Some members of the Northwest Territories legislature are asking the government to save Yellowknife's diamond-cutting and polishing plants, which they say are struggling in the economic slowdown.
Dropping demand for diamonds worldwide forced Laurelton Diamonds to close its Yellowknife polishing facility last month.
While a new factory, Crossworks, opened in the N.W.T. capital in November, two other facilities are at risk of shutting down, Yellowknife Kam Lake MLA Dave Ramsay told the legislative assembly on Monday.
"The Arslanian and Polar Bear factories are shut down all of this week and already five employees have been laid off," Ramsay told the assembly.
"The factories are closed so that management can come up with a plan as to how to survive in this worldwide recession. And their plan may be ... to close the factories for good. This would be an outright shame."
Ramsay said a total of about 65 jobs are in danger of being cut.
He and Yellowknife Centre MLA Robert Hawkins asked the government to do more beyond the loan guarantees and training programs it has already offered to local diamond polishing and cutting businesses, also known as the secondary diamond industry.
"Does the minister of [industry, tourism and investment] have an action plan that includes financial resources to help support the secondary diamond industry?" Hawkins said in the assembly.
"If he does have one, could he give this house some details as to what that actually means?"
Industry, Tourism and Investment Minister Bob McLeod told the assembly he is willing to meet with the diamond plant operators to come up with a solution, adding that the government is reworking its diamond policy.
But offering the industry direct financial support can be a risky move, McLeod added.
"We're committed to working to help maintain and conserve the secondary diamond industry, but it'll have to be on our terms," McLeod told the assembly.
"We're not going to gut our policies without making sure that the North continues to receive benefits."
The Northwest Territories boasts three diamond mines: BHP Billiton's Ekati mine, Rio Tinto's Diavik mine and De Beers Canada's Snap Lake mine.