A new diamond cutting and polishing facility in Sudbury, Ont., means more competition for the N.W.T. diamond processing industry, MLA Robert Hawkins says. (CBC)

The Northwest Territories' hold in Canada's diamond processing industry may be getting undercut by Ontario, where a diamond-cutting plant opened recently, a Yellowknife MLA says.

Yellowknife Centre MLA Robert Hawkins asked Premier Floyd Roland on Friday about the Crossworks Manufacturing Ltd. plant in Sudbury, Ont., where 27 experienced workers have been brought in from Vietnam to cut and polish diamonds.

The Sudbury facility, the first of its kind in Ontario, is expected to handle about $25 million worth of rough-cut diamonds this year.

It has a contract with DeBeers Canada, with the diamonds coming from that company's Victor Mine near James Bay.

"Ontario has said that they want to be the new international diamond pipeline. That is their position now for Canada, that diamonds run through there," Hawkins said in the legislative assembly.

The Northwest Territories has three diamond mines, all 200 to 300 kilometres northeast of Yellowknife: BHP Billiton's Ekati mine, DeBeers's Snap Lake mine and the Diavik mine, owned by Rio Tinto and the Harry Winston Diamond Limited Partnership.

The capital city of Yellowknife, which has dubbed itself "North America's diamond capital," is home to several diamond processing plants, including one by Crossworks Manufacturing.

Ontario 'cheaper to do business'

But Hawkins said Ontario is rolling out the red carpet for the diamond industry, raising questions about whether the Northwest Territories can keep up.

"Ontario is now producing diamonds, and their market is looking a heck of a lot more attractive when they can get deals on land to set up shop. They can get workers in there cheaper, their power is cheaper," he said.

"Everything is cheaper to do the business."

But when asked if the government has a "Plan B" strategy to protect the Northwest Territories' diamond cutting and polishing industry from emerging competition, Roland sounded less concerned.

"Let's be clear: the Northwest Territories' diamonds, the polar bear diamonds, are prized throughout the world for the quality that we have here in the Northwest Territories. So let's not undersell ourselves on this," Roland told the legislature.

"Our diamond industry is spooling back up. Our factories are hiring more people again as there is more interest and more money available for diamonds again throughout the world."

Roland said the N.W.T. government's policies on the diamond industry are under review.