The Conference Board of Canada has issued its March 2023
Metropolitan outlooks for Thunder Bay and Greater Sudbury and the immediate
news looks good for Thunder Bay. As a
result of the construction of a new provincial jail in Thunder Bay over the new
two years, Thunder Bay is expected to see its real GDP grow 3.6 percent in 2023
making it number 1 out of 24 comparable CMAs for economic growth. On the other hand, Sudbury at only 1.4
percent projected growth for 2023 is still doing well and expected to rank 12th out
of the same 24 CMAs. Sudbury is doing
well as a result of expected persistence of demand for nickel given the growth
of the electric car industry. In terms of how Thunder Bay and Sudbury will fare
in the longer term based on these economic drivers, the Conference Board
projects that Sudbury will see some continued growth particularly in employment but Thunder Bay after the
construction boom is expected to falter somewhat given the absence of a more
robust long-term driver.
Figures 1 and 2 plot both real GDP growth and employment growth
for Thunder Bay, Sudbury and Ontario as presented by the Conference Board
reports. While 2023 sees Thunder Bay
surpass both Ontario and Sudbury for growth, for the 2024 to 2027 period, Sudbury
sees real GDP growth stay at about 1.5 percent while Thunder Bay falls to just
over one-half of one percent. Despite
the anticipated slowdown in 2023, Ontario real GDP growth recovers to an
average of over 2 percent for 2024-27. In terms of employment growth, Thunder
Bay sees a surge to a 4 percent growth in jobs created for 2024 but eventually sees
employment shrink moving into 2025 to 2027.
While Sudbury also is expected to see lower employment growth moving
forward, it remains positive to 2027.
And finally, Figure 3 provides a retrospective on local
investment spending for the two cities in terms of the value of building
permits from 2014 to 2021. Fluctuations
notwithstanding, the long-term trend up to 2021 has been slightly positive for
Sudbury, and slightly negative for Thunder Bay. Going forward, housing starts
are an important component of building permits, and the provincial and federal
budgets are expected to see some initiatives for boosting housing spending. The Conference Board is forecasting that
total housing starts in Thunder Bay will fall from 193 units in 2021 to 161 in
2023 but then start to increase reaching 237 by 2027. Sudbury is expected to follow a similar
pattern declining from 434 starts in 2021 to 269 by 2023 but then recovering to
301 by 2027.
Both communities have aging populations which in the absence
of economic opportunities attracting large scale immigration means that investment,
employment, and real GDP growth in the long term will lag the rest of the
province. One potential game changer is of course in the area of mining for
both communities given the global demand for critical minerals and the expected
development of the Ring of Fire. Tomorrow’s
provincial budget may provide a glimpse of what might happen there in terms of infrastructure spending.
