Ottawa said it is “committed to protecting taxpayers’ money” as the Ekati diamond mine enters insolvency, months after taking a federally backed $175-million loan.
An initial $115-million loan was agreed late last year between Ekati owner Burgundy and a Crown corporation named the Canada Enterprise Emergency Funding Corporation (CEEFC).
The loan was a Large Enterprise Tariff Loan or LETL, a financial device set up by the federal government to combat the effects of American tariffs on Canadian businesses. Tariffs imposed by the US – particularly on India – have hurt the diamond business over the past year.
Burgundy was granted a $60-million expansion of that loan in March.
However, records released last week through Ekati’s insolvency filings show the mine was in terrible financial health for much if not all of 2025.
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Jobs were being cut, diamonds lost three-quarters of their value as the year went on and Burgundy ended up posting a loss for the year of more than $100 million, those documents state.
In that light, how Burgundy met the criteria to receive an LETL is not clear.
The CEEFC states on its website that to receive an LETL, any company that applies “must have a plan that presents a reasonable likelihood of the Borrower returning to a position of financial stability and being able to repay the Loan Facilities at maturity.”
Federal finance minister François-Philippe Champagne announced Burgundy’s initial loan in December 2025, stating at the time: “The loan announced today will support stability. It will help to maintain good, high-value jobs, strengthen our Northern industries, and help us build a more diversified and prosperous economic future for all of Canada.”
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Champagne declined an interview request from Cabin Radio this week through a spokesperson.
However, his office did provide brief answers by email to written questions.
“The government is closely monitoring Burgundy’s creditor protection ruling and continues to engage with its Territorial and Indigenous partners, including the Northwest Territories’ government, to proactively support the region’s immediate needs all while advancing economic diversification in the North,” wrote Marie-France Faucher, who was identified as a Department of Finance official.
Asked what evidence Burgundy put in front of the CEEFC to show a “reasonable likelihood of returning to a position of financial stability,” Faucher wrote: “Previous investments were made with an understanding of the financial risks while also recognizing the value diamond mining brings to the Northwest Territories’ economy and its people.”
The CEEFC is “working with the company, the courts, and other creditors on next steps,” she continued.
“The government, in turn, is committed to protecting taxpayers’ money as CEEFC engages in this process but recognizes that LETL was conceived to provide immediate financial support to companies and their workers staring down challenging situations brought on by U.S. trade actions.”
Burgundy is now expected to initiate a court-supervised sale process for Ekati in the next week – the third time someone has tried to sell the mine in five years.
Dominion Diamond Mines finalized the sale of Ekati in early 2021 after entering its own creditor protection process. Arctic Canadian Diamond Company, a firm owned by various asset management groups, took over the mine but was then bought out by Australia-based Burgundy in 2023.
Burgundy said last week that some mining at Ekati will continue while the insolvency process plays out.
The current mine plan calls for operations to continue until 2040. However, Ekati is expected to get through the next 10 weeks only through a $7-million emergency cash injection.
