When Budget Requests Collide: Thunder Bay 2026

  

Thunder Bay has released its planned 2026 operating budget and as usual there are a plethora of numbers, facts and figures splashed across our local media.  This year’s budget is especially interesting given that in the lead up to its release, the messaging from The City was that the tax levy increase would be held to 2.6 percent.  However, as it has emerged, this initially did not consider the rather large request from the Police Services Board of a 9.1 percent increase for their requirements as well as larger requests from other external boards. Apparently, those are 'external' and the City itself has done a good job of keeping its increases to 2.6 percent though one should add City Council needs to approve all of these increases if they are to go forward.

Given that police services alone account for 22 percent of the property tax levy, this has bumped up the proposed municipal levy increase to 4.4 percent though the City as usual is doing its after growth schtick and saying it is only 4 percent. With the Growth Plan setting 3 percent in the assessment growth as a target, we can joyfully anticipate the day when there will be a 4 percent levy increase but which only amounts to 1 percent after growth. And as usual, one also needs to factor in the rate-supported budget in all of this. The average residential household will see a 4.1 percent increase in their total Water and Wastewater charges bring the average per household up to $1,479.88 from $1,436.84.  As a further note, The City will also be expanding its employment in 2026 adding 57.1 Full Time Equivalent positions in areas such as safety and security, growth, service delivery and to run the 2026 municipal election.

 

As has been my practice, the accompanying figure plots Thunder Bay’s tax levy increases since 1990 to provide context.  The last four years have seen a distinct increase in the tax levy not only from the lows of the pandemic but from the period immediately pre-pandemic.  Over the 2023 to 2026 period, the levy increases average 4.7 percent putting this year’s increase slightly below the four-year average but well above the 2015 to 2022 period average of 3 percent.

Of course, the budget still must be ratified and there is a period of public input but the current Thunder Bay City Council is not likely to push back much against what is being asked for even if public opposition emerges given their performance last week largely endorsing the sale of public properties and development as proposed to build new density housing projects in established neighbourhoods. On the other hand, the debate will be interesting to monitor to see what finally emerges given that we are going into an municipal election year. 

 

 

Is Thunder Bay Housing History About to Repeat Itself?

 

In the early 20^th century, the Lakehead cities of Port Arthur and Fort William were amidst an economic boom fueled by the expansion of the Canadian wheat economy in the west and the Lakehead’s role as a port and transport centre.  As the boom progressed, population surged and the years from 1900 to 1914 saw massive growth with the population growing from just over 6,000 people to 30,000 – a 400 percent increase.  With this boom, the need for housing was paramount and the same era saw a massive construction surge with numerous houses built. 

Indeed, it seemed like the growth would never end and plans were afoot to bring huge swaths of land into readiness for what was certainly to become the Chicago of the North.  The pre-1920 period saw residential subdivisions planned and sometimes started for the Kam River Islands, Parkdale (which incidentally was zoned for 25-foot lots as far back as 1907), The Alma Adair Addition and the areas currently between Lakehead University and Confederation College now off Central Avenue and to be known as Inter-Ocean Park.

The Great Boom came to an end not only at the Lakehead but across Canada and for decades Thunder Bay was marked by huge swaths of land that eventually reverted to the municipality for non-payment of taxes and evolved into informal green spaces throughout the city. Along with large swathes of greenery in the centre of the city, many neighbourhoods have also had patches of green space on empty lots that were never developed.  While these lands sometimes evolved into official parks or parkettes, for the most part they were simply green space – owned by the city.  Visually, they made for a vision of forest within the city and in practical terms, while they served no obvious productivity need, they did harbour wildlife and absorb rainwater.  One only needs to see what happens to the inter-city area after a major deluge given that most of the green space there has been paved over.  If anything, the urban green space contributed to that intangible Thunder Bay often advocates as one if its attractions – quality of life.

Fast forwarding to the present, after decades of economic and population stagnation, it once again appears that Thunder Bay’s hour has struck and a boom – albeit a modest one - is underway.  With infusions of public infrastructure money, growing demand for transport services and mining activity in the region, employment and population have finally begun rising again with some of that growth boosted by recent immigration of permanent and temporary residents.  According to Statistics Canada numbers, between 2015 and 2024, the CMA population rose from 124,719 to 133,063 while the City of Thunder Bay proper rise from 110,298 to 117,100 – increases of 6.7 and 6.2 percent respectively. 

There is a demand for housing and with the assistance of federal and provincial housing money, Thunder Bay has embarked on a plan to boost the number of housing units via a combination of infill in existing neighbourhoods as well as move on disposing of its surplus green space.  The infill in existing neighbourhoods with higher density apartment units and more basement units have naturally disturbed the former pace and character of some neighbourhoods as additional residents and their vehicles have cluttered the streets.  Simply accusing existing residents of NIMBYISM does not address their concerns given that the City of Thunder Bay seems to do little to enforce either parking or noise bylaws.

