Final Draft Report

January 2012

TABLE OF CONTENTS

EXECUTIVE SUMMARY
1 BACKGROUND AND INTRODUCTION 1.1 History and Background 1.2 Strategic Issues 1.3 Approach and Method 1.4 Other Investigations SITUATIONAL ANALYSIS 2.1 Current Situation 2.1.1 Historical Perspective 2.1.2 Economic Growth and Employment Trends by Sectors 2.1.3 Demographic Trends 2.1.4 Political Spectrum and Dynamics 2.1.5 Economic and Business Cycles 2.1.6 Provincial Decision Making Analysis OVERVIEW / REVIEW 3.1 Critical Economic Development Issues and Success Factors Regional Development Issues 3.1.1 Common Identity 3.1.2 Geographical Dispersion 3.1.3 Political and Economic Integrated Vision Economic Development Issues 3.1.4 Taxes 3.1.5 Labour Availability and Costs 3.1.6 Land and Site Location 3.1.7 Cost of Energy and Reliability of Supply 3.1.8 Business Incentives 3.1.9 Infrastructure 3.1.10 Regional Diversity and Sub-Regions 3.2 Competitive Analysis 3.2.1 Thunder Bay and Regional Districts 3.2.2 Northwestern Ontario 3.2.3 The Rest of the Province of Ontario and Canada 3.2.4 Regional Competitive Advantage 3.2.5 Economic, Environmental and Social Sustainability REGIONAL CONSULTATION AND ENGAGEMENT 4.1 Introduction 4.2 Regional Strengths and Opportunities 4.3 Regional Weaknesses and Threats 4.3.1 Regional Issues 4.3.2 Strategy in the Global Environment 4.4 Intended and Emergent Strategies 4.5 Organizational Design and Structure 4.5.1 Mandate and Functional Authority

3
10 10 11 14 14 14 15 15 18 20 26 27 29 31 32 32 32 33 33 34 34 38 39 39 41 42 44 48 48 49 49 51 55 57 57 58 60 60 61 61 62 63

4.6 Best Practices 4.6.1 Key Findings 4.6.2 Key Planning Principles 4.7 Vision and Mission Statement 4.8 Policies and Programs 5 ACTION PLAN 5.1 Marketing the Regional Plan 5.2 Communication Strategy 5.3 Leveraging Resources 5.4 Performance Indicators and Timelines 5.5 How to Measure Success 5.6 Maintaining Momentum FRAMEWORK AND IMPLEMENTATION PLAN 6.1 Background and Introduction 6.1.1 Goals and Objectives 6.1.2 Proposal 6.1.3 Key Findings 6.2 Regional Economic Development Area 6.3 Guiding Principles 6.4 Mandate and Functional Authority 6.5 Proposed Model and Process 6.6 Strategic Partnerships 6.7 Performance Evaluation and Assessment Model 6.8 The Northwestern Ontario REDA Model 6.9 Organizational Structure Model 6.9.1 Structure of the REDA Board 6.10 Functional Areas of Responsibility 6.11 Funding and Organizational Requirements 6.11.1 Funding 6.11.2 Accountability Agreement 6.11.3 Implementation Plan CONCLUSION

64 66 68 68 68 69 69 69 70 71 72 73 74 74 74 74 75 75 81 82 86 86 87 89 90 92 97 98 98 100 100 107

REFERENCES APPENDICES
Appendix A Key Community Survey/Interview Questions Appendix B Schedule of Meetings and Interviews Appendix C Reports on Pre-Summit Consultation Appendix D Aboriginal Engagement and Information Gathering Appendix E Competitive Advantage by Economic Sectors Appendix F Comparison of Canadian Hydro Rates Appendix G Review of NWO Strategic, Official and Economic Plans Appendix H Review of Northwestern Ontario Aboriginal Economic Strategies

108 111
112 113 116 125 139 141 147 155

LIST OF FIGURES AND TABLES

163

EXECUTIVE SUMMARY History Included in the 2010 Province of Ontario budget was an announcement about partnering with Sudbury and Thunder Bay to establish pilot economic development planning areas. The concept of regional economic planning was subsequently detailed in the 2011 Growth Plan for Northern Ontario. To steer the process in the Northwest, the Joint Task Force on Northwestern Ontario Economic Development Planning (Northwestern JTF) was formed in the spring 2010 to play a lead role in developing a proposed model and implementation plan for regional economic development planning. Background and Introduction Global competition and economic, social and demographic trends have in recent years combined to create structural changes that have had a substantial impact on Northern Ontario communities. Such changes have created both challenges and opportunities. A primary challenge is to maintain the economic base that supports a community, while developing strategic economic plans that express the desires and aspirations of the region as a whole. These changes also present an opportunity to build on the inherent strengths of each community through a regional collaborative approach to create prosperity. Purpose - Goals and Objectives The overall goal of this project was to apply the concepts, theories, best practices and frameworks of strategic regional economic development in order to aid in the development of a planning process that assists stakeholders in the region to achieve their respective and collective goals. This report also provides a comprehensive analysis of the key factors that influence community economic development, including strategic investment decisions aimed at supporting and producing a foundational plan to position the region through a collaborative effort. It also includes an implementation and action plan that can be easily integrated between the regional communities and the broader strategic regional economic development plan. The mandate, functional authority, organizational structure and performance indicators for a new regional organization are being provided in a separate report. The Northwestern Ontario Joint Task Force (JTF) has identified some clear objectives and guiding principles that are simple but powerful statements about the region being willing, able and ready to take on a more prominent role in its future. Specifically, a regional economic development organization can accomplish more than individual communities by: Addressing systemic barriers to economic development, Expressing a unified voice on policy issues for the provincial government, 3

Supporting regional communities with limited resources in their economic development efforts Increasing the number of investment leads directed to the region as a whole

Present Situation Northwestern Ontario is trending lower than the province in terms of income and employment due to the recent displacement of higher paying jobs in traditional resource-based and manufacturing industries from which a large part of the regions employment is derived. There is a relatively older population with high home ownership. Lower education levels and slower population growth compared to the rest of the province are challenges that many communities also face in Northern Ontario. The City of Thunder Bay has been able to somewhat diversify its economy and it is emerging from the recent recession in a better position than some of the regions smaller communities, with its economy expected to grow by 1.4 percent in 2011 compared to a historical average of .5 percent in the last 10 years. (Source: Winter 2011 Edition of the Conference Board of Canadas Metropolitan Outlook) This is not reflected across the region, as each district has its own challenges and opportunities. While heavily interconnected to the City of Thunder Bay, the smaller municipalities in the region have been more reliant on the single industries, especially forestry, that have been the backbone of the local economy. These communities have, therefore, been more vulnerable to the negative economic impact of the downturn of the forestry industry. It is important to note that the diversity of strengths in many sectors (Appendix D) provides the region with a sustainable competitive advantage. In fact, Thunder Bays rapid rise in the rankings as one of the most liveable cities in Canada (ranked 24 out of 179 cities in 2009) is an excellent example of this. (Source: Money Sense Canadas Best Places to Live 2009) Review of Strategic Issues A key objective of this project was to clearly identify and analyse key strategic issues facing the region. The external environment is continuously changing and todays municipalities and regions need to be dynamic, adaptable and flexible in order to meet the needs of their constituencies in an effective and efficient manner. The strategic issues identified are summarized as follows: 1. Lack of a clearly defined vision for the region 2. Repositioning the region through economic diversification and collaboration 3. Emerging, underutilized and changing competitive advantages 4

4. Economic diversification 5. Requirement for environmental and social sustainability 6. Speaking with a common voice and opportunities for change 7. The need for a new governance model 8. Benchmarking and best practices 9. High importance of coordinated and collaborative decision making. 10. The need for sustainable infrastructure The specific requirements of each area as they relate to the above strategic issues were reviewed and discussed with regional stakeholders during the regional engagement and information gathering. Their input, along with the input of the Northwestern Ontario Joint Task Force (JTF) members and the delegates and presenters at the recent Think North II economic development summit in Thunder Bay, has resulted in the development of a holistic organizational and structural model to guide future regional development. Regional Consultation and Engagement An analysis of strengths, weaknesses, threats and opportunities provided the key findings listed below. Such findings were corroborated by interviews with key stakeholders, discussions with participants in the Thunder Bay Think North II summit and the consultants analytical review and research. Strengths Good quality of life Proactive, energetic and informed business community Potential for major local tourist attractions (Lake Superior, Lake Superior Heritage Coast, provincial parks, etc.) Vast mineral resources in the region Good location and transportation infrastructure Improving telecommunications infrastructure Availability of trained and skilled workforce Excellent health care, research and innovation and education facilities

Opportunities Exploration, mining and support services opportunities Expansion and growth in the health care, education and research sectors Enhanced tourism and recreational opportunities through community collaboration, etc. Exporting opportunities across various sectors (i.e. value-added wood products, metal 5

fabrication, etc.) into the U.S. Midwest and western Canada markets. Small business sector growth opportunities through enhanced programs in education, training, entrepreneurship, telecommunications, etc.

Weaknesses and Threats Local Issues Lack of long-range planning for the area/region as a whole Relatively high residential, industrial and commercial tax rates in relation to other Northern communities and rest of the province Over-reliance on natural resource industries and poor current market conditions in pulp and paper Some mining operations are concluding Lower educational level of workforce Persistent lack of common identity for the region Lack of new and readily-available land use designations Ongoing out-migration

Global Issues and Regional Trends U.S. and global economic slowdown, high Canadian dollar Cyclical weaknesses in commodity prices affecting forestry employment in the area Structural deficiencies of Northern communities Constraints to development outside of the municipalities control (i.e., government regulations) High hydro costs

Key Areas of Opportunity: The greatest opportunity in both the short and long term is to build on current strengths by adopting a holistic regional economic development approach. This approach is interlinked and interdependent with both the internal and external environment. The greatest economic development opportunities lie in promoting the regions superior quality of life and housing affordability, tourism and recreation, value-added wood products, mineral resources, food security in agriculture, research and innovation and continued expansion in the health care and education sectors. Other opportunities include telecommunications, small business growth, and exports to U.S. and western Canadian markets. While Northwestern Ontario is already benefiting from a natural strength in these sectors, its true potential can be maximized by a cohesive and collaborative effort with key regional stakeholders through a focused approach to regional economic development. 6

Current and Future Challenges Key challenges lie in building the economic base in a sustainable way. According to the BMA report (2008), the region meets many of the criteria required for attracting investments but GDP growth is lower than the provincial average. This situation has led to relatively high residential, commercial and industrial tax rates, thereby impeding the ability of regional communities to compete in attracting investments. Local Control and Sharing of Resources Input to the study from all sectors of the Northwest region has been clear and strong on this issue. Ministries of education and health have much more local control and input through local boards. The Northwest region needs a transformation that is workable, with control shared under a basic general framework that includes Aboriginals, regional and provincial representation and a solid management structure. Not to act in this area will negatively impact the Northwests economic and social future for years to come. A suggested revenue-sharing model framework based on the concept of community-based planning is provided in section 2.1.4.

Strategic Options The deep recession that has been experienced worldwide in recent years has had a major impact on the rest of the province and Canada and across all sectors of the economy. Northwestern Ontario has had to contend with a decade of slow growth and structural changes in the forestry and pulp and paper industries and related transportation and service sectors. The attention now being paid by government to the economy should enable the region to reposition itself well by taking advantage of funding for infrastructure, education and training. To some extent, a repositioning of the economy is already occurring and major public sector investments are taking place. However, over-reliance on transfer payments from government can be a detriment to future growth if high government deficits require future cutbacks. In order for sustainable growth, the region needs to broaden the tax base through private sector investments. Applying Best Practices in Strategic Planning Given the strengths and opportunities as well as the weaknesses and threats identified, the region needs to be prepared and remain flexible in adapting to a changing external environment. Research indicates that Northwestern Ontario would benefit most from incorporating a holistic strategic economic development planning model into its present strategic process.

Holistic Strategic Planning Model The holistic model consists of four key elements: 1. 2. 3. 4. Developing a regional strategic vision involving extensive regional input; Aligning and prioritizing strategic goals and initiatives with the vision; Aligning regional municipalities business plans with the strategic goals; and Measuring and reporting the results.

Other key recommendations related to a holistic approach and best practices include: Enhanced level of consultation and communication is required; Key success factors must also be identified; and More frequent reviews of key strategic objectives and results are necessary. Recommendations The primary recommendations in this strategic economic development planning model are based on the key findings on strategic issues and are: Develop a clear and consistent vision for the region Develop a strategy to rebrand Northwestern Ontario Rebalance decision making and control to occur more at the local level Position Northwestern Ontario to take advantage of other strategic resources by developing partnerships Build on the strengths of unique resources and capabilities (competitive advantage) Continue the progress of economic diversification Work towards reducing the disparity in GDP growth and other economic and social indicators with the rest of the province Adopt the principles and model of a holistic strategic economic development planning process Increase flexibility and adaptability of the regional economy Further refine the performance measures presently used Develop a communication and outreach strategy for an effective regional economic integration Consult with and engage regional stakeholders for long-term sustainability Ensure economic, environmental and social sustainability Expand the Regional Capital Infrastructure initiative

To carry out such recommendations, the JTF proposes the creation of a regional economic development organization that will coordinate the development of a regional economic development strategy and implement regional economic development projects and programs.

Framework and Implementation Plan The final section of this report includes key recommendations on regional economic development planning models and organizational structure and presents the key highlights of research findings, regional consultations and analysis from official plans, strategic plans and economic development plans from the various municipalities across the region. It also provides examples of several regionally- or geographically-based organizations that have been appointed by the Ontario Government to act in its stead on a range of matters and offers a proposed Regional Economic Development Area Act based on one of these models. In addition, it proposes a region-wide approach to economic development which is consistent with other measures taken by the Ontario government in devolving responsibility to the regional level in the areas of health, social services and tourism.

The framework and implementation plan lays out the steps to be taken in the development of a five year regional economic development strategy that will include the following key components: One stop shopping for regional economic development; A pan-northern approach to infrastructure requirements; Support for regional local food supply efforts, agricultural research and food security for Northern communities; Strategic collaboration with Regional Tourism Organizations (RTOs); Analysis of strategic investments required to help First Nations residents settle into urban areas; Region-wide approach to the development of labour skills emerging opportunities; Region-wide strategy to attract pool of labour where shortages exist; Region-wide strategy for Aboriginal education and training; Development of programs to encourage retention of youth; Promotion of private sector investment; Regional branding; and Identification of infrastructure requirements around the mining activity in the region.

Conclusion The research team and the JTF recognize that strategic economic development planning is a continuous and systematic process, where stakeholders come together to make decisions about a desired outcome.

Such decisions, where possible, should be made by consensus and all factors important to the regional communities should be considered. This document outlines six guiding principles that will help shape the process of developing the strategic economic development plan process and performance measurement model, to develop a more formal framework for outcomes-based measurement that is strategic in nature and focuses on results. Plans developed under this process will create opportunities for the communities to fully participate in the planning and implementation of their recommendations. Finally, this document also includes a process for the region to measure the progress of this plan. This is not only from an economic perspective, but also from a human resource and quality of life potential, in order to enable the region to be well positioned and prepared to take advantage of future opportunities as they arise. Such opportunities are primarily focused on ensuring the long-term diversification and sustainability of the regions economy. If Northwestern Ontario is to succeed in establishing itself as a desirable location to live, visit and work, it must provide its stakeholders with the tools necessary to compete in a global environment. Key to this future will be the dual principles of local decision making and collaborative government. The JTF members are confident that this strategic economic development plan will provide Northwestern Ontario and the provincial government with a road map to assist the regional communities and the region as a whole to achieve their goals.

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1.1

BACKGROUND AND INTRODUCTION

History and Background

Included in the 2010 Ontario budget was an announcement about partnering with Sudbury and Thunder Bay to establish pilot economic development planning areas. The Minister of Northern Development, Mines and Forestry, Michael Gravelle, challenged the leadership of Northwestern Ontario on how best to create these economic planning areas at the Northern Ontario Associated Chambers of Commerce (NOACC) Annual General Meeting in Sioux Lookout in April 2010. Soon after, representatives of the Northwestern Ontario Development Network (NODN), the Northwestern Ontario Associated Chambers of Commerce (NOACC), the Northwestern Ontario Municipal Association (NOMA), the City of Thunder Bay, Common Voice Northwest (CVNW) and the Thunder Bay Community Economic Development Commission (CEDC) met to explore the concept further. Subsequently, the concept of regional economic planning was detailed in the 2011 Growth Plan for Northern Ontario. The plan stated that the Province would identify regional economic planning zones or areas as an inclusive, collaborative mechanism for long-term economic development, labour market and infrastructure planning that crosses municipal boundaries. It further stated that regional economic development plans would, at a minimum, involve widespread collaboration, identify regional linkages and synergies, economic strengths, 10

challenges and opportunities, land, infrastructure and labour market opportunities and needs, and provide context and direction to local economic development efforts. To steer the process in the Northwest, the Joint Task Force on Northwestern Ontario Economic Development Planning (JTF) was formed on its own initiative in the spring of 2010. Its mandate would be to play a lead role in developing a proposed model and implementation plan for regional economic planning in Northwestern Ontario. The JTFs membership has grown from the original organizing group. Its members now include: Common Voice Northwest Confederation College FedNor Fort William First Nation Lakehead University Mtis Nation of Ontario Nishnawbe Aski Nation Nishnawbe Aski Development Fund North Superior Workforce Planning Board Northwestern Ontario Associated Chambers of Commerce Northwestern Ontario Development Network Northwestern Ontario Municipal Association Northern Advisory Committee (NAC) members Robinson Superior Treaty City of Thunder Bay Thunder Bay Community Economic Development Commission Treaty 3

1.2

Strategic Issues

The external environment is continuously changing and todays organizations, including economic development regions, need to be dynamic, adaptable and flexible in order to meet the needs of their constituencies and communities in an effective and efficient manner. For the region of Northwestern Ontario, strategic issues can be summarized as follows: 1. Vision: Have a clearly defined vision of its future and be able to communicate it effectively to its citizens and community stakeholders 2. Positioning: How will the region position itself to minimize threats and maximize opportunities, not only for the present but for the future? 11

3. Identifying competitive advantages: What are the regions natural or created competitive advantages? (i.e., location in the centre of Canada, adjacent to a transportation corridor, vast natural resources, pristine environment, emerging education, health and research clusters, local food supply, etc.) 4. Economic diversification: What sectors of the economy offer the most opportunities? How is the global environment affecting the economic diversification strategy? How best to compete in this new global arena? 5. Environmental and social sustainability: Is the region adopting effective strategies to meet the emerging demands of climate, social, environmental, and economic changes? 6. Strategic economic planning process: Does the region have in place a strategic economic planning process that is dynamic, responsive and flexible in order to meet the changing needs and attitudes of its constituency? 7. Governance: Is the strategic economic development planning process able to integrate governance models that are viable and sustainable in the long-term? 8. Benchmarks and best practices: How will the region know if it is being successful? Who and what should it be comparing itself against? What are best practices at the national and international level? 9. Local Decision Making: Does the region have sufficient local autonomy in decision-making to influence its own future? What is the best way to determine, quantify and communicate this strategic concept? 10. Infrastructure: What is the best way to position the region to maintain and enhance its infrastructure for the short-, mid- and long-term in a financiallyviable way? The key strategic issues above do not stand in isolation and the extent to which the region can address them is tied in with its ability to evolve its strategic economic planning process. The chart below provides a schematic model of organizational design that matches the internal and external environment within the context of strategic directions and effective outcomes and the strategic role that senior management under the direction of a regional council would have in its development and implementation.

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Figure 1 Top Management Role and Governance in Organization Direction, Design, and Effectiveness

Source: Daft and Armstrong, 2009

Guiding principles: 1. The Strategic Regional Economic Development Planning model must be developed by working in close collaboration with key community stakeholders; 2. The model will help develop strategic planning opportunities and attributes that are unique to the Northwestern Ontario communities; 3. The model must be practical and able to be implemented, beginning in the short term, given local resources and abilities; 4. The model must support the development of sustainable long-term strategies for the region; 5. The model must be consistent and synergistic with regional communities requirements; 6. The development of the model must be compatible with and complementary to the plans for general community and economic development within the region.

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1.3

Approach and Method

This document will be divided into three phases as follows: Phase I Situation analysis and review of criteria for Regional Economic Development Planning models, framework and local decision making. Research the area of strategic regional economic development planning as it relates to the needs of the Northwestern Ontario communities development programs and initiatives, and other trends, best practices and findings supportive of the initiative. Finalization of the model proposal and preparation of a strategy, recommendations, framework and implementation plan.

Phase II -

Phase III -

The JTFs approach to this project was both sequential and integrated. The work was structured into a series of tasks and deliverables, each with its own set of objectives and activities. The JTF members were committed to a high level of consultation with all major stakeholders to ensure that all relevant information was included in the plan. To this end, a questionnaire (see Appendix A) was prepared and interviews were held with key community stakeholders throughout the region. The results of such meetings are summarized in Section 4.1. 1.4 Other Investigations

The research team reviewed extensive documentation assembled during the initial consultations with the regional stakeholders and international experts as well as other relevant material, including historical regional economic development trends and structure. In order to understand trends, risks and opportunities in both the local and global environment, research was conducted and in-depth discussions were held with business people in the region along with municipal officials and, Regional Directors of Ministries, staff, and key community leaders.

SITUATIONAL ANALYSIS

PHASE I REVIEW OF EXISTING MATERIAL AND DATA FOR THE REGION Goal: the goal of this stage was to: 1) Gain an understanding of the regions external environment through its historical growth, current development and future trends, including demographic changes and business cycles and dynamics within each major strategic sector in which the region is presently engaged. 2) Gain a thorough understanding of the regions strengths and weaknesses. 14

Approach: Review of existing materials/studies: The research team began Phase I by evaluating information that was previously prepared by the Joint Task Force (JTF) with input from a variety of committees and other community organizations, regarding their present strategic economic development planning process and models. As well, the team reviewed the findings and recommendations presented by the participants in the regional workshops and consultation sessions. The objective of this review was to follow up on previous conferences/workshops that have led to action plans and successful strategic economic planning models. It is important to identify ways to capture and measure any potential bottlenecks (organizational, structural, political, demographics, etc.) that may be preventing a quicker and integrated response to the strategic and economic development needs of Northwestern Ontario.

2.1

Current Situation 2.1.1 Historical Perspective

The history of continuous settlement by non-Natives in Northern Ontario is relatively recent when compared to the rest of Ontario. Settlement started in earnest with the construction of the Canadian Pacific Railway in the late 1870s and 1880s. This was soon followed by the construction of the Canadian Northern Railway and the Grand Trunk and National Transcontinental Railways. Most non-Aboriginal communities in the region were initially railway towns. Following the building of the railways, the regions growth has been driven primarily by the forest industry and by mining. The development of communities was, for the most part, undertaken by large resource extraction corporations based outside the region rather than by local entrepreneurs. This fact has meant that the social and economic structure of this region exhibits several unique characteristics. The first of these characteristics relates to an overdependence on natural resource exploitation. This has meant a high degree of vulnerability to resource depletion, world commodity prices, corporate policy changes, the boom and bust cycles of resource industries, changes in the Canadian exchange rate and changes in government policies regarding Northern Ontario. The second characteristic is a high degree of dependency on external forces. The fact that most communities were developed by outside interests means that local entrepreneurship has been more limited than in other areas. This has served as a barrier to the cultivation of an 15

entrepreneurial culture in these communities. This dependence is also seen in the area of political decision-making. Unlike most areas of Ontario, Northern Ontario is made up of districts instead of counties. Unlike counties, districts do not have regional governments. Northern Ontario is unique in Ontario in that, unlike the counties of Southern Ontario, there is no regional government serving as an intermediary between the provincial government and municipalities. While all communities in the region share some common characteristics, Northern Ontario can be divided internally into three different types of communities: Small and Medium-sized Cities Northern Ontario includes five cities with over 40,000 inhabitants. They are, in order of size, Sudbury (157,857), Thunder Bay (109,140), Sault Ste. Marie (74,948), North Bay (53,966) and Timmins (42,997). While these centres are heavily dependent on resource industries they are also relatively diversified in that they tend to be important centres for health, education and other services for the outlying regions. Resource-Dependent Communities - The vast majority of the remaining non-Aboriginal communities in the region are resource-dependent communities or single industry towns, which share many distinct characteristics. These communities are smaller and less diversified economically than the small and medium-sized cities. They are much more directly dependent on resource industries. Aboriginal Communities - Northern Ontario is unique in terms of its large number of Aboriginal communities (In 2006 Statistics Canada listed 124 census subdivisions in Northern Ontario as Indigenous Reserves). The Aboriginal population makes up almost 12.6 percent of the population of the region. The population in the area of the region north of the 50th parallel is almost entirely made up of Aboriginal communities. Of all the communities in the region, Aboriginal communities face the greatest number of social and economic challenges. Source: North Superior Workforce Planning Board; 2006 Census Analysis Reports. Trends in Northern Ontario Income Levels

As Figure 2 shows, Northern Ontario comprises 88 percent of the land mass of the province but represents only 6.5 percent of the total population of the province (2006 Census). This percentage represents a decrease from 6.9 percent in 2001. Northwestern Ontario represents 58 percent of the total land mass and it includes the districts of Thunder Bay, Kenora and Rainy River.

