Thunder Bay a link to ‘Heartlandia’ – by Livio Di Matteo (Thunder Bay Chronicle-Journal)

The Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario. This column was originally published on June 01, 2009.

Economics Matters

For much of its economic history, Thunder Bay’s lake head role made it a transshipment point and transportation node that enabled it to reap the benefits of east-west economic flows – in particular, the grain trade. Thunder Bay’s role as the gateway to the west is about to get an important boost given the continued economic growth in western Canada and particularly the central interior North American economic region of Heartlandia.

Heartlandia – comprising Northwestern Ontario, Manitoba, Saskatchewan, North and South Dakota and Minnesota – is a region at the cross roads of the North American continent and indeed the world.

Heartlandia covers 2.4 million square kilometres with a population of nearly 9 million people and a GDP of about US$405 billion. This economic region contains agricultural production activities, food processing, forestry, petroleum, potash, uranium, coal, mineral and hydroelectric resources as well as substantial manufacturing, research and service capacity.

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Time for North [Ontario] to take control – Thunder Bay Chronicle-Journal Editorial (February 6, 2011)

The Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario. This editorial was published on February 6, 2011.

For an extensive list of articles on this mineral discovery, please go to: Ontario’s Ring of Fire Mineral Discovery

Provincial energy policy has punished the North with electricity prices that haven’t been able to match competing jurisdictions nearby. And yet, the North produces all of the electricity that it needs at a real price that is far lower than that which is being charged its industrial, business and residential users. (Thunder Bay Chronicle Editorial – Feb/06/2011)

THE TIME has never been better for Northern Ontario to take control of its own destiny. Discontent with provincial policy has rarely been stronger in the North which has been given a strong new hand to play in the form of major mining opportunities.

This region has shipped its resource riches and the bulk of their profits to southern Ontario and beyond for many decades, even as they provided the province with a major part of its revenue. One provincial government after another promised to facilitate value-added manufacturing of forest products but the logs and lumber, as well as much raw mine product, left here. Paper mills that did thrive are now mostly closed due in large part to provincial energy policy that helped to render them uncompetitive.

A slow provincial reallocation of forest resources is beginning to show some results, but the woods industry will never be what it was. The Northern Growth Plan remains to be written but from what is known about it so far, we should not expect a breakthrough in innovative thinking at Queen’s Park.

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Northern Policy Advice for Ontario’s Next Premier: Hudak or McGuinty? – by Livio Di Matteo

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/

For an extensive list of articles on this mineral discovery, please go to: Ontario’s Ring of Fire Mineral Discovery

A regional power authority could become a valuable tool for
northern development and provide the cheap electricity for
value-added processing and development necessary for mining
in the Ring of Fire. – Livio Di Matteo (January 17, 2011)

As Ontario heads towards its fall 2011 election, there will inevitably be discussion of what new policies can help drive Northern Ontario’s economy in the 21st century. Historically, economic development in Ontario’s North was a partnership between private sector resource exploitation and a public sector economic strategy to make the north an investment frontier for the south as well as a source of government revenue via the exploitation of natural resources.

Nineteenth century Ontario implemented a northern development scheme that could be termed a “Northern Ontario Policy” that operated parallel to the Federal government’s National Policy. Ontario’s Northern Policy provided a regional program of northern land grants to promote agricultural settlement and the building of the Temiskaming and Northern Ontario Railway and colonization roads to foster access.  As well, there was the passage of the “Manufacturing Condition” which required that timber cut on crown land be processed within the province so as to retain value added as well as provide government revenue.

At its peak, the province of Ontario obtained nearly one quarter of its revenue from northern resources and used it to fund expanding provincial services.  Indeed, in the early part of this century, Ontario’s northern forests and mines were akin to Alberta’s oil today. 

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Time For a New Northern Policy in Ontario – by Livio Di Matteo (Part 2 of 2)

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.

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Time For a New Northern Policy in Ontario – by Livio Di Matteo (Part 1 of 2)

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.

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A Northern Province for Ontario? – by Livio Di Matteo (Part 2 of 2)

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.