However, the latest chapter in this saga is the declaration of surplus and sale of four major pieces of municipally owned land to build density housing: 300 Tokio Street, 144 Fanshaw Street, 791 Arundel Street, and the land between 211-223 Tupper Street and 224 Camelot Street.  The City of Thunder Bay wants 400 units on Tokio Street, 200 on Fanshaw Street, 600 on Arundel Street, and 185 on Tupper/Camelot streets for a total of about 1,385 units. A key issue here is that of these pieces of land, only one is in a downtown area and can be considered as part of a deliberate plan to boost density in the downtown cores which have been the focus of substantial redevelopment dollars to revitalize them but still lack higher population and traffic.  The others are all on green space adjacent to existing residential areas which in the case of the Arundel lands are also already marked by some high density apartments. 

So, there has been push-back from residents and the Tuesday January 13^th City Council meeting is expected to see a final decision on whether the city will dispose of this land.  Of course, city councillors and administrators have already generated a narrative to convince themselves and city residents – a large portion who concur – that Thunder Bay needs more housing and that this is the right thing to do.  The city maintains that with rising population, Thunder Bay is facing a shortage of 1,000 units of housing and they need to build large quantities of housing quickly to increase supply and make housing more affordable.  Thunder Bay is also pursuing an active growth agenda and plan, and this construction activity is seen as growing the tax base which is a priority of the new growth plan.  To assuage push-back, the claim has been made that the proposals are all conceptual and subject to change hinting but not stating that they will be down-scaled. And, at least one councillor has argued that << “If you build some of these types of units, you will allow people to still stay in your neighbourhood and you will open up a house that has three bedrooms that could potentially occupy [more] people,”  … “Change is hard to kind of wrap your head around ‘til you see it,” he continued. “Sometimes change is good, and then sometimes … the proposal might not be that change, it might be something different.”>>

In deciding on this matter, Thunder Bay City council needs to consider the following points made with reference to some of the arguments that have been advanced:

1.        Thunder Bay needs more housing and that this is the right thing to do.  The city maintains that with rising population Thunder Bay is facing a shortage of 1,000 units of housing and they need to build large quantities of housing quickly to increase supply and make housing more affordable.

Thunder Bay does need more housing and particularly affordable housing and social or geared to income housing.  To date, most of the new builds have been units at market rent and they have increased supply but that new supply comes at monthly rents between $2,000 to $2,500 a month.  These are GTA level rents in a city that despite its recent surge in growth does not even begin to offer the opportunities of a much larger city but seems to be developing all its drawbacks including crime and generally more inconsiderate behaviour on both the roads and in neighbourhoods.  Indeed, Thunder Bay rents are pretty much at the Ontario average. As for rising population, that growth may be about to end.  With recent changes to federal immigration including the caps on international student enrolment, Thunder Bay’s population may once again be levelling off.  In some respects, this may be a small-scale replay of the early 20^th century where the boom petered out, and Thunder Bay was left with large quantities of zoned land with no demand.  In this case, it will be a lot of units that may not find renters.  On the bright side, a classic overbuilding boom may be just what we need to bring local rents down in the longer run. I am sure City Councillors are not too concerned if developers are left holding the bag as that would be someone else's problem.

 

2.        Thunder Bay is also pursuing an active growth agenda and plan, and this construction activity is seen as growing the tax base which is a priority of the new growth plan. 

Thunder Bay’s growth agenda is a municipal revenue enhancement plan masquerading as an economic growth plan.  The key targets are not employment growth targets or business formation targets or per capita GDP growth targets, but measures directly correlated with municipal revenue.  The key targets are to grow the property tax base of 3% annually and grow population by 1 percent annually. Building multi-residential units that generate more tax revenue on a per square foot basis than single family dwellings meet these goals rather nicely – if growth in employment and population continue.  As already noted, continued population growth is not assured. If one looks at Statistics Canada’s labour force characteristics for Thunder Bay, in 2025, the population aged 15 years old and over has stopped growing.  From spring of 2016 to the end of 2024, Thunder Bay’s plus 15 years old CMA population grew from 104,300 to 111,900 – an increase of 7.3 percent.  However, by December 2025, the 15 years plus population was 111,400 – a decline of 500.  A blip? Perhaps? But nevertheless, making decisions based on previous growth rates continuing is always risky.  On the other hand, the developers will be taking the risks and once they have acquired the land, they may simply sit on it for years if economic conditions shift.  At least that is what happened when the city sold off the Municipal Golf Course for housing way back in 2016.  We are still waiting there.

 

 

3.        To assuage push-back, the claim has been made that the proposals are all conceptual and subject to change hinting but not stating that they will be down-scaled.

This is classic bureaucratic issue management.  Make the affected public feel better by giving them the hope that the development will be smaller than the concept drawings illustrate.  That may or may not happen.  Once the land is sold to developers, they will be calling the shots on what is eventually built.  The projects may be scaled down, or they may be scaled up.  People in the Junot /John/Red River area still remember what happened with the Transitional Housing Project for youth that was supposed to be under 30 beds.  If you look at the footprint of the almost completed structure now, it looks like it is well over 50 if not more. In general, in Thunder Bay when there is a development plan, what you see is not always what you get.  Indeed, many of the drawings presented give me a vibe out of Fritz Lang's Metropolis with a 1960s Soviet era flair.

