There’s more than snow sparkling in Canada’s north these days as high-grade gem-quality diamonds are now mined, cut, and polished in the Northwest Territories. Since the discovery of world-class diamond deposits fourteen years ago, Canada has become the fifth largest producer of diamonds in the world.

The discovery of diamonds at Point Lake NWT in 1991 sparked the largest staking rush in Canada’s history. The Ekati Diamond Mine, located about 180 miles northeast of Yellowknife, began production in 1998 and the Diavik Mine opened in 2002. Exploration has proceeded at a rapid pace since then, with significant finds in Nunavut, Northern Ontario, Quebec, Saskatchewan and Alberta.

“The benefits in terms of employment, in terms of business outgrowth and opportunities, in terms of GDP--almost any way you want to calculate it--have been huge,” says Martin Irving, Director of Diamond Projects for the NWT government.

Because the territories do not take ownership of revenue from resources like provinces do, most of the profits reaped from the diamond mines don’t remain in the territories.

“Revenue from the diamond mines, the vast majority of it, flows to the federal government in Ottawa. The Northwest Territory is not a province, and while we have authority and responsibility for a wide range of programs and services, we do not have authority or responsibility for land and resources,” says Irving.

Canadian diamonds have done more than make a mark on the territories. In the international community, Canada’s diamonds have become a symbol of ethical mining practices. Much of the industry elsewhere has been plagued by the sale of conflict diamonds—also called blood diamonds—which channels money through the black market some of the profits funding brutal ruling regimes, criminal gangs and terrorist groups.

Once a diamond is cut and polished its history is shed—there’s no way of knowing whether it came from the slave mines of Sierra Leone or from a country with ethical labor practices. This is why in June 2003, BHP Billiton, the owner of the Ekati mine, introduced the CanadaMark to identify its diamonds. The CanadaMark, which comprises a certificate of authenticity number, is etched into the girdle of each stone by a laser.

Another effort to stem the flow of illicit stones is the Kimberley Process, an international certification system which is a joint scheme between the diamond industry, governments, and civil society. Over 50 diamond producing and trading countries are now members, including Canada.

Nikki Skuce is the program director of One Sky, which launched a campaign called ‘Blood Diamonds are for Never’ in 2002. She says that initially some countries and the diamond industry itself were opposed to a monitoring system.

“It’s such a secretive trade, and that’s been part of the problem in getting transparency and getting the Kimberly Process in place. Those who dominate the industry are not that willing to have people come in and check up on them. But there’s evidence that the Kimberley Process is making a difference.”

Skuce goes on to say that while it’s encouraging that large diamond companies like DeBeers have been “trying to clean up their act,” there’s still much work to be done.

“While conflict right now isn’t as much of an issue, the fact is that these diamonds still aren’t clean. There’s child labor, there’s little benefit to the community, and there are environmental impacts. We’ve been doing some research on whether it would be possible to develop such a notion as a fair trade diamond, but with the way the whole diamond industry works it’s been really challenging.”

Irving insists that Canada’s diamonds mines have a minimal adverse impact on the environment. He says that apart from dealing with the dust and ensuring that the water is not contaminated, pollution is not a problem.

“If you’re going to have mining, diamond mining is probably the best type to have. There’s none of the issues of cyanide or acid leaching that are associated with other types of mining.”