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Figure 2 Northern Ontario Regions by District

Source: Map of Ontario Census Divisions Ontario Ministry of Finance

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2.1.2 Economic Growth and Employment Trends by Sectors The City of Thunder Bay and Northwestern Ontario region are strategically located in the centre of the Canada. Historically, as the terminus point of the fur trade activity that linked east and west, Thunder Bay gained a place of relevance in transportation and commerce that continues to this day through its abundant natural resources, a port, and railway as well as an international airport. Over-reliance on natural resources and a high degree of dependence on external sources due to limited local entrepreneurship and decision making have greatly affected the economic growth of the region and left it vulnerable to the economic shocks of the recent global recession. As can be observed in Table 1 below, this decline has been ongoing for almost 10 years and it continues to this day. Table 1 Gross Domestic Product % of Ontario (2006) Northwest Northeast Southern Source: Rosehart Report, 2008 1.5% 3.7% 94.8% Change from 2001-2006 -6.7% +3.5% +13.6%

Sector Employment For the period 2004 to 2009, Northwestern Ontario experienced some major losses of employment. The sectors impacted the most are shown below and reflect how the loss of jobs in the forestry sector (1,900) impacts the overall economy. Table 2 Employment Sector Details Northwest Economic Region Occupation Sectors 2004 (000s) 2009 (000s) Absolute Change % Change

Construction Other Services

7.2 4.0

6.9 3.2

-0.3 -0.8

-4.2 -20.0 18

Professional, Scientific and technical services Information, culture and recreation Forestry, Fishing, mining, oil and gas Trade

4.2

3.1

-1.1

-26.2

4.5

3.0

-1.5

-33.3

4.9

3.0

-1.9

-38.8

16.3

9.9

-6.4

-39.3

Source: Statistics Canada Labour Force Survey 2004 and 2009 Yearly Averages Current Labour Force Trends From June 2010 to June 2011, employment in Northwestern Ontario decreased by 6,900 with the majority of job losses being in part-time employment (-4,000). During this period, fewer people looked for work, leading to a decline in the size of the labour force (-7,000) and a drop in the participation rate by 3.7 percent to 59.6 percent. An increase in the number of unemployed people caused the unemployment rate to rise from 7.4 percent in June 2010 to 7.8 percent in June 2011. Over the same period, the provincial unemployment rate declined from 8.8 percent to 7.9 percent. (Source: Northwestern Ontario Labour Market Monitor June 2011 Ontario Region, Service Canada) As the current labour trends above indicate, the economic conditions of Northwestern Ontario have deteriorated in the last year and are having a negative impact on employment levels. Diversifying the economy and attracting new residents to the region as visitors or as new investors will require a different approach. Economic development officials and business and community leaders are all recognizing the importance of the manufacturing and service sector industries (including retail, recreation and tourism, as well as health care and education) in attracting new businesses to their community. Over and above the current initiatives being undertaken by all economic development participants, the worsening employment conditions indicate the need for a renewed effort by all levels of government to accelerate the pace of investments in infrastructure and labour force training to transition to a knowledge-based economy, remove systemic barriers that are a drag on economic expansion and make substantial changes in resource revenue sharing and land use planning to give the region the tools to make some fundamental structural changes.

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2.1.3 Demographic Trends Population As indicated in Table 3 below, the City of Thunder Bay has, in the period 2001 to 2006, experienced almost no change in its population, while the Thunder Bay District as a whole showed a slight decrease. These decreases have largely been associated with economic declines in the resource sectors and the out-migration trend of workers and young, mobile professionals moving from rural communities in Northern Ontario to larger regional centres and urban cities in Southern Ontario and Western Canada. This trend is of significant concern to decision makers because it reflects the long-term market potential of the region. In fact, it is no coincidence that the decline in the population has also shown a corresponding decline in taxable assessment in other regional communities. A more complete analysis of other factors affecting population decline will be provided later in this document. Table 3 Population Changes Community Thunder Bay Thunder Bay District Rainy River District Kenora District Ontario 1996 Census 113,662 157,619 2001 Census 109,016 150,860 22,109 61,802 2006 Census 109,140 149,063 21,564 64,419 % Change 1996-2001 -4.1% -4.3% % Change 2001-2006 0.1% -1.2% -2.5% +4.2% 6.6% 13.1% % Change 1996-2006 -4.0% -5.4%

10,753,57 11,410,046 12,160,282 6.1% 3 Source: Statistics Canada (2001, 2006 Census)

On the other hand, between 2001 and 2006 the Kenora District has experienced a population growth of 4.2 percent. Ontarios population grew by 6.6 percent during the same time period. Ontario Ministry of Finance projections estimate the population of the Kenora District in 2011 at 67,350, or an increase of 4.5 percent. The population of Thunder Bay and Rainy River Districts are projected to remain stable in 2011. The population of Ontario is projected to grow 10 percent during the same time period. (Source:www.fin.gov.on.ca/en/economy/demographics/projections/)

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Trends in Aboriginal Population and Employment Levels Thunder Bay and District Contrary to the declining population trend being experienced in most Northwestern Ontario communities, the Aboriginal population in Thunder Bay experienced an increase of 22 percent between 2001 and 2006 for a total of 8,845 Aboriginal people. The Districts Aboriginal population grew by 17.6 percent between 2001 and 2006 for a total of 15,495 Aboriginal people. It is important to note that, while unemployment rates dropped 4.6 percent for Aboriginal persons living in the Thunder Bay District between 2001 and 2006, substantial gaps still exist between the employment of Aboriginal and non-Aboriginal people. For example, the unemployment rate for the Aboriginal people was 17.1 percent compared to 8.1 percent for the Thunder Bay District as a whole and the Aboriginal employment rate was 48.6 percent against 58.5 percent for the Thunder Bay District. (Source: North Superior Workforce Planning Board (NSWPB) Local Labour Market Plan 2009-2012) Kenora and Rainy River Districts There are 53 Aboriginal communities located in the Kenora District and another 12 in the Rainy River District. As of 2006, the Aboriginal population in the Kenora District was 26,345, an increase of 23 percent since 2001. The Aboriginal population in the Rainy River District in 2006 was 4,615, an increase of 27.5 percent from 2001. The Kenora District ranks first in Ontario for the largest concentration of Aboriginal people in an urban environment with 2,365 or 16 percent of the total municipal population. In 2001, 49 percent of the Aboriginal population was under the age of 25. Similar to the Thunder Bay District, Aboriginals in the Kenora District were underrepresented in the workforce with an employment rate of 47.3 percent and the unemployment rate of 16 percent in 2006. In the Rainy River District the situation is slightly better with employment rates of 55.5 percent and unemployment of 13.2 percent. (Source: Statistics Canada - Aboriginal Population Profile- 2006 Census) The under-representation of Aboriginal people in the workforce is a concern and has major implications for the future. For example, the demographic composition of a larger, younger population in the Aboriginal community offers an opportunity for education and training of a growing supply of younger labour force in an aging population, while high unemployment carries with it a host of social and economic issues. (Source: North Superior Workforce Planning Board (NSWPB) Local Labour Market Plan 2009-2012)

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As shown in Table 4 below, the median age (41.7 years) of the population in Thunder Bay is the same as that in the Thunder Bay District (41.7) but higher than the province of Ontario (39.0 years). Table 4 Median Age of Population 2006 Census Thunder Bay 41.7 Thunder Bay District 41.7 Rainy River District 41.0 Kenora District 34.9 Ontario 37.2 39.0 Source: Statistics Canada (2001, 2006 Census) Community In the Kenora District there are more youth up to the age of 20 than the provincial average, contributing to a median age of 34.9, younger than Ontarios median age of 39. In the Rainy River District, there are fewer individuals up to the age 20 than the provincial norm, resulting in a median age of 41, two years older than the provincial median age. Additionally, Table 5 below shows the 65 plus population of Northwestern Ontario as a percentage of the total population (an average of 16.14 percent) is higher than the province of Ontario at 13.6 percent indicating that there is a higher concentration of those 65 and older. Table 5 Percentage of Population 65 and over in 2006 Community # of people 65 years and over 18,050 Total Population % of total 16.5% 15.2% 16.1% 16.7% 13.6% 2001 Census 39.2 38.7

Thunder Bay 109,140 Thunder Bay 22,615 149,060 District Rainy River District Kenora District Ontario 1,649,180 12,160,285 Source: Statistics Canada (2006 Census) Implications of an Older Population

The implications of a relatively older population (Table 5 above) is that the demand for health care services and other services required by an aging population will be relatively more acute in Northwestern Ontario than in the rest of the Province. On the other hand, such a trend may also indicate that regional seniors are beginning to move into larger urban centres such as Thunder Bay and Kenora. 22

According to the Statistics Canada 2006 Census, future trends based on the 2001 to 2006 growth of the 55-64 years age group indicate a rising number of older adults in Northwestern Ontario. This group represents the future retirees and the ones that will start needing an increasing level of medical care. As shown in Figure 3 below, the largest segment of the population in Thunder Bay is between 35 and 59 years of age and this will present challenges in the near future. The Kenora District will experience less of an impact as its median age is 34.9, but the Rainy River District composition is similar to that of Thunder Bay District.

Figure 3 Thunder Bay Population by Age

Source (Statistics Canada 2006 Census) Another implication of an aging population is that fewer younger people will be available to enter the workforce and this may affect the current shortage of qualified workers in some sectors of the economy that are experiencing renewed growth, like construction, mining, information technology, and others. With some trained workers having left the region due to the major layoffs in the forest, pulp and paper and related industries that have occurred since the time the Census was taken in 2006, the challenge will be to provide them an opportunity to come back and make sure that those who stay are properly educated and trained for the jobs of the future.

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Education As Table 6 below shows, an over-reliance on good paying jobs in the resource-based economy of Northwestern Ontario has produced a workforce that has a higher level of high school, skilled trades, certificates or diplomas than the provincial averages but whose level of higher education is much lower. These variations need to be taken into account when determining the implications and identifying strategies for economic diversification. Table 6 Percentage of the population over 15 with varying levels of education No Certificate, Diploma or Degree High School Certificate, or Equivalent Apprenticeship or Trade Certificate or Diploma College or NonUniversity Certificate/ Diploma 19.8% 17.5% 15.9% 18.4% University Certificate Diploma or Degree

Community

Thunder Bay District Rainy River District Kenora District Ontario

26.7% 30.1%

25.3% 28.2%

11.5% 11.6%

16.8% 12.5% 11.3% 24.6%

38.6% 23.9% 10.3% 22.2% 26.8% 8.0% Source: Statistics Canada (2006 Census)

Education Implications for the Northwest Region Higher levels of education and training provide municipalities with a competitive advantage when trying to attract investment. It also makes it easier for workers to find and maintain better-paying jobs. Forestry and manufacturing sectors in the region are going through major restructuring and large numbers of older workers are being displaced. This poses a challenge for communities to provide retraining and higher education, enabling the transition for the region towards a knowledge-based economy. Recent efforts by the province through its Growth Plan for Northern Ontario 2011, and funding announcements in the provincial budget (March 7, 2010) related to skills development for displaced workers, signals a continued commitment to Northwestern Ontario and a regional approach that bodes well for the future. However, the latest labour trends (June 2010-June 2011) indicate a continued reduction in employment levels and rising unemployment, while certain sectors of the economy are experiencing skills shortages. This paradox requires a highly focused collaborative effort from 24

the education institutions, Planning and Adjustment Boards, Economic Development agencies and industry. For example, to equal the average provincial educational attainment in the Kenora District and better prepare the workforce for the future: 6,499 more people would need to obtain a university degree, diploma or certificate 1,221 more people would need to obtain a college diploma 8,013 more people would need to obtain a Secondary School diploma In the Kenora District, 23.9 percent concluded their formal education after earning a secondary school diploma as compared to 26.8 percent in Ontario. However, at 38.6 percent, a significant percentage did not earn a secondary school diploma. To equal the average provincial educational attainment in the Rainy River District: 2,062 more people would require a university degree, diploma or certificate 153 more people would have to earn a college diploma 239 more people who have a secondary school diploma would have to go on to postsecondary education 1,346 more people would need to earn a secondary school diploma. Both areas fare better than the province in terms of those who have earned apprenticeship certification. 1,124 more people in the Kenora District and 613 more in the Rainy River District have earned an apprenticeship certification than the provincial average. (Source: Northwest Training and Adjustment Board. 2011 Trends, Opportunities, Priorities Report) Aboriginal Education The educational levels of the Aboriginal population in Kenora and Rainy River Districts are significantly lower than the general population. For example, in 2006, 50.5 percent of the Aboriginal population age 25 to 34 years had not obtained an Ontario Secondary School diploma. This compares to 31.1 percent of the population in that age group in the Kenora District and 15.0 percent in the Rainy River District. Among Aboriginal youth, those who completed secondary school were more successful in finding employment. The unemployment rate for young Aboriginal people aged 15 to 24 with an Ontario Secondary School diploma or some post-secondary (12.2 percent) was half that of those without an Ontario Secondary School diploma (24.1 percent). (Source: Northwest Training and Adjustment Board. 2011 Trends, Opportunities, Priorities Report)

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Income and work Thunder Bay District had higher than Rainy River and Kenora Districts median earnings in 2006 but slightly lower than the province indicating that its workforce is becoming better diversified. Table 7 Income Characteristics Average Earnings per year 2001* Median Earnings per year 2006**

Community

Thunder Bay District Rainy River District Kenora District Ontario

32,010

35,185

28,565 25,011 24,504 29,335

Source: Statistics Canada (2001, 2006 Census) *Note: Average Earnings (all persons with earnings) **Note: Only Median Earnings is provided by Stats Canada for 2006 Census It is important to note that the average earnings are for all persons with earnings in a year, regardless if they were full time or part time. Also, for 2006, Stats Canada uses median earnings which are slightly lower than average earnings as they are not skewed (averaged) higher with higher wage earners. 2.1.4 Political Spectrum and Dynamics

The Northwest region operates within the context of the political changes and dynamics that have and continue to affect this province. Downloading of services and added regulatory requirements from the province without corresponding compensation (revenue neutral concept) have and continue to put pressure on budgets and municipalities ability to deliver services while maintaining relatively low taxes. The onus then is on municipal councils and administration to find ways to grow the revenue stream while reducing costs and maintaining services. Demographic, employment, and growth statistics in the previous sections clearly indicate that the Northwest is lagging behind the province on just about all fronts. Key resource areas like forestry, mining and land use planning that could allow the Northern communities new sources of revenue are being micromanaged by Toronto (98 percent of all crown land is in the North) when in the past decisions about use of resources were by regional directors and district managers. 26

There are many policies that profoundly influence economic development including but not limited to the Endangered Species Act, the Far North Act and Forest Tenure. It is understood that lands in Northern Ontario belong to everyone but the communities that are closest to them need to have a say. While there is a need to ensure sustainability through the regulatory process there is also a need to allow growth to happen at the same time. (Source: Phase I Regional Consultation - Community Leaders Interviews) Input to the study from all sectors of the Northwest region has been clear and strong on this issue. Ministries of education and health have much more local control and input through local boards. The Northwest region needs a transformation that is workable, with control shared under a basic general framework that includes Aboriginals, regional and provincial representation, and a solid management structure. Not to act in this area will negatively impact the Northwests economic and social future for years to come. A suggested model would be based on a gap analysis (undertaken in the situational analysis of this report and summarized above) and be based on the principles of:

Northerners wanting to share in the provincial growth A concept of community-based planning

Deleted section: Model Framework (Revenue Sharing Model) 2.1.5 Economic and Business Cycles The economy of Thunder Bay is closely tied to the economy of the surrounding region. Usually smaller communities close to Thunder Bay should stand to benefit from the spin-off effect of a larger and more diversified economy. However, this has not been the case. In fact, Thunder Bay, while experiencing some growth in the institutional and commercial sectors, has experienced an overall decline in its economy during the 1996-2001 period as reflected in a population loss of 4.1 percent (Stats Canada - Census 2001) and taxable assessment drop in the industrial sector of Thunder Bays economy of 39 percent. (City of Thunder Bay 2010 Longrange Financial Forecast). The 2001-2006 time period was somewhat better even though the forestry sector declined substantially. In fact, overall growth in taxable assessment during the period of 19982008 averaged only 0.5 percent per year. (City of Thunder Bay - 2008 Budget). Economic and business cycles are not limited to a city or region but also operate within a local and global context. While some changes are global in nature, others are unique to the North including: Low levels of growth due to structural deficiencies (roads, water and sewer infrastructure, climate, distances, etc.) and lower economies of scale due to low population density; Intense investment in capital equipment in the resource-based industries resulting in significant reductions in labour. This displacement is permanent, not cyclical; 27

The stabilizing force of significant growth in government services, in education and health care in the North, while improving in recent years, may be eroding in the future due to growing government deficits and possible restructuring and cutbacks. Heavy reliance in the North on provincial transfer payments, both to individuals and to municipalities would hurt the north more than the rest of the province when there are cutbacks.

Small Business Growth As is the case in so many other parts of the country, small business is now providing the largest employment gains and is quickly becoming the backbone of our economy. This sector has the potential to transform many regional communities by creating much-needed jobs and helping develop a more reliant and diversified economy. Key Trends related to Small to Medium Enterprises (SMEs) Thunder Bay District Total SME (owner operators to 199 employees) employment in the Thunder Bay District represents 60 percent of all employment, in contrast to the provincial rate of 67.9 percent. This data points to the Thunder Bay regions more limited entrepreneurial culture and greater dependence on larger employers. With the global economic downturn in the forestry sector, larger firms are more vulnerable to the boom and bust cycle and thus face additional layoffs or closures. The Thunder Bay District saw 232 fewer employers in 2010 than in 2008 (from 7,860 in 2008 to 7,628 in 2010) or a drop of 2.95 percent. The greatest losses in employment were in the food and beverages services (-6.5 percent or 332 jobs) and professional, scientific and technical services (-3.71 percent of 88 jobs). There were also gains, mostly concentrated in the construction of buildings (13 new companies), support activities for mining, oil and gas extraction (+10), support activities for transportation (+8) and real estate (+8). Kenora District In the Kenora District, with the exception of manufacturing and education, health care and social assistance, 99 percent of all business establishments employ less than 100 people. Between 2008 and 2010, there was a decrease of 22 business establishments (from 3,325 to 3,303) or less than 1 percent. Almost all of the decreases in business establishments in Agriculture and Forestry Industries were Forestry related.

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Rainy River District In the Rainy River District, 99 percent of all business establishments employ less than 100 people. Between 2008 and 2010, there was a decline of 49 businesses (from 1,396 to 1,347) or 3.5 percent. The decline in the number of business establishments in almost every sector of the economy, and particularly sectors predominantly governed by private sector activity, highlights an economy in some stress. Source: Canadian Business Pattern Data, Statistics Canada, June 2010 2.1.6 Provincial Decision Making Analysis The basic premise of the Regional Economic Development Zones Project is based on the concept of authority in decision making as a tool for local implementation and influence. Input into this study has strongly emphasized this strategic point as being key to future regional economic development and prosperity. An important aspect of this premise is the required revenue stream to provide decision making tools to implement and influence decision makers. Collaborative Governance The premise stands on the foundational concept of collaborative governance, whereby decisions are made through a collaborative effort that includes all stakeholders. Collaborative governance has been defined as the process of establishing, steering, facilitating, operating and monitoring cross-sectional organizational arrangements to address public policy problems that cannot be easily addressed by a single organization or the public sector alone (Ansell and Gash 2008). International Best Practices The principles of local decision making and collaborative governance are also based on international regional economic development best practices. For example, a typical regional development agency in Europe is a semi-autonomous agency that acts at arms length from the central government. In Canada, Bradford and Wolfe (MOWAT 2010) suggest that governments should coordinate programs at the local level and work across sectors and with civil society. Acting alone, government departments and agencies often create silos, fragmentation and overlap or, even worse, steer in the opposite direction. In Canada, many government agencies are involved in economic development, therefore collaborative governance that gives a decisionmaking role to provincial and local governments and community organizations is essential. Local Decision Making (Gap Analysis) Substantial input during the regional consultation process focused on key themes driving the need for local decision making. The major themes are summarized below: 29

The local MNDMF office is perceived as lacking sufficient resources to initiate and support fast turnaround on decisions affecting the North, especially during the times of critical economic changes that have been experienced over the last decade. Local absence of Deputy and Assistant Deputy ministerial positions to represent the interests of the northern economy at the administrative/political level. Local ministries, especially MTO, MNR, and MOE, are viewed as regulators who create constraints and barriers to economic development in the region and not facilitators to economic development. There are substantial differences in need within the sub-regions of Northwestern Ontario. What works in Thunder Bay may not work in Kenora or Greenstone. Past government decisions rarely take such differences into account as decision makers in Southern Ontario lack the flexibility required and tend to use a one size fits all approach. There are trends towards centralized government and decision making due to technological advancements and the need for efficiency and cost reduction in government. Such efficiencies are being questioned and should be validated through a cost-benefit analysis that would take into account the long-term economic implications for Northern Ontario. The need for layered decision making in the Northwest region that takes into account the requirement for flexibility.

Based on the findings from the regional consultations, the case is becoming apparent for a multilayered approach where certain policies and programs would benefit from a region-wide application, while others would require a more focused sub-regional implementation. Consistent to this variable approach is the fundamental requirement for a more localized decision-making process. Holistic Approach to Decision Making and Collaborative Governance Given the gap analysis above and the premise on which decision making and collaborative governance are based, a holistic approach based on the guiding principles and foundational pillars of the Growth Plan for Northern Ontario 2011 is recommended. The major themes are the economy, people, the environment and communities. Common to these themes and cutting across all decision-making nodes are the key issues of infrastructure, the need for coordination and collaboration, building capacity and the Aboriginal economy.

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OVERVIEW / REVIEW

PHASE II - RESEARCH AND ANALYSIS OF CURRENT INFORMATION Goal: To identify and analyze all relevant collected information. In addition to the factors noted in Phase I, Phase II analysis consists of the following: Future global and regional trends in the identified economic sectors; Social, demographic, lifestyle and cultural trends that impact the overall economy of Northwestern Ontario and the specified sectors in which the region operates; Identification of social, economic, and environmental needs and training and/or support services required by the large employers and small business community in the identified sectors; Identification of measurable factors at both the internal and external environment of the region as well as barriers and limitations of the model as it applies to the Thunder Bay, Kenora and Rainy River Districts; and A focus on structural, political, demographic, and social bottlenecks.