 

4.        “If you build some of these types of units, you will allow people to still stay in your neighbourhood and you will open up a house that has three bedrooms that could potentially occupy [more] people.”  

This is an intriguing argument. I am not sure what type of housing market demand this statement is directed at.  I suppose there are some people in Thunder Bay that would like to downsize to an easier to maintain lifestyle once the kids are gone.  Indeed, the thought has often crossed my mind that it would be nice to sell the house and move into a condo or apartment.  The problem with condos in Thunder Bay is that Thunder Bay’s condo market is very limited in terms of what is available.  Most of it is really glorified apartments with few amenities and outside parking – not terribly attractive.  Moreover, based on average house and condo prices in Thunder Bay, unlike southern Ontario or the GTA where you sell your house, buy a three-bedroom condo in a building with a pool, gym and underground parking and have several hundred thousand dollars left over, the Thunder Bay reality is different.  You sell your house, buy a condo in a building with no pool or gym and outside parking and must sink another $100,000 or so on the purchase price. If that is not enough to change your mind, how about I base the rebuttal here on a simple personal anecdote.  I currently live in a four-bedroom house with yard and deck.  The expenses of maintaining my home (taxes, water, insurance, basic maintenance, etc.…) even with the occasional emergency repair such as an appliance going, do not amount to more than $15,000 annually. Why would I downsize to a two-bedroom apartment at $2,000 a month - $24,000 annually - plus a monthly fee for outside parking that would add another $1,000 annually? True, if I were in my late 70s or early 80s and finding home maintenance challenging, it might be more attractive but at that stage one is looking more at a retirement home or assisted living arrangements.

 

5.        “Change is hard to kind of wrap your head around ‘til you see it,” he continued. “Sometimes change is good, and then sometimes … the proposal might not be that change, it might be something different.”

 

Well, we should save the best for last.  To start, coming right out and saying a proposal is going to change and might be something different means in the end neither we nor City Council for that matter know what City council is deciding to do.  That is not terribly reassuring. Moreover, it is one thing for an administrator or bureaucrat to engage in the assuaging platitudes of issue management; it is another for a ward representative to do so in response to obviously upset people. I am really not sure what to make of this statement by the councillor in question aside from that he is an obvious fan of the Alex Rider series on Prime Video and has decided to channel Dr. Grief.  As aficionados of the series may recall from Season 1 of Alex Rider, Dr. Grief is an evil villain seeking to change the world by placing his clones in key positions around the world.  A key scene is when Dr. Grief in response to a classroom question by teen spy Alex about who gets to choose the one percent in a world starting over, intones: <<Change is never easy. Change hurts, but it can be for the better.>> Not sure if people who are concerned about the erosion of neighbourhood green space and residential quality of life really appreciate this type of lecture from their elected representative but maybe it will work.  People in Thunder Bay complain a lot, but then usually just go back to sleep and let things happen.

 

So, what more can one say.  Thunder Bay probably does need more housing, but a lot already has been or is under construction and it is not obvious that the demand will continue to grow at the same rate. In some respects, Thunder Bay may be about to embark on a small-scale repetition of the early 20^th century when there was a massive push to accommodate housing demand that eventually fell short. Density housing is an obvious solution to future housing needs, but more effort needs to be made to design well placed units with amenities rather than simply throwing up apartment blocks reminiscent of 1960s quick builds.  Most importantly, the City of Thunder Bay is taking the quick and easy way out with greenfield development rather than a more focused approach to building urban density in its core areas especially given the amount of money that is continually being spent to “improve” those areas but without the follow through of increasing the population in those areas. This has been said before and will be said again.

 

 

Recent Labour Force Performance: Thunder Bay and Sudbury

 

Welcome to 2026! While everyone is interested in what 2026 will bring economically, it is also important to review what the recent trends have been. While 2025 has been an economically tumultuous year for Canada, in the end the Canadian economy has performed more resiliently than one might have expected.  This is also the case in northern Ontario’s two main urban centres of Thunder Bay and Sudbury.  The accompanying figures plot monthly labour force data from Statistics Canada over the 2011 to 2025 period for the two cities for four variables: total employment, the unemployment rate, the labour force, and population aged over 15 years of age.

 

 

The most interesting development is when comparing pre and post pandemic employment levels (Figure 1) which suggests that there has been an upward trend in job creation in both cities since 2020.  It turns out that 2025 continued this trend with Thunder Bay going from about 66,200 to 69,100 jobs over the November 2024 to November 2025 period – an increase of 2,900 jobs or 4.4 percent. Over the same period, Sudbury saw an increase in employment from 90,400 to 94,800 – an increase of 4,400 jobs or 4.9 percent.  While Sudbury had relatively greater employment growth, interestingly enough, its unemployment rate in 2025 was higher than Thunder Bay’s (Figure 2). By the end of 2025, Thunder Bay’s unemployment rate was just under 5 percent while Sudbury’s was nearly 7 percent. 

