Northern Ontario - Economy

Economy

Sudbury is the dominant city in Northeastern Ontario, and Thunder Bay is the dominant city in Northwestern Ontario. These two regions are quite distinct from each other economically and culturally, and also quite distant from each other geographically. As a result, Sudbury and Thunder Bay are each the primary city in their part of the region, but neither city can be said to outrank the other as the principal economic centre of Northern Ontario as a whole.

In fact, each city has a couple of distinct advantages that the other city lacks—Sudbury is at the centre of a larger economic sphere due to the city's, and Northeastern Ontario's, larger population, but Thunder Bay is advantaged by air, rail and shipping traffic due to its prime location along major continental transportation routes. The Thunder Bay International Airport is the third busiest airport in Ontario after Toronto Pearson International Airport and Ottawa Macdonald-Cartier International Airport, carrying some 600,000 passengers in 2004 with over 100 flights and four international flights daily. Sudbury's economy, in which the largest sectors of employment are government-related fields such as education and health care, is somewhat more diversified than Thunder Bay's, which is still based primarily on natural resources and manufacturing. Yet in the era of government cutbacks, Thunder Bay's economy has been less prone to recession and unemployment.

Under the staples thesis of Canadian economic history, Northern Ontario is a "hinterland" or "periphery" region, whose economic development has been defined primarily by providing raw natural resource materials to larger and more powerful business interests from elsewhere in Canada or the world.

Northern Ontario has had difficulty in recent years maintaining both its economy and its population. All of the region's cities declined in population between the censuses of 1996 and 2001. (This coincides with the discontinuation of the operation of the subsidized government airline norOntair in March 1996.) Although the cities have tried with mixed results to diversify their economies in recent years, most communities in the region are resource-based economies, whose economic health is very dependent on "boom and bust" resource cycles. Mining and forestry are the two major industries in the region, although manufacturing, transportation, public services and tourism are represented as well. In the 2006 census, some of the region's cities (including its four largest) posted modest population growth, while others saw further declines.

The cities have, by and large, been very dependent on government-related employment and investment for their economic diversification. The Liberal government of David Peterson in the 1980s moved several provincial agencies and ministries to Northern Ontario, including the Ontario Lottery and Gaming Corporation (which maintains a large office in Sault Ste. Marie) and the Ministry of Northern Development and Mines (whose head office is in Greater Sudbury).

As well, many of Northern Ontario's major tourist attractions (e.g. Science North, Dynamic Earth, the Sault Locks, etc.) are agencies of the provincial or federal governments. Further, much of the funding available for economic development in Northern Ontario comes from government initiatives such as the federal government's FedNor and the provincial Northern Ontario Heritage Fund.

Over the past several years, there has been a renewed interest in mining exploration. McFaulds Lake in the James Bay Lowlands has attracted the attention of junior mining exploration companies. Since the 2003 investigation of the area for diamonds, some 20 companies have staked claims in the area, forming joint ventures. While still in the exploration phase, there have been some exciting finds that could bring prosperity to the region and the First Nations communities in that area. New mining sites have also been investigated and explored in Sudbury, Timmins, Kirkland Lake, Elliot Lake and the Temagami area.