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Diamond industry principal economic driver in the territories

A new study by Impact Economics indicates that the Canadian diamond industry has been the principal economic driver within the territorial economy during the past decade.

The report released today by the Mining Association of Canada (MAC) and the Northwest Territories and Nunavut Chamber of Mines, highlights the contributions of the Canadian diamond mining industry to the economy of the Northwest Territories between 1997 and 2007 and provides a critical analysis of the effects of the industry on the economic and social performance of the territory.

According to the study, since diamonds were discovered in 1991 the overall impacts to the NWT economy have been dramatic, with the territorial Gross Domestic Product tripling from $1.5 billion in 1991 to $4.5 billion in 2007.  During the same timeframe, the NWT unemployment rate has fallen from 13.7% to 5.4%.

“The study validates that the diamond industry is the primary economic driver in the NWT, effectively raising gross domestic product, employment and personal income levels across the territory,” noted Mike Vaydik, General Manager, Northwest Territories and Nunavut Chamber of Mines. “The size and quality of the territory’s labour force has expanded dramatically as a result of increased business opportunities, and enhanced skill set and capacity.” 

Northern employment levels for each of the mines have grown well beyond original expectations.  The study notes that direct employment of NWT residents has amounted to more than 11,800 person-years from 1997 to 2007.  Of that amount, 49% represent northern First Nations, Inuit and Métis workers.

According to the report, by the end of 2008, total personal income sourced directly from the diamond operations will exceed $100 million.  The increase in average income from $33,000 in 1999 to $51,000 in 2007, with parallel drops in the proportion of the population receiving government income support reflects the significant contribution the industry has made to the standard of living in the Territory.

“Since Canada’s diamond mining industry began development in 1995, it has invested and contributed in many ways to enhancing the economic and social development of northern and Aboriginal communities,” said Rick Meyers, Vice President, Diamond Affairs, Mining Association of Canada.  “With four producing mines, the diamond producers have collectively negotiated 19 Impact Benefit and Participation Agreements with Aboriginal communities in the NWT, Nunavut and northern Ontario.  Under these agreements the communities are guaranteed revenue, community development contributions, employment and skills training and business procurement contracts, among other benefits,” added Mr. Meyers.

According to the report, since diamonds were discovered in 1991:

  • natural resource development has accounted for 75% of all capital investment in the Territory;
  • mining operations have invested more than $8.8 billion, including $6.5 billion on northern business,  of which $3.1 billion is Aboriginal business;
  • the percentage of the population on income assistance has dropped from 11% to 4.5 %; and
  • high school graduation rates are showing a dramatic increase, from 33% in 1995 to 56% in 2007. 

The Mining Association of Canada is a national organization of the Canadian mining industry.  Its members are companies engaged in mineral exploration, mining, smelting, refining and semi-fabrication.

Northwest Territories and Nunavut Chamber of Mines represents the interests and concerns of exploration and mining companies operating in the two northern territories.

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