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A Northern Province for Ontario? – by Livio Di Matteo (Part 1 of 2)

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/

Between 1867 and 1899, the timber industry produced about 28 percent of total provincial revenues. These revenues contributing greatly to the welfare of Ontario citizens. Whereas northern Ontario accounted for at best 10 percent of the province’s population it consistently provided about one quarter of the province’s total revenue. – Livio Di Matteo

There are periodic calls for Northern Ontario to form a separate province, which seem to surface whenever the north feels it is being poorly treated by the provincial government.  The demand for a separate province feeds on the large amount of northern lore regarding the supposedly exploitative nature of the relationship between the north and southern Ontario.  A persistent theme in northern Ontario history is that it served as a natural resource frontier for the economy of the industrialized south by providing resource inputs into southern industry.  Moreover, much importance is attached to the natural resource rents from forests and mines which provided the Ontario government with a large proportion of its tax revenue in the first half of this century.

The case that usually follows is that northerners should have their own province so that the economic benefits from northern resources are retained for northerners.  The failure of the north’s economy to grow at the same rate as the south over the last 30 years, with the subsequent outmigration of youth, is blamed on the absence of provincial status and the ability to control our own economic destiny.  The implicit argument is that the North would be better off economically as a province though there have not been any arguments rooted in economic analysis to evaluate this point.  Moreover, given that the market for natural resources is international in scope, no explanation of how being a separate province might change the terms of trade for northern Ontario resources has been offered.

The best case for a province of northern Ontario rests in the past during the period 1870 to 1920 which was a time of rapid growth on par with the Prairies.  However, the Prairies were federal territories which obtained provincial status while northern Ontario remained part of Ontario. 

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Breakaway Country [Northwestern Ontario] – by Livio Di Matteo

The National Post is Canada’s second largest national paper. This article was originally published in the Financial Post on September 06, 2006.

Livio Di Matteo is professor of economics at Lakehead University in Thunder Bay, Ontario, and a co-author of a recent paper in Canadian Public Policy dealing with “Mantario.”

How can we empower people in these regions to help solve their own problems rather than wait for a supplicated solution from a pharaoh in a distant capital? In an act of supreme neglect, the Canadian federation has allowed its vital “zone of transit” [Northwestern Ontario] to decline to the point where an errant moose could choke the lifeblood of the nation. – Livio Di Matteo (Sept/06)

The isolated residents of northwestern Ontario are tired of life as a resource extraction colony. One option would be to create a new province – Mantario

The northwestern portion of Ontario, comprising the Districts of Thunder Bay, Kenora and Rainy River, represents 60% of Ontario’s land and an area the size of France. It was an imperial acquisition of the 19th-century when the province viewed itself as “Empire Ontario.”

It is a region rich in natural resources but sparse in population, and yet it is vital to the Canadian federation as an east-west transport corridor for road, ship and rail. Indeed, one can only imagine how different Canadian history might have been had northwestern Ontario become part of Minnesota. While alienation from Southern Ontario has affected all of Northern Ontario, sparking periodic calls to separate, the feeling has become particularly acute in the region stretching from White River to Kenora.

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Laggard Ontario – by National Post Guest Columnist Livio Di Matteo

The National Post is Canada’s second largest national paper. This editorial opinion was originally published on November 17, 2010 in the Financial Post section. Livio Di Matteo is professor of economics at Lakehead University in Thunder Bay.

 “In the midst of all the economic carnage, the Ontario government is presiding over a massive hike in electricity costs — an energy source that used to be the foundation of Ontario’s economic advantage. Add to this the fiscal deficit and a net debt that is expected to reach $240-billion by 2011, and one has an economy that is on the verge of being unable to deliver the standard of living that its citizens have come to expect.” – Livio Di Matteo – National Post, November 17, 2010

Dalton McGuinty has presided over the province’s economic decline

The Ontario government will be tabling its fall economic statement in the legislature on Thursday. Premier Dalton McGuinty, who has been seemingly unaware of the impact of his energy and economic policies on the province’s economy, would do well to take heed from the danger signs provided by another update — the recent Statistics Canada update to provincial GDP numbers.

The new StatsCan numbers show that, as a result of the recession, real gross domestic product in 2009 fell in every province except Manitoba. Moreover, the declines were steepest in Newfoundland and Labrador, Saskatchewan, Alberta and Ontario.