Approach: The research team conducted interviews with key community stakeholders and business leaders to gain an overall perspective on the regions strengths and weaknesses, and development opportunities for a regional economic development planning area. A total of 35 interviews were conducted (see Appendix A for interview questions, Appendix B for schedule of interviews and participants, and Section 4.1 for summary of interview results). Interview questions attempted to identify: 1. 2. 3. 4. 5. How to integrate the best strategic economic development planning models in the region based on past and current successes as well as emerging opportunities; Issues and barriers to regional economic development and processes to mitigate them; Opportunities for strategic positioning of key issues and initiatives currently taking place within the region; Opportunities for an integrated regional political and economic vision with long-term viability and sustainability; and Identification of key champions and an organizational structure to market and implement the vision and goals of the regional economic development planning model and the Northern Ontario Implementation and Advisory Committees.

Summary of Stakeholders Interviews 1. A common theme that permeated the interviews was the appreciation of community stakeholders for being involved in the process. A need for continued engagement at the early stages of the future economic development planning model process was identified. Another major issue was the lack of trust with government and the need for results31

2.

3.

4.

oriented action instead of more planning and studies. A fundamental issue was the need for Aboriginal involvement and participation throughout the process as well as regard for its distinct social and economic needs and the support needed to develop its capacity for a parallel economic development planning process. Key successes identified were the interlinking of resources and strategic positioning similar to the approach used in successful region-wide initiatives such as: The attraction of the Northern Ontario School of Medicine and The 2009 infrastructure funding applications to the federal government whereby the City of Thunder Bay facilitated the process of bringing together Lakehead University, Confederation College, the Thunder Bay Port Authority and the Thunder Bay International Airports Authority in a coordinated effort to present a community-based priority list of projects.

These and other examples were identified by the community stakeholders interviewed as being highlights of community and regional partnerships at their best and providing a renewed sense of optimism for future collaboration.

3.1

Critical Economic Development Issues and Success Factors

Besides the critical areas that a potential investor would examine such as taxes, labour, land and site locations, the cost of energy and incentives, among other considerations, the region shares other unique critical factors from a regional and community development perspective such as a common identity, geographical dispersion and the need for an integrated economic and political vision. From a quality of life perspective, the critical issues are social, environmental and technological sustainability. Regional Development Issues 3.1.1 Common Identity A common identity is a critical issue for a number of reasons. The principal reason is that it takes time to fully integrate the diverse needs of the region. While the process of integration occurs (for example, the identification of additional suitable commercial and industrial lands as well as investment readiness training for smaller communities, larger versus smaller towns issues, TBayTels role for broadband deployment in the region, competition for the Ring of Fire development, etc.), it tends to focus energies and resources more on internal issues than on the need to market and promote the area as a whole.

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3.1.2 Geographical Dispersion While geographical dispersion is an issue in terms of the region and individual municipalities ability to provide services at a reasonable cost in the absence of economies of scale (i.e., in-filling strategy for housing development, need for fire hall presence in the rural areas to offset high insurance costs which drives up the cost of providing fire service, etc.), the more pressing issue and one that may take some time to resolve, is the diverse needs and priorities of each community. In fact, when faced with issues specific to their particular needs, the residents of a community may have difficulty relating to all of the other regional issues. At times, it is not uncommon to hear complaints based on the perception that resources are being allocated disproportionately to one area versus another by the province (i.e., wood allocation, funding for rural roads, land use planning, resource sharing, etc.). This is not an insurmountable obstacle and a properly developed and implemented strategy of a unified regional vision will go a long way in addressing this issue. 3.1.3 Political and Economic Integrated Vision A critical issue in community economic development is the lack of an integrated approach between the political decision makers and the economic development processes. The need for closer collaboration was always present but it has been accentuated in recent years as a result of the restructuring and downloading of services at all levels of government, which has placed a greater burden on already limited resources, especially in northern communities. Within this context of limited resources, expenditures for economic development are usually viewed as a cost and not as an investment that will help grow the tax base and consequently the municipalities ability to pay for services. The Township of Schreiber was recently forced to lay off its economic development officer due to a greatly diminished tax base as a result of the loss of a major industry. Resolving the issue of availability of resources will be a key factor in the creation and implementation of a political and economic integrated vision. For example, the concept of onestop shop (i.e., having all information and resources available in one spot) for economic development and strategic community collaboration lends itself better to larger geographical areas like the Northwest region. Larger regional centres like Thunder Bay (given its resources compared to smaller regional communities) have produced some valuable results in the attraction of valued-added companies such as: Global Sticks (cooperation with an outlying municipality); Contact centre such as OLS (flexibility and adaptability by the City of Thunder Bay in lease renewal and proactivity by the CEDC in seizing opportunities); and 33

 Service centres such as Superior Propane (technological collaboration by TBayTel). Other regional successes in this area have taken place in Greenstone where the community has planned ahead for the development of an industrial park with adequate services to accommodate expansion in the mining and related sectors. Actuary Laboratories (ActLabs) has already opened a regional office there that will employ up to 40 people.

The Ring of Fire area (see map below) provides a great opportunity to integrate the political and economic vision required to maximize the full potential of one of the richest mineral deposits in the world and, in the process, benefit the province, Northern Ontario and Aboriginal communities. In fact, in the August 2011 issue of Northern Ontario Business, Stan Sudol writes extensively about the need for a Mining Marshall Plan that will harness the enormous mineral potential located north of the French and Mattawa Rivers 90 per cent of Ontarios geography. Figure 4 The Ring of Fire Belt

Source: Thunder Bay International Airport 2010 Annual Report Economic Development Issues 3.1.4 Taxes While property taxes are only one of many factors that will influence a decision to invest or to move into a specific location or community, they are important because they represent a fixed cost over which an investor (or a family) will have little or no control. From a marketing perspective, it is important to know and understand how each regional municipality compares to other communities inside and outside of the region. 34

The following comparative analysis will focus on the individual communities for 2009 residential, commercial and industrial tax rates. Figure 5 Residential Tax Rate
2009 Residential Tax Rates per $1000 Assessment

$25 20 $20 18 16 $15 12 12 15 21

$10

$5

$0 Thunder Bay Oliver Paipoonge Neebing North Bay Kenora Dryden Sault Ste Marie

Given the unique characteristics and tax structure of each community in Figure 5 above, such a comparison is only meant to provide an opportunity for further analysis and development of appropriate taxation strategies to maximize strengths and minimize weaknesses, in relation to other jurisdictions outside of the region.

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Figure 6 Commercial Tax Rates

2009 Commercial Tax Rates per $1000 Assessment

$60 $50 $40 $30

54 49 44 39 33

52

16 $20 $10 $0 Thunder Bay Oliver Paipoonge Neebing North Bay Kenora Dryden Sault Ste Marie

Commercial tax rates for Thunder Bay are fairly high compared to other municipalities shown above, (especially Oliver Paipoonge, Neebing, and Dryden) but comparable to Sault Ste. Marie and North Bay. Oliver Paipoonge and Neebing would have a competitive advantage when trying to attract commercial-type investment. Figure 7 Industrial Tax Rates
2009 Industrial Tax Rates per $1000 Assessment

$70 $60 $50 $40 $30 $20 $10 $0

65 58 51 45 40

60

21

Thunder Bay

Oliver Paipoonge

Neebing

North Bay

Kenora

Dryden

Sault Ste Marie

Industrial tax rates vary greatly, with Oliver Paipoonge considered to being 36

competitive with respect to other communities in the region, especially Thunder Bay. The charts above would seem to indicate that those municipalities with a higher tax structure, such as Thunder Bay and Sault St. Marie, would require better positioning and marketing in order to attract companies on the basis of tax rates alone. However, like the experience of Global Sticks has shown, decisions on where to establish a manufacturing operation are never made on taxation issues alone. Availability of land, labour and key raw materials, infrastructure and closeness to transportation corridors, and a host of other factors will influence the ultimate location. For the purpose of this study, it is also important to determine the Northwest regions level of tax competitiveness especially against other municipalities in the rest of the province. When comparing the average taxation rates of Northern Ontario communities and 81 other communities in Ontario (OMBI report, 2008), Thunder Bay is higher on the municipal levy per capita and much higher than the survey average across the province on the ratio based on assessment, as assessment figures are much higher in Southern Ontario (See Table 8 below). Table 8 Taxation Comparison: Northern Communities and Rest of the Province

Source: OMBI 2008 While the above indicators do provide some relevant benchmarking, to get a better picture of the affordability level of property taxes as a percentage of household income, Table 9 below shows that at least in 2008 Thunder Bay fared better than most, including the northern communities. The table indicates the measure of affordability within each community. Table 9 Taxes as a Percentage of Income in Comparison with rest of Province

Source: OMBI 2008 37

The BMA 2009 report below illustrates a substantial change in affordability in the survey average since the 2008 report was released, indicating that Thunder Bay no longer holds a competitive advantage in this area, being slightly lower than the Northern average and equal to the survey average. Thunder Bay Property Taxes as a % of Household Income 4.1% Survey Average 4.1% 5.0% North Average 4.2% 5.2%

Water/Sewer + Taxes as a % of Household Income 5.0% Source: OMBI 2009

It is interesting to note that all communities in the survey (including Northern municipalities) have improved their affordability index, indicating good control over property taxes while household incomes have increased year over year. 3.1.5 Labour Availability and Costs Labour availability and costs are some of the most important factors for companies wishing to relocate or invest in a specific location. In fact wages can represent over 50 percent of total annual operating costs for a typical manufacturing operation (KPMG Competitive Alternatives Study 2010). Due to its relative historical high unemployment compared to Southern Ontario, Western Canada or the U.S. Midwest, labour availability and rates in the Thunder Bay District and Northwestern Ontario are fairly competitive and therefore attractive. Testimony to this fact comes from companies like Superior Propane which employs over 100 people in its new administrative support back office in Thunder Bay and reduced its operating costs by over 40 percent compared to its main office in Edmonton. Other more recent success stories have been: Global Sticks, a value-added wood product company that came back from China to set up a manufacturing operation in Oliver Paipoonge near Thunder Bay and is expected to employ approximately 100 people; and OLS Contact Centre replacing Star Tek in Thunder Bay which is expected to employ close to 400 people. (Source: CEDC Strategic Plan 2010) The number of students graduating every year from the regions college and university programs and the vast range of programs available are also making a major contribution to the human capital that provides Northwestern Ontario with a competitive advantage especially as the region moves towards more knowledge-based industries. (Source: North Superior Workforce Planning Board (NSWPB) Local Labour Market Plan 2009-2012 38

However, the recent recession and the demise of the forest industry, with its negative impact on related sectors such as transportation and support services, is creating some areas of high unemployment while growth in the mining, engineering, research, life sciences and information technology has been creating shortages that may curtail further growth opportunities in these sectors. In fact, companies like Tornado Medical Systems and Sencia that rely on computer science and computer programming graduates are already experiencing such shortages. (Source: Key Community Stakeholders Interviews) Recently, the Computer Programming Analyst program at Confederation College in Thunder Bay was cancelled due to insufficient enrolment. The computer science program at Lakehead University only graduates about 5-7 students per year, and companies in this sector are facing contracting out and hiring from out of the region in order to meet their requirements for skilled labour. Even though substantial work has been done in this area by the local planning board (NSWPB Labour Market Report Update 2011), this situation presents a paradox that requires further investigation and analysis.

It is recommended that the North Superior Workforce Planning Board (NSWPB), the Northwest Training and Adjustment Board (NTAB), the Thunder Bay Community Economic Development Commission (CEDC), Confederation College and Lakehead University collaborate in this area to provide strategic alignment in specific sectors of the economy facing skilled shortages and curtailing the regions growth opportunities. A new Regional Economic Development Agency could play an important coordinating role in matters of strategic regional interest like this one.

3.1.6 Land and Site Location Amortized building costs will only represent approximately 5 percent of total annual operating costs for a typical manufacturing operation but the availability of building and sites, properly zoned and serviced, are very important marketing elements when trying to attract investment (KPMG Competitive Alternatives Study 2010). While there seems to be industrial and commercial land available in Thunder Bay, Greenstone and other regional communities, the process for new industrial parks or land inventory is not formalized and coordinated at the regional level. 3.1.7 Cost of Energy and Reliability of Supply Cost The cost of energy typically represents between 5 and 10 percent of the annual operating costs of a manufacturing project but it is much higher for mining or saw mill operations. Utility costs in the region are generally not viewed as being competitive and there 39

are concerns that the rates may increase further. There are wide ranging opinions on this issue but current trends and recent interviews with energy consultants in the region indicate a move towards a continuing increase in utilities rates, making them much higher than in other jurisdictions such as Manitoba, British Columbia or Quebec where the utilities are publiclyowned. In order to help large industries in Northern Ontario remain competitive, on September 27, 2010, the province announced the Northern Industrial Electricity Rate Program (NIER). This 3-year (averaging $150 million annually) program is meant to help large industries in Northern Ontario improve their energy efficiency and sustainability. Qualifying industries receive electricity price rebates of two cents per kilowatt hour when they commit to the preparation and implementation of comprehensive energy management plans. The NIER program is available to industrial facilities that consume greater than 50,000 mega-watt hours of electricity per year. On August 5, 2011 the Ontario government announced that Weyerhaeuser Company Limited, in Kenora would receive electricity rebates of two cents per kilowatt hour (kWh) to help manage their electricity costs and provided a retroactive payment of $1.2 million. (Source: Foresttalk.com) On August 19, 2011 the Ontario government approved an initial rebate for Abibow of over $7.5 million based on the facility's consumption for the 2010-2011 fiscal year. (Source: news.Ontario.ca) Another company that has been taking advantage of the NIER program is Kirkland Lake Gold, where electricity costs account for about six percent of their operating costs and are the second biggest cost after labour. (Source: Northern Ontario business August 2011) Green Power The announcement by the Province of Ontario in its 2006 budget that it would shut down Atikokans coal generating plant by 2014 created investment uncertainty in the region. However, with the plant in Atikokan now being fuelled by bio-mass and the one in Thunder Bay being converted to natural gas, this may change market opportunities for potential investors. Tax incentives for the generation of green power have also stimulated renewed interest in Northwestern Ontario for wind, biomass and solar-generated power but this stimulus should not be viewed as sufficient to meet the social imperative in the Northwest Region for economic development that is broad based and enduring. Infrastructure There are substantial opportunities for economic development in Northwestern Ontario, especially in the mining sector. To achieve this, there are several major electrical power infrastructure issues that need to be resolved. These issues are different for the three 40

major areas of the region: the southern zone (along the Lake Superior highway corridor); the mid-zone (running horizontally through the whole of Northwest Region: Kenora to Geraldton) dealing with lack of redundancy due to radial circuits; and the northern zone in remote communities still running on diesel and therefore greatly limiting housing capacity and economic expansion within Aboriginal communities). (Source: Pre-filed Statement of Evidence of NOMA Interveners to the Ontario Power Authority, September 19, 2008) The current power mix and infrastructure are not seen to be sufficient to provide a reliable power supply at a competitive price and are considered a risk for the region. Given that higher gold and other commodity prices and increased levels of mining exploration can result in thousands of new jobs in the region, having a reliable source of power (including in remote Aboriginal communities), will be key to Northwestern Ontarios future growth and prosperity. The social and environmental impact of energy also needs to be taken into account. In a speech made on April 7, 2010, Howard Wetston QC, Chair of the Ontario Energy Board (OEB) clearly stated, "The issues that are important to the public and that are affected by energy regulators are largely not just about energy, but also about the environment and other social imperatives.

It is recommended therefore, that the Minister of Energy issue a supply-mix directive specifically for Northwestern Ontario based on the unique needs of the region and that the best available electricity infrastructure planning resources be used in recognizing the social imperative of new economic development in the Northwest region within the unique context of vastness of the territory, scarcity of population and lack of adequate infrastructure for a reliable power supply. 3.1.8 Business Incentives Incentives do not appear to be a key factor in site location and most often it is not even in the top ten factors. In fact, industry literature on surveys of top U.S. and Canadian real estate executives revealed that: 80 percent of firms use incentives only as a tiebreaker, if all other competing sites are equal in terms of meeting business needs; and Only 3 percent said incentives could sway location decisions.

This finding was further confirmed by a KPMG study comparing business costs in major North American cities. In most cities, for manufacturing operations, the impact of negotiated incentives is less than one percent of total operating costs over a ten-year timeframe. Only in New York, NY and Columbus, OH did the impact of negotiated incentives equal or exceed one percent. The situation for the services sector is similar. (Source: KPMG Competitive Alternatives Study 2010). 41

However, this does not mean that incentives do not play a role in site selection. In fact, Northwestern Ontario communities would still be at a disadvantage in trying to attract U.S. companies since most U.S. cities (even small communities) offer some incentives. Incentives seem to be critical to the medium-size firm that needs loans or grants on the front end to defray a negative cash flow in the first few years of operation. In Ontario, the provincial government has consistently rejected requests for incentives aimed at helping Northern communities on the premise that they do not contribute to the longterm economic sustainability of the province. The belief is that they will attract companies willing to locate in a specific location to take advantage of incentives and then relocate once those incentives have been used up. Business Improvement Areas Until now, the only way a community could provide some form of incentives was to designate an area such as a downtown core as a business improvement area (BIA). This would allow the community to provide some form of assistance to all those businesses in the area that meet certain criteria. Thunder Bay has already used this form of incentive to revitalize its central business districts. It provided a redevelopment grant program whereby eligible property owners were able to receive a grant equal to 100 percent of any increase in municipal taxes that resulted from the re-assessment of improved properties. (Source: City of Thunder Bay website). Of strategic importance is the designation of the Thunder Bay International Airports Authority lands as a BIA. This required a major collaborative effort on the part of the Airport management team and its Board members to lobby the provincial and municipal governments with the assistance of the Thunder Bay Community Economic Development Commission. The designation was approved by City Council and since then, the airport has been able to attract aviation-related businesses that have the potential to create a cluster of economic activities around the airport. (Source: City of Thunder Bay Planning Report No. 2007.016). More recent efforts have enabled a similar designation for the Thunder Bay Port Authority lands so that this underutilized community asset can also play a more integral part in the future repositioning of Thunder Bay and the region as it becomes a critical link of the supply chain of natural resources required by the emerging western Canadian provinces and nations of India and China. (Source: City of Thunder Bay Planning Report No. 2009.031). 3.1.9 Infrastructure Given the vastness of the territory, climate extremes, rough terrains, higher fuel and transportation costs and a host of other factors that affect regional infrastructure (roads, buildings, bridges, port and airports, etc.), Northwestern Ontario has unique infrastructure 42

needs (DELETED: that are not always recognized by decision makers in Southern Ontario who are unfamiliar with the local area) that are acknowledged in the Growth Plan for Northern Ontario 2011 which identifies infrastructure as a key priority that will ensure that the building blocks for economic growth are supported and sustained. Modern and efficient infrastructure is, it states, is key to the future of all of Northern Ontario.

Recent announcements by the province for four-laning of Highway 11/17 between Thunder Bay and Nipigon; reconstruction of the Nipigon River Bridge; $1 million in funding from the Northern Ontario Heritage Fund Corporation to help the Thunder Bay Port Authority acquire a new crane to handle more cargo and increase the ports capacity; and other investments in infrastructure, indicate that higher orders of government are starting to address the infrastructure deficit of Northern Ontario. Given the relative small size of the community, the City of Thunder Bay has been able to position itself well amongst larger players in the province. For example the Citys recent Infrastructure Stimulus funding of $32 million is 1 percent of the total $3.7 billion allocated in Ontario. The announced funding for Ontario municipalities equates to $279 per capita while the City received $294 per capita ($15 above average). (Source: Renew Thunder Bay Presentation to City Council of Sept. 2, 2009) This has been done through the efforts of Councils and supported by an effective administrative staff. However, not all regional municipalities have the resources that Thunder Bay has and are not always able to position their infrastructure demands as effectively. A regional economic development organization would be able to use a pan-northern approach to infrastructure requirements. As well, a framework for collaborative government and local decision making would ensure continued adaptability and flexibility and a voice at the provincial and federal levels where key decisions affecting the regions future are made.

Some of the key issues related to infrastructure and related services in the Northwest region are summarized below: All regional communities have an infrastructure deficit and need money to maintain and sustain this infrastructure. Roads and infrastructure are now viewed as economic corridors as they handle people, goods, services, cargo, leisure and recreational activities and enhance the overall quality of life. They connect communities to each other and to the world. There is a need for political will at all levels to provide the necessary tools to support efficient, modern infrastructure. 43

Maintaining regional airport services is a must if the full potential of Northern Ontario is to be realized. For example, the Thunder Bay International Airport lost the trans-border service when Delta and Northwest Airlines stopped flying to Thunder Bay from the US due to escalating costs and reduced traffic. Increasing government fees and taxes are motivating passengers to drive to Duluth and Minneapolis to catch their flights. This was a great economic loss for the region and undermines the service infrastructure required to remain competitive in a global environment.

Broadband Infrastructure The Growth Plan for Northern Ontario 2011 recognizes that information and communications technology infrastructure is now core infrastructure for businesses and industries of all sizes. The research has brought to light the following key issues: Rural areas in particular are struggling through insufficient broadband transportation corridors that are so crucial to the successful emergence of the new economy in the north In terms of investments in broadband infrastructure, FedNor contributes 10 percent versus 90 percent for the province In their deployment of broadband in the northern communities, the federal and provincial governments are only putting up to 75 percent of the capital investment while TBayTel puts in the remaining 25 percent. This is an investment by TBayTel in the social infrastructure of the region. Governments have made no provisions for life cycle replacement, ongoing maintenance and technological upgrade costs. Such expenditures can only be justified from a social investment perspective. Rural and northern communities do not have a business case (return on investment), so the government needs to step in to support these social investments. Atikokan put in cellular but three years later analog technology moved to digital and the system became almost redundant. The municipality does not have the means to upgrade the system without the help of the government. In rural and northern communities, the government has a greater role to play and needs to view these communities differently. 3.1.10 Regional Diversity and Sub-Regions

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Regional Diversity Thunder Bay District Diversity of the population and workforce can be a significant competitive advantage for any community or region as it provides a broad-based level of skills and life experiences that are much sought-after by employers. The immigrant population in Thunder Bay has a high employment participation rate (85.1 percent versus 63.7 percent for the District). However, the low rate of immigration to the region, coupled with the proportionately higher levels of population in the 65+ age bracket in the Thunder Bay and Rainy River Districts, may contribute to a slower growth in the district and growing regional disparity. The visible minority population in the Thunder Bay District is only 2.3 percent of the whole population. The Chinese community is the largest visible minority representing 26.3 percent of the visible minority population (945) out of a total of 3,580 individuals. In 2006, 9.6 percent of the residents in the Thunder Bay District were foreign-born which is considerably lower than the provincial rate of 28.3 percent. There were 730 newcomers to the Thunder Bay District between 2001 and 2006. The newcomers by major place of birth for the Thunder Bay District were: Asia and the Middle East at 34.9 percent, Africa at 19.8 percent, Europe at 18.5 percent and the U.S.A. at 15.7 percent. (Source: North Superior Workforce Planning Board (NSWPB) Local Labour Market Plan 2009-2012 pg. 65) Kenora and Rainy River Districts In the Kenora Districts there are 2,840 immigrants or 4.4 percent of the overall population. Most of these immigrants have arrived before 1991, with only 320 newcomers arriving between 1990 to 2000 and 210 from 2001 to 2006. The total visible minority population is 595 or .9 percent of the whole population. The representation is widely distributed.

