N.W.T. Chamber of Mines suggests tax relief for territory's struggling diamond mines

The executive director of the N.W.T. and Nunavut Chamber of Mines says easing property taxes is one way the N.W.T. government could support the territory's struggling diamond mines.

Karen Costello, the chamber's executive director, spoke to CBC News after the N.W.T.'s diamond mines reported hundreds of millions in financial losses in 2024, partially due to weak diamond prices and inflationary costs.

She said the N.W.T. government should consider a few options that are in its control to help the diamond mines navigate the difficult financial times. 

"When ... we pay property taxes in the city, it goes towards supporting services. But the mines are fully self-sufficient — yet they pay property taxes," Costello said. 

"Is there something the government could consider doing in that regard?" 

Each of the territory's three diamond mines — Diavik, Ekati and Gahcho Kué — are expected to begin closing between 2026 and 2030, but there are concerns among some analysts that the low diamond prices could push them to close earlier than expected. 

Diavik paid $9M in property taxes in 2024

Property taxes are typically charged to mines when they're close to a population centre and are using municipal services. That's not the case with the N.W.T.'s diamond mines and it's something acknowledged in a 2020 report prepared for the territory to look at its competitiveness in the mineral sector. 

"Northwest Territories is unique in imposing a property tax on the entire territory," the document reads.

CBC News reached out to all three diamond mines about how much was paid in property tax. Diavik was the only to respond to say it paid around $9 million in 2024.

In its financial statements, Diavik reported around $127 million in losses that same year. It said there were various reasons behind those losses, including the tragic Fort Smith plane crash in early 2024. 

Ekati saw a $94.7-million loss, and Gahcho Kué's minority stake owner Mountain Province reported a $81-million loss.

Costello said that the territory should look at ways to support the mines, as the mines have supported the territory. She mentioned investments they've made and assistance provided during the 2023 wildfires.

"[The mines] have made significant contributions not only through their impact benefit agreements and socioeconomic agreement," Costello said. 

"They've also been, and I think the best way to put it, they've been good neighbours. They have been part of the communities, they've been part of the territory."

Heather Exner-Pirot is a senior fellow and director of energy, natural resources and environment at the Macdonald-Laurier Institute think tank. Her husband also works for Gahcho Kué.

She says she supports the idea of removing the property taxes from the mines. 

Exner-Pirot wrote in an email that there is a lot of talk of using federal funds to build infrastructure to incentivize new mines, whereas in this case there are mines already built. 

She said that any help to the mines can pay off as the continued operation leads to workers paying taxes to, and in, the territory. 

"I think the fiscal benefits outweigh the negatives," she wrote.

N.W.T. ministers meet with the mines

According to the N.W.T.'s ministerial activities advisory, Finance Minister Caroline Wawzonek and Employment Minister Caitlin Cleveland met with the three diamond mines virtually on April 2.

In an email to CBC News, Cleveland said the parties discussed "the challenges in the global diamond market, the impacts on the sector in the Northwest Territories, and how the government can support the sector."

"The government is closely monitoring the economic and financial impacts on northern businesses and working with partners to ensure the Northwest Territories remains a competitive, stable, and attractive place to invest and operate," Cleveland said.

After this article was published, Cleveland reached out CBC News to say that the territorial government is exploring the options suggested by the N.W.T. and Nunavut Chamber of Mines.

Cleveland acknowledged the challenging situation the diamond mines are facing, but said the territory is taking action to address this — "including recent changes to government-required valuations that provide producers with more flexibility to get their product to market," she wrote.

Kevin O'Reilly is a former MLA who has been critical of the territorial government's lack of transparency in its relationship with the mines.

He said it is an important industry and economic sector, but when the conversation is on the subject of subsidies, that  should be public.

"They [the mines] also, as independent experts have pointed out, have a very charitable regime in terms of not having to pay a lot of revenues, taxes to the government of the Northwest Territories," he said.

"Are we really going to go down the road of further subsidizing this industry? I think that really deserves a public discussion and debate rather than some kind of agreement that's reached behind closed doors."