Mining? Forestry? Which Leads the Way in Economic Impact for Northwestern Ontario?

By Graham Strong supported by the Thunder Bay Community Economic Development Commission

Mining Support and Spin-offs Will Drive Economic Development in Thunder Bay

The latest economic report for Thunder Bay likely marks a watershed moment in the economic history of Northwestern Ontario. For decades, mining has been forestry’s little brother in a region rich with natural resources. But the downturn in the paper industry in 2008 combined with the coming critical minerals boom (including the Lithium Rush) means that those two industries are likely to switch positions soon.

In June 2023, the Thunder Bay Community Economic Development Commission (CEDC) released a report on the Economic Profile for Thunder Bay prepared by the Northern Policy Institute (NPI). This review of seven key sectors found that forestry directly added approximately $47 million to Thunder Bay’s GDP, while mining directly contributed $40 million.

Further, forestry directly employed 364 people living in Thunder Bay compared to 278 in mining. Of course, most direct forestry and mining activity happens outside of Thunder Bay. These numbers also do not include the revenue and jobs generated by service and supply companies, many of which service both industries. But these numbers act as a useful bellwether to gauge what is happening in the region as a whole.

What’s most striking in this case that the number of people working in forestry employment has shrunk by 32% from 2016 to 2021 while mining grew by 9%. Northwestern Ontario may have been victim to the global downturn of paper demand, but the region will be the beneficiary of the increased demand for gold and critical minerals such as lithium, platinum, and nickel.

It’s the indirect economic activity that will really drive prosperity for the city. For example on June 19, 2023, Avalon Advanced Metals announced it had purchased land on Thunder Bay’s waterfront to build a lithium hydroxide plant. The company said its “integrated project” of mine and processing will create approximately 500 jobs, most of which will be in Thunder Bay – and all of which will be in Northwestern Ontario. In turn, the raw materials produced here will go on to drive the EV battery industry in southern Ontario and beyond.

That’s just one project. Other players in the coming Lithium Rush include Green Technology Metals, Rock Tech Lithium, and Frontier Lithium. Outside of lithium, critical mineral mining companies include Impala’s Lac Des Illes mine (palladium). Generation Mining (palladium and copper) near Marathon, Tartisan Nickel near Kenora, and Ring of Fire Metals (nickel) are also in various stages of development.

Critical minerals may be the new gold, but the old gold is doing just fine as well. Newmont, Kinross, West Red Lake Gold Mines, and Barrick Gold are some of the established gold mining companies.