Regulatory and Policy Updates

Diamond Policy Framework

Tuesday, November 19, 2019 - 10:00am to 10:20am Theatre Two


M. Welsh (Presenting)
Department of Industry, Tourism and Investment, GNWT
A. Gillander
Department of Industry, Tourism and Investment, GNWT

Established in 1999, the Diamond Policy Framework (DPF) was designed to facilitate the development of a diamond manufacturing industry in the Northwest Territories (NWT).  In addition, agreements with NWT diamond producers were established which required them to offer 10 percent of their production, by value, to Approved NWT Diamond Manufacturers (ANDM) for manufacturing in the NWT.

The NWT is the most expensive jurisdiction in which to operate a manufacturing facility and despite some early success, the policy was not successful in creating an operating environment for the secondary industry to flourish.

In 2018, ITI commissioned a review of the DPF that sought recommendations on how to make this industry more attractive to investors.  The report contained a detailed review of the global diamond market. It also presented a series of cost per carat analyses of NWT production costs versus costs in other diamond manufacturing regions.

Policy recommendations included adopting an export provision for NWT rough diamonds (and making that export volume contingent on their investment in the NWT), permitting the development of a facility for high-skill planning and lasering services, and generally ensuring that the policy supported the acceptance of innovative business plans.

In 2018, The Department of Industry, Tourism and Investment (ITI) amended the DPF.  Accordingly, a new approach to the utilization of rough diamonds was developed to realize maximum economic benefits for the NWT and its residents.

The amended DPF now has provisions that allow an ANDM to export a portion of their allocation based on their business proposal and an ANDM is no longer required to complete the entire manufacturing process in the NWT.

To be eligible to export rough diamonds, ANDM applicants must provide a comprehensive business plan that outlines investment details.  Business plans are reviewed and scored based on a comprehensive matrix that determines the export volume.