 

 

The reasons for this is that compared to Thunder Bay, Sudbury had a faster rate of both labour force and population growth in 2025 (Figure 3 and 4) relative to jobs created. Sudbury’s working age population in 2025 grew nearly 2 percent, while its labour force grew just over 6 percent.  On the other hand, Thunder Bay's  population growth in 2025 remain flat after several years of growth while its labour force nevertheless rose 4.5 percent as participation rates increased. 

 

 

Needless to say, both Thunder Bay and Sudbury did quite well in 2025 when it comes to employment creation and this naturally bodes well for the coming year.  While northern Ontario’s economy still faces challenges going into the new year as a result of the continuing economic adjustment to a more tariff prone United States (Sault Ste. Marie and its steel industry comes to mind), its resilience so far bodes well for the future.  It is important that the region remains alert and on guard to take advantage of new opportunities as they emerge.

 

What Is Thunder Bay's Population?

 

During the last Thunder Bay City Council Meeting, the discussion over the city’s new Smart Growth Plan included a few remarks by the mayor that the city was growing and that according to conversations that he has had, it is probably around 150,000.  Of course, while it cannot be denied that Thunder Bay has seen its population grow over the last few years based on even anecdotal observation, the 150,000 number is vastly at odds with any estimate provided by Statistics Canada or even the City itself in its annual submissions of municipal data to the Ontario Government via the Financial Information Return (FIR). This type of mixed messaging and confusion on what Thunder Bay’s population is, including the usual casting of doubt on Statistics Canada, does not do anyone any favours.  This becomes even more problematic given that Thunder Bay is engaged in long-range financial planning that also presents population and household numbers. 

Thunder Bay will soon be dealing with a Long-Range Financial Plan for the 2026 to 2035 period, and the current draft presents population estimates (Plan starts at page 32 of December 9th Agenda for Finance and Administration Standing Committee) taking the city from 112,330 in 2020 to 117,003 in 2025.  Over the same period, the same draft has the number of households in Thunder Bay growing from 47,180 to 48,405.   In other words, the City of Thunder Bay says it has added 1,225 households since 2020 and 4,673 people.  However, it should be noted that average household size in Thunder Bay is approximately 2.2 people so the additional households should probably only be associated with only an additional 2,695 people.  Or perhaps it could be that our current population increase is also being accompanied by an increase in household size.  In addition, the household number in the draft plan is also out of whack with the household number and population in the finally submitted Thunder Bay FIR report to the provincial government for 2024 which says Thunder Bay has 50,995 households and a population of 108,843.

This range of estimates – none of which incidentally approach 150,000 - begs the question as to what then the population of Thunder Bay is?  Part of the issue is that there is a distinction between the population of Thunder Bay as contained within the city limits – the City of Thunder Bay – and the population of the immediate surrounding area as defined by Statistics Canada as the Census Metropolitan Area (CMA).  The accompanying map shows that the city itself is contained with a much larger CMA which in turn is within an even larger District which according to Statistics Canada in 2024 had a population estimated at 157,293.   Perhaps this the source of so much confusion among our elected officials in that they conflate the population of the district (which essentially stretches from Fort Frances to Wawa) with the population of the city itself which is anywhere from 108,843 to 117,003 or perhaps even the CMA at 133,063.  That Thunder Bay is a service centre for a regional population of 157,293 that accesses its government, health, retail and education services is a reasonable statement but saying that our city itself is swarming with 150,000 people is not.

 

 

The accompanying figure plots three population series: the CMA and City populations from Statistics Canada and the City population according to the annual FIR reports - which I again must note, are filed by the City of Thunder with the provincial government.  For the CMA, the StatsCan numbers show a decline from 2001 to 2011 from 126,696 to 124,926 followed by a flat population that starts to increase after 2016 and in 2024 is estimated at 133,063.  For the city itself, the Statistics Canada numbers show a pattern like the CMA but the numbers are larger than the numbers the city itself seems to be using in its annual FIR reports.  The City of Thunder Bay’s population according to this series declines from, 113,298 in 2001 to 110,861 in 2016 and then starts to grow and in 2024 was estimated at 117,100.  According to the StatsCan estimates, between 2016 and 2024, the Thunder Bay CMA grew 6.6 percent and the city itself 5.6 percent.  However, the FIR numbers say the Thunder Bay had a population of 115,419 in 2001 which shrank to 107,909 in 2016 and has since grown an anemic 0.9 percent to 108,843.

 

 

If the city is making the case that its population numbers are underestimates that affect the grants it receives from the federal and provincial governments, a key part of the problem is that the city itself seems to be submitting numbers in reports that are much lower than the StatsCan estimates.  On the other hand, the provincial government probably has a good handle on how many people live in the city of Thunder Bay versus the surrounding area based on Driver’s License and OHIP usuage data and does believe the population of the city itself is closer to 108,000 with a large percentage of the CMA population outside the city. Indeed, based on the FIR estimate, 20 percent of the CMA population lives outside the city limits and is probably a factor in all the traffic being generated as they come in and out of town accessing city services.