Being in the company of so many poor performers will not be a suitable defence for Ontario’s economic record for two main reasons. First, while Ontario’s decline was smaller than that in Newfoundland, Alberta and Saskatchewan, those provinces can blame their drop primarily on the fall in natural resource commodity prices, namely oil. Ontario’s key natural resource sector — forestry — while hit hard over the last decade, is not as important a sector to Ontario as oil and gas is in these other provinces. The economy will grow in Newfoundland, Alberta and Saskatchewan as oil and gas prices recover.

Second, Ontario’s dismal performance caps a decade of dismal performance. Ontario has become a laggard in per capita GDP, as highlighted when it entered the ranks of the “have-not” provinces and began to collect equalization.

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Northern Ontario Needs Regional Control and Decision Making to Economically Prosper – by David Robinson

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.  Dave Robinson is an economist with the Institute for Northern Ontario Research and Development at Laurentian University. drobinson@laurentian.ca His column was published in the October, 2010 issue.

We all wonder why some resource-rich regions like Alberta and Saskatchewan do so much better than other resource-rich regions like Northern Ontario.  And why do some boreal regions, like Sweden, Norway and Finland become rich, creative powerhouses while young people flee others – like Northern Ontario? – David Robinson

Are you old enough to remember Van Morrison’s “Days Like This”? The song has a wonderful line about days when “all the parts of the puzzle start to look like they fit.” It was one of those days when I stumbled on a study from Harvard that answered some questions about Northern Ontario for me.

We all wonder why some resource-rich regions like Alberta and Saskatchewan do so much better than other resource-rich regions like Northern Ontario. And why some communities without resources – think of Singapore and Denmark, and Holland – do well and others basically go nowhere. And why do some boreal regions, like Sweden, Norway and Finland become rich, creative powerhouses while young people flee others – like Northern Ontario?

Now I know some people think Northern Ontario is doing pretty well – and we darned well should be. We are in the early stages of the biggest worldwide resource boom ever. Treading water in this economy is probably easier than sinking.

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Finance minister compares Far North Act to creation of Algonquin Park – by Nick Stewart

This article was originally posted September 29, 2010 on the website of Northern Ontario Business. 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.

Last week’s passage of the highly controversial Far North Act was likened to the creation of a provincial park by Ontario Finance Minister Dwight Duncan, following a presentation to the Greater Sudbury Chamber of Commerce on Sept. 27.

“It’s all about how we develop the mix of development moving forward and how we make sure that, as we enhance our ability to grow the North, we also enhance our ability to preserve that part which will have enormous appeal in the future,” said Duncan to Northern Ontario Business in an interview following his speech.

“In 1895, (then-Premier) Oliver Mowat created Algonquin Park over a whole lot of objection at the time, and it still remains an enormous tourism magnet. So it’s about finding balance, and we’ll continue to work with communities across the North to get the right balance, and I’m glad we’re having a debate because we needed to have it.”

The act, passed last week in the provincial legislature with a vote of 46-26, dictates the setting aside of 225,000 square kilometres of the region as “protected areas.”

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Far North Act Will Impair Our Economy – by Harold Wilson

Harold Wilson is president of the Thunder Bay Chamber of Commerce.

On Sept. 15, numerous business representatives, prospectors, municipalities and other organizations participated in a rally at Queen’s Park at a rally organized by First Nations to protest the proposed Far North Act.

The Thunder Bay Chamber of Commerce received unanimous approval in April from the Ontario Chamber of Commerce delegates on our resolution to have the act withdrawn.

Despite many other long-awaited government initiatives, such as the Northern Growth Plan and the Wood Supply Competition, the Far North Act is first on the agenda when the legislature convenes. Why is it such a big deal?

A group of dogmatic environmental “stewards” ensconced in the
premier’s inner circle, who do not know, nor care to know, how to
grow an economy, are dictating our economic future.

Mine exploration and development throughout northwestern Ontario is new money flowing into our economy. This is private sector money, raised from investors. Regardless of the diversified nature of our local economy, we benefit markedly by development of our natural resources. There are already important tangible examples of how increased exploration and prospecting is adding to the economy of Thunder Bay.

A few recent ones include: Activation Laboratories’ expansion, the expansion at WiskAir of its fleet of helicopters and now its hangar, the arrival of Porter Airlines, Cliffs Resources –a huge mining player in the U.S. — will soon be setting up shop in Thunder Bay. These activities are threatened by the Far North Act and other regulatory impediments to mining in our region.