The Rainy River District has 1,575 immigrants or 7.4 percent of the overall population. Close to 80 percent arrived before 1991 with only 110 (or less than 1 percent) arriving between 2001 and 2006. The total visible minority numbers 75 (less than .5 percent) with the largest group (45) from Latin America. (Source: Statistics Canada Community Profiles Kenora and Rainy River Districts 2006 Census) Sub-Regions Northwestern Ontario is a vast territory with unique attributes that have shaped its culture and economic diversity. This natural evolution has been formally accepted in the form of its Districts of Thunder Bay, Kenora and Rainy River. While all share in the common experience of living in Northwestern Ontario region, they are uniquely proud of their differences. It is not uncommon 45

to hear leaders of the Kenora and Rainy River Districts stating that, due to the geographical distances from Toronto, they have more in common with the western province of Manitoba. During the regional engagement and information gathering, the research team has repeatedly heard that, when dealing with the economic development of the region one size does not fit all. This theme has also been accepted as best practices when dealing with regional economic planning according to Eric McSweeney of McSweeney and Associates Economic Development, a company that was commissioned by the Ministry of Northern Development, Mines, and Forestry (MNDMF) in anticipation of the release of the Growth Plan for Northern Ontario, 2011. The companys role was to undertake a comparative analysis of inter-jurisdictional regional economic development planning models in Canada and selected locations around the world. The Northern Growth Plan (draft - 2009) recommended creation of an economic development zone: GROW NORTH PLAN DRAFT VERSION 1. Establish regional economic zones in Northern Ontario as an inclusive, collaborative mechanism for long-term economic development, labour market, infrastructure, land-use, cultural and population planning, which will: a) Engage urban, rural and Aboriginal communities, businesses, labour, economic development organizations, research and education sectors, service delivery organizations and other non-government organizations. In its formal response to this recommendation, Common Voice Northwest stated that: COMMON VOICE NORTHWEST supports the above noted statement but recommends the following changes and additions to read: Recognize and foster regional economic zones in Northern Ontario as an inclusive, collaborative mechanism for long-term economic development, labour market, infrastructure, land-use, cultural and population planning, which will: Identify Northwestern Ontario as a unique economic zone, with a number of subzones to be defined by the Northwest itself. It must be recognized in the Growth Plan that Northwestern Ontario is an existing Economic Zone with a number of geographical sub-zones each sharing a commonality. Northwestern Ontario should be identified as one area for the purpose of the proposed pilot project and that sufficient investment incentives should be provided by the Ontario Government to facilitate the evolution of the Zones. 46

 Each sub-zone will develop its own strategies and will feed into the decisions to be made at the Zone level. The Governance Body managing the Economic Zone must be chosen by Northerners and remain accountable to them. The proposed public policy institute for Northern Ontario will be a logical source for the northern analysis of socio-economic and environmental issues and the basis for policies and programs that significantly impact northern business, residents and communities. The above guidelines are consistent with the economic, demographic and social structure identified in the situation analysis of the regional districts and would provide a solid foundation for a regional approach and model to regional economic development planning. The final Growth Plan, released by the Ontario Government on March 4, 2011 contains the following section: Regional economic planning 4.5.1 The Province will identify regional economic planning areas as an inclusive, collaborative mechanism for long-term economic development, labour market, and infrastructure planning that crosses municipal boundaries. 4.5.2 The Province will help strengthen the capacity of Northern Ontario communities to plan for economic development by supporting the development of strategic regional economic plans for each regional economic planning area. Regional economic plans will, at minimum: a) involve collaboration among municipalities, Aboriginal communities, Francophone communities and their institutions, business and industry, education and research sectors, and community organizations b) identify regional linkages and synergies with provincial economic action plans developed in accordance with Policies 2.2.4 and 2.2.5.

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3.2

Competitive Analysis

The following sections will analyse the competitive position of Northwestern Ontario and Thunder Bays role in it as the regional centre. Insight will also be offered on possible approaches to leveraging resources and maximizing results not only in economic development but also in achieving a role of prominence and relevancy within the province in light of such strategic regional assets as mineral, forest, land and water resources. 3.2.1 Thunder Bay and Regional Districts The release of the Northern Ontario Growth Plan draft (Nov. 2009) provided an updated view of the economic situation of Northern Ontario and it is worthy to note that Thunder Bays role as the regional centre was highlighted throughout the document. The role that Thunder Bay plays in the regional economy is historic and has been pointed out in previous reports and analyses. A quote from Lakehead University economist Livio Di Matteo in the April 2001 Chronicle Journal special insert Northwest 2001 - Northwestern Ontario Progress Edition best describes Thunder Bay's role in the region. It said:

It is the conventional wisdom here in Northwestern Ontario to assert that Thunder Bay is a regional hub and service centre. What this means in economic terms is that Thunder Bay represents a significant concentration of the region's economic activity and that much of that activity consists of providing services for the region...however, what may surprise some observers is how much of Northwestern Ontario's economic activity lies outside of Thunder Bay and the mutually supportive economic links that have evolved. Indeed, the relative specialization of Thunder Bay in service activities and the region in goods-producing activities provides gains to Northwestern Ontario as a whole.

What this means is that, to a large extent, both Thunder Bay and the region are dependent on each other for their future economic well-being. While each has its own role to play, all benefit by having a clear understanding of their strengths and weaknesses and how best they can work together to take advantage of opportunities while minimizing risks. For example, an integrated approach to develop Internet access for the region will benefit both the users and the providers of the technology. Ultimately, the region as a whole will become more competitive worldwide through the use of high speed access in business and by alleviating the shortage of medical specialists in the region through the use of telemedicine Thunder Bays optimum role in this environment is to continue to seek mutuallyadvantageous opportunities and ways to work together with its partners in the region. 48

Any new investor visiting Thunder Bay should also be visiting the surrounding communities in the region. However, this will not happen on its own but through a proactive approach to regional economic development and the participation of key decision makers. What are required are a higher level of understanding about these issues and a new level of co-operation among all parties. Another quote from Livio Di Matteo captures the essence of this new level of partnership. It says: Thunder Bay as a regional hub and service centre is also about regional leadership. Thunder Bay needs to view the surrounding region and its communities not simply as a market but as a partner in economic development. The economies of Thunder Bay and the surrounding region are not competitors but complements to one another. What is good for Thunder Bay is good for the region and what is good for the region is also good for Thunder Bay. 3.2.2 Northwestern Ontario Because of the structural changes in the northern economy, Northwestern Ontario as a whole has not benefited from the economic expansion that has occurred in other parts of the province. On the contrary, between 2001 and 2006, the region showed a substantial loss in jobs due mostly to the downsizing of the forest industry (peaking at 52,000 jobs in 2002 and declining to 42,000 in 2006 for a loss of 10,000 jobs). Source: Statistics Canada 2006 Census In view of this reality and the inherent difficulties in providing quick and easy solutions to complex problems, Northwestern Ontario Municipal Association (NOMA) members have worked to provide a common front when representing the interests of the region at the provincial government level. The mayors and councils of the Thunder Bay, Kenora and Rainy River Districts have also shown leadership and a proactive approach to the many problems and issues facing their municipalities. While this direct approach needs to continue, it also needs to be reinforced by a consistent message coming from organizations such as Common Voice Northwest, NOMA, NOACC and the Association of Municipalities of Ontario (AMO). These organizations can provide smaller municipalities a stronger voice relative to their size. A regional economic development planning model would provide a common thread for an integrated approach to future growth and prosperity.

3.2.3 The Rest of the Province of Ontario and Canada Any strategic regional economic development plan has to consider other provincial and federal jurisdictions when planning a targeted approach for attracting and retaining 49

investments. To the extent that provincial regulations allow only a limited range of business incentives, it is important to be aware of what others are offering. Many communities in the province and especially in Northern Ontario are now pursuing lower commercial and industrial tax rates as an incentive for attracting investments. In fact, in a March 2006 article in Northern Ontario Business, Rick Evans, Manager of Economic Development for the City of North Bay indicated that North Bays City Council had adopted a budget that would reduce commercial tax rates by one percent annually over the next 20 years. While North Bays industrial tax rates were already among the lowest in the province, its new industrial economic development plan had identified industrial and commercial tax rates as being too high both for business retention and expansion and the attraction of new investments. The province of Ontario has provided assistance in this area by adopting some of the recommendations of the Northwestern Ontario: Preparing for Change report by Dr. Robert Rosehart, specifically the acceleration of the Business Education Tax (BET) rate cuts for northern businesses that has allowed a reduction in commercial and industrial tax rates, bringing them closer to provincial averages. This was consistent with the province passing "range of fairness" legislation which stipulates that industrial and commercial tax rates should fall within a certain range in relation to the residential rates. The tax ratios for the residential class are set by the province at 1.0000. Table 10 below shows Thunder Bays 2008 tax ratios in comparison to the provincial average. Table 10 Thunder Bays Tax Ratios Compared to Provincial Average Property Class Tax Ratios Survey Average Residential 1.00 1.00 Multi-Residential 2.74 2.09 Commercial 1.95 1.73 Industrial (Residual) 2.43 2.28 Industrial (large) 2.63 2.88 Source: Corporate Report N. 2009.042 - City of Thunder Bay Tax Policy Consideration, May 25, 2009 Thunder Bay City Council has adopted a long-term tax strategy to reduce the tax burden on non-residential property owners to make Thunder Bay more competitive in attracting business and to provide support for the long-term viability of present businesses. (Report N. 2009.042)

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Federal, regional and local tax rates When attracting investments from outside the region province or country, it is important to include information on corporate taxation at the federal, provincial/state and city level. For example, Table 11 below compares Quebec, Ontario, Manitoba and Alberta to major U.S. states in both manufacturing and non-manufacturing sectors: Table 11 Comparison of Canadian city Corporate Taxation Comparison of Corporate Tax Rates - 2010 Large corporations - Effective Tax Rate (%) MANUFACTURING SECTOR Federal Province/State City Total

Quebec 18 11.9 0 29.9 Ontario 18 11 0 29 Manitoba 18 12 0 30 Alberta 18 10 0 28 Minnesota* 35 9.8 0 41.4 2008 Adj. Wisconsin* 35 7.9 0 40.1 2008 Adj. Michigan * 35 6 0 38.9 2008 Adj. New York* 35 7.1 0 38.9 2008 Adj. Source: Deloitte and Touche LLP - Canada (English) and OC Register.com *Note: the combined US federal and state rate is adjusted for federal deduction of state taxes paid In Canada since January 2002, the corporate tax rate was 26.12 percent (including a surtax of 4 percent). This rate was reduced by 2 percent annually to reach 22.12 percent by 2004 where it remained until 2008 when it was changed to 19.50 percent, thereby providing a further competitive advantage over the U.S. The rate changed again in 2010 to 18% and, in 2011, to 16.5%. In January 2012, it will drop to 15%. This fact is not well known or well publicized in the United States, where the perception of Canada as a high-tax country still persists. Any marketing materials, especially if targeting the U.S., should include such positive investment and tax rates. 3.2.4 Regional Competitive Advantage In the private sector, a company has a competitive advantage when its profitability is higher than the average of the industry and it has a sustained competitive advantage when it is 51

able to maintain superior profitability over a number of years. Two basic conditions determine a companys profitability: the amount of value customers place on the companys goods and/or services and the companys cost of production. (Jones and Hill, 2009 pg. 78). For northern municipalities, profitability translates into operating efficiencies and effectiveness of service delivery, which in turn translates into the concept of value for tax dollars paid. The concept of value creation lies at the heart of competitive advantage which in itself does not require an organization to have the lowest cost structure or to create the most valuable product/service as competitive advantage can also be achieved through successful differentiation. (Jones and Hill, 2009 pg. 79) Ultimately, for a company or organization to outperform its competition, it must have unique strengths or distinctive competences in at least one of the building blocks of competitive advantage: namely, efficiency, quality, innovation and customer responsiveness. Figure 10 provides a schematic model of the interaction of strategies that shape and are shaped by distinctive competencies built on resources and capabilities of the organization that ultimately provide a competitive advantage. Figure 8 Distinctive Competencies and Competitive Advantage

Source: Jones and Hill 2009 The section below provides a comprehensive review of Northwestern Ontarios distinctive competencies and the repositioning that has and continues to take place to allow it to refocus its resources and capabilities and ultimately create a sustainable competitive advantage for future growth and prosperity. Historical Perspective Northwestern Ontario has benefited for many decades from the availability of wood fibre. The slow growth of the northern boreal forest also helped produce a higher quality lignite which in turn resulted in a higher quality pulp and paper that was consistently in high demand by the newsprint market. 52

The high cost of energy, longer distances from the fibre and cost of transportation to the mills, higher labour costs and low investments in technology compared to new and smaller paper mills, combined with a worldwide recession, created the perfect storm that practically decimated the forest industry in North America, including Northwestern Ontario. With over 7,000 jobs directly or indirectly affected in the region, the Northwest has lost a natural competitive advantage. (Source: North Superior Workforce Planning Board Local Labour market Plan 2009-2012) Repositioning for the Future As a result of the economic devastation that occurred in Northwestern Ontario during the demise of the forestry industry, the Northwestern Ontario Municipal Association (NOMA), in co-operation with the Northwestern Ontario Associated Chambers of Commerce (NOACC), labour, academics, urban-Aboriginal, multi-cultural and youth representatives, struck a multistakeholder committee to form the Common Voice Northwest (CVNW) initiative. Originally this committee was formed under the name, The Regional Recovery Program Committee. Its original mandate was to identify ways in which the region could begin to recover from the downturn in the economy in both the short and long term. After eight months of research, discussion and debate a report entitled, Forging the Future: An Economic Vision for Northwestern Ontario was created and released by the committee. The report recommended the creation of a Common Voice for the Northwest as a key tool toward having the needs of the region understood by those who have the authority to affect economic change. Membership within this Common Voice initiative would consist of a broad cross section of the regions leaders. They would come together, not only to identify the public policy changes needed to enhance the viability and future of the Northwest, but also to identify those steps that the region can and should take to build a future for itself. (Source: Common Voice Northwest Overview March 2011) The Common Voice Economic Vision for Northwestern Ontario document was released in April 2007 with the goal of developing a strategy for the allocation of resources for sector development in the region. Having a strategy in place was viewed as being critical because of the fundamental restructuring of the local economy and the profound change and outlook for the forestry sector (both locally and nationally) which has since been accompanied by the most significant global economic downturn in 50 years. The global recession has created enormous shifts in future economic opportunities for Northwestern Ontario, which is well poised to provide the resource requirements of the emerging nations of India, Russia, Brazil and China and, in the process, create wealth for its people and the rest of the province. On February 12, 2010 in its response to the Growth Plan for Northern Ontario (draft 2009), CVNW recommended a substantial change to the provincial vision for the Northwest.

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COMMON VOICE NORTHWEST recommends that the following be added to the VISION STATEMENT: Northern Ontario is a vast storehouse of forest and mineral wealth and, with the economies of China, India and Brazil eventually driving resource prices up, once again Northern Ontario will be the economic engine of Ontario. At the same time Northwestern Ontarios traditional economic pillars of transportation, natural resources and government are in the process of evolving into a new economic base that can most succinctly be described as value-added, knowledge creation, and services. The Ontario government must support and facilitate Northwestern Ontarios transition to a value-added knowledge culture that generates high-end products and services based on the traditional resource-sector and transportation activities, as well as in the new areas of health research, education and the bio-economy. This knowledge economy spans across all economic sectors, as the application of innovation and technology is as pertinent to traditional sectors such as retail/service, forestry, manufacturing and mining as it is to new emerging economic streams such as bio-technology, communications and waste management.(Building a Superior Workforce; 2009-2012 Labour Market Action Plan; North Superior Workforce Planning Board) It is estimated that 300 communities in Canada have suffered major closures of forestryrelated employers. Many have not enjoyed the successes that Northwestern Ontario has achieved in their efforts to change their economies. Specifically, Northwestern Ontario embarked on a journey to reinvent itself a decade ago by: Building knowledge-based industries (the Thunder Bay Regional Health Sciences Centre, the Thunder Bay Regional Research Institute, the Northern Ontario School of Medicine, etc.), the results of which are readily evident in job creation announcements and new employers moving to the city of Thunder Bay and region. A vital element of this investment attraction is the availability of human capital provided by Confederation College and Lakehead University; which the vast majority of the 300 hard hit Canadian resource communities do not have access to. In light of this, Thunder Bay and the region have a significant lead in the new economic order and a sustainable competitive advantage. (Source: North Superior Workforce Planning Board Local Labour market Plan 2009-2012 and CEDC Strategic Plan 2010) In some ways, Northwestern Ontario is returning to the past in terms of resource development. However, as Gordon Pitts of the Globe and Mail conveyed on April 29, 2010 to a regional audience in Thunder Bay: for the next 40 years resources/commodities are a big part of your future as they are of Western Canada. Mining in particular holds great promise for employment growth in this region because of the insatiable appetite of emerging economies and the defense aspirations of the United States. Commodities and resources have/are being found in abundance in Northwestern Ontario and NOT in Southern Ontario. The Northwest regions historical links to the west, its increasing exposure to the dynamic elements of global growth because of the needs of Asia, vis--vis 54

the commodity angle, is forecast to outweigh the drag of its historical economic linkages to Southern Ontario and the United States. (Source: CEDC Strategic Plan 2010) This strategic repositioning of the Northwest economy continues throughout the region but, as indicated in other areas of this report, there are still too many systemic obstacles such as high energy prices, an infrastructure deficit, lack of local decision making, lack of sufficient capacity in Aboriginal communities and onerous and bureaucratic land use planning to permit the region to fully catch up and share in the prosperity of the rest of the province.

3.2.5 Economic, Environmental and Social Sustainability As stated in the Growth Plan for Northern Ontario 2011, the regions environment anchors much of its economy. To move toward a sustainable and viable economy, the region needs to adopt an integrated planning approach that incorporates the climate, social, environment and economic aspects of society and engages the various communities and municipalities in decision making aimed at promoting the long-term stewardship of all its resources. Ongoing research will keep the region up to date with respect to current thinking, state of the art methods and best practices. The following are strategies that have been identified in the research phase to provide Northwestern Ontario with a sustainable competitive advantage for the foreseeable future. Some strategies may provide benefits to more than one area. Climate Climate change is having a substantial impact on water levels across the world but especially in the southern U.S. states. Current demand for this scarce resource, projected to be more valuable than gold or oil in the future, will ensure that Northwestern Ontario is well poised to reap substantial benefits from the stewardship of its still pristine lakes and rivers, not only for consumption but also for quality of life and recreational use. Climate change is also having a favorable impact on the agricultural potential of the region. With current and projected increases in food prices as well as food security, local food supply is now becoming more of a strategic resource and should be viewed as such. New initiatives and research are now being undertaken at Lakehead University to ensure that remote Aboriginal communities can fully benefit from a better cultivation and distribution of food. One of the more promising and recent initiatives was the joint announcement on June 6, 2011 by Nishnawbe Aski Nation, Quality Market of Thunder Bay and the True North Community Co-operative that they had established a partnership to bring more fresh food options to 14 First Nations communities. Currently most of the food for First Nations communities is shipped from Winnipeg. Quality Market had to work for three years to meet 55

government regulations on this initiative. There are considerable costs and barriers for new entrants to overcome in order to compete in this important supply chain for Northwestern Ontario and this greatly limits social and economic capacity of remote and other First Nation communities. These initiatives are foundational for the long-term social, environmental and economic stability of the region and should be supported and expedited.

Environment A regional approach to sustainable economic development will ensure that best environmental practices are applied consistently across the region for the benefit of present and future generations.

Social The social aspect of a regional economic development plan is evident in the situation analysis that clearly indicates a declining and aging population base requiring greater social and health care, not matched by a corresponding growth in the regional Gross Domestic Product. The growing Aboriginal population offers both challenges and opportunities in its need for social equality and increased economic capacity to enable it to fully participate in the regional economy. The low level of immigrants to the region also limits recruitment of skills required by the new economy and succession planning as the foundation for an entrepreneurial culture that is so important for long-term regional economic sustainability. The specific areas identified below represent some of the suggestions provided by key community stakeholders: Invest in regional infrastructure, arts, recreation and the social service delivery system on an ongoing basis. Further utilize TBayTels services towards becoming a Smart region and providing access to Wi-Fi and internet to all members of the regional community. o Pursue a wider range of communication initiatives such as increased band width to cover remote areas. Promote social inclusion through the development of policies and initiatives that address barriers for integration into community life experienced by new residents, the Aboriginal population, and the aging population as well as people with disabilities. Having policies which focus on inclusion of these diverse populations helps to attract and retain professionals and others which would contribute to the economy as well.

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Economic The best approach for long-term economic sustainability is to continue to diversify the economy through support for research and innovation and a more focused move towards knowledge-based industries. Input into the study has identified some barriers that are still limiting the regional evolution towards diversification. For example, RegenMed, a local bone tissue company, was strongly supported and funded by all orders of government, but found itself unable to get provincial certification by the Ministry of Health for over six years. This almost forced the company out of business. Common Voice Northwest has already identified specific recommendations to enhance and grow the current regional research and innovation cluster as follows: Build on existing capacity in Northern Ontario and enable these existing organizations to do more and to deliver programs on behalf of the Ministry of Research and Innovation and others. Provide resources so that these organizations can collaborate in delivery to this vast region, by building on their strengths. Develop strategies that will break down the barriers and enhance the availability of public and private funds to support innovations in healthcare. This will include public and private R&D investment; venture capital investments, angel investments. REGIONAL CONSULTATION AND ENGAGEMENT

PHASE III GATHERING OF INPUT AND SWOT ANALYSIS Goal: To examine strategic economic development planning opportunities in light of strengths and weaknesses and external factors.

4.1

Introduction

According to Jones and Hill (2009), an important part of the strategy-making process is ensuring that an organization maintains the support of the key stakeholders upon which it depends. An organizations stakeholders are individuals or groups with interest, claim or stake in the organization, in what it does and how well it performs. For the purpose of this project, both internal and external stakeholders were interviewed (See Appendix A for questions, B for the list of participants, and C for executive summary of pre57

summit regional consultation) to gather a comprehensive overview of how regional economic development planning is being perceived. The complete reports on the feedback received can be accessed on line at www.nwoeconomiczone.ca A comprehensive review of the Northwestern Ontario municipal official plans, strategic plans and economic plans was also undertaken to identify shared economic priorities and trends in economic development. Most of the 33 municipalities were reviewed and findings are summarized in Appendix H. This information, along with the research in this report, support the preliminary feedback received during the initial regional consultation and the Think North II Summit proceedings. 4.2 Regional Strengths and Opportunities

The following findings include input received in the interviews with key stakeholders plus key points discussed during the Think North II Summit in Thunder Bay on June 13-14, 2011. Strengths Throughout the discussions, the research team heard of the great quality of life, the recreation opportunities and that the region is home to relatively safe family-oriented communities with a beautiful, natural environment. The availability of reasonably-priced housing and the regions improving health care were also high on the list of strengths. Being centrally located in the middle of the continent and having ready access to transportation links such as an international airport and a seaway access port were also considered strengths that should be better marketed. Other specific strengths identified are as follows: Potential for major local tourist attractions (waterfront development in Thunder Bay, Great Lakes Heritage Coast, provincial parks, regional tourism strategies, etc.) Improving telecommunication infrastructure Abundant regional mineral deposits Thunder Bays status as a regional centre

Other key strengths identified during the summit in Thunder Bay were: Educational institutions Natural resources Mining, forestry, agriculture expertise

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Opportunities Specific opportunities identified during the summit are as follows: Engage private sector Expand education Promote diversity Increase collaboration Succession planning Tourism Agriculture Take advantage of emerging technology

During the summit there was an opportunity to learn from best practices and international experts, as well as from the input and feedback from the participants. The key points raised are listed below: Lessons and best practices for developing regional economic development planning areas: Engage and collaborate with industry, Aboriginal communities and other levels of government Focus on youth retention, education, research and innovation, local priorities, decision making, inclusiveness, brand identity Strive for diversified, action-centred leadership Examples of incorporating these best practices: School of Architecture (proposed) Northern Ontario School of Medicine Wasaya Airways Northeast Superior Forest Community

Benefits of incorporating these best practices: Trust and respect Better alignment of northern policies and needs Streamlined bureaucracy Fresh focus Challenges of incorporating these best practices: Too much red tape Trust issues with First Nations Lack of small community power Capacity 59

4.3

Regional Weaknesses and Threats

Most of the weaknesses and threats identified deal with structural deficiencies and challenges across the region and have been fully discussed in the situational analysis of the report. Weaknesses Youth out-migration Trust issues Geography Lack of infrastructure Lack of representation from minority groups

Threats Aging population Lack of entrepreneurial culture Climate change Outstanding land claims and other Aboriginal issues Poor transportation infrastructure Policy restrictions 4.3.1 Regional Issues The key regional issues were identified as part of the implementation phase and are highlighted in the section below. Implementation Success Regional economic development planning areas are a new initiative for Northern Ontario that will require commitment and buy-in from all stakeholders. What do you see as key issues to be addressed for success in implementation? Commitment and buy-in from all stakeholders so they feel empowered and able to drive change Relationship building through strong leadership, trust and communication Commitment to remove barriers and red tape that impede implementation Establish a common vision that attracts and engages the private sector, Aboriginal communities and youth Representative decision making that promotes action and results for northern needs Define the geographic region(s) so that implementation is inclusive and effective

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4.3.2 Strategy in the Global Environment The strategic approach to regional economic development planning utilizes best practices and guiding principles that take into account the unique aspects of Northwestern Ontario operating in a global environment. In fact, many of the strategic assets such as mineral and natural resources, human capital and transportation corridors and strengths identified such as emerging clusters of research and innovation in life sciences and health, among others do not stand in isolation but are affected by global trends and market changes. Any organizational and governing structure of a regional economic development model needs to take these global forces into account and ensure that adaptability and flexibility are the norm and not the exception.