Of course, rather than blame someone else, the solution here in part is that the city of Thunder Bay needs to get its act together in terms of getting a handle on its own numbers.  For a city with 3,207 employees (2,165 full time, 995 part time and 47 seasonal), Thunder Bay seems unwilling or unable to hire a couple of graduate school level trained economists and statisticians who could provide a more disciplined and consistent approach to compiling and analyzing its economic and population data to make its case with both higher tiers of government and its own municipal ratepayers.  Instead, we are left with plans, pronouncements and submissions that have conflicting data and population estimates that seem to emerge out of thin air.

How Thunder Bay Wastes Both Taxpayer Money and Urban Core Development Opportunities

 

The City of Thunder Bay is engaged in budget season and striving to keep its total tax levy increase to 2.6 percent.  As part of its new two-part budgeting approach, the capital budget two-year plan is now underway with initiatives including $34 million in road improvements in 2026 with another $26 million in 2027 as well as initiatives in waste diversion and transit. The proposed capital budget for 2026 amounts to $160 million while 2027 is going to be lower at $148 million. January will see the operating budget and with the 2025 total levy at $241.7 million, a 2.6 percent increase could bring the levy up to $248 million.

The proposed 2026 tax levy increase is indeed modest by recent historical standards as the accompanying figure shows as  the 2025 increase was 5.2 percent and 2025 was 4.5.  However, the proposed 2.6 increase is also below the average increase over the 2015 to 2025 period which comes in at 3.4 percent.  Of course, increases need to be balanced against what the needs are and keeping rates low for their own sake is not necessarily the ultimate policy objective.  Rather, the aim should be to provide the best public services desired at the lowest costs possible which implies efficient and not wasteful spending, which brings me to the main event.

 

 

Whether the City of Thunder Bay will come in with a tax levy increase of 2.6 percent or not remains to be seen.  However, what is more important is what often seems to be a lack of strategic direction with how Thunder Bay seems to allocate its spending and projects by doing them in a manner that often works at cross purposes.  A case in point is the recent moves to build density housing in the City of Thunder Bay to address the housing shortage and provide affordable housing. 

The City of Thunder Bay is preparing to sell municipally owned land to developers to build density housing.  The pieces of land are:  300 Tokio Street, 144 Fanshaw Street, 791 Arundel Street, and the land between 211-223 Tupper Street and 224 Camelot Street.  Despite the oft stated claim to want to provide affordable housing, the City has apparently rejected a developer’s affordable housing bid for the land that included transitional housing because it was not dense enough. The City of Thunder Bay wishes for: 400 units on Tokio Street, 200 on Fanshaw Street, 600 on Arundel Street, and 185 on Tupper/Camelot streets for a total of about 1,385 units.

Now, Thunder Bay municipal politicians are very good at using the right words and as one councillor was quoted:

<<"There is no question that we are in a housing crisis, not only in the city of Thunder Bay, across the province and across the nation," Foulds said. "We're also in a climate crisis."

"In order to deal with those two huge issues, we do need to have a focus on intensification and increasing the density of our cities, building on existing infrastructure. With that said, we do need to make sure that the infrastructure can handle it. We also must make sure that the developments are appropriate and safe.">>

The problem here is that Thunder Bay’s idea of increasing density in a climate crisis apparently includes cutting down swaths of green space to build density development in areas often removed from where density either already exists or should be promoted.  Moreover, the constant dispersion of new development results in the new residents of these “density developments” having to rely mainly on automobile transport rather than public transit which is not convenient or timely given the dispersed nature of the city.

As noted in an earlier post:

<<Of these four proposed locations, three are essentially going to be plonked on available space – often green space – in the midst or immediately adjacent to existing residential areas.  Only one – the Camelot Street location is going to be placed near a downtown core area.  And that is the point.  To date, the large builds on Junot and Fulton have been built in or adjacent to existing lower density residential areas and often at the expense of nearby green space.  Except for Camelot – which is a good location if one is planning to build up core area density – these are all scattered willy-nilly in places where the only option is to drive somewhere to get anything done.>>

As noted in the same post, the logical place to target density developments in Thunder Bay should be the two former downtown cores areas of Port Arthur and Fort William and the corridor connecting them that runs along and immediately adjacent to Water/Fort William Road/Simpson Streets and Algoma/Memorial/May Streets.

So, how does this come back to my point about wasteful spending? Thunder Bay is constantly trying to revitalize its core areas – the former cores of Port Arthur and Fort William - with initiatives that cost millions of taxpayer dollars.  For example, the recently completed north core/Port Arthur streetscape project clocked in at about $13 million.  Currently underway is the south core/Fort William Victoria Avenue revitalization project which is going to kick in at $18.4 million.  Then there is the Simpson Street redevelopment cost from the end of Victoria Avenue to the Ogden/Dease Street area which is approaching the $8-$9-million-dollar cost. 

