Northern Ontario Policy Advice for Tim Hudak – by Livio Di Matteo (July 14, 2011)

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/

Ontario PC Leader Tim Hudak is in Thunder Bay today and along with an appearance at The Hoito will also be addressing a luncheon being sponsored by the Thunder Bay Chamber of Commerce.  According to the most recent poll by Ipsos-Reid, Mr. Hudak’s Conservatives hold an 11 point lead over the Liberals overall but have even stronger support outside of the GTA.  Even Northern Ontario apparently has Mr. Hudak in the lead.  However, it is only July and the election is not until October and given the voting tradition in the North, red and orange rather than blue are the usual autumn colours. Perhaps, Mr. Hudak will prove them wrong.  Nevertheless, internal party polling must have revealed this trend earlier, which is why this week also saw more aggressive Liberal ads attacking Tim Hudak.

Mr. Hudak, should he become premier, will certainly have his hands full given Ontario’s productivity challenge, Ontario’s infrastructure challenge and Ontario’s fiscal challenge.  Moreover, there is also Ontario’s northern economic development challenge.  What policy suggestions would Northern Economist like to leave with Mr. Hudak?

First, Tim Hudak should enthusiastically embrace the North.  The North is 90 percent of Ontario’s land mass and is a storehouse of minerals,  forest resources and hydro-electricity that can represent an investment frontier for Ontario in the 21st century.  Mr. Hudak should become an advocate and salesman for northern Ontario economic development both at home and abroad.  The North is not a problem, it is an opportunity for all Ontario but solutions require imagination rather than one-size fits all policies.

Second, Ontario and the Federal government together should set as their ambitious goal the four-laning of the Trans-Canada highway through all of northern Ontario by 2020. Such an ambitious infrastructure project will generate substantial economic activity and the improved transport corridor will generate long-term commerce and trade throughout the North. Such a corridor will also complete the vital east-west zone of highway transit for the Canadian federation.  If this is too ambitious a proposal, I can live with completely four-laning the highway from Nipigon to Shabaqua, which would eliminate much of the potentially troublesome bottleneck that has all of the east-west traffic of the country going over just one bridge at Nipigon.

Third, the province should explore the creation of northern tax incentive and trade zones to spur economic activity and attract investment. These incentive zones are especially crucial in border areas immediately adjacent to the United States such as Sault Ste. Marie, Thunder Bay and Kenora.  This is not special treatment but recognition of the economic challenges that more remote border regions with low population density face when trying to generate economic activity.

Fourth, the provincial government should allow the North to operate its own regional electric power grid through a regional power authority. The North is blessed with thousands of megawatts of potential hydroelectric power that is cost-effective, sustainable and not a contributor to greenhouse gases. 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.

Finally, the province should allow the North to take on more responsibility for its economic development and foster institutional change to bring about more regional autonomy in the areas of energy, environment, transportation, economic development and resource management. Indeed, the creation of new hydroelectric corridors in the North could fall under the auspices of either a regional government or a new regional development authority. Moreover, a regional authority could also open up access to crown lands for cottage and recreational development. To date, crown lands have been administered as if they are as scarce as in the more populated South.

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