4.4

Intended and Emergent Strategies

The basic strategic planning model suggests that a companys strategies are the result of a plan, that the strategic planning process itself is rational and highly structured, and that the process is orchestrated by top management. Critics of formal planning systems argue that we live in a world in which uncertainty, complexity and ambiguity dominate and in which small chance events can have a large and unpredictable impact on outcomes. (Jones and Hill, 2009 pg. 11). Given that adaptability and flexibility are key strategic issues as identified by McSweeneys report on best practices, the schematic model in Figure 9 provides a framework by which future plans can incorporate the responsiveness and autonomous range of options for senior and middle management to influence the plan if required by changing events.

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Figure 9 Emergent and Deliberate Strategies

Source: Jones and Hill, 2009 In an unpredictable world, there is a premium on being able to respond quickly to changing circumstances, altering the strategies of the organization accordingly. (Jones and Hill, 2009, pg. 11). When the purpose of an organization changes in response to the external environment, its function also needs to provide the necessary flexibility. The organizational design section below provides the context by which the regions own structure can be viewed as being flexible, nimble, and efficient enough to meet the challenges of the future. 4.5 Organizational Design and Structure

Any organizational design and structure needs to be based on guiding principles that are conceptual in nature but applicable in practice. The following are based on the Northern Advisory Councils preliminary discussions and may change. However, the common themes that bind them together will allow for a preliminary framework to be developed. Trust: reliance in intention and ability we operate in an environment of mutual reliance and interdependence; Courage: take risks be innovative with confidence and resolution take strong stands and accept possible consequences. Inclusive: Consultative, engaged in real partnerships Aboriginals and Mtis, Youth, females, new Canadians Rural, urban, isolated, Aboriginal communities Private sector key industry and entrepreneurs 62

Local decision making: Action-oriented, project driven Master of own destiny, increased local autonomy, self-determined, voluntary Removal of systemic (government) barriers, provincial and federal governments involved, Northern Ontario policies With strong leadership, merit-based participation Speaks with one voice: Brand identity Consistent vision, focus Success defined; includes wealth creation and community/social development Focused on Northern Ontario priorities in global economy as per Northern Ontario Growth Plan: Supported by infrastructure, e.g., transportation, energy Focus on value-added and not just natural resources extraction Focus on innovation, creativity, research One approach with multi-layers or modes, single framework with variable components: Not competing, individual, isolated initiatives but multi-industry, multi-community, etc. projects Regions defined according to projects, by business supply chains and markets, by concentration of natural resources, by transportation corridors, by economic development priorities, etc. Involves finding connections to define regions may not correspond to established geographic or political boundaries

4.5.1 Mandate and Functional Authority Given the guiding principles above, and the gap analysis in this report that clearly shows the need for a renewed effort in a regional approach to economic development, it is proposed that the mandate of the Northwestern Regional Economic Development Area (REDA) include the following: 1. Serve as a planning and integrating structure for regional economic development. Elements of this will include setting priorities and strategic directions, developing a 3-5 year regional economic development plan for annual review and updating and integrating local economic development plans into the regional plan; 63

2. Establish a bottom up approach structure where those closest to the challenges, opportunities and nuances at the grassroots level drive the process and decisions while working through subsequent layers going up the pipe which organize and categorize the information into effective modules of desired outcomes; 3. Work to bring northerners and their many groups together to collaborate and streamline our feedback into one clear and concise voice; 4. Work closely with the Northern Policy Institute (NPI) to advise on the direction of policy for Northern Ontario as it pertains to economic development, by playing a lead role in the establishment and vetting of information for the NPI; 5. Play a lead role in assisting the Northern Advisory Committee (NAC) in developing recommendations for implementation and to prepare the NAC to effectively accomplish the desired outcomes at the government level; 6. Take the lead role on broad-based regional economic development initiatives such as transportation, energy generation, transmission and distribution, research and innovation, telecommunications and major mining clusters; 7. Play a lead role in attracting infrastructure investment to the region; 8. Identify and address gaps in regional economic development; 9. Be actively engaged with the province on the implementation of the Northern Growth Plan on a ministry by ministry basis through the two coordinating ministries (Northern Development and Mines and Infrastructure); 10. Develop and implement regional branding initiatives and marketing campaigns; 11. Work in consultation with the regional Workforce Planning Boards to integrate and coordinate the labour market needs of the regional economy; and 12. Communicate with all stakeholders on regional economic development matters and receive ongoing input from all stakeholders on these matters. The mandate of the REDAs would be supported by the work of the Policy Institute, especially in the areas of policy and research. However, it must be recognized that the role of the NPI is much broader than just economic development and should encompass all public policy affecting life in the North. The advocacy role would be fulfilled principally by the existing representative organizations currently operating in Northwestern Ontario.

4.6

Best Practices

The current organizational environment within which municipal governments operate is defined by heightened fiscal caution and increased scrutiny of public organizations. Local governments are being put under increased pressure to ensure its operations are becoming more responsive to the needs of its constituency. Developing a strategic economic plan that 64

outlines the regional vision and strategic priorities is an important way to communicate to stakeholders in this environment. (Plant, 2008) Communicating with stakeholders Feedback from interviews with key community stakeholders clearly indicate the desire to be included in the strategic economic planning process at the early stage and receive strategic level information on initiatives that the region is undertaking that would affect directly or indirectly these organizations. Translating strategy into operational delivery In addition to these communication objectives with stakeholders, it is also important that the process be tactical in nature and aligned with the goals of the municipal operating departments delivering services to the public. Further aligning the strategic plan and the budget process will ensure that the resources are allocated in achievement of the strategic goals set for the region. (Plant, 2008) Adaptability Municipalities must now consider how to adapt to the changing organizational environment of a regional approach to economic development and how to implement a planning system that is integrated into the municipal senior management decision-making process. Best practices indicate a flexible approach to change business level strategies at the middle and senior management levels. Few (if any) opportunities are available at those levels to change the strategic objectives or direction of municipal strategic plans once they are approved by Council. Holistic Strategic Economic Planning Model A holistic system is based on the assumption that all of the system elements are interrelated and interdependent. The model consists of four key elements: 1. Developing a strategic regional economic development vision involving input from key stakeholders; 2. Aligning and prioritizing regional strategic goals and initiatives with the vision; 3. Aligning regional and municipal business plans with the strategic goals; and 4. Measuring and reporting the results. In addition to the above elements, key success factors must also be identified in order to drive the desired success. Strategy that is not measurable will not provide an indicator of success. Section 4.7 will expand on the performance evaluation side of the model.

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Not all municipalities have the capacity to adopt a comprehensive holistic approach. In fact, according to Plant (2008), presently there are few municipalities in North America that have gone beyond the basic Strategic Planning model. Those that have successfully addressed the gaps traditionally found in the implementation of a strategic planning framework include the cities of Westminster, Colorado; Coral Springs, Florida; Austin, Texas; and Boise, Idaho in the United States. In Canada they include the cities of Winnipeg, Calgary and Ottawa. In Northwestern Ontario only 19 out of 33 municipalities studied have even completed a strategic plan (see Appendix H), and Aboriginal communities have even less capacity, indicating a strong need for additional resources in this area. A REDA organization could play a meaningful role of planning, coordinating, and integrating capacity resources for enhancing the regional capabilities of taking advantage of present and future economic development opportunities.

4.6.1 Key Findings Based on the previous four sections, a foundation document for a strategic regional economic development planning process and performance measurement action plan can be developed. The plan will outline recommendations that will allow the Joint Task Force and Northern Advisory Council to take results-oriented action in line with the strategic issues identified. A summary of findings on strategic issues is provided below: 1 Clearly defined vision The region does not have a clearly defined vision. Positioning The region has initiated the process of repositioning itself through economic diversification, and a greater collaboration with key stakeholders. Given the ongoing changes in the external environment, the region needs to remain flexible and adaptable in its positioning efforts. Competitive advantage Northwestern Ontario has many natural competitive advantages. Some of them are underutilized such as Thunder Bays port and others going through major changes such as forestry. New ones are emerging (mining, health care and education, research and innovation, telecommunications). Economic diversification While some improvement in economic diversification has occurred in a larger centre like Thunder Bay, the smaller communities and the economy of the region are still suffering the effect of the recent recession. In fact, the labour force statistics show a loss of 7,000 jobs from June 2010 to June 2011 and an increase of the unemployment to a rate of 7.9 percent. 66

Environmental and social sustainability Municipalities in the region have been at the forefront of environmental responsibility and Thunder Bay has done particularly well in this area. Through its Earth Wise program it has been receiving many awards and recognition. Social sustainability is being challenged by the lack of economic and social capacity in the Aboriginal communities preventing it from fully participating in future prosperity.

Strategic Economic Planning Process Major improvements were experienced in this area of regional planning in the last couple of years with Common Voice Northwest addressing issues common to the region in a comprehensive manner. Opportunities are now being provided through the Northern Growth Plan for Northern Ontario and the regional economic development planning process to influence the strategic direction of the region,. The announcement by the Province of Ontario in its 2006 budget that it would shut down Atikokans coal generating plant by 2014 created investment uncertainty in the region. However, with the plant in Atikokan now being fuelled by bio-mass and the one in Thunder Bay being converted to natural gas, this may change market opportunities for potential investors. Tax incentives for the generation of green power have also stimulated renewed interest in Northwestern Ontario for wind, biomass and solar-generated power but this stimulus should not be viewed as sufficient to meet the social imperative in the Northwest Region for economic development that is broad based and enduring. 7 Governance The guiding principles provide a framework for governance models that can best be adapted to the specific needs of Northwestern Ontario. Benchmarking and best practices The region is presently using many elements of benchmarking (i.e., economic indicators and others) but can benefit from additional improvements in areas of best practices. Local Decision Making The region does not have sufficient local autonomy in decision-making to influence its own future. There is room for improvement in balancing the needs of the region with those of the province, providing a win-win solution. Sustainable infrastructure While major investments are taking place, the region still falls below provincial standards for roads and other infrastructure, that need to be addressed. (City of Thunder Bay, 2010 Budget)

10

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4.6.2 Key Planning Principles The strategic economic development plan needs to be based on the following key principles: Well-defined, practical action plan, with realistic and measurable objectives; Take into account both the dynamics and needs of the various communities and the region as a whole; Give high priority to the economic and community development aspirations of the region while developing a theme to bind them together; Position Thunder Bay as the regional service centre; and Complement other strategic community development work already going on in the region in order to leverage resources and maximize the benefits. Vision and Mission Statement

4.7

The vision statement can crystallize the resources of the region and its citizens towards a common goal. Such goals have to be clear and simple enough to be remembered and express the desires and aspirations of the regional communities. An example of a focused vision is provided below. Northwestern Ontario Proposed Vision Statement is: Become one of the most prosperous regions in Canada The Mission Statement is: Northwestern Ontario offers a balance of services and amenities that provide a superior quality of life and support our economy in a responsible and sustainable manner The region would achieve this Vision through: 4.8 An integrated political and economic vision The development and enhancement of opportunities for investment, employment and a rewarding lifestyle Further diversification of the economic base Policies and Programs

The region would develop policies and programs that: Reflect the aims of the vision in planning, policy-making and program implementation; 68

Build a sound, well planned and long lasting regional economic development infrastructure; Maintain community involvement in the process of developing regional economic development infrastructure and delivering regional services; Market the region and actively promote the spirit and pride of its communities; and Foster an excellent quality of life by balancing economic development and diversification with social amenities and environmental responsibility.

5 5.1

ACTION PLAN Marketing the Regional Plan

The primary objectives of the marketing plan are: To build awareness of Northwestern Ontarios regional approach to economic development planning and as an attractive location for business and a great place to live. The focus will be on priority sectors and industries that best position the region for new investment and business development opportunities in the global marketplace; To build confidence in the communities capacity to successfully explore and cultivate new and innovative economic and investment opportunities in manufacturing and service enterprises, particularly small- to medium-sized businesses that are crucial to the local areas economic prosperity; To foster a welcoming and progressive environment that encourages growth and contributes to a high quality of life for the citizens of Northwestern Ontario.

5.2

Communication Strategy

The region will benefit from a continued and enhanced communication with stakeholders, taxpayers, government agencies and other orders of government. A communications strategy has to keep in mind what the intended outcome is. Is it just to inform, persuade, or motivate people to action? Any one of these objectives would require a slight deviation in the strategy. In light of the recommendations presented by the research team, a targeted approach to achieve all three objectives is recommended. Informing the local community The first objective, to inform, can be geared towards the general population to ensure that the residents and taxpayers are well informed of changes that would affect them. The present communication vehicles (newsletter and web site) are sufficient at this stage. An enhanced version of the inform objective would use more current means such as a Facebook 69

page and more targeted e-mails that allow for easy transmittal of information to large groups quickly. Through these means, the target group could be broadened to include businesses and other stakeholders. Persuasion dealing with perceptions Another key objective of an enhanced communication strategy is to dispel perceptions that, if allowed to linger, will produce a level of discontent that feeds on itself. For example, while many issues and barriers still exist, many worthwhile initiatives have been launched by the provincial and federal governments and many success stories have been identified during the regional engagement and information gathering phase. The current level of programs and services being received need to be clarified as presently there seems to be a disconnect between peoples perception and reality. This can be accomplished by hosting an annual or bi-annual review through town hall meetings where municipal leaders and citizens can participate and be fully engaged. Early wins would also go a long way in dealing with negative perception and lack of trust towards higher orders of government. Staying in the loop - communication is a two-way street A communication strategy does not only provide information to others but includes being informed as well. The new regional economic planning model would need to ensure that its detailed contact information is readily available. Ensuring that all information related to strategic community and economic development opportunities is received in a timely manner by all participants would be a key responsibility of this organization. For example, key economic and demographic trends should be identified in line with strategic objectives and raised as strategic issues at the decision making level. This high-level intelligence gathering should become part of the quarterly reporting to stakeholders, municipal councils and governing body. 5.3 Leveraging Resources

Attracting investment As discussed in the body of the report, while the larger centres such as Thunder Bay have the necessary resources to develop a full-fledged investment program, a good understanding of what is already available in the region in regards to economic development will ensure that opportunities are not missed. For example, the Thunder Bay Oil Sands Consortium has been able to form an association of metal fabrication companies in the area which is now getting contracts from Western Canada, thus keeping their skilled trades working at home. Input from potential community partners in the region has indicated that the focus of the consortium needs to be broadened and include regional partners. 70

A more recent success story was that of Global Sticks, with whom the Thunder Bay CEDC spent a considerable amount of time and resources to attract to Thunder Bay. Eventually, the company chose to locate in the Municipality of Oliver Paipoonge. This is a value-added wood product company with the potential to create around 200 jobs for the outlining communities (including Thunder Bay) and make an economic contribution to the whole district. Regional collaboration Past wins like the successful collaboration of regional stakeholders speaking with one voice for a new Regional Hospital, Northern Ontario School of Medicine, Aviation Centre of Excellence, and many more similar projects, indicate that the region is willing, capable and ready to continue this successful approach towards a Regional Economic Development Area (REDA). Infrastructure renewal Organizations like Common Voice Northwest, have taken a leadership role in sector gap analysis and infrastructure deficit. This information could be easily made available to a new REDA organization that would also be tasked to integrate the current regional economic development programs for a more cohesive and highly coordinated approach. Flexibility and adaptability Best practices in regional economic development planning require a balance of accountability and control which determines the organizational structure. The management and organization structure that has been identified in this report encourages more flexibility and focus at the upper administrative levels. To achieve this balance requires the adoption of the holistic strategic economic planning model by a regional council. This model allows for more participation and contribution of regional municipalities including their senior level managers to the strategic planning process. The model also requires a more frequent review and input by the public and stakeholders. Such feedback would allow for a more adaptable and flexible process that would also realign the organization strategic objectives with those of the regional communities.

5.4

Performance Indicators and Timelines

The intent of this section is to clearly identify performance indicators that can be reviewed, evaluated and measured. This process should be flexible enough to allow for change with time and circumstances, and include both short-term and long-term approaches. In addition to the performance indicators identified in Section 4.7, the following are further indicators of success.

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The performance indicators will flow from the vision, an economic development framework and sound policy statements (i.e., help strengthen, modernize and expand the mining industry in a manner consistent with maintaining a high quality of life, encourage area youth to develop an interest in and skills for entrepreneurial careers). Other short-term objectives may be to foster and facilitate the expansion of exports to foreign countries while attracting non-competing investment into the area. While such objectives will require other intermediate steps (i.e., identify future commercial and industrial land site supply, encourage new communications infrastructure investments, expand opportunities for new residents through the attraction of physicians program network) the short-term effect of implementing such strategies may be measured as such over a two-year time frame. Examples include: Achieve at least a 2 percent growth in regional GDP and individual communities taxable assessment per year (total including Residential, Industrial or Commercial) Attract x # of investment projects into each district per year Assist x # of local companies in expanding their business into related areas of expertise per year Help local companies establishing a presence in the U.S. and Western Canada markets Work with x # of area companies per year to help them re-position their companies for long-term tourism and recreation opportunities

Outcomes: Detailed below are the broader, long-term effects linked to the program goals and vision: 5.5 Helping Northwestern Ontario rank as one of the most livable regions in Canada Helping Aboriginal communities increase their capacity for socio-economic development Making companies more competitive Identifying new business opportunities Establishing key business and industry contacts Growing the local and regional economy Retaining and expanding business Retaining youth How to Measure Success

Key Success Factors: how we are going to measure success? The following indicators are just some examples of successful outcomes. Table 12 provides a more complete range of possible indicators.

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Growth in regional GDP and tax assessment in commercial, industrial, and residential tax base through planned development and economic expansion. Assessment levels by class and in total for the regional communities should be prepared. Future changes can be compared to these base years to determine the level of success in achieving growth and diversification of the tax base. Increase in the number of people who visit the region (i.e., tourists to the area) and extend their stay, thereby contributing more tourist dollars to local businesses and the local economy. These numbers can be derived from tourism statistics and from surveys of local businesses. Population growth to measure the net inflow of people into the region. (Population growth can be measured yearly through the Income Tax Filer information provided by Revenue Canada.) Planned population growth is an indication of sound planning and economic expansion. Even though there is some debate about the value of this information, much good information can still be determined by analyzing the mix (i.e. relative age of the population, to determine future service needs and availability of workforce, etc.). Increase in disposable income is ultimately the measure of wealth in any community or region. In fact it is not sufficient to measure the number of jobs being created if we are replacing higher paying jobs with lower paying ones. This information is available from Human Resources Development Canada and from Census numbers. Maintain and enhance a high quality of life. Quality of life is a combination of many indicators, including those identified above. It also comprises education, health, recreational facilities and programs, environmental consideration (quality air, water) and proper infrastructure including roads. All these factors make a region and its communities a better place to live, work, and play and enhance its marketable potential to attract new investments. 5.6 Maintaining Momentum

Maintaining momentum is an important component of an effective strategic planning and community economic development strategy. While a lot of effort is usually dedicated in attracting new investments in the community, 80 percent of business growth comes from the expansion of present businesses. (CEDC, 2010 Strategic Plan). Sufficient resources and attention should be dedicated to this sector to ensure momentum building, while new opportunities are being explored especially in the areas where the region has a competitive advantage. Any news regarding positive political, economic, environmental, social, and technological developments should be fully exploited and the awareness of opportunities in the area will increase accordingly. Consistent implementation of the strategic regional economic development plan marketing and communication strategy will ensure that Northwestern Ontario can position itself for future growth and prosperity. 73

FRAMEWORK AND IMPLEMENTATION PLAN 6.1 Background and Introduction 6.1.1 Goals and Objectives

The objective of the process to develop a Northwestern Ontario regional economic development framework and implementation plan as a pilot project has been to identify shared economic development priorities, issues, barriers, successes and opportunities in all sectors across Northwestern Ontario in support of a vibrant and resilient northern economy. The interconnectivity and distinct contributions of urban, rural and Aboriginal communities have at all times been taken into account. This information will serve as the basis for the development of a regional approach to economic development and a planning model.

It is recognized that the process to create a regional economic development framework is a fluid one and that this framework and implementation plan is a living document. As such, collaboration among municipalities, Aboriginal and Francophone communities, business and industry, the education and research sectors and community organizations will be ongoing. 6.1.2 Proposal To carry out the recommendations, the Northwestern Ontario JTF proposes the creation of a regional economic development organization that will coordinate the development of a regional economic development strategy and implement regional economic development projects and programs. The basic premise is that this type of organization can accomplish more than individual communities by: Addressing barriers to and opportunities with respect to regional economic development; Aligning regional economic development strategies with existing and emerging provincial economic development priorities and achieving linkages and synergies with provincial economic development plans; Diversifying the economic base; Increasing the involvement of Aboriginal peoples in the northern economy; Attracting investment and business growth to the region; Complementing economic development priorities for the region as a whole by tailoring directions to local circumstances and opportunities;

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 Supporting regional communities with limited resources in their economic development efforts; and Increasing the number of investment leads directed to the region as a whole. Key to this regional approach will be the principle of collaboration and a coordinated and collaborative approach to decision making. 6.1.3 Key Findings The key findings show a common view that there are systemic barriers that affect development at the regional and local levels. The preceding sections of this document provide many examples of these systemic barriers to development and the consensus seems to be that, unless changes are made, they will continue to be a major impediment to regional economic development. The other major finding is that, while sharing some similar issues including high transportation and energy costs the need for more clarity on Aboriginal consultation protocols, the need for a more visible FedNor presence at the table and a more regional influence in land use planning, there are substantial differences between the sub-regions of Northwestern Ontario. These findings highlight the need for a multi-layered, region-wide economic development zone. Given all of the issues and barriers to development that have been identified, the research has also found evidence of many successes and future opportunities. These have been broken down by sectors to facilitate the analysis and follow-up. The intent here is to learn from what is already working in Northwestern Ontario and apply these successful practices to emerging opportunities. 6.2 Regional Economic Development Area

Northwestern Ontario is a distinct geographic, economic and social space within Canada. The challenges it faces are different and the contributions it makes to the province and country are unique. The complex decisions affecting the Northwest are best understood and made by those who live here. To be heard clearly by the other regions of the Province and country, Northwestern Ontario must operate as consensual union that speaks clearly on common areas of interest1. During the regional consultation, it became apparent that smaller regional communities view a Thunder Bay-centric planning zone as perpetuating the isolation of the smaller regional communities. Even if only on a trial basis, the message that a Thunder Bay-centric approach would send would undoubtedly not resonate well in the region and would undermine any future efforts for a regional approach to economic development.
1

Common Voice Northwest web site

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The recommended region-wide approach is consistent with other measures taken by the Ontario government in devolving responsibility to the regional level in the areas of health, social services and tourism. Region-wide Local Health Integration Networks (LHINs) Community Care Access Centres (CCACs) Regional Tourism Organization 13c District-wide Workforce planning boards District Social Services Administration Board (DSSAB) Boards of Health (2 for 3 districts) In addition, in the field of transportation, the province has recently created Metrolinx and has for many decades owned and operated the Northeastern Ontario-focused Ontario Northland Transportation Commission. Regional development planning supports the advancement of Northern Ontario as a globally competitive and preferred place to live, work and invest in by: Providing a mechanism to coordinate regional infrastructure, labour force and economic development investments Focusing public and private investment on regional priorities Building capacity and collaboration among urban and rural communities , First Nations, Mtis and key organizations Facilitating public-private partnerships to strengthen competitive advantages and achieving greater scale to compete in global markets in order to ensure that the appropriate investments are made in a timely manner Reducing competition among communities and providing a unified regional economic development voice Increasing access to capital, investment and technology Encouraging multi-sector, multi-community sharing of information and resources Ensuring an inclusive and integrated approach to building networks and collaborations that are representative of all regional interests (municipalities, First Nations, Mtis, education, business and industry, labour, innovation, research and development).