In total, this is almost $40 million dollars in capital spending and rather than being additionally leveraged into a denser set of core urban areas with the tens of millions of dollars in federal housing infrastructure money, it is going to be left to mainly its own devices to attract residents.  And beyond these four proposed projects, there is the proposed Central Avenue Development Lands project which while ostensibly in the “center” of the city will build over 40 acres of largely wooded area eliminating much of the green corridor that runs from Lakehead University through to the College and ultimately Chapples Park. 

Thunder Bay’s development motto is essentially “density if necessary but not necessarily urban density.”  Thunder Bay equates urban density as simply the act of putting multi-residential units on anywhere the city has surplus land rather than working with owners in existing brownfield areas to consolidate derelict and underused properties. Infill is not always the same as creating urban density.  Thunder Bay wastes taxpayer money by providing business owners in the former core areas with beautification baubles but then does not follow up with real strategic investment in those areas.  It is the type of short-term thinking that has led to the creation of a dispersed and costly to service city with an over-reliance on automobiles.  Enjoy the short-term construction benefits from all the new housing projects as the future costs to both the taxpayer in servicing costs and the environment will be substantial.

Thunder Bay Is Missing Its Chance for Strategic Urban Density

 

After decades of low growth, Thunder Bay has been experiencing a period of growth that affords it an opportunity to reshape its urban landscape.  Historically, Thunder Bay has allowed its urban footprint to expand in a low-density highly dispersed web that is more costly to service and provide efficient infrastructure such as water and sewer as well as public transit.  The recent spate of population growth as well as the availability of provincial and federal money for housing means that Thunder Bay could be making some major strides building density in its core urban areas.  This of course would complement the rather large dollar amounts that have recently been expended for urban redevelopment projects in the downtown cores such as the North Core Streetscape Project and the Victoria Avenue Revitalization.

Alas, in its haste to meet federal and provincial housing targets and obtain government money, Thunder Bay is on the verge of yet again squandering the opportunities that have presented themselves by engaging in short term decision making that will build scattered density developments that will sprout like toadstools after a summer’s rain. City officials have noted that they are only 32 percent of the way in meeting their housing targets and must build an additional 1200 units by February 2027 to meet the target of 1,755 housing units. The proposed locations for density development are at 300 Tokio Street, 144 Fanshaw Street, 791 Arundel Street, 211-223 Tupper Street and 224 Camelot Street. 

Of these four proposed locations, three are essentially going to be plonked on available space – often green space – in the midst or immediately adjacent to existing residential areas.  Only one – the Camelot Street location is going to be placed near a downtown core area.  And that is the point.  To date, the large builds on Junot and Fulton have been built in or adjacent to existing lower density residential areas and often at the expense of nearby green space.  Except for Camelot – which is a good location if one is planning to build up core area density – these are all scattered willy-nilly in places where the only option is to drive somewhere to get anything done.

Thunder Bay needs to use this opportunity for growth to be more strategic in how it does its housing if it wants to truly build density.  The density housing projects in this city should be designed to concentrate population near services and amenities, not encourage more time-consuming commuting in the long run, to meet short term funding targets. The density build locations in Thunder Bay should be the two former downtown cores areas of Port Arthur and Fort William and the corridor connecting them that runs along and immediately adjacent to Water/Fort William Road/Simpson Streets and Algoma/Memorial/May Streets.  It is up to the mayor and council to provide this type of directive to its administration because simply asking them to come up with sites for density build will generate the quickest solution rather than a methodical plan for infill.

 

What might such a density corridor look like?  A good example is rooted in the urban renewal studies of the past.  Plate 20 of the 1968 Proctor and Redfern Downtown Fort William Urban Renewal envisioned a Simpson Street with density rental housing as the accompanying figure illustrates. Many of those apartments or condos would likely have sweeping views of the lake and provide for a mix of both premium and affordable units with room for shops, stores and offices on the street level.  Indeed, the recent redevelopment of Simpson Street's road and sewer infrastructure should have presented an opportunity for the consolidation of derelict and underused properties to build the multi-unit buildings the city seems to so desperate to ram through existing residential neighbourhoods and green space.

This opportunity is going to be short-lived and if we simply build things in an erratic short term pattern, we will have to live with the costs for decades to come.  Our municipal politicians need to actually step up and lead for a change by providing direction rather than hide behind bureaucratic processes.  This window of opportunity will not last long.

Thunder Bay Reaches Employment Peak

Thunder Bay has hit an employment milestone.  Data from the Statistics Canada October 2025 Labour Force Survey shows that for the month of October, Thunder Bay hit an employment level of 68,200 jobs.  This was an increase of 700 jobs from September 2025 and 2,100 jobs from October of 2024.  Annualized October to October, employment in Thunder Bay was up 3.2 percent.  Moreover, October 2025 was the highest monthly employment total ever going back over nearly 40 years to 1987.  The accompanying figure plots the monthly ebbs and flows of employment since 1987 (along with a 5th order polynomial smooth to illustrate trend) and while there have been other notable peak periods such as June 2003 (67,400), April 2023 (67,100) and June 2018 (66,200) it remains that 68,200 is the largest yet.  

