Was giving diamond mines financial help the right approach?

Burgundy Diamond Mines says it’s cutting hundreds of jobs at its Ekati mine despite the NWT government committing millions of dollars in April to try to avoid that outcome.

Three months ago, the territory published a package of supports worth about $15 million with the stated goal of “maintaining stability” for workers in the NWT’s diamond industry.

“Without action, there is a clear risk of disruption to northern jobs, contracting opportunities, and the economic stability of communities that rely on the sector,” the GNWT stated at the time.

On Thursday, a regular MLA who criticized that plan when it rolled out – Yellowknife North’s Shauna Morgan – suggested the bailout’s failure to protect hundreds of jobs demonstrated the GNWT had fooled itself about its ability to intervene.

“The financial supports given a few months ago were fuelled by a lot of hope and perhaps fantasy about what the GNWT could influence or control within the mining industry,” Morgan told Cabin Radio.

“We have not been clear-eyed enough about how corporate business decisions are made in head offices around the world.

“We often act or make policy as if we had significant influence over those business decisions, which I think is a mistake.”

Morgan had called the supports a “hail mary” at the time.

Ekati is one of three active diamond mines in the NWT. Burgundy is closing open-pit mining at Ekati’s Point Lake site, with the loss of “several hundred” jobs, while continuing to mine underground beneath its Misery pit.

The Diavik diamond mine is scheduled to close early next year, while the third mine, Gahcho Kué, has a planned mine life that extends to 2031. Diamond mines across the NWT and beyond are currently struggling with low prices for naturally mined rough diamonds, partly because of the growing lab-grown diamond sector and partly because of uncertainty created by United States tariffs, both real and threatened.

The NWT has so far struggled to identify an industry, or even a set of industries, primed to replace the economic output of diamonds once those three active mines cease operating.

Asked how she would approach problems in the territory’s diamond mining sector if she were the industry minister, Morgan said even regular MLAs aren’t sure “what set of tools is available to ministers or the GNWT to have significant influence or control over decisions made by mining companies – and that’s part of the problem.”

“There’s a lot of speculation and a lot of talk and a lot of assumptions about how the industry responds to government incentives or changes, and we have very little evidence as to how tools the GNWT has will actually affect decisions made by industry,” she said.

“What we can control is establishing a foundation of a territorial workforce that is well educated, that has capacity and skills to not only be workers but to be contractors, to have northern businesses with a range of different skills that can respond to different economic opportunities.”

Acknowledging that this requires longer-term shifts, and that the territory cannot be entirely self-sufficient, Morgan said the NWT remains “extremely fragile and dependent not only on businesses that come from other parts of the world, but even on workers and skills and capacity that’s coming from everywhere else in the world.”

“The more we have a depth of local skill, talent, capacity in a variety of business spaces, different industries, the more resilient we can be,” she said, “and the more buffered we can be to decisions being made from far away.”

The next chapter

Asked on Wednesday evening if the loss of hundreds of jobs in a day – according to a Burgundy spokesperson’s estimate – amounted to a crisis for the territory’s economy, industry minister Caitlin Cleveland said she didn’t know the full extent of the cuts and couldn’t answer that.

“I definitely feel for all of the employees and the contractors who were involved and who are absorbing this news, and certainly have a tremendous amount of concern for the territory,” Cleveland told Cabin Radio.

“As we always have, we will continue to support residents and continue to work on our strategic projects for the next chapter of mining in the Northwest Territories.”

Cleveland said the NWT is “standing in front of” that next chapter – she pointed to the likes of critical minerals – and working hard on what she called “the suspension bridge that really gets us to those opportunities.”

But she said Wednesday’s news from Ekati did not necessarily suggest the GNWT’s approach needed to change.

“No, certainly not at this point,” the minister said.

“I’ve heard from different employers as to how they might be stepping in or signalling that they’re looking for staff. At this point, it’s too soon to say, and certainly I’m just thinking of the staff who unexpectedly received this news today – that would be very difficult for those people.”

Burgundy says about 28 percent of the 1,200 or so people either working full-time or contracted to work at Ekati in 2024 were northerners. Of those, about 60 percent were Indigenous.

On Wednesday, spokesperson Ariella Calin declined to say how many of the hundreds being laid off were northerners.

“I do not have that breakdown and it’s not something we will comment on in terms of numbers as of right now,” Calin wrote.

A more precise overall figure for the number of jobs lost has not been made available.

At the NWT and Nunavut Chamber of Mines, executive director Karen Costello expressed concern for those affected by a “tough day.”

“It is not surprising that one of the diamond mines has indicated some unscheduled layoffs due to economic conditions,” Costello said.

While “everything depends on economics,” Costello said this week’s job losses demonstrated the urgency with which the NWT needs to get more projects off the ground.

“We have additional advancing projects. They’re like bridesmaids, they’re brides in waiting. They’re looking to go over the edge and make that final push into becoming a mine,” she said.

“There has to be a recognition that for the NWT’s mining industry to remain healthy, it needs these advancing projects to cross that threshold to become mines.

“It needs to have a healthy exploration sector, which means having a regulatory environment that is streamlined, is efficient, and policy directions coming from the territorial government that indicate the territory is welcoming and open for the mining industry to continue.”

Costello said the workforce trained to work at the diamond mines remains “an asset for the territory” that she hopes other businesses will put to use in the meantime.

“We know NWT workers want to remain in the NWT, and they’ll be looking for opportunities to do so,” she said.

Jacksen Friske contributed reporting.