The scope of regional economic development planning builds on the existing work of local economic development agencies and organizations and will be tailored to specific regional needs. An important consideration in the creation of a regional economic development zone is the boundaries and makeup of the zone. 76

It is proposed that a Northwestern Ontario-wide Regional Economic Planning Zone Pilot Project be created, recognizing that regional collaboration and planning facilitates the understanding of the diverse needs of different sectors and different types of communities (rural, Aboriginal, urban, etc.) and provides an accurate representation of each group towards common goals. Additional factors that will be taken into account include the regions history of collaboration, efficiencies, the importance of region-wide communication, the regions infrastructure and sub-regional differences. The regions history of collaboration is a key consideration. Examples of this collaborative relationship follow: NOMA The Northwestern Ontario Municipal Association has a long history of being a cohesive voice of the municipalities of Northwestern Ontario. They have a reputation of being an organization that is grounded in the realities of the northwest with an ability to take the issues facing the region to governments and getting the right decisions made. Unlike other municipal organizations, NOMA represents 100% of the municipalities in its region. It has a solid and credible reputation and brings forwards issues in a well researched and concerted manner. The Northwestern Ontario Associated Chambers of Commerce The Northwestern Ontario Associated Chambers of Commerce, representing 12 independent chambers across the Northwest, has adopted a structure that ensures that each of their chambers is represented on the board of directors. The executive is elected from the membership at the annual general meeting held in the spring. Member chambers remit $10 for each member of their individual chamber as their fees for the year. Common Voice Northwest The year 2006 saw the establishment of Common Voice Northwest (CVNW), a movement toward unified action by the citizens of Northwestern Ontario to chart their own course within Ontario and Canada by addressing regional challenges with realistic Northwestern Ontario solutions. Membership in CVNW includes area businesses, industry, labour, municipalities, areas without municipal organization, education, and multicultural organizations, with seats available for Aboriginal Treaty organizations. The role of Common Voice Northwest is to ensure that, through co-operation with all of its partners, the people of the Northwest become more advantaged than they are today. Common Voice Northwest identifies, promotes and develops economic opportunities in and for Northwestern Ontario. It has also surveyed residents and interest groups of the Region to determine those projects that should be undertaken as a priority. Among numerous other initiatives, CVNW provided a detailed response to the proposed Growth Plan for Northern Ontario and worked towards the development of a Northern Ontario Policy Institute. In addition, its Energy Task Force, which originated with NOMA, has led the campaign to ensure that the needs of the Northwest for electrical distribution and transmission are recognized by the government in its long term plans for the region. 77

CVNW also led the collaboration between a wide range of geographic based destination marketing organizations, distilling a number of key tourism reports into a comprehensive document that informed the Sorbara Commission on the needs of the Northwest. A number of the CVNW (Tourism Northwest Task Force) recommendations were repeated in the Governments Report. Northwestern Ontario partnerships have led to a wide number of successes in regional economic development. One example of a successful Northwestern Ontario-wide initiative is the drive to attract the Northern Ontario School of Medicine (NOSM) to Thunder Bay with many Northwestern Ontario communities and Treaty organizations successfully working to support this initiative. Another practical example of regional cooperation was the former NW Ontario Energy Association which used collective resources to manage most of the hydro utilities across the region. These shared resources included policy input and best practices along with cost saving collective tools such as common billing. A major issue identified in the regional consultations is that smaller communities do not often have discretionary resources for matching funds for infrastructure or any projects due to the fact that their industrial tax base is almost gone and their residential tax base is struggling to maintain the status quo. Other communities, who rely solely on a residential tax base, find their aging population unable to fund inflation increases let alone any expansion or capital replacement. There is a need, therefore, to minimize duplication to maximize efficiency. Adopting a region-wide approach to economic development will serve to level the playing field for disadvantaged communities and utilize all of the assets that our region has to offer. The current situation of different Northwestern Ontario regional communities vying for the same opportunities with limited resources is not effective and is, in fact, counter-productive. A region-wide approach to economic development planning will enhance regional communication which has proven to be a key success factor in a number of initiatives. For example, the establishment of the Global Sticks operation in Oliver Paipoonge has been an important lesson for the Northwestern Ontario regions economic development professionals. There was good collaboration from the beginning when the company was looking for its wood supply, site location, and other business-case variables such as financing and private-public partnerships. When Global Sticks was seeking birch veneer to support its operations, the company contacted individual economic development offices independently to try to source wood. This was a time and resource intensive process for the company, and it could have led to missed opportunities for businesses in the region because every community does not have an economic development office. Given the competition amongst the regional economic development professionals and limited resources, a higher level of collaboration and cooperation region-wide is required to take 78

advantage of economies of scale, different levels of investment readiness by municipalities, availability of properly zoned land, and other offerings, it is imperative that a region-wide approach be undertaken. The region needs to be better prepared to take advantage of similar opportunities in the future. Northwestern Ontario already has region-wide telecommunications networks and regional transportation corridors and services in place, along with an international airport which serves as a hub for numerous regional airports. This infrastructure serves as a foundation to economic development opportunities which reach all corners of the Northwestern Ontario region. Thunder Bays TbayTel has been able to help smaller regional communities address their geographical isolation through region-wide broadband capabilities. These smaller communities need to remain involved and take advantage of new economic opportunities, especially in the areas of entrepreneurship, telemedicine, education and training, tourism, and all of the new areas of opportunity in mining, value-added forest products and knowledge-based sectors. The Thunder Bay International Airport has seen its passenger numbers increase even during the recent recession. This was due mostly to the new mining exploration opportunities across the region. Such opportunities are not limited to one area such as the Ring of Fire but rather encompass the whole region at different levels. The pilot project area would best maximize these opportunities if it was comprised of the whole Northwestern Ontario region. The existence of two major regional airlines, serving both the regional hubs and remote First Nations connects the region in a major way. Porter Airline increasing to five flights per day from downtown Toronto to Thunder Bay is a reflection of responding to the needs of a growing business demands for access to the region. Initiatives to prepare the region for investment such as through the Northern Community Investment Readiness program have been applied region-wide with good success (participation rate very high) and some municipalities have actually moved to sector-specific opportunities where the province has now expanded the funding. It is recognized that there are key differences between the western part of the Northwestern Ontario region, Thunder Bay and the eastern part of the region. Key among these differences is the fact that the west tends to view Winnipeg as its regional hub whereas the east relies more on Thunder Bay as its source of retail and services. There is also an economic and policy disengagement as in the Kenora District, investment tends to come from the west (Winnipeg and beyond) and in the Rainy River District from the south (U.S. Midwest states), while the policy and regulations that influence such investments come from Southern Ontario. At the same time there is a significant commercial relationship between the Rainy River District and Northern Minnesota and between the Kenora District and the Province of Manitoba. These regional differences, while requiring a more sub-region tailored approach in finding suitable solutions, would also greatly benefit from a region-wide strategy that would help bring the west more in line with those areas of common interest (i.e. economies of scale and shrinking tax base discussed previously) and flexible policy-making aimed at recognizing regional and sub regional disparities. 79

It is also important to think in terms of where growth is occurring in the region and to be able to respond to this growth in a timely and well-planned manner. With mining, growth will likely take place in a multitude of unorganized territories across the entire Northwest. The questions of who then plans for these areas and who advocates for the industry arise. Developments are currently being considered in the Minaki region but, without a municipal champion, progress will likely be slow. And if resource revenues are to be transferred to communities from mining which will largely occur in unorganized zones, to whom will those funds flow? In the same vein, as the new forest tenure system is implemented across the entire region, along with the fibre allocation, every area in the Northwest will be faced with similar challenges. A single, yet variable model of Economic Development Planning will facilitate the response to this challenge. While some parts of the region are experiencing a resurgence of the economy, many communities across the region are dealing with the loss of their major industry. These communities are facing tough fiscal challenges at the exact time that they need financial resources and economic development support. A region-wide economic development process could provide much-needed assistance to these communities. Other reasons why a pan-northwestern model makes the most sense for this region include: Even though Thunder Bay is considerably bigger than other regional municipalities, its strength lies in the resources of the region and therefore, there is a need for a regionwide approach. A good example is the Global Sticks situation referenced earlier in this document. Global Sticks ultimately located in Oliver Paipoonge because of suitable land and a private sector partnership model rather than in Thunder Bay. The region as a whole benefitted since the company did not locate outside of the region. Resources are region-wide and therefore the opportunities are global. If the region is to reach global markets, it requires economies of scale and region-wide collaboration. Southern Ontario and Canada have always benefited from the development of Northern resources (i.e. forestry, Ring of Fire and numerous additional significant explorations throughout the region). Given the continuous growth and demand from developing countries, there are mutually-beneficial needs to maximize the opportunities present in Northern Ontario.

There must be an opportunity for communities, districts, reserves and other areas to decide for themselves if they want to be part of the Pilot Project. The proposed area must be submitted to the entire region for consideration and each entity must have the ability to opt in or out of the model. The zone will not, without their permission, apply to First Nations treaty areas. Duty to consult will at all times apply to property contained within their lands. Participation by treaty organizations in economic development activities in the pilot area will be by their choice.

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Careful consideration needs to be given to the fact that the geographical boundaries of the treaty territories do not align with the geographical boundaries of the region. There is a need for further discussion and clarity on how this will it work as full Aboriginal participation and engagement is viewed as being an important element of a moving-forward strategy. As demonstrated in this section, there are numerous strong arguments in favour of establishing a Northwestern Ontario-wide regional economic planning zone. While the composition and boundaries of the zone may change over time, the region in its entirety needs to be included at least in the early stages of research and planning. The creation of a single Economic Planning Zone for Northwestern Ontario is a logical extension of the work of NOMA, NOACC, CVNW and the decisions of the Province to establish the NW LHIN and the NW CCAC. Based on the foregoing, it is recommended that all of Northwestern Ontario be considered the pilot area for regional economic development planning with participation by First Nations treaty areas and the Metis Nation of Ontario at their discretion.

6.3

Guiding Principles

Any organizational design and structure needs to be based on guiding principles that are conceptual in nature but applicable in practice. The following are based on the Northern Advisory Council (NAC) and Northwestern Ontario Joint Task Force (JTF) committee discussions supported by research in best practices and the needs of Northwestern Ontario. Trust: reliance in intention and ability we operate in an environment of mutual reliance and interdependence; Courage: take risks be innovative with confidence and resolution take strong stands and accept possible consequences. Inclusive: Consultative, engaged in real partnerships Aboriginals and Mtis, youth, females, new Canadians Rural, urban, isolated, Aboriginal communities Private sector key industries and entrepreneurs Local decision making: Action-oriented, project-driven Master of own destiny, increased local autonomy, self-determined, voluntary Removal of systemic (government) barriers, provincial and federal governments involved, Northern Ontario policies With strong leadership, merit-based participation 81

Speaks with one voice: Brand identity Consistent vision, focus Success defined; includes wealth creation and community/social development Focused on Northern Ontario priorities in global economy as per Northern Ontario Growth Plan: Supported by infrastructure, e.g., transportation, energy Focus on value-added and not just natural resources extraction Focus on innovation, creativity, research One approach with multi-layers or modes, single framework with variable components: Multi-industry, multi-community, non-competitive projects Regions defined according to projects, by business supply chains and markets, by concentration of natural resources, by transportation corridors, by economic development priorities, etc. Involves finding connections to define regions may not correspond to established geographic or political boundaries 6.4 Mandate and Functional Authority

Given the guiding principles and the gap analysis in this report that clearly shows the need for a renewed effort in a regional approach to economic development, it is proposed that the mandate of the Northwestern REDA include the following: 1. Serve as a planning and integrating structure for regional economic development. Elements of this will include setting priorities and strategic directions, developing a 3-5 year regional economic development plan for annual review and updating and integrating local economic development plans into the regional plan (4.5.1, Growth Plan for Northern Ontario 2011); 2. Establish a bottom up approach structure where those closest to the challenges, opportunities and nuances at the grass roots level drive the process and decisions while working through subsequent layers going up the pipe which organize and categorize the information into effective modules of desired outcomes (IAIN MAYBE 4.5.3??); YES 3. Work to bring northerners and their many groups together to collaborate and streamline our feedback into one clear and concise voice (4.5.2, a); 82

4. Work closely with the Northern Policy Institute (NPI) to undertake research on matters that relate to economic development matters in Northwestern Ontario and contract with the NPI for special economic development-related research projects (4.5.2, a); 5. Play a lead role in assisting the Northern Advisory Committee (NAC) in developing recommendations for implementation and to prepare the NAC to effectively accomplish the desired outcomes at the government level (2.2.4); 6. Take the lead role on broad-based regional economic development initiatives such as transportation, energy generation, transmission and distribution, research and innovation, telecommunications and major mining clusters (4.5.2., d); 7. Play a lead role in attracting infrastructure investment to the region (4.5.2, d); 8. Identify and address gaps in regional economic development (4.5.2, c); 9. Be actively engaged with the province on the implementation of the Growth Plan for Northern Ontario 2011 on a ministry by ministry basis through the two coordinating ministries (Northern Development, Mines and Forestry and Infrastructure) (2.2.4); 10. Develop and implement regional economic development branding initiatives and marketing campaigns; 11. Work in consultation with the regional workforce planning boards to integrate and coordinate the labour market needs of the regional economy (4.5.2., d); and 12. Communicate with all stakeholders on regional economic development matters and receive ongoing input from all stakeholders on these matters. (4.5.1) 13. Prior to their adoption, review and provide input into all new Provincial Policy Statements impacting the economy of Northwestern Ontario to ensure that said statements reflect both the reality of the Northwest and the needs and aspirations of its residents and companies operating or investing in the region. (4.5.1, 4.5.2 b,c,d)

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14. Review and provide input suggesting changes to all existing Provincial Policy Statements impacting the economy of Northwestern Ontario to ensure that said statements reflect both the reality of the Northwest and the needs and aspirations of its residents and companies operating or investing in the region. (4.5.1, 4.5.2 b,c,d) The mandate of the REDAs would be supported by the work of the Northern Policy Institute, especially in the areas of policy proposal development and research. However, it must be recognized that the role of the NPI is much broader than just economic development and should encompass all public policy affecting life in the north. The advocacy role would be fulfilled principally by the existing representative organizations currently operating in Northwestern Ontario. The relationship between mandate and functional authority is shown in Figure 10.

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Figure 10 Relationship between Mandate, Structure and Functionality

Government of Ontario
NPI

REGIONAL ECONOMIC DEVELOPMENT AREA BOARD Organizational Structure Functional Authority Collaboration and Advocacy
Community Futures Development Corporations Confederation College Construction Labour Forestry Sector Health Sector Industrial Labour Lakehead University Mtis Nation of Ontario Mining Sector Multicultural Association (Thunder Bay) Nishnawbi Aski First Nation Northern Education Leaders Northwestern Ontario Municipal Association Northwestern Ontario Associated Chambers of Commerce Northwestern Ontario Innovation Centre Northwestern Ontario Development Network Public Labour Robinson Superior Treaty Treaty Three Workforce Planning Boards Establish grass-root driven decisions Planning and integration Policy Communication Lead on region-wide initiatives Review Growth Plan implementation Regional Branding and Marketing Investment Attraction Labour Market requirements Common Voice Northwest Northwestern Ontario Municipal Association Northwestern Ontario Associated Chambers of Commerce Northwestern Ontario Innovation Centre Northwestern Ontario Development Network Aboriginals Community Futures Development Corporations Workforce Planning Boards

NAC

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6.5 Proposed Model and Process The planning model is based on the principles of a holistic strategic economic planning process and the following concepts: A political and economic integrated vision The development and enhancement of opportunities for investment, employment and a rewarding lifestyle Practical application of fundamental business principles A decision making and accountability model based on delegation of strategic responsibility at the local level

In this model, all system elements are interrelated and interdependent. The model consists of four key elements: 1. 2. 3. 4. Developing a regional strategic economic vision Aligning and prioritizing regional strategic goals and initiatives with the vision Aligning municipal and community business plans with regional strategic goals Measuring and reporting the results

The objective is to: Reduce the disparity in GDP with the rest of the province Ensure economic, environmental and social sustainability The process is: Develop a regional vision Rebalance decision making and control towards local level including Aboriginals Leverage resources through partnerships (collaborative governance) Build on the strength of unique resources and capabilities to maintain a sustainable competitive advantage Proactively engage, consult and communicate with regional partners Make more visible the integrated collaboration between regional decision makers and the provincial government Review strategic economic plan annually and allow municipalities to influence strategic objectives Use key performance economic indicators to measure progress 6.6 Strategic Partnerships As identified in the key organizational elements section, best practices show that successful REDAs are those that leverage resources through collaborative partnerships. The organizations below have the potential to create substantial synergies with the REDA and their working relationship should be clearly defined in the early stages of the new initiative.

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Northwestern Ontario Development Network (NODN) The NODN is comprised of economic development practitioners from across the region and it is a leading regional source of relevant information and expertise on economic development issues. The REDA can benefit by delegating certain technical responsibilities to NODN and by sharing strategic-level information through board representation. As NODN would be hired to provide a range of technical services in economic development, it would have an arms-length relationship to the REDA and its position on the Board of Directors would be a non-voting one (ex-officio). Regional Tourism Organizations (RTOs) The RTOs have been established on a region-wide basis and share many similarities with the REDA. The REDA can learn from the RTOs implementation process. The region-wide scope would allow the RTOs to provide meaningful contribution on the Board of the REDA. Community Futures Development Corporations (CFDCs) The CFDCs have been identified as one of the best examples of successful regional approaches to economic development by the MOWAT Regional Economic Development Studies (June 2010) in their review of best practices for FEDDEV Ontario. A review of Northwestern Ontario municipalities official, strategic and economic plans (see Appendix H in the foundational report), has also highlighted the important role that CFDCs play in those areas where smaller municipalities do not have the resources necessary to engage in economic development. That critical role and the success the CFDCs have had over the years need to be taken into account and supported through a collaborative partnership and representation at the Board level. Common Voice Northwest (CVNW) Common Voice Northwests role and regional mandate are also very closely associated to that of the REDA. To avoid duplication and overlapping, CVNW will need to determine if its role has been overtaken by the REDA and the Policy Research Institute and/or if it continues to have a meaningful role within the regions. 6.7 Performance Evaluation and Assessment Model As the best practices clearly indicate, performance indicators are instrumental in creating accountability and in closing the loop on a holistic strategic economic planning model where integration and interdependence of various parts of the system are crucial to the effective and efficient delivery of services. This is in line with the concept of value for the tax dollars paid that is so important for the long-term sustainability of any municipality.

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Based on the framework, Northwestern Ontario has an opportunity to benchmark on a yearly basis and measure its relative performance on all four levels as indicated below. The following are samples of recommended indicators under each heading (see Table 12). Others will need to be selected and agreed to by the people who will use them (i.e., high level performance indicators for a REDA and operational indicators for municipalities). Table 12 Performance Indicators
Measurement Type Community Impact Name of Performance Indicator Source Stats Canada Municipalities Stats Canada Municipalities Municipalities Education Institutions HRDC

Municipal Disposable Income Growth in Municipal Tax Base Population Growth (Yearly) Tax Rates Taxes as a % of Income (Affordability Ratio) Number of Area Students Enrolled in and Graduating from Post Secondary Education including Aboriginals Employment Rates

Service and Responsiveness Level

Number and value of NOHFC Applications Approved by

Province (including length of time)

MNDM FedNor MNDM NOMA & NOACC NODN Province

Number and value of FedNor Applications Approved by

the Federal Government (including length of time) Number of Provincial Regional Directors and Senior Managers stationed in Northwestern Ontario as Compared to Northeastern Ontario Number of NOMA and NOACC Resolutions Approved and Implemented Number of Communities with Completed Strategic or Economic Development Plans Length of Time for EA Approvals

Infrastructure

Port and Airport Infrastructure Requirements Met Municipal Infrastructure Deficit Addressed Telecommunication, Regional Broadband Access
Regional GDP Absolute and Relative % Growth Regional Taxable Assessment Absolute and % Growth Number of New Companies Attracted in the Region Number of New Jobs Created and Retained by District Unemployment, Employment and Participation Rates Increase % of Private Sector Employment

Authorities Municipalities Telecom providers Stats Canada Municipalities NODN NODN Workforce Planning Boards Stats Canada

Economic Sectors

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6.8 The Northwestern Ontario REDA Model The reviews of best practices (McSweeney 2011) and international expert opinions have clearly identified that, when dealing with regional economic development planning, one size does not fit all. When trying to incorporate best practices into a Northwestern Ontario model, it is important to focus on the uniqueness of the region and tailor any regional economic development approaches to the particular circumstances of the social, economic and political environment in which a REDA organization would operate. This document has incorporated a made in Northwestern Ontario approach that closely matches the priorities, goals and objectives of the Growth Plan for Northern Ontario 2011, while incorporating the substantial stakeholders feedback received during the regional consultation and the Thunder Bay summit. This information was further triangulated for validity and reliability through extensive independent research, which included a comprehensive review of the regional municipalities and Aboriginal communities strategic, municipal official plans and economic development plans. Figure 11 captures all the elements indicated above and closes the loop on a progressive performance management and accountability model. Figure 11 A Northwestern Ontario REDA Model

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6.9 Organizational Structure Model An effective implementation of the organization`s strategy is highly dependent on the organization`s design. With a good organizational design, costs can be reduced and value can be added within the structure. An organizations strategy will dictate the number of levels and the span of control necessary to be effective. In order to meet the needs of the regional and functional-level strategies (sector specific or sub-regional focused), it is important to match distribution of authority and responsibility accordingly. The REDA will: 1. Be a vehicle by which locally-driven decisions are achieved through a bottom up structural design; 2. Not play an advocacy role but rather function as cohesive and coordinated economic development facilitators that effectively influence decisions at the provincial level; 3. Function as a means to streamline or reduce bureaucracy; 4. Work to set strategic purpose and direction to regional economic development and motivate a cohesive approach to accomplishing the strategies; 5. Support and enhance the work that is being done at the municipal and sub-regional level on economic development; 6. At all times respect the traditional rights of Aboriginals; and 7. Function as a dynamic agency that is able to respond quickly to changing conditions and opportunities. A review of international and Canadian best practices by Eric McSweeney has identified five critical success factors in organizational structures for REDAs. They are: 1. Provincially-established organizations with regionally-determined agenda and mandate 2. Leadership-driven Nimble, flexible and entrepreneurial 3. Focus on a 3-5 year economic plan but work on a long-term vision 4. Key decision-makers on Board of Directors Regardless of the structure chosen, the key factor in successful implementation and sustainability was the leadership qualities of the CEO and the Board members. Organizational REDA Framework Prior to the development of the actual membership and structure of the REDA Board, it is important to understand how the Board will relate to the existing structures in the Northwest as well as in the province. It is also important to understand how the Board will go about obtaining advice on matters under their consideration. The following is the framework under which the REDA Board will operate: 90

Figure 12 Northwest REDA Board Framework Advice to REDA and Government

The Northern Policy Institute (NPI) and the Northern Advisory Committee (NAC) will provide ongoing advice and feedback to the REDA Board.

Government of Ontario

NPI

NAC

Board Composition The REDA Board consists of

geographic /political/sectoral representation from each District and the City of Thunder Bay.

