THUNDER BAY — Led by the ongoing construction of the new $1.2-billion provincial jail, Thunder Bay's economy is projected to grow at better than twice the national rate this year.
The forecast comes in the latest economic outlook for the city issued by the Conference Board of Canada.
Real gross domestic product (GDP – the value of all goods and services produced) is expected to grow 1.6 per cent, compared with only 0.7 per cent for the country.
In a report issued Monday, the economic think tank said the jail project will continue to boost the local economy, just as it did in 2023 when employment in the city grew 3.3 per cent to a total of 64,000 workers.
In the construction sector specifically, more hiring for the jail and other area projects is expected to lift the industry's employment by just over 700 people this year, an increase of more than 13 per cent to an all-time high of nearly 6,000 people.
Health-care jobs, the board said, will grow by 800 positions this year to reach a record of 14,600.
It expects dips in employment levels in other areas – such as in the services sector, which gained 1,400 jobs last year but will shed 900 this year, as well as in manufacturing – will result in an overall employment drop of 0.8 per cent in 2024, to a total of 63,500.
Next year, however, should see a bounce back with a 1.3 per cent increase in jobs.
Looking farther into the future, the report anticipates some potential disappointment in the mining sector.
"With sales of electric cars stalling, the market for lithium, a key battery input for them, has collapsed. Car manufacturers and metal miners are re-evaluating prospects," it states.
Senior economist Robin Wiebe, who produced the Thunder Bay forecast, said it's one of the reasons a proposed lithium processing plant in Thunder Bay is an uncertain prospect.
The price of lithium, he said, has tumbled roughly 80 per cent from its recent peak.
But the proponent of the plant, Avalon Advanced Materials, continues to work on the project, saying the outlook for lithium demand is bright.
"The forecasted battery manufacturing capacity is expected to increase over the coming years as world EV and battery utilization becomes more mainstream. The decision to pursue production of battery grade lithium hydroxide and lithium carbonate is driven by continued strength in lithium battery demand and North American supply chain needs for high quality product produced in North America," CEO Scott Monteith stated in April.
In a news release just last week, Avalon revealed that a recent independent valuation of the former paper mill site it purchased last year on Strathcona Avenue put its worth at around $60 million.
"This reinforces Avalon's conviction that our perfectly located property in Thunder Bay accelerates the timeline for the construction of Ontario's first lithium hydroxide conversion facility," Monteith said.
Last December the company said it was aiming for a refinery startup sometime in 2028.
Wiebe expects Thunder Bay's population will rise modestly each year through 2028.
"Higher federal immigration targets seem to be benefiting Thunder Bay . . . The potential for remote work and moderately-encouraging local economic prospects might tempt some of the new Canadians to sample Thunder Bay's very affordable housing," he wrote in the report.
A recent Royal LePage report identified Thunder Bay as the most affordable city in Canada based on the percentage of income required for a monthly mortgage payment.
In an interview, Wiebe told TBnewswatch "It's one of Thunder Bay's main selling points."
Noting that the city suffers "from some fairly unresolvable problems, not the least of which is its relative isolation," he reiterated that "if work from home continues to be a big component of Canada's labour market, Thunder Bay could be attractive to some people because its housing is so affordable. That's particularly true if people looking for houses like the outdoors, which in Thunder Bay there's no shortage of."
