Should alarm bells be louder for the NWT’s post-diamonds future?

“The idea is not to be alarmist, but we also have to face some facts.”

The Northwest Territories is about to start losing the diamond mines that drive a huge chunk of its employment and revenue. Yellowknife economist Graeme Clinton doesn’t think the territory and its residents necessarily understand that yet.

“I’m not sure if people get it,” he told Cabin Radio.

In an attempt to change that, he has produced a paper – backed by the NWT and Nunavut Chamber of Mines, the mining industry body for the North – and will present some findings to Yellowknife City Council on Monday. (After this article was first published, Clinton said an updated version of the paper was available separately.)

The bottom line, he says, is we’re about to lose a lot of jobs and money without anything to replace them.

And when he says people don’t get it, Clinton adds that he realizes you know this is coming. You’ve heard the diamond mines are getting ready to close. You understand there will be consequences.

“I don’t think anybody is ignorant to the fact that the resource sector is an important part of our economy. But I don’t think they quite understand the scale of the effects,” he said.

“In terms of what we lose? Just Yellowknife alone, over 1,300 jobs are tied either directly, indirectly, or through induced activities to the three major diamond mines. It represents something in the neighbourhood of 13 percent of the employment income of the city. It’s in the neighbourhood of $170 to $180 million of labour income.”

That’s before you get to the consequences of people leaving the territory because their jobs have gone, or because other people’s jobs go, making them decide their own future lies elsewhere.

The NWT’s latest population data, published last week, revealed the territory’s population continues to flatline just below 45,000, where it has been parked for more than a decade – even with active diamond mines.

At the moment, migration from other countries is propping up the population.

‘A starting-over phase’

Clinton’s paper goes further than imagining the future beyond diamond mines. It models what might happen if the entire mining industry simply blinked out of existence, which is not a realistic prospect.

But his paper warns that this doesn’t mean the exercise is “entirely academic.”

“Diavik is closing in two years, and there’s really nothing that’s going to happen to change that. There are very valid scenarios out there that show us Ekati and Gahcho Kué could close two to four years after that,” Clinton said, naming the NWT’s three active diamond mines.

“There’s nothing in the next six years that is going to replace 3,000 jobs at those three mines. There’s nothing.

“We are at a bit of a starting-over phase and this is really where anybody who considers themselves a leader needs to understand where we are with the economy and where we want to go, and recognize that these things are happening. We ought to understand the implications and then devise a way forward.”

The chamber of mines commissioned the work and, as an industry advocacy group, has an obvious purpose in doing so: to drive home the importance of mining, as the chamber sees it, to the political leaders who make decisions about that industry’s future.

In an accompanying news release, the chamber’s president, Kenny Ruptash, made that clear.

“The resource sector has been the economic foundation to the North for decades and we look forward to working with our newly elected government, in collaboration with Indigenous and federal governments, to refresh mineral exploration and development in the North,” Ruptash was quoted as saying.

Clinton insists that while he’s “not here to promote mining as the only way forward,” from his perspective as a longtime northern economist, he doesn’t think other revenue sources can take over.

“There are a lot of different ideas and they often seem to get an equal weight, suggesting they’re equally important. I think there’s a really big role for tourism, for the conservation economy, for fishing. These are your typical opportunities for diversification. But they only really work if there’s an anchor tenant,” Clinton said.

“In the absence of the money that mining brings to the territory, all those other ideas require taxpayers to invest in them in order for them to operate. We don’t want to trade our only truly legitimate, standalone private-sector opportunity for things that we have to invest in to maintain them or keep them afloat.

“The conservation economy is really important and it’s a perfect complement to a resource-sector economy. But you take the resources away, and what you have is $100 million or $200 million spread over 33 communities over 10 years. It doesn’t add up to anything near what a $2-billion resource sector adds up to.”

Shortly after noon on Monday, councillors will have an opportunity to hear from Clinton and make their own remarks about what he says.

Beyond that, Clinton wants the territory’s leaders to hold “a real, meaningful discussion about how all these things can actually fit – and then devise a vision, and an investment strategy around that vision.”

Referring to his paper, he said: “Give us some hope. That would be a great outcome from this little project.”