NORTHWEST REDA BOARD

ORGANIZED VOICES

Organized Voices
The REDA Board will require ongoing input from the entire region on a broad range of issues Task Forces can be used to ensure a focused development of policy options for the Boards consideration. Task Forces may be permanent committees of the REDA or may be one time, ad hoc bodies. Members of the Task Forces can be self-selected or nominated by the Board Existing political organizations, such as NOMA, NOACC and the Political Treaty Organizations can also submit their requests to the REDA Board on behalf of their constituent members. Geographic or organizationally focused Task Forces Formal input from NOMA, NOACC, PTOs etc.

Sector Task Forces

Issue Task Forces

Misc. Task Forces

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6.9.1 Structure of the REDA Board Building on the strength of the structure of Common Voice Northwest, which in turn was built on the structure of the Northwestern Ontario Municipal Association, the REDA board will work best when all of the key leaders or their organizations are represented and involved in policy setting. That way, the diverse interests of Northwestern Ontario will be considered throughout the planning and implementation of economic development led by the REDA Board. The JTF is considering 4 options for the structure of the Board of the REDA. OPTION A In the following proposed structure, Option A, , it is recommended that the board be made up of two key components: a management committee consisting of 16 members and the full board which includes the management committee and a minimum of 11 sectoral and interest group members. The management committee will consist of representatives selected by both geography and organization. Each of the three provincial districts and the City of Thunder Bay will have a business, municipal and economic development practitioner selected for the board, while each of the four political treaty organizations (Treaty 3, NAN, Robinson Superior and MNO) will designate their individual representatives, if desired. The municipal representatives will be chosen by NOMA. It is suggested that they follow the process used for Common Voice Northwest, whereby each of the District (and City) Vice Presidents are appointed to the Board, with the exception of the District where the current NOMA President is from. It is suggested that the City of Thunder Bay use the CVNW approach as well, where the Mayor is automatically the member unless the Mayor chooses otherwise. It would then defer to the Citys Vice President on NOMA. The economic development practitioners will be chosen by the Northern Ontario Development Network from either municipal economic development departments or agency or from the Community Futures Development Corporations operating within each District. The Citys economic development representative will come from the Community Economic Development Commission.

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OPTION B Option B replaces the lower tier group of representations (shown in the red boxes) with a series of Task Forces designed to provide issue or geographic specific input.

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OPTION C Option has a much smaller Management Board than the previous two options. NOMA and NOACC representation is reduced from 4 to 1, with NODN provided with a seat at the table. Two additional independent or at large members would be selected by the Board.

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OPTION D This option reduces the size of the Management Board by eliminating the EDO practitioner position as proposed in Option A.

Other key organizational elements would be: Not-for-profit corporation Funding a combination of annual core funding and project funding Key deliverables developed with province through a regional agenda Board composition to include key decision makers and broad regional representation for effective influence at the regional and provincial levels 96 Opportunity to leverage other resources through strategic partnerships

Note that the model for the agreement is based on what has been adopted by the current provincial government and provides a level of delegation of decision making with which the government is clearly comfortable. This model can easily be modified to meet the expressed needs of the region while at the same time leaving the final authority with the Minister.

6.10 Functional Areas of Responsibility Besides the key program areas identified above, other important areas of functional responsibility for the NW Ontario REDA would be: NOHFC funding allocations to meet Northwestern Ontarios priorities as defined by the NWO REDA and developed in conjunction with municipalities; Would consult with municipalities to develop a NWO- appropriate land use policy for lands within municipal boundaries and Crown lands but not treaty lands. Would assist First Nations when and if required to create economic development plans for their territory; Have input into the wood fibre/licence allocation which would be designed to serve the best interests of the region and the communities it serves; Streamline and northernize the environmental review process; Influence transportation, energy and social planning in relation to economic development; Would designate a Northern Commissioner position to keep the focus on Northern Ontario issues;

The REDA would also be actively engaged with the province on the implementation of the Northern Growth Plan on a ministry-by-ministry basis through the two coordinating ministries (Northern Development, Mines and Forestry and Infrastructure). A key priority for the REDA will be the development of a 3-5 year economic development plan for the region that will integrate all economic development planning activities for the abovementioned sectors as well as the high-priority projects/recommendations below that were identified during the regional consultation process and the feedback received during the June 13-14 Summit in Thunder Bay.

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6.11 Funding and Organizational Requirements 6.11.1 Funding Given the guiding principles outlined and the critical success factors identified in the section on best practices, it is recommended that the REDA be incorporated as a not-for profit organization. The key deliverables would be developed through a regional agenda (see Mandate for details) within a framework of a provincial accountability agreement as outlined below. As identified by the JTF in its list of priorities, the REDA would need authority to give decision makers the tools to implement and influence decisions regarding economic policy and strategies and ongoing funding to give decision makers the tools to implement and influence the strategies. In McSweeneys review of the best practices of REDAs around the world, as well as during the NAC post-Summit discussions with the international speakers who presented at the Summit, one of the key challenges that the REDA organizations across the world faced was their struggle to secure sufficient funding for long-term sustainability. In some cases, their success was greatly hampered by the amount of time being spent by staff in securing funding. The funding requirements of the REDA would be based on its program delivery responsibility and would be negotiated with the province. Figure 10 reflects the relationship between mandate, structure and functional authority. All of these elements would be captured within an accountability agreement as outlined in the Act of Incorporation example above. The key areas are: Administration: funding would be based on managerial, administrative and program delivery requirements as outlined in section a) of the Accountability Agreement. The goals and objective of the NW Ontario REDA are largely outlined in the 12 points of its mandate and functional responsibility. Program budgets: key program areas will include outreach and engagement with regional, Aboriginal communities and other partners; policy research through the Policy Institute and others; technical assistance through NODN and the Workforce Planning Boards; advocacy and lobbying through collaborative partnerships with NOMA, NOACC and others; communication and branding; regional economic development including investment attraction and exports; and other specific initiatives as required. The funding requirements for administration and core program areas would be fully supported through a funding arrangement with the province while collaborative funding formulas would be explored with a range of strategic regional partners for the key priority projects/initiatives as contained in the 3-5 year economic plan. Such funding arrangements would be reviewed every 2-3 year business cycle to ensure long-term sustainability. 98

The REDA will require ongoing financing to operate as the extensiveness of its responsibilities will require full time staff to work with a volunteer board of directors. It is envisioned that the budgetary requirements for the life of the pilot project will be as follows: Year 1: Recruitment Costs Staffing
Executive Director Administrative Assistant Director of Planning Director of Outreach and Research

$ 50,000 $100,000-$120,000 $ 50,000 $ 90,000 $ 75,000 $100,000 $250,0002 $100,000 $815,000-$835,000

Overhead (office, communications, travel, etc.) Research Fund(Core) In Kind (staff, board, reports etc) Total Year 1 (assumes 12 months) Year 2: Year 3 Year 4 Year 5 $ 775,000 795,000 $760,000 780,000 $745,000 765,000 $655,000 675,000

Funding Sources It is recognized that it is important to secure funding from more than one source and in particular from more than one order of Government. While any funding allocation will be subject to direct discussions with the potential funders, the following in the preferred mix of sources (based on the above noted budget) Provincial
MNDM

Federal Regional in-kind Total Annual Revenue

$357,500 $357,500 $100,000 $815,000

44% 44% 12%

It is also anticipated that from time to time, major research requirements will necessitate an

2 Year 1, declining annually to $100,000 in year 5 99

application for funding from existing granting agencies over and above the annual $100,000 core research budget noted above.3 6.11.2 Accountability Agreement As the REDA will be obtaining funding from the province and other orders of government, an Accountability Agreement is required. The accountability agreement shall be for a minimum of three fiscal years and shall include: (a) Performance goals and objectives for the regional economic development agency for Northwestern Ontario (NW Ontario REDA); (b) Performance standards, targets and measures for the NW Ontario REDA; (c) Requirements to report on the performance of the NW Ontario REDA;to both the government and to the region (d) A plan for spending the funding that the NW Ontario REDA receives, which spending shall be in accordance with the appropriation from which the Minister has provided the funding to the agency; (e) A progressive performance management process for the REDA; All of the above elements have been captured in large measure in this report which will provide the basis for a negotiated agreement, including a funding allocation.

6.11.3 Implementation Plan The goal of the implementation plan is to ensure that the recommendations may be carried out in a results-oriented fashion. A well defined, practical action plan, with realistic and measurable objectives, will go a long way towards implementation and success. Such a plan must take into account the needs of the REDA organization (both internal and external), individual sectors of the regional economy, key stakeholders (both georgraphic and political) and the region as a whole. While giving high priority to the need for growing the regional economy, identifying critical issues, measuring the efficiency and effectiveness of programs and the economic advantages it will bring to the region, a common theme must bind the various stakeholders together.

Note, the next version of this report will include an expanded project budget that will reflect contributions from the private, foundation and public sector. 100

The regional performance evaluation and assessment model (benchmarking framework figure 13 and performance indicators table 12) will provide a progressive performance management model (as required in the accountability agreement) and will be sustained by a marketing strategy framework to crystallize the vision necessary to make it a reality, while a clear understanding of who does what, when, where and why will ensure the success of the strategy. Table 13 identifies the REDAs implementation objectives for the short-, mid- and long-term, aligned (wherever possible) with the Growth Plan for Northern Ontario 2011. In its ongoing repositioning efforts, Northwestern Ontarios strategic priority should be to build awareness of the area based on a brand image that reflects the regions competitive strengths. Once this priority is addressed, a comprehensive integrated marketing program can be developed that links all materials to be used to market the REDA for community and business development purposes.

Short-Term (within 6 months) Many interview participants pointed to the need for some quick wins. These short term initiatives should help to convey a message that the region is moving forward in a positive manner. The items below represent some of the strategic level recommendations that can be readily pursued. Commitment by the province for continued support and funding of the REDA; Commitment by the province to allow the REDA to have input into Ministries strategic plans that are relevant to Northwestern Ontario; Development of a regional economic development plan that will help direct the efforts of the REDA for the first five years; Development of an outreach program to the regions municipalities, districts and Aboriginal communities; Further roll out of the Northern Ontario Investment Readiness Program by the province to provide funding for completion of strategic plans for those 14 communities that still do not have one (See Appendix H for details); Ongoing collaboration with Aboriginals strategic economic development planning and infrastructure development to enable them to unlock the resources of remote areas; and Work closely with NODN to identify areas of specific expertise that NODN can provide to the REDA.

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Table 13 An Integrated Implementation Plan Time Frame Priority Areas and Sectors - REDA Priority Area and Priority Projects Sectors Growth REDA Plan for Northern Ontario 2011 4.5 MOU with province Development of a 5-year regional economic development plan Development of an outreach program Expansion of NCIR Program by the province Identify areas of specific expertise that NODN can provide to the REDA. Responsibility

Short Term (within 6 months)

Ongoing programs: Outreach and engagement Policy research Technical assistance through NODN and workforce planning boards Communication and branding Investment attraction and exports

JTF and province REDA

REDA REDA and province

REDA and NODN

Medium-Term (6 months to 2 years) The medium term can be considered six months to two years. This phase should include working closely with regional municipalities to align their current municipal strategic plans to match the regional strategic economic plan process and measurable outcomes wherever possible; the development and implementation of a targeted communications and branding program with a budget allocation; further expansion of the provinces Investment Readiness program into a regional business retention and expansion program; and the pursuit of economic development opportunities for local small businesses and companies. During this time frame, the region should also initiate the development of a highly-targeted education and skills development program with the local workforce planning boards and educational institutions to enhance its labour force competitiveness. This applies to all communities at different levels but it is meant to deal with the paradox of high unemployment 102

in certain areas and shortages of skilled labour in others. As well, there is a general need for portable skills in the new knowledge-based economy and adult workers who have lost their jobs in forestry need dual-core training to transfer such skills into mining. A crucial component of the regional economy relies on attracting outside investment and the REDA should play an important role through the development of a one-stop investment database and funding program. A key area of focus for the REDA during the mid and long-term would also be to facilitate a greater role for private sector involvement in the regional economy. Given the financial challenges faced by higher orders of government and the over dependence by the regional economy on transfer payments, innovative investment tools like flow-through shares for research and innovation, bio-economy and other knowledge-based sectors, would be one of many ideas that the REDA would fully explore and advocate for on behalf of its constituency.

Time Frame

Priority Areas and Sectors - REDA

Priority Area and Priority Projects Sectors -Growth REDA Plan for Northern Ontario 2011 Section 2.2 - An economic plan for Northern Ontario

Responsibility

Mid-Term

Ongoing programs, plus

Same as above REDA and advocacy organizations such as NOMA, NOACC, etc. as required

(6 months to 2 NOHFC and FedNor years) allocations Provincial land use policy Fibre/licence allocation Northernize the environmental review process Transportation planning Social planning Energy planning

Harmonize FedNor and NHFC funding 1.6 - NGP prevails applications over a provincial alignment of policy statement current municipal 1.7 - NGP strategic plans provides policy to match the direction for REDAs collaboration Regional BR&E with other orders program of government Branding and communication 2.1 - Forestry and plan mineral sectors Workforce vital to Northern education and economy skills development 2.1 - Competitive

REDA and NODN REDA REDA, education institutions and workforce planning boards REDA and 103

advantage in Update tourism, arts and regional culture industries community profiles and 2.2.1 - The strategic plans province will Full collaborate with deployment of the federal regional government broadband Export development

municipalities REDA and telecom providers REDA, province and federal government

Long-Term (2-5 years) The long term covers two to five years and should include a commitment to update the regional community profiles and investment readiness of those municipalities that are still lagging behind in this area. Workforce enhancement programs such as skills development initiatives should be continued and adjusted to reflect the changing demographics of the regional labour force characteristics and education levels, especially in light of forecasted future retirements in the skilled trades. The REDA should also pursue region-wide strategies for immigration that include strategic investments in Investors Nominee programs and First Nation migration to large urban centres. Full implementation of retention/expansion programs should also occur during this time. As well, the full deployment of broadband technology in the rural and remote areas and accessibility of reasonably-priced high-speed access for all residents of the area would enable growth in the small business sector and help open up potential new sources of exporting opportunities. The outreach/communications program would be ongoing to ensure buy-in and participation by the regional and Aboriginal communities.

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Time Frame

Priority Areas and Sectors - REDA

LongTerm (2-5 years)

Ongoing programs, plus priority areas above, plus One stop-shopping for regional economic development Provincial investment into a Brownfield Renewal Fund Strategic collaboration with RTOs in tourism product development Support strategic investments for First Nation migration to urban centres Policy support for education institution to grow enrolment Region-wide strategy for Aboriginal education and training for skills development

Priority Area and Sectors Growth Plan for Northern Ontario 2011 Section 2.2 - An economic plan for Northern Ontario 2.2.2 - Existing & emerging priority economic sectors a) advanced manufacturing b) agriculture, acquaculture and food processing c) arts, culture and creative industries d) digital economy e) forestry and value-added industries f) health sciences g) mineral sector and mining supply and services h) renewable energy and services i) tourism j) transportation, aviation and aerospace k) water technologies and service

Priority Projects REDA

Responsibility

Database of investment opportunities and funding programs Support for regional local food supply efforts, agricultural research and food security plans for First Nation communities Investor nominee program

REDA & Policy Inst.

REDA, MEDT, NODN and local EDOs

REDA, FN, LU

REDA and advocacy organizations

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Five Year Plan Once established, the REDA will chart its own course in ongoing collaboration with municipalities, Aboriginal communities and organizations, Francophone communities and their institutions, business, labour and industry, education and research sectors, community organizations and other orders of government. It is envisioned, however, that the REDAs five year economic development plan will include the following key components: 1. One stop-shopping for regional economic development including database of investment opportunities and funding programs. Provide support to smaller communities for accessing funding, training and advice; 2. Regional branding; 3. Adopt a pan-Northwestern approach to infrastructure requirements; 4. Support for regional local food supply efforts, agricultural research and food security plans for First Nation communities.; 5. Strategic collaboration with RTOs for a better alignment of resources and services in product development, capacity building and investment attraction (i.e., research-based decisions for maximum synergy between the REDA and the RTO); 6. Analyze strategic investments required to help First Nation residents settle into urban areas such as Thunder Bay, Sioux Lookout, Kenora and Dryden. This is a migration that is already occurring and it would enhance the regional economy if handled properly; 7. Region-wide approach to development of labour skills for the emerging opportunities in mining, value-added, software engineering and life science, among others; 8. Region-wide strategy to attract pool of highly-educated labour for those highly skilled areas where shortages exist (current and projected); 9. Region-wide strategy for Aboriginal education and training for skills development; 10. Promote and enhance provincial youth internship and co-op programs region-wide; 11. Develop programs to encourage the retention of youth; 12. Promote private sector investment in the region; and 13. Identify mining activity in the region and aid where appropriate in the development of related infrastructure to ensure maximum benefit to the region.

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CONCLUSION

Northwestern Ontario is fortunate to have a wealth of natural resources and human capital. However, the economic transformation brought about by the decline of its main competitive advantage in forestry and lack of growth in both population and tax base over the last 10 years has left it relatively weak in tax competitiveness and over reliant on transfer payments by the province. Diversification and repositioning are taking place but more needs to be done. A more clearly defined vision and rebranding will help but ultimately success will be based on implementation of a holistic strategic regional economic planning process that includes participation by the regional municipalities, as well as clear and strategically-focused performance indicators and a communication strategy.

Strategic regional economic development planning is a continuous and systematic process, whereby the various stakeholders come together to make decisions about a desired outcome. Such decisions, whenever possible, should be made by consensus and all factors important to the communities involved should be considered. Towards this end, this report includes guiding principles that will help shape the process of developing the strategic economic plan process and performance measurement model, to develop a more formal framework for outcomes-based measurement that is strategic in nature and focuses on results. Implementation plans developed under this process will create opportunities for the regional communities to fully participate in the planning and implementation of its recommendations. This report also includes a process for the region to measure the progress of this plan. This is not only from a monetary perspective, but also from a human resource and quality of life potential, in order to enable the region to be well positioned and prepared to take advantage of future opportunities as they arise. Such opportunities are primarily focused on ensuring the long-term diversification and sustainability of the area's economy. They are not limited to one specific area, thus providing Northwestern Ontario with a range of competitive advantages. Ultimately, if Northwestern Ontario is to succeed in establishing itself as a desirable location to live, visit and work, it must provide a new vision for the future that is consistent with the desires and aspirations of its constituencies. Such a vision needs to be shared by the higher order of government and based on a collaborative model that has as its core a new formula for local decision making. We are confident that this strategic regional economic planning model will help provide the tools to help the region to region achieve its goals.

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References BMA 2008-9. A Municipal Study on Competitiveness and Location Sensitive Factors by BMA Management Consulting Inc Bradford N. and Wolfe A. D. (2010). Toward a Transformative Agenda for FedDev Ontario. MOWAT Regional Economic Development Studies. June 2010. Bradford N. (2010). Regional Economic Development Agencies in Canada: Lessons for Southern Ontario. MOWAT Regional Economic Development Studies. June 2010 Common Voice Northwest Overview - March 2011 Canadian Business. Money Sense Canadas Best Places to Live 2009. Retrieved on May 5, 2010 from: http://list.canadianbusiness.com/rankings/bestplacestolive/2009/Default.aspx?sp2= 1andd1=aandsc1=6 Centre for Education and Research on Aging and Health (2010). Age-Friendly Thunder Bay. Presentation to City Council May 10, 2010. Lakehead University. City of Thunder Bay Long-Term Financial Plan. Budget Presentation 2011. Corporate Report N. 2009.042 - City of Thunder Bay Tax Policy Consideration, May 25, 2009 Daft, Richard L. and Armstrong, Ann (2009). Organizational Theory and Design, First Canadian Edition. Toronto, Nelson Food Security article. Retrieved on July 22 from: http://www.tbnewswatch.com/news/149155/Program-aims-to-bring-more-affordable-freshfoods-to-some-remote-First-Nations Hill, C.W.L. and Jones, G.R. (2009). Essentials of Strategic Management, 2nd Edition. Mason, OH: South-Western, Cengage Learning. Hitt, M. A., Miller, C. C., and Colella, A. (2009). Organizational Behaviour: A Strategic Approach, 2nd ed. Hoboken, NJ: John Wiley and Sons, Inc. KPMG Competitive Alternatives Study 2010 McSweeney, E. (2011). Pilot Economic Development Planning Areas Research Key Jurisdictional Information. Ministry of Northern Development, Mines and Forestry. 2011 Northern Industrial Electricity Rate Program. (2010). Retrieved on August 12, 2011 from: 108

http://news.ontario.ca/mndmf/en/2011/08/support-for-electricity-intensive-companyin-kenora.html Northern Ontario Proposed Growth Plan. (2009). Places to Grow Better Choices, Brighter Future. Ministry of Northern Development, Mines and Forestry. October 2009. Northern Ontario Growth Plan. (2011). Places to Grow Better Choices, Brighter Future. Ministry of Northern Development, Mines and Forestry. 2011 North Superior Workforce Planning Board (2009). Building a Superior Workforce: 2009-2012 Labour Market Action Plan. North Superior Workforce Planning Board Labour Market Action Plan 2011 Update. Retrieved on July 20, 2011 from: http://www.nswpb.ca/assets/files/BuildingASuperiorWorkforce_Update.pdf North Superior Workforce Planning Board. 2006 Census Analysis Reports Northwest Training and Adjustment Board. 2011 Trends, Opportunities, Priorities Report Ontario Forestry Coalition, Report to the Thunder Bay Municipal League. Ontario Ministry of Finance Population Projections. Retrieved on July 22 from: http://www.fin.gov.on.ca/en/economy/demographics/projections/#s3d Ontario News. Retrieved on August 26 from: http://news.ontario.ca/mndmf/en/2011/08/thunder-bay-company-saving-onelectricity-costs.html Plant E. Thomas (2008). Strategic Planning for Municipalities: A Users Guide. Municipal World Rosehart, Dr. Robert G. Northwestern Ontario: Preparing for Change. Northwestern Ontario Economic Facilitator Report, Ministry of Northern Development and Mines. (February 2008). Stan Sudol. (2011). Mining Marshall Plan for Northern Ontario. Northern Ontario Business. August 2011. Statistics Canada, 2001 Community profiles: Thunder Bay, Kenora and Rainy River Districts. Statistics Canada, 2006 Community profiles: Thunder Bay, Kenora and Rainy River Districts. The Conference Board of Canada, Metropolitan Outlook 2. Economic Insight into 27 Canadian Metropolitan Economies. Winter 2010, (January 2011). 109

Thunder Bay Community Economic Development Commission (2010). Strategic Action Plan Update Thunder Bay District Agricultural Economic Impact Study. October 2009. Thunder Bay Port Authority (2010). Port of Thunder Bay Canadas Gateway to the West. 2010 Annual Report. Thunder Bay Telephone (2010). Annual Report. Richardson, P., Wong, K., and Nightingale, D. (n.d.) Queens Executive Development Centre. Strategy Workbook.

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APPENDICES Appendix A Key Community Survey/Interview Questions Appendix B Schedule of Meetings and Interviews Appendix C Report on Pre-Summit Consultation Appendix D Aboriginal Engagement and Information Gathering Appendix E Competitive Advantage by Economic Sectors Appendix F Comparison of Canadian Hydro Rates Appendix G Regional Planning Structure and Organization Chart Appendix H Review of NWO Official, Strategic and Economic Plans Appendix I Review of NWO Aboriginal Economic Strategies

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Appendix A Key Community Survey/Interview Questions 1. Give an example of a business investment that was realised or lost. What made the investment attraction process successful or unsuccessful? Who controlled the decisions that affected this project? 2. What in your experience are the obstacles or barriers to economic development in your region? Who is in charge of those obstacles? 3. How can these be overcome? Are there any public policy or law changes that are needed to overcome these obstacles 4. What do you believe are the best opportunities for economic development in your region and why? What barriers have you identified that are between the proponent and its success? 5. How can these opportunities best be achieved?

