly and probably by the same person, comments here under this very important story, I’ll take a stab.

    Canadians, I would argue, are pretty much the easiest group of people in the world to dupe. They almost take pride in it. If you act nice enough toward a Canadian, and with the correct jocular tone of voice, he will do almost anything for you. Such as sign an incredible contract with some nefarious firm….’If any disagreements arise, you can always placate your Canadian mark by pointing toward their southern border and saying, “Well, now, you don’t want to be as bad as them Americans, now do you?”

    Don’t believe me? Just watch any Canadian TV commercial. Drinking Tim Horton’s coffee has become an act of national pride. It’s not that hard to keep these people from asking their political masters where all the money goes.

    • BJ says:

      You must be American or some other foreigner. I do agree we get dooped…but…at the same time…we are a caring people… who want to live our daily lives… unfortunately…more and more we let a bunch of jerks run our country…because we can’t be bothered letting an everyday person run it. It’s always got to be a businessman, lawyer…professional. Let the everyday guy run it…the one who drags themselves to the job everyday..just to make ends meet. The one who if they are lucky can invest into the market and make a killing. So we look the other way.. some of us vote…to exercise our right to a democracy. It infuriorates me that any Government NDP,Conservatives, Liberals…they are all the same Once IN POWER.

    • Anonymous says:

      come to canada so i can shoot off your head you fucking fool think were stupid trust me show your face around here and say that shit you will get you shit tossed son

      • john dillon says:

        hilarious … you are posted as Anonymous and you want someone else to ‘show your face around here’ …

      • Anonymous says:

        I recognize a Texan when I read incoherent rant- like comments

      • anonymous says:

        It’s funny how some people post comments that have nothing to do with the article. Like, did you even bother reading the article, or are you guys just here to reply to random comments?

        Seriously, you have nothing to say about the horrible news announced here, but when one American makes a totally subjective and undefensible comment about Canadians, that’s enough to get you writing.

    • Anonymous says:

      Agreed. What’s that line about nationalism and the last the last place a scoundrel sinks?

    • 1001111011111 says:

      Yeah ok assclown. What happened to the U.S. Constitution? rip

      Kinda like how you guys take such pride in hyping your future presidents as if one candidate over the other will ever truly make a difference, while your system has been raping it’s people for decades.

  5. Sophie says:

    Screwed in Ontario by the government.Screwed in Newfoundland by the government.Seems to be a common trend,been screwed by the government.They should not be allowed to passed any bill that is not public knowledge.

    • BJ says:

      right on sophie!

    • Whut? says:

      I guess it needs to be pointed out that it’s actually the company doing the screwing, and the government is merely allowing it.

    • Rémy says:

      we are screwed by the gouverment in Irving euh i mean New brunswick..but that thing about diamond royalties is bad very bad. just giving away our ressources likes that is bad it goes on for oils seafood/fish forestry everywhere in every industry we get rob without even knowing.

      • Anonymous says:

        We know about it all but no one cares…
        The deals are there for everyone to see but we don’t bother because we are trusting people
        Nothing is passed behind closed door because it can be made undone
        All10 provinces are getting bit from our leaders

    • Anonymous says:

      Hoping the pendulum will shift way over the other side. Hate to generalize but the trend could move to the other side, where some tremendous change might take place. Be careful what you wish for but things have to change. If it doesn’t, we all will suffer. The party won’t matter as in the Middle East. Note: PBS ran a special on these diamond mines 1800 km north of Edmonton. Very interesting counter to the recent articles

    • Anonymous says:

      How many omnibus bills did the PC pass that was plain deceptive and sneaky

  6. Sophie says:

    Vote NDP give them a chance to screw us too.

  7. Questionable says:

    Not to sound like a corporate stooge, but I don’t just like to look at the surface of things.

    So I assume these royalties are paid on top of corporate taxes and all the income taxes the jobs that these employers of people add to the economy.

    The article also only states gross revenue which is useless. What was the net revenue/profit earned by these companies. That is the important number…

    • Anonymous says:

      The number both the government and the company are trying to hide.

      • why is everyone here so unbelievably ignorant? says:

        Publicly traded corporate profits are a matter of public record. And why is almost everyone here apparently completely financially illiterate….’we’re getting screwed blah blah’ Actually no, you are extremely stupid and have no idea how the world actually works — it’s called economics. Companies employ people and pay taxes. Resources buried in the ground are worth more or less fuck all generally speaking. Once someone has taken the expense and risk of discovering, extracting, and processing them they have value. If you destroy the incentive to do the above by taxing the life out of anyone who succeeds you effectively stifle the will to develop resources and create jobs. If any of you ever actually produced anything in your life you might understand these things.

    • Anonymous says:

      Taxes are important, but these mining companies don’t own those resources. Canadians own them. I’m fine with a corporation going there to mine it and make some money off it, but they should have to share it with who owns it. They act like it’s a birthright of theirs. 83% royalties are paid for the oil I Norway, and they have accumulated almost a trillion dollars in trust for its citizen since the 70’s. The way our government runs OUR national resources is bull shit.

