OPINION: Thunder Bay’s economic hardships are a sign of things to come for the rest of Canada – by Livio Di Matteo (Globe and Mail – December 23, 2019)

https://www.theglobeandmail.com/

Livio Di Matteo is a professor of economics at Lakehead University.

There’s a good argument to be made that Canada would not exist as we understand it today without Thunder Bay. The 19th-century federal policies around building the Canadian Pacific Railway made it necessary to build cities on Northern Ontario’s lakehead.

Port Arthur and Fort William, the cities that would amalgamate into Thunder Bay in 1970, became grain shipment points for the prairie frontier, bringing the area prosperity. That was only amplified by provincial government policies supporting the myriad industries that followed suit: forestry, mining, shipbuilding, rail-car manufacturing, pulp and paper.

And the economic infrastructure that was laid in the first third of the 20th century provided opportunities for immigrants in the area’s sawmills, pulp mills, grain elevators and manufacturing plants.

This was the golden age of Thunder Bay’s economic development. By the 1970s, the city offered numerous well-paid industrial and transportation jobs for unskilled labour, spawning a large and prosperous local middle class that required little investment in education. Moreover, the relative isolation of the local economy created a captive market for retail goods and services, as well as a cozy business environment dependent on a few key industries in a company town.

But then the veneer of that golden age began to chip off. Thunder Bay was forced to adjust to labour-saving technological change, greater global competition in resource industries, shifting grain markets and the decline of the grain trade. The forest-sector crisis ultimately saw three out of four pulp mills and a major sawmill close.

For the rest of this article: https://www.theglobeandmail.com/opinion/article-thunder-bays-economic-hardships-are-a-sign-of-things-to-come-for-the/

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