Moreover, while government officials have stressed that this act is primarily to address issues expressed by the First Nations, the Far North Act is not supported by the First Nations leadership in Northern Ontario. In fact, they have already rallied against it.

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Go North, to Find Ontario’s Next Economic Boom in the Ring of Fire Mining Development – by Livio Di Matteo

Livio Di Matteo is professor of economics at Lakehead University. This column was originally published in January, 2010.

While it is simplistic to believe that history repeats itself, economic history is shaped by cyclical demographic and economic factors. Ontario’s economy, despite its current lethargy, is poised for a boom reminiscent of what shaped the province at the dawn of the 20th century.

During the late 19th century, Ontario’s economy was laid low by a global economic slump. Between 1891 and 1901, Ontario’s population growth crawled to a virtual halt and out-migration of its young people to the United States became a chronic lament.

Ontario’s economy was saved during the early 20th century by two booms
that fuelled its manufacturing sector’s growth and ensured that Toronto
became the financial centre of Canada.

Ontario’s economy was saved during the early 20th century by two booms that fuelled its manufacturing sector’s growth and ensured that Toronto became the financial centre of Canada. The first, the prairie settlement boom, saw hundreds of thousands of European settlers flock to the Prairies and form a market for consumer goods produced by central Canadian industry. The second was the forestry and mining resource boom of Ontario’s northern frontier, which generated inputs into southern Ontario industry, created Toronto’s role as a financial centre and created a lucrative source of provincial government revenue via enormous resource rents and royalties.

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Part Five of the Environmental Commissioner of Ontario Annual Report 2009/2010 – Modernizing Mining in Ontario

For the entire annual report go to the Environmental Commissioner of Ontario website: Redefining Conservation: Annual Report 2009/2010

For an extensive list of articles on this mineral discovery, please go to: Ontario’s Ring of Fire Mineral Discovery

2010 Amendments to the Mining Act

From Environmental Commissioner of Ontario (ECO) Issues

In the 1800s, miners used picks and shovels to find and extract minerals. Embarking out into the wilderness of Ontario, prospectors had “free entry” to access any land that contained Crown-owned minerals. They could stake their claims with wooden posts and acquire mineral leases with no need to consider the interests of property owners or the public. This right of free entry was a fundamental feature of Ontario’s first mining laws and was designed to promote mining activity, create wealth in the province and encourage the settlement of the northern lands.

Much has changed in Ontario since the Mining Act (the “Act”) was enacted in 1869. First, there are many more recognized uses for Ontario’s land than mining. Second, early mines were generally small in scale with a relatively small ecological footprint; modern day mining often involves large-scale and mechanized digging, drilling and blasting, with the potential to have significant environmental impacts. Finally, the public has grown more concerned about our natural environment and the impacts of human activities, expecting environmental risks to be mitigated and mining lands restored.

Although the Mining Act and the concept of free entry may have worked in the 19th century, it is clearly at odds with 21st century land uses and values. Free entry assumes that mineral development is appropriate almost everywhere and that it is the “best” use of Crown land in almost all circumstances, giving mining priority over forestry, commercial development, recreation and tourism, the interests of Aboriginal communities, and the conservation of ecologically significant species and landscape features.

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Balance in Far North Bill – Toronto Star September 19, 2010 Editorial Comment on McGuinty Liberal’s “Far North Bill”

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on Canada’s federal and provincial politics as well as shaping public opinion. This editorial was originally published on September 19, 2010.

For an extensive list of articles on this mineral discovery, please go to: Ontario’s Ring of Fire Mineral Discovery

Beyond romantic notions of caribou running wild across endless tundra, most Ontarians know very little about the northernmost 40 per cent of our province.

Much of the land is barren and beautiful, but it is also facing increasing pressure for development; logging, mining and power companies all see great potential there. The First Nations, who have long called the region home, need a say in determining the future of the land and an assurance that they will benefit economically from its development.

The province, on the other hand, needs to balance these interests with environmental protections for the northern boreal region, a globally significant ecosystem. The provincial government’s Far North Act, Bill 191, would achieve that balance.

So it is unfortunate that the chiefs of the Nishnawbe Aski Nation (NAN) territory are threatening that there will be “no peace on the land” if the government passes the bill in the coming days.

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