      • Anonymous says:

        I hear you well on that one.. A lot of countries have disgruntled citizens,and rightly so especially when they the wand wavers,think they know best for everything..john key the same, monkeys ass’ ideas.. Any company that isn’t paying a fair share should be ashamed of themselves.. Infuriates me big time,, greed is ugly

      • why is everyone here so unbelievably ignorant? says:

        Norwegian oil has higher margins….do you actually think you have insight into resource management that govts somehow missed? Govts get exactly as much as they can from resource extraction corps…do you not understand there is a competitive global marketplace to attract investment dollars to develop resources. It is in any govts best interest to extract as much revenue as they can from any business without driving business away. All governments try to maximize revenue, obviously, but if they charged an 80 or even a 50 percent royalty on oil sands all investment would grind to a halt. When it comes to oil extraction, tar sands are a difficult and costly resource to develop

    • Bruce123abc says:

      Looking at the amount collected, it doesn’t seem to matter what the net profit was. $226 in a year is rediculous even if their net profit was zero.

      The royalties are for the resources. What thier bottom line is is in material. It should be basted on the commercial value if the resources collected!

  8. BJ says:

    I am in Ontario Questionable… but you do! sound like a corporate stooge. at the very least a person who is ABLE to have money to invest and get good dividends back… I want CORPORATIONS WHO HAND OUT DIVIDENDS to people like yourself…get gouged more. and our Health system restored to what it was. I met a person from England who told me what they get…therapies, such as physical, psychiatric, medicines.. NOT siting to rot on waiting lists. That’s where the corporate taxes should be going to.. not to support whatever government is in power. THE WHOLE IDEA OF SOCIAL HEALTH CARE WAS TO LET POOR,MIDDLE, AND RICH ALL HAVE THE SAME ACCESS TO QUALITY HEALTH CARE…NOW SINCE THE G.D. HARRIS GOVERNMENT WAS IN POWER…THEY’VE CHIPPED AWAY AT THAT SYSTEM IT IS NOW TWO TIER AND HAS BEEN SINCE THE 90’S.
    SO WHY should we be surprised that the government and diamond companies find new ways of screwing Canadians.

    • Jean says:

      I guess that is why Canadians are always saying, “Sorry,” for every little misdemeanor. It’s almost a greeting.

  9. How about this: a 50-50 split. For the government, it is a lot more than the pittance they get now, and for the foreign company, they still get a sizeable chunk of the evil profits they are after.

    • why is everyone here so unbelievably ignorant? says:

      If you think profit is evil, maybe best you move to North Korea. You’ll fit right in.

    • Mr NOYB says:

      Thanks Adam. I really liked that link there. I work in industrial construction and on a 7 day pay check they once (or twice took 49% of my gross. I guess that was to make up for DeBeers (or was it Mobile Exxon) 1% or lower royalties. Canada is the laughing stock of the world. Our doors are wide open and all of the foreigners who come here to work weather they are temporary or not come here because there is no work back home or people are shooting them in their own counties. And not a one of them give two hoots about being here where nobody is trying to kill them. They DO like our availability of health care though. Women fly all of the way around the globe to have their baby delivered in a Canadian hospital so that the baby and the baby’s offspring get a Canadian pension one day. And our leaders give everything away for free while we have to pay retartded taxes. I the working middle class, am the one shouldering the cost of running Canada. The rich do not pay taxes unless they get a TAX BREAK. The poor can not afford to pay taxes and all of the money made here by foriegnmultinational companies goes directly to offshore bank haven. OH! Sorry. Almost forgot about these Temporary Foreign Workers….who send all of their money home elsewhere in the world.

      I never did like diamonds. They get lost too easily. Thanks again for that link Adam.LOL!

      • Frank says:

        Again the 1% making the 99% pay
        I huess we are going in fear of loosing it all if we made the 1% pay…
        Who will really loose
        This is how the French revolution started
        We have never had anything to loose
        we have nothing compaired to the1%
        So this has to change ( Read the book of marx)
        And don’t say i’m a commi because i believe in the new way to devide our money
        This is deadly erong and it will lead to bad

  10. Sheldon says:

    Think its worse for FN’s – they got screwed out of the land as well!

  11. Baruch says:

    Shut them down.

  12. MCF says:

    Sheldon, you are too right. The DeBeers Mine is on Attawapiskat First Nation traditional land. Puts things in perspective doesn’t it? Non-Aboriginal Canadians feel they are getting screwed on the royalties issue but the Attawapiskat have been robbed outright. Really pisses me off.

  13. Stewie says:

    The $228 was for 2013, The mines first profitable year. $55 million payroll, $60 million annual purchases from first nation businesses. Mine is scheduled to close in 2018.
    Keep checking and you’ll find how much they contribute to local communities.

    • why is everyone here so unbelievably ignorant? says:

      Thank you Stewie…somebody using their mind and stating fact rather than belly aching over some horse shit report taken totally out of context. Why do people love to bitch about businesses that provide them with all of our wealth, jobs, goods and services and enrich our tax base?

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