 

There has definitely been an upswing in employment since 2015, notwithstanding the pandemic drop. Thunder Bay has seen substantial economic activity over the last couple of years particularly as a result of numerous construction projects for housing along with highway work and some major institutional projects such as the one billion dollar new correctional facility, the art gallery and most recently the start of the multiplex turf facility. Of course, whether this can be sustained over the long term is an important question and Thunder Bay's peak employment figures have largely fluctuated between 65,000 and 70,000 jobs but have never been able to break out of this corridor.  Depending on what the impact of federal and provincial infrastructure money is down the road, as well as whether the region's mining projects for critical minerals indeed come to pass. 

Nevertheless, good news for the time being 

Thunder Bay, The Conference Board and Smart Growth

 

The Major City Insights for Thunder Bay by the Conference Board of Canada was released October 15^th and the report essentially summarizes the economic situation in Thunder Bay as “Local economy treads water” with the key points being as follows:

· Thunder Bay faces a tepid economic outlook featuring mixed performances from the various sectors of its economy. Ongoing work on the city’s $1.2-billion jail remains an economic bright spot, but other important sectors face a range of difficulties.

 

· Plans for at least two local lithium plants remain in play, but faltering demand for electric vehicles (EVs), which use lithium in their batteries, and the recent removal of the federal EV mandate could scupper them. The big drop in lithium prices since 2022 is a bad sign for the industry.

 

· Modest recent improvements in lumber and pulp prices spell some optimism for the long-suffering local forest products industry, although this year’s big jump in U.S. softwood lumber tariffs to a total of 35.19 per cent is a setback.

· Thunder Bay’s real GDP has largely floundered against this uninspiring backdrop. We forecast no change in 2025 following a 0.2 per cent easing in 2024, then a 0.7 per cent rise in 2023. Fractional 0.7 per cent growth is our call for 2026, followed by annual advances just above 1 per cent in 2027–29.

 

· The window of migratory opportunity might have closed for Thunder Bay due to sharply lower federal immigration targets that are limiting the number newcomers from abroad. Rising return-to-office orders from firms and governments, meanwhile, will eventually limit other Ontarians’ ability to take advantage of very affordable local housing.

Out of 24 CMAs covered in the Conference board reports,Thunder Bay ranks 24^th in terms of real GDP growth forecast for the 2026 to 2029 period.  Total employment is expected to remain flat going forward and while population for the CMA is forecast at 134,000, it will remain at that level for the foreseeable future. On the other hand, low growth is not negative growth and business owners in Thunder Bay appear to be well adjusted to a low growth environment given that the most recent survey results out of Thunder Bay Ventures find them cautiously optimistic amid economic challenges.

Needless to say, it is not the most auspicious backdrop for the unveiling of the City’s Smart Growth strategy.  What the ultimate plan to address the City’s economic future will be is interesting to say the least and community input is being solicited on the draft as well as being subject to review by assorted City Standing Committees.  Despite what seems to be some robust construction activity underway in the city in terms of residential and hotel activity, it appears that this is not sufficient to offset what the Conference Board views as “tepid” economic performance.

Indeed, while the City seeks to address growth, a lot of the emphasis to date seems to be on assessment growth and growing the property tax base which are usually not the main targets of economic growth inducing policies.  It would be like next week's federal budget making the case that moving Canada's economy forward requires more people paying more income taxes. The aim should be growing the city’s level of economic activity to increase  both real total and real per capita GDP through private and public sector investment in productive job creating activities.  The City of Thunder Bay Smart Growth plan proposes two key measures to guide growth over the next decade:

• Grow the property tax base by 3% annually

• Grow the population by 1% annually

It would appear that in the end, this is not really an economic growth plan per se but a plan to try and grow Thunder Bay’s municipal tax base that is accompanied by a lot of social and quality of life and community goals masquerading as economic targets.  Indeed, the entire approach resembles a much earlier initiative by Thunder Bay Ventures circa 2005 called Thunder Bay Fast Forward concerned with growth in the midst of the forest sector crisis which also generated sets of indicators. Nevertheless, this latest effort at growth and measurement will probably go over well given the general level of economic literacy in the community. One suspects that perhaps such an approach also works well in a city where one-third of employment is broader public sector and public sector construction projects have been key drivers for the last few years. 

Of course, growing both the economy and the municipal tax base are not mutually exclusive goals but it is odd the performance indicators for successful growth do not include real GDP (which incidentally looks somewhat flat going forward) though employment and labour force indicators as well as building permits which are correlated with overall economic growth are included.  However, as the report states, the “key performance indicators such as tax base and population growth are priority metrics”.  In other words, as long as there are more people on public sector incomes paying more property taxes, this plan will be declared a success.

