Natural resources driving Thunder Bay development – by Ian Ross (Northern Ontario Business – July 8, 2013)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. Ian Ross is the editor of Northern Ontario Business

Vince Mirabelli didn’t know much about the mining scene when he first became a realtor. Like many in Thunder Bay, he was unaware of the behind-the-scenes activity in northwestern Ontario’s fastest growing sector until mining executives started showing up as clients.

“When I got into this business five years ago I was oblivious to the Ring of Fire, and then I just started meeting guys one by one.”

So far, he’s sold high-end homes to folks employed with North American Palladium, Goldcorp, Premier Gold, Mega Precious Metals, almost all of them.” In late March, he closed the sale on a home to one executive who was relocating his family from Nevada and he’s sold houses to groups of miners who fly in to work at the remote Musselwhite site.

“I know the executives are spending good money up here on new (homes) and resales,” with prices ranging between $400,000 and $600,000. “A couple of years ago there would only be a handful in that range; now that number is starting to grow. Half of my clientele are out-of-town buyers,” said Mirabelli.

The mining industry, the post-secondary institutions and Thunder Bay Regional Hospital have become major job generators in luring new professionals to town.

They’re filling up new subdivisions and buying semi-rural lots on the city’s fringe.

“Every time they open up a new cluster of lots, they’re gone right away,” said Mirabelli. Last year, Thunder Bay hit 220 new home starts, the highest level since the early 1990s when 400 units annually was the norm.

Those homes that hit the market aren’t listed for very long, making Thunder Bay one of the tightest resale and rental markets (1.1 per cent) in Canada with low supply and high demand. Homes sold in the first quarter of this year were 14 per cent higher than in 2012.

It has Mirabelli wondering what will happen over the next five years?

While the exploration industry is experiencing lean times, mining supply and service companies, like recently arrived Abitibi Geophysics and Golder Associates, continue to trickle into town, adding to an estimated 200 local companies already engaged in some capacity.

There’s new construction at once-vacant Innova Business Park where engineering firms like True Grit Consulting cut the ribbon on its shiny new digs last year and now Genivar is building its headquarters across the street.

All this activity hasn’t been lost on city planners and administrators who’ve thumbed through the city’s Mining Readiness Report released last spring.

As many as 10,000 new jobs could be created over the next decade with 10 new mines ready to pop. And that’s before any mention of the blue sky potential from the Ring of Fire deposits, 500 kilometres to the north.

Thunder Bay is making moves to position and promote itself as a supply hub catering to the industry. City manager Tim Commisso said if Thunder Bay lands 6,000 of those jobs created at local assay labs, supply outfits, and engineering and accountng firms, it’ll replace those lost over the last decade from the crash of the forestry industry.

The spinoffs from mining won’t happen in a flash, but take place over time, he said.

“If the Ring of Fire happens that’s a bit of game changer and we could be having a different discussion,” said Commisso.

With Thunder Bay already in growth mode for the last few years, the city has an infrastructure renewal program underway.

This spring marked the start of a busy construction season with $32 million being spent on road widening, new sidewalks, sewer and water services.

The most recent project is a multi-million dollar four-laning of Golf Links Road and Junot Avenue. It’s designed to alleviate traffic bottlenecks running between the hospital, the post-secondary schools, the new subdivisions, and Innova Park which city officials believe could lure companies creating between 2,000 and 5,000 jobs.

With an eye to the future, there are long-range plans afoot for a new Northwest Arterial Road with extended sewer capacity as homebuilding stretches to the northwest. At the same time to curb sprawl, they’re encouraging urban infilling through condo projects in the city’s north and south business cores.

“We expect the university and college to be keys in any growth scenario,” said city planner Mark Smith, with Confederation College having 40 acres of woodlot and plenty of room available at Innova. “The reality is there are lots of options if the demand is there,” such as a high-tech park affiliated with Lakehead University. “Thunder Bay is set up kind of cool because we have these hubs of economic activity – like the airport lands – and we’ve got the policy frameworks in place to allow for community development areas.

“I think we’re well positioned if we have to move with infrastructure because we’re getting increased growth, no question about it,” said Smith. Building permit revenues are hitting new highs in each of the last four years.

As an incentive to builders, Thunder Bay is one of the few cities without development charges. Commisso said that issue has been revisited in the past but the city’s stance won’t likely change unless there’s explosive growth.

“In the event the Ring of Fire opens up, and we’re seeing huge growth, I would see a development charge being in place to finance and open up new subdivisions,” he said.

On the industrial land front, the city is promoting a 1,000-acre brownfield property on the nearby Fort William First Nation which is the city’s partner in attracting mining-related business.

“That asset has significant tax benefits (for companies) partnering with Aboriginal people,” said John Mason, the city’s mining services project manager. If supply chain companies settle there, Mason said one issue that must be addressed is the state of a “decrepit” 100-year-old swing bridge that connects the two communities.

Talks between the city and CN Rail have started while the city considers a fixed link in the future. In speaking with mining companies, Mason believes Thunder Bay can be promoted as a bedroom community for the industry.

One company’s strategy is to “recruit families, not individuals” to come to Thunder Bay and make it their permanent home.

Workforce numbers compiled reveal that between 25 and 30 per cent of Musselwhite’s and North American Palladium’s Lac des Iles employees reside in the city with the balance commuting from across Canada.

“We want to change that culture by promoting a community that’s vibrant and offers lots of services,” said Mason with a new waterfront, medical school and cultural events.

“That’s part of our marketing and communication strategy. It’s not just about hiring people but retaining them. We have to brand and market ourselves to suggest the opportunity to work and reside here.”