Northern Ontario History

This article was originally published in the Fall, 2005 issue of Highgrader Magazine . Highgrader is committed to serve the interests of northerners by bringing the issues, concerns and culture of the north to the world through the writings and art of award-winning journalists as well as talented freelance artists, writers and photographers.

Don McKinnon, a man with a vision. 45 years ago the Ontario government ordered a study on the viability of a northern port. Naturally, it has been put on the shelf. Now Don McKinnon explains why a sea port some 28 kms form Moosonee would rejuvenate the North’s economic viability for decades to come.

Northern Ontario was opened up as the result of the dream of politicians who wanted to secure it for future generations. The major communities were born as a result of men with dreams refusing to accept defeat and pursuing their ambitions beyond the bounds of logic. Iroquois Falls today is the result of entrepreneur Frank Anson’s vision. He established a mill, which, at one time was the largest pulp and paper mill on the continent.

His imagination was sparked by the reports about timber possibilities written by two students he had grubstaked in 1909 to seek gold. Anson then went north to access the potential of the frontier. Who would believe the ramifications of this man’s dream would result in the development of a modern community?

In 1910, Anson investigated the site and lumber properties. Two years later, Anson sent several experts to the Iroquois Falls mill site. Anson’s dream of creating the Abitibi Pulp and Paper Company Limited became known as ‘Anson’s Folly’ but he refused to give up.

Read more

Livio Di Matteo is Professor of Economics at Lakehead University in Thunder Bay, Ontario.  Visit his new Economics Blog “Northern Economist” at http://ldimatte.shawwebspace.ca/ This column was originally published November, 2002.

It is in Ontario’s interest to see the north of the province become economically self-sustaining. A growing north will create economic activity and ultimately tax revenue. – Livio Di Matteo (November, 2002)

Nearly one hundred years after the beginning of its first Northern Policy, Ontario is faced with a need for a New Northern Policy.  The rationale this time is not to open up an investment frontier but to salvage the economic potential of a vast geographic region that suffers from locational disadvantages when it comes to economic activity.  While the north and the northwest are ostensibly at the center of the continent, unfortunately the bulk of the continent’s population with their attendant market demand and job opportunities lie elsewhere. 

Unless policies are put in place to boost economic growth in the north and northwest, these regions are likely to continue their decline and become a drain on the public purse of the province of Ontario.  It is in Ontario’s interest to see the north of the province become economically self-sustaining. A growing north will create economic activity and ultimately tax revenue. Moreover, given the continued growth and congestion in southern Ontario, there are benefits to dispersion of development in terms of the quality of life.

The legs of a New Northern Policy should focus on reducing the region’s locational disadvantages, augmenting its capital infrastructure, deepening its human capital and creating new governance institutions that would assert regional control over local development.

Read more

Livio Di Matteo is Professor of Economics at Lakehead University in Thunder Bay, Ontario.  Visit his new Economics Blog “Northern Economist” at http://ldimatte.shawwebspace.ca/ This column was originally published November, 2002.

Ontario obtained enormous benefits from the exploitation of northern resources and deliberately pursued a policy of resource revenue maximization that was partly responsible for launching the north on a development path that has brought us where we are today. – Livio Di Matteo (November, 2002)

The 2001 census revealed that for the first time, there has been an absolute decline in the population of Northwestern Ontario.  From a peak population of 244,117 attained in 1996, 2001 revealed a decline of 3.8 percent to just over 234,000. This absolute decline came on the heels of decades of relative decline as the population of the Northwest grew more slowly than that of Ontario as a whole.  Given that the population growth of regions is often a key indicator of economic growth, a historical view of the numbers is of some use.
 
Table 1 reveals that from the period 1871 to 1951, the population of Northwestern Ontario grew faster than Ontario as a whole.  As a share of Ontario’s population, the Northwest’s population peaked at about 3.6 percent of that of the Ontario total shortly after World War II and has since declined. During the 1990s, slower population growth rates in the Northwest tipped over into negative growth and we have reached the lowest share of Ontario’s population in 100 years.  We now account for barely two percent of Ontario’s population.  This relative decline has affected northern Ontario as a whole.

Read more

Originally published in February,1997

Livio Di Matteo is Professor of Economics at Lakehead University in Thunder Bay, Ontario.  Visit his new Economics Blog “Northern Economist” at http://ldimatte.shawwebspace.ca/

These figures suggest that a province of northern Ontario would be as viable economically as Saskatchewan, Manitoba or any other of the Atlantic provinces and should be able to
generate comparable levels of government expenditure and revenue. – Livio Di Matteo

While the North would definitely have been economically viable as a separate province at the turn of the century, that does not mean it still would be today. Modern northern Ontario has seen a decline in its traditional natural resource and transportation employment base. Since the mid-twentieth century, the north’s economy and population have grown at a much slower rate than the south and the north has possessed a chronically higher unemployment rate. Since the 1960s, the north’s economy has been supported by a substantial expansion of government spending to the point where the broader public sector accounts for nearly one-third of the labour force.  

As well there has been a decline in the importance of natural resource revenues to the Ontario government to the point to where they account for barely one percent of provincial revenue.  Combined with the higher per capita cost of providing government services in the north, the implication is that the last twenty-five years have seen a reversal of the traditional fiscal flows from the north to the south.

Nevertheless, interesting questions are what an economy of northern Ontario would look like in terms of  size and whether it would provide the necessary tax base for our current level of government services. Unfortunately, estimates of Gross Domestic Product (GDP) are not provided on a regional basis. However, using data from the 1991 census, it is possible to construct a crude approximation to the region’s GDP using household income data which yields a regional output of nearly 21 billion dollars. With a population of about 870,000, the economy of northern Ontario would be at the middle ranks of Canada’s provinces. Northern Ontario’s economy would be bigger than any one of the Atlantic provinces, slightly smaller than Manitoba’s and about the same size as Saskatchewan.

Read more