In light of the Conference Board Report, one suspects the response of our civic leadership to square the Smart Growth Plan with the Conference Board report will be to remark they are measuring different things and growth is more than about just measuring economic output – the perennial apples and oranges comparison. They may even claim the Conference Board report is missing the real sources of economic growth and performance just like Statistics Canada is missing the true size of our population with their numbers.  All we can do is wish our municipal leaders good luck on this one.

 

Thunder Bay’s Employment Trends in the Wake of the Lost Decade

 

Thunder Bay even during the trade war has been doing quite well.  Population is up as is total employment in the wake of the pandemic.  While the national unemployment rate in August of 2025 was 7.1 percent and Ontario clocked in at 7.7 percent, Thunder Bay was below both at 5 percent.  Moreover, employment grew from 65,300 in July to 66,400 in August which incidentally is one of the highest the highest monthly total employment amounts in 20 years.  While Thunder Bay has seen ebbs and flows over time, there has been a distinct upward trend in total employment since about 2012 marking the end of what could be termed the early 21^st century lost decade as the forest sector crisis ravaged the local and regional economy.

Figure 1 plots monthly total employment obtained from assorted Statistics Canada series from 1987 to 2025.  It also fits a LOWESS non-parametric smoothing curve to highlight the trends in total employment.  The early years of the first decade of the 21^st century saw total employment in Thunder Bay rise as the recessionary 1990s were left behind and the all-time peak employment of 67,400 jobs reached in July of 2003.  Soon after began the shocks and declines of the forest sector crisis began to accumulate and employment trended downwards until 2012.   

 

 

Thunder Bay’s economy transformed in the aftermath of the forest sector crisis as it moved into knowledge economy jobs as well as saw the expansion of the regional mining sector.   Indeed, despite the ebbs and flows, the period since 2012 is the longest continuous upward trend in employment in this nearly 40-year period. However, despite this good news, total employment in August 2025 still falls short of previous peaks reached in July 2003(67,400), June 2018 (66,200) and April 2023 (67,100). Indeed, Thunder Bay’s best employment performances historically have always oscillated within a band of 65,000 to 68,000 jobs.  This band has never been exceeded and until it is one can argue that Thunder Bay remains strangely constrained in a situation of bounded economic ability.

The other interesting point in all this that I came across while cleaning out files was a 2005 Major Employer List out by the Thunder Bay Community Economic Development Corporation.  Sadly, they no longer seem to have such as list on their web site as I could not locate either the old ones or an updated version.  Nevertheless, the list is compelling documentation of the world that we have lost.  Thunder Bay is intriguing in the sense that over time one is faced with the dual reality that there has been both major economic change and no change whatsoever.

Figure 2 plots the major employers in 2005 ranked from highest to lowest.  Highlighted in red are all the employers that to the best of my knowledge are no longer with us.  In 2005 the list has 55 employers with then largest being the City of Thunder Bay (3,080 employees) and the smallest being DST consulting Engineers and Loch Lomond Ski Resort (both at 100 employees each). Interestingly, the top ten employers on this list are all still with us showing the amazing continuity that is often Thunder Bay despite all the change that has occurred.

 

This list of major employees added up accounts for 29,320 employees with average total monthly employment in Thunder Bay in 2005 at 64,000.  Notable by their absence is any of the grain elevator companies but these had been hollowed out in the 1980s and 1990s and to my knowledge there could not have been more than 300-400 workers left in that sector.  Then there is TBayTel which easily has several hundred employees also, but it is possible that they are under the municipal total. Nevertheless, if you add these jobs too, then this list was essentially the city’s economic high ground with nearly 50 percent of employment.

Since 2005, Thunder Bay’s economy lost several major employers.  Gone are Buchanan Group Northern Wood (550 employees), Cascades Fine Papers Group Thunder Bay Inc. (550 employees), Abitibi Consolidated (down to 400 by 2005 after other closures), Buchanan Group Great West Timber (290 employees), Buchanan Northern Hardwoods (200 employees), Zellers (368 employees), Sears Canada (300 employees) and OPG Generating Station (150 employees)for a total of 2,518 jobs. The last three employers mentioned went later than the forest sector companies with Zellers departing 2013 (it was a national departure), Sears Canada (2018, another national departure) and OPG Generating more recently.

Between 2005 and 2010, average annual monthly total employment went from 64,000 to 59,800 as associated multiplier effects worked in reverse affecting retailers, suppliers and other services.  Thunder Bay itself lost about 5,000 jobs during this period – many high paying resource sector jobs - an upheaval that essentially ended a way of middle-class life for many families.  The fact that Thunder Bay is currently back to 66,400 jobs is a remarkable achievement given that it means that nearly 7,000 jobs have been created since the forest sector crisis low point.  In other words, the 5,000 lost jobs have been made up – in quantity of not always quality – with growth of an additional 2,000 jobs.  This is good news. 

Crucial to the remainder of this decade will be continued growth in Thunder Bay’s economy that boosts employment well above its historic 65,000 to 68,000 glass ceiling.