Northern Ontario’s next boom must come from within – by Livio Di Matteo (Waterloo Region Record/Troy Media – June 3, 2015)

Livio Di Matteo is professor of economics at Lakehead University in Thunder Bay.

Ontario’s north has experienced slower economic growth than the rest of the province for decades. Its shrinking economic role within Ontario — rooted as it was in natural resource extraction and processing — is a constant economic and political issue that has vexed politicians and community economic leaders for nearly 50 years.

The crisis in the forestry sector and its more capital-intensive production methods have also led to reduced northern employment. Whereas in 2003 there were 373,000 jobs in northern Ontario, by 2013 the number had decline five per cent to 355,000. Even the favourable unemployment rates in major northern urban centres are illusory, given that they reflect a shrinking labour force.

Compare that to Ontario as a whole, which saw employment grow 11 per cent over the same period despite the manufacturing malaise.

One response from northern Ontario to the employment decline has been to rely more on government. But public administration, health and social assistance, and education together already make up nearly 30 per cent of employment in northern Ontario, compared to 24 per cent in the province as a whole.

Northern Ontario’s economic predicament and its response to economic challenges are also shaped by its history — one that generated persistent economic attitudes.

After Confederation, Ontario implemented a northern development scheme of land grants, industrial protectionism and railway building that operated parallel to the federal government’s national policy.

Between 1891 and 1911, the previously “barren north” became “New Ontario” and there was a massive economic boom, as private investment, capital and migrants flooded into the north. As a result, ingrained in the northern Ontario psyche is the correlation between government policy and economic development.

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