IV.

Economy

Yellowknife’s economy is based largely on the administration of government services, and the city contains a number of territorial and federal government offices. Mining has traditionally been one of the major sources of jobs in Yellowknife, but declining production and labor conflicts in the mines caused difficulties in the 1990s. A long strike at the Royal Oak mine turned violent when strikebreakers were brought in. Several of them were killed in an explosion set by one of the strikers.

The discovery of diamonds in 1991 near Lac de Gras, about 300 km (about 190 mi) northeast of Yellowknife sparked a “diamond rush” that resulted in one of largest mineral staking rushes in North American history. Much of exploration activity was centered around Yellowknife. In 1998 the Ekati diamond mine at Lac de Gras opened, creating more than 1,000 new jobs in the region. In 2003 a second large diamond mine near Lac de Gras began production. Yellowknife officials have made other efforts to diversify the economy, particularly through the promotion of tourism, and the city has had some success promoting itself as a site for observing the aurora borealis (northern lights).

A paved road, the Mackenzie Highway, connects Yellowknife with Edmonton in southern Canada. The city loses its road access twice a year—during the fall freeze-up and the spring breakup—when the ferry across the Mackenzie River at Fort Providence shuts down for as long as three weeks. Between those events, the ice is thick enough to drive across. To make it even thicker, water is pumped from the river onto the traffic lanes until it forms a very strong “ice bridge.”

The city is a major hub for air travel in northern Canada, with daily connections to Edmonton and Winnipeg, Manitoba, and scheduled service to the western and eastern Arctic. There is also regular air service to Whitehorse, the capital of the Yukon Territory. The Yellowknife airport accounts for about 90 percent of all air travel in the Northwest Territories.