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Report on Business In Thunder Bay, Bombardier adds to an already grim labour situation

The Bombardier Inc. job cuts in Thunder Bay will have large ramifications for a local labour market that has struggled to create jobs and opportunities over several decades.

The 550 workers affected amounts to half the work force at Bombardier’s rail-car division in the city. Put another way, that’s nearly 1 per cent of total employment in the Thunder Bay area.

“If you took the [Greater Toronto Area] labour force and laid off 1 per cent, you'd have tens of thousands of people being laid off all at once,” said Livio Di Matteo, an economics professor at Lakehead University.

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Layoffs have become a feature of life in Thunder Bay, where total employment has essentially flatlined since at least 2001. Some of the city’s major industries, such as grain transportation and forest products, have been decimated, erasing thousands of well-paid, blue-collar jobs that bolstered household wealth.

The numbers are stark. Since 2001, Thunder Bay’s employment has declined by 1 per cent, or roughly 600 workers, according to Statistics Canada. Out of 33 census metropolitan areas tracked by Statscan, Thunder Bay is the only one where employment dropped over that time period. Over all, Canadian employment climbed by 28 per cent.

Thunder Bay’s employment stagnation is part of a wider trend that’s seen provincial job growth accumulate largely in Toronto and, to a smaller extent, in Ottawa. Over the past decade, the Toronto and Ottawa areas account for greater than 70 per cent of the province’s job gains, despite having about half its population.

More broadly, Canada finds itself in a hiring boom. During the first half of 2019, close to 250,000 jobs have been added across the country, which in raw numbers is the best start to a year since 2002, and Canada’s jobless rate is close to historic lows.

But the boom hasn’t extended to Thunder Bay, where over the past year, employment has dropped by around 6 per cent. Bank of Montreal, which ranks labour-market performance at the city level on a monthly basis, currently pegs Thunder Bay last out of 33 areas.

Population growth is nonexistent, too. As of the last census in 2016, the Thunder Bay area had nearly 122,000 residents. Two decades earlier, it was close to 127,000. Prof. Di Matteo says there’s been little immigration over that span and many young people have left.

“In the end, economic opportunity fuels population growth and people go to where the jobs are,” he said.

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As private employment has lagged, the public sector has taken on greater importance and accounts for nine of the city’s 10 top employers, including school boards, postsecondary institutions and hospitals, according to city numbers from April. (Bombardier, which is the only private company on that list, also relies on public money − in the form of contracts from two provincial transit agencies, Metrolinx and the Toronto Transit Commission.)

“The public sector has become dominant in the local economy,” Prof. Di Matteo said. “And that’s been a trend in many of the rural, remote towns in Northern Ontario.”

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From a demographic perspective, Thunder Bay’s outlook is challenging. Like the rest of Canada, it will grapple with an aging population that weighs on labour-market participation.

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Earlier this year, a Statscan report said labour forces would continue expanding in most Canadian regions over the next two decades, “with the possible exceptions of Thunder Bay and Sudbury, and the non-metropolitan regions of Quebec and Atlantic Canada.”

For the combined area of Thunder Bay and Sudbury, the participation rate is projected to decline to 55.5 per cent in 2036 from 60.4 per cent in 2017.

In other words, there would be nearly one person either working or looking for employment for every person not in the labour force.

Part of the solution, Prof. Di Matteo says, is driving more immigration to Thunder Bay.

“If you have entrepreneurial immigrants come in, they often create their own jobs,” he said. “Unfortunately, in Canada right now, most of the immigration goes to the major cities.”

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