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Appendix B Schedule of Meetings and Interviews Sector Name and Organization Date

Economic Development

Dan Brenzavich, Manager Northwestern Ontario Development Network (NODN) Livio Di Matteo Economist, Lakehead University

May 13, 2011 May 16, 2011 May 17, 2011

Dina Quenneville, Greenstone EDC May 24, 2011 Ed Schmidtke, Chair of CEDC May 27, 2011 Royden Potvin Manager Thunder Bay Ventures May 27, 2011 Margaret Wanlin - Consultant, Thunder Bay Ventures June 1, 2011 Richard Pohler Senior Economic Development Officer CEDC June 1, 2011 Ian Sgambelluri Economic Development Officer CEDC June 1, 2011 Steve Demmings, CEO at Thunder Bay CEDC

Utilities

Don Campbell CEO TBayTel Marg Scott, Executive Director of North Superior Workforce Planning Board (NSWPB)

June 8, 2011 May 16, 2011

Education and Training Steering Committees and Public Engagement

North Eastern Ontario Joint Task Force Committee - Sudbury Nipigon Thunder Bay District Regional Consultation Meeting Fort Frances Kenora and Rainy River District Regional Consultation Meeting Thunder Bay District Mtis Nation of Ontario George Macey Chair, Common Voice Northwest

May 19, 2011 May 25, 2011 May 26, 2011

June 30, 2011 July 4, 2011

Government and Related Organizations

Charla Robinson Executive Director, NOMA Darrell Matson Manager, Transportation and Works, City of Thunder Bay Judy Sanders Manager, NWO Innovation Centre

May 9, 2011 June 3, 2011

June 6, 2011

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Mark Smith Manager Development, City of Thunder Bay Tim Pile Secretary Treasurer, Mtis Nation of Ontario Anna Gibbon Aboriginal Liaison, City of Thunder Bay Katherine Turner Manager, Program Delivery, FedNor

June 8, 2011 June 8, 2011 July 5, 2011 July 8, 2011

John Cyr Lawyer, representing City of Thunder Bay on Energy Issues Scott McFadden President and CEO, Thunder Bay International Airport Authority Ian Smith, Regional Director, Ontario Ministry of Transportation John Taylor, Regional Director, North Region, Ontario Ministry of the Environment Jim Adams, Regional Director, North Region, Ontario Ministry of Training, Colleges and Universities Allan Willcocks, Regional Director, Northwest Region, Ontario Ministry of Natural Resources Lynn Buckham, Acting Regional Director, Northwest Region, Ontario Ministry of Municipal Affairs and Housing

July 8, 2011

August 2, 2011

June 29, 2011 July 18, 2011 July 18, 2011

July 11, 2011 July 12, 2011

Tourism and Hospitality Industry

Experiential Tourism Superior North Chamber of Commerce and Tourism Stakeholders (Nipigon Workshop) Paul Pepe - Manager Tourism, City of Thunder Bay Levina Collins Manager, North of Superior Tourism Tim Lukinuk Amethyst Mine Panorama and Gift Shop

April 11, 2011

May 20, 2011 June 2, 2011 June 2, 1011

Life Sciences Industry

Michael Power CEO Thunder Bay Regional Research Institute

July 13, 2011

Business and Labour Wasaya Group Aboriginal Owned Airline and other

June 7, 2011

Investments. Eric Kudaka, Project Advisor; Gordon Wabasse, Business Development Liaison and Ring of Fire Coordinator; Bruce Fallon, Tourism Advisor; Iain Angus, Councillor and Chair of the Regional Economic Development Task Force

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Harold Wilson President, Thunder Bay Chamber of Commerce Gordon Milliard President, Northwestern Ontario Building and Construction Trades Council Michael Nitz and Nathan Lawrence SHIFT Pres. and V.P. Young Professionals Network Melanie Kelso Pres. Thunder Bay District Labour Council Irene Kozlowski President and CEO, Sencia Canada Ltd.

June 7, 2011

July 8, 2011

July 18, 2011

July 18, 2011 July 20, 2011

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Appendix C Reports on Pre-Summit Consultation REGIONAL ECONOMIC DEVELOPMENT PLANNING PROJECT Thunder Bay Area Community Stakeholders Engagement and Interviews Pullia Business Consulting - June 10, 2011 EXECUTIVE SUMMARY Introduction and background The objective of this research study was to identify shared economic development priorities, issues, barriers, successes and opportunities in all sectors across Northwestern Ontario. Such information would serve as the basis for the development of a regional approach to economic development and a planning model. Limitations It is important to note that this report is presenting preliminary research findings only, which do not include the regional consultation (presented separately) and foundational research and analysis from Official Plans, Strategic Plans, Branding Plans, etc. from the various municipalities across the region. Disclaimer The information in the report represents the work of the consulting team and the views of the participants, not the views of the Joint Task Force. As well, the recommendations in this report do not represent a consensus of the participants. Methodology The study incorporates interviews with about 25 key community leaders and Economic Development practitioners (See Appendix A). The views expressed were from the perspective of the organizations that they represented and therefore provide an opportunity to view similar issues, barriers, success stories and opportunities from different angles (triangulation). This approach tends to strengthen the findings which will require further study and analysis (evidence-based) to substantiate. Key Findings Key findings show a common view that there are systemic barriers (silos and bureaucracy) within the provincial ministries that mostly affect development at the regional and local levels. Specifically, inquiries to Ministry of Innovation and Research, Investment and Trade, Agriculture and Aboriginal Affairs, are usually delegated to the local MNDMF office which does not have the resources or capability to deal with them effectively. The other Ministries that are viewed as barriers to development are the Ministry of Transportation (MTO), Ministry of Natural Resource (MNR) and Ministry of the Environment (MOE). The consistent theme in their case is that they view their function as one of regulators 116

where the need is for being facilitators. There are many examples shown in the body of this report of such systemic barriers to development and the consensus seems to be that, unless some changes are made, they will continue to be a major drag on regional economic expansion. The other major finding is that, while sharing similar issues of high transportation costs, energy costs (hydro rates), more clarity on Aboriginal consultation protocol, the need for a more visible FedNor presence at the table, land use planning, etc. there are substantial differences between the sub-regions of Northwestern Ontario. A section of this report has been dedicated to highlight the need for a region-wide economic development zone, and this will be expanded to include the specific areas of need for a multilayered approach in phase II of the study once additional research is conducted. Given all of the issues and barriers to development that have been identified, this initial research has also found evidence of many successes and areas of future opportunities. These have been broken down by sectors to facilitate the analysis and follow-up. The intent here is to learn from what is already working in Northwestern Ontario and apply these successful practices to emerging opportunities. Conclusion In conclusion, the initial evidence shows an emerging region blessed with vast natural resources and human capital, but still struggling to come out of a long-term recession. There is evidence of many successes and great opportunities, but also a view that the government needs to take a much closer look at the systemic barriers that are limiting economic development and expansion. As well, the sub-regions of Northwestern Ontario are unique in their needs, opportunities, and approaches to economic development and for any model to be successful it will also require to incorporate a tailored approach. The case is becoming apparent for a multi-layered approach where certain policies and programs would benefit from a region-wide application, while others would require a more focused sub-regional implementation. Consistent to the variable approach is the fundamental question for a more localized decision-making process.

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NORTHWESTERN ONTARIO JOINT TASK FORCE REPORT REGIONAL ECONOMIC DEVELOPMENT PLANNING FROM THE PERSPECTIVE OF THUNDER BAY DISTRICT, GREENSTONE AND SUPERIOR NORTH COMMUNITIES

June 8, 2011 By Sarah Lewis, Economic Development Officer Township of Nipigon

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Northwestern Ontario Joint Task Force Report Regional Economic Development Planning in the Rural Communities of Thunder Bay District, Greenstone, and Superior North Regions Sarah Lewis, EDO, Nipigon Executive Summary This report summarizes the comments of rural communities in the Thunder Bay District, Greenstone and Superior North areas who participated in the information gathering process initiated by the Joint Task Force (JTF). There is interest on the part of these communities in the potential benefits of regional economic development planning for Northwestern Ontario (NWO). The consensus of the feedback about this initiative is that the success of a regional economic development model will depend on how well the planning process balances the interests of rural communities, aboriginal communities and existing regions within NWO. The concern expressed from the region is that the benefits of a regional model may not be equally accessible to rural communities as they would be to the City of Thunder Bay. Communities say they are tired of plans being developed without sufficient resources being dedicated to the implementation of those plans. Sufficient staffing and resources to implement the regional economic development model that is developed by the Joint Task Force need to be secured. The source of these funds needs to be determined as soon as possible. Recommendation of Rural Representation - An equal number of rural and urban representatives in the Joint Task Force (JTF) would be a good first step in addressing concerns about representation - Aboriginal communities and organizations should have a separate discussion respecting the governance practices of each First Nation Recommendation of a Sub-Regional Approach - As the regional economic development process moves forward it is recommended that regions within NWO, including rural regions, are provided with the resources necessary to support local coordinators for sub-regional projects. - It is a challenge for rural communities to contribute the time that coordinating regional initiatives can consume. In addition, since many communities have no resources to invest in economic development, the delivery of services is uneven. Economic Development Priorities - Fiscal Sustainability - Natural Resource Industries - Tourism - Energy pricing and access - Economic Development

- Government Coordination - Aboriginal Communities - Small Business Development - Social Capital - Transportation 119

JTF Western Regional Consultation ___________ June 10, 2011

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PURPOSE Consultation meetings were completed in Fort Frances, Kenora and Dryden in response to a request of the Joint Task Forces for regional input into the Ministry of Northern Development Mines and Forests Regional Economic Development Planning Pilot project targeted at the Thunder Bay region. Approximately 30 economic development officers (EDOs), economic development committee members or chairs, community future development corporation managers and business development officers were invited. On the advice of the local EDOs, key business people were included from the retail, banking, agriculture, forestry and tourism sectors. EDOs that were unable to attend a session were either interviewed by phone or in person. Participants were asked to respond to five questions agreed upon by the Joint Task Force. The Consultants do not accept any responsibility for any decisions taken directly or indirectly, in whole or in part, based on information or findings contained in the report. The information contained in this report does not reflect the analysis of the Consulting firm but as per the clients request relays the information obtained in the consultations held on the JTFs behalf.

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SUMMARY SUMMARY OF DEVELOPMENT OBSTACLES IDENTIFIED Regulatory Environment Business losses were identified as a result of the weight of Ontario`s environmental, labour, safety regulation and legislation. Size and Waste of Government The size of the current government, the layers of decision making and government waste were seen as root causes for high taxation. Taxation Regime Ontario`s taxation regime were perceived to cause competitiveness issues. This included the HST, taxes on gas, property tax assessments and corporate tax environment. Land Development Issues were identified that were halting or preventing development on crown lands and within municipal boundaries. Problems identified were specifically within Ministry of Municipal Affairs and Housing (MMAH) or Ministry of Natural Resources (MNR) treatment and requirements for development. Federal Border Issues Tourism revenue losses were reported directly related to increased minor criminality enforcement at the Northwest border crossings. Economic and Policy Disengagement In the western part of the Northwest, investment comes from the west and south and policy direction from the east. Energy Issues were identified with physical failures of the energy grid and policy decisions within the provincial government related to pricing and programs. Access to Fibre Issues were identified with losses based on how slow and unpredictable the fibre allocation process is and a lack of transparency. Access to Capital With particular emphasis on the tourism industry, and despite the Heritage Funds (NOHFCs) programs, businesses have access to capital issues. Finding equity financing is difficult in the region.

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Aboriginal Partnerships The inability of the provincial and federal governments to establish concrete procedures for consultation and resource sharing, and settle land claims, creates an uncertain investment environment.

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SUMMARY SUMMARY OF SOLUTIONS TO BARRIERS Local Decision Making In most cases, the solutions to the barriers to development involved providing greater local autonomy. Regional Planning Control Solutions involved sharing of resources and creating a Northwestern Ontario planning body that could resolve issues. Policy Institute Solutions involved leveraging the policy institute to provide economic development offices and local governments with real data regarding the cost and benefits of local, provincial or federal policies or initiatives. Regulatory Reduction Solutions involved the removal of policies that hinder development and provide no benefit in the context of Northern Ontario. Economic Development Agency Accountability Provincial and federal economic development solutions involved providing an ongoing revenue stream that was de-politicized, establishing service delivery standards and reacting to the needs of communities or the private sector in a timely and thoughtful manner. Program Efficiencies Strategies for greater efficiencies included implementing program reviews; single door access to programs (provincial, municipal and federal) and having Community Future Development Corporations (CFDCs) deliver both federal and provincial programs. Energy Solutions involved the creation of a regional energy policy body and making significant improvements in the grid. Aboriginal Partnering Numerous examples of effective First Nations, government and private sector partnerships were revealed. The key requirements to successful partnerships were that they were project driven; not legislated but voluntary; and that the participants did not rush the agreements.

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Appendix D Aboriginal Engagement and Information Gathering Information Gathering of the Nishnawbe Aski Nation Submitted by: Cindy Crowe Consulting www.cindycroweconsulting.ca

Executive Summary Introduction Cindy Crowe Consulting was contracted through the research study of Northwestern Ontarioal Economic Planning Joint Task Force to gather input from the Nishnawbe Aski Nation (NAN). In order to ensure that all protocols were fulfilled, the consultant met with the Deputy Grand Chief Les Louttit and the Policy Advisor, Economic and Resource Development of NAN and a subsequent letter (please refer to Appendix A for a copy of this letter) was distributed to all NAN First Nation communities and Tribal Councils through NANs communication systems. Limitations The consultant had four (4) weeks to conduct this research study for the NAN territory which is made up of 49 First Nation communities. In addition to the allotted time restrictions, the research was also conducted during the time of year that staff is away on holidays. This seriously affected the returns on the invitations to the Economic Development Officers (EDOs) to be interviewed. In addition, some of the EDOs were new on the job however a couple have been working in the same position for 25+ years. Therefore, a variety of other individuals were invited to participate from various sectors of the territory including small business owners, Aboriginal governance, education, health, youth and funding agencies who work directly for NAN communities or who have experience working in this territory. Disclaimer The research gathered is directly from the individuals who participated in the interview process and not necessarily the views of the consultant or Northwestern Ontario Economic Planning Joint Task Force. It is the intention of the consultant to provide a copy of this research back to the individuals that participated in the research including Deputy Grand Chief Les Louttit and the Policy Advisor, Economic and Resource Development of NAN. Methodology The research presented in this report is derived from interviews with twenty-seven (27) individuals (please refer to Appendix B for a schedule of these interviews). The order of the topics are placed in the order of the frequency that these topics were mentioned during the interviews. There is also some material concerning successful ventures presented in Appendix C which is derived from secondary data.

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Key Findings ISSUES Business Funding Changes to the Indian Act to enable NAN First Nation band members to acquire equity on reserve through home ownership; the need for increased government funding for small businesses and Community Futures Development Corporations; and, a return on personal investments spent in urban centers while attending post-secondary or medical appointments were the prominent issues stated by the research participants affecting economic development in the NAN territory. Cultural and language barriers; minimal capacity; negligible funding for business support at the community level; and, lack of resources for Community Futures Development Corporations all add to the challenges of acceptable business planning. The research cited many instances of visions being suppressed due to inadequate business plans and off reserve businesses usually return to the blanket of the community to avoid taxation, banks and creditors. The average population of the 49 NAN communities does not sustain a sufficient customer base and adds to the competition issues faced by small businesses. Furthermore, the monopoly that the Northern Stores control discourages on reserve entrepreneurship. Human Capital Next in urgency identified by the research is that the on reserve education curriculum has much lower standards than the provincial curriculum and there are no post-secondary institutions in the NAN territory. Grade 6 is the community median. This obliges families to seek their higher learning within urban centers. More government funding is needed to: support communities to achieve provincial standards on reserve; provide adequate family living allowances while off reserve; and, in the interim support communities to purchase expertise. These hardships add to the recruitment and retention issues: lack of housing, comparable salaries, pension packages, benefit packages and other incentives oblige the community graduates to look for employment in urban settings. NAN members are reluctant to look at businesses or employment off reserve and minimal capacity inhibits individuals to seek out innovative options such as online stores. The human capital required does not fit the current equation. A handful of NAN communities have agreements in place or community ventures which are creating jobs and subsidizing their insignificant government community program funding. Front Line Service Providers are busy putting out fires on a daily basis and community leadership are babysitting organizations. Absence of communication among the various on reserve programs perpetuates a silo mentality: not sharing resources (funding, human, materials). An article in Sundays Canadian Press stated: "If we want these kids to get beyond the hopelessness and the desperation and the despair they feel if they are educated to a level where they can see some promise for their future it will go a long way to helping them," said 126

Dr. Bert Lauwers, the Deputy Chief Coroner for investigations in OntarioIn addition, the coroner's report said "serious consideration" should be given to rethinking how education is delivered in First Nations communities, including possibly completely transferring the responsibility from federal jurisdiction to the provinces, which have considerably more experience in education (Allison Jones, 2011). Refer to Appendix E for a complete copy of this article. Social Issues The social issues are seen as being equal in urgency to Human Capital and are attributed to the injustices of Residential School and governments strategy for assimilation. Crisis level issues such as loss of language and culture, suicide, poverty, lack of housing, dependency on welfare, diabetes, prescription drug abuse, gas sniffing, alcoholism, other addictions, racism, discrimination, child abandonment, child apprehension, criminal activity and low self-esteem are high on the list. The uneducated are the highest at risk. It is a sad reality that Aboriginal people today are usually introduced to their language and culture at a Rehabilitation Centre; while incarcerated; or, at an educational institution. Security is a necessary and very costly outcome of the criminal activity for larger community projects and smaller businesses alike. The worldview of NAN First Nation band members concerning economic development is one of distrust. The lack of economic development education prevents individuals from reaching their highest potential and achieving their visions and leadership is not supporting individual members concerning economic development. Infrastructure The mainstream society needs to be aware of the unique economic development challenges of the fly-in communities encompassing 210,000 square miles. Leadership and the communities struggle daily with providing amenities such as: infrastructure, housing, all-weather roads, transportation, safe drinking water and energy. Government needs to recognize its treaty responsibility to the people that are living in third world conditions and provide adequate funding to meet the growing population needs of the communities. Incomplete Land Use Plans; running out of reserve land; and, the on reserve housing and infrastructure crisis prevents communities from allocating business zones and lots for business start-ups. Slowly the reality that the Aboriginal population is growing at staggering rates is permeating the local governments and reluctant action is being taken. Lands and Resources Consultation The unlimited permits and licensing being issued by Ontario to mining exploration and forestry companies and the free-entry exploitation of NANs traditional homelands is complicated with the urgent need for capacity growth of community leadership. Agreements are being signed without proper consultation of band membership due to lack of expertise funding; the absence of capacity; and, negligence of seven generations planning. Northern Growth Plan One size does not fit all when it comes to developing an economic model for Northern Ontario. The model has to be flexible and provide crucial investments for local businesses. As a 127

result of insufficient input sought from the NAN territory and the rushed timelines for this input as indicated by the research, the NAN territory will not embrace the Ministrys proposed economic model. Refer to Appendix D for a copy of NAN Resolution #11/14 requesting the provincial government to delay its process until NAN has the funding necessary to develop and implement a NAN economic model. When attempting regional planning for the massive geographical area of the NAN territory, lack of unity among the NAN First Nations undermines their success. Government Responsibility The non-Aboriginal society has to comprehend their co-responsibility to the treaties and this has to be supported by municipal, provincial and federal agencies. Non-Aboriginal businesses in urban settings are already recognizing who their biggest customers are and are catering to their Aboriginal customers. When are the various levels of government going to follow suit? BARRIERS Capacity Development Lack of business experience; language barriers; minimal education; inability to speak in front of customers; impatience with the time it takes for higher learning; losing a permanent house on reserve and non-existent supports for your family to attend post-secondary; transportation to higher learning; and, the absence of moral support are the most common barriers to economic development as indicated by the research. Old cultural attitudes from inter-generational injustices avert individuals to: seek out higher learning and business planning support (pride and embarrassment); prevents band members from reaching for success; and, living a healthy lifestyle distances you from your family, friends and community. Current leaders do not have the training required to properly assess lands and resources agreements and provide necessary consultation with their community membership. The high crisis level in the communities forces Chiefs and Councils to be service oriented instead of business minded. Band Council Resolutions required for business support are reliant on who is in power. Investment Barriers Common investment barriers across the NAN territory are: third party management; not having financial credit; the search for suitable investment partners; limited business resources at the community level; accessibility to urban resources is challenging; and, the criteria required for business funding such as equity and understanding import/export of products/services. Limited Access On reserve and off reserve businesses (excepting major urban centres such as Thunder Bay or Winnipeg) face the huge barrier of limited access to suppliers due to the high cost of travel and shipping i.e. shipping in the eastern region of the NAN territory is in the range of $1.39 to $1.75 128

per pound from Timmins. Most remote NAN communities are at energy capacity which inhibits new community ventures and new small businesses. Non-Equality Reasonable resource allocation and resource royalties from the province were cited as means to promote equality for the NAN territory within the province. Impartial distribution of revenues from resource extraction that has taken place has not benefited many NAN First Nations. SUCCESSES The research specified that NAN individuals and communities are experiencing economic development successes through: private sector investment assistance instead of government assistance; resource agreements paying for expertise and capacity development; external management expertise; diversification strategy; receiving higher education; and, reinvestment back into the communities. Refer to Appendix C for a list of NAN successes derived from secondary data. OPPORTUNITIES The well-known current NAN territory opportunities are through resources such as the Ring of Fire and the Ontario Power Generation. Agreements could provide economic development opportunities for community members such as training and business funding. Other economic opportunities i.e. mining, tourism, forestry could be identified through land use planning. NAN has a lot of work to do in this area and then, agreements could be negotiated. Business opportunities identified by the research were: infrastructure development; any support services for the mining industries; and, any services currently provided by the mainstream society. Sharing the culture with other global visitors is also a huge economic opportunity. Education is empowerment! Our economy depends on well-educated families! Smart economics would result from communities, municipalities, the province and the nation to invest in the education of the NAN families. The research further indicated that: NAN requires a regional economic model (including business templates); NAN needs the non-Aboriginal people to help them with economic development; and, more partnerships between NAN First Nation communities and municipalities are needed. PUBLIC POLICY Changes to the Indian Act; equality of the on reserve education funding; and, matching government business funding were all noted as being imperative to create positive economic development advancements. 129

Conclusion and Recommendations Through the research gathered over the four week period, it is the opinion of the participants that social issues; lack of capacity; business plan requirements; and, minimal business funding are the greatest barriers to entrepreneurship. Community ventures are hindered by governments failure to meet its infrastructure responsibilities; education inequality; free-entry exploitation of NANs traditional homelands; marginal leadership capacity; and, unjust provincial distribution of revenues from resource extraction. Successes are being experienced through training and business funding mechanisms structured through resource agreements and accessing arms length management expertise. Education is unquestionably the greatest opportunity for NAN families and would be the victory of our Northern Ontario economy! Education needs to be supported by all levels of government. Human and financial support also needs to be provided to NAN communities to complete their land use planning. The following recommendations are sourced from the NAN Economic Summit priorities. For the complete list of recommendations, refer to Section 7.0: 1. What can NAN do? Provide political advocacy to First Nations local economic development initiatives. 2. Develop a Regional Economic Strategic Plan. 3. Develop a NAN-wide data base of the First Nation Inventories, where Tribal Councils will have a regional data base and First Nations have their community data base. To become investment/development ready. This data base could then be developed into a NAN Census with accurate and up to date statistics. 4. Develop a data base or First Nation Business Portal that shares information i.e. Business plan templates, RFP templates, consultants, lawyers, mentors etc. 5. Plan for a Youth Economic Summit by providing the youth with resources to plan it. Identifying, holistically what potential employment opportunities there could be in the next 10 years, potentially having a career fair that outlines these jobs and provides tools and resources. 6. Research to investigate the need to establish a NAN-wide Environmental Agency and regime to meet the needs of NAN First Nations in dealing with environmental/ecological and cultural impacts resulting from resource developments in the NAN Territory. In addition to the internal recommendations from the NAN Economic Summit, the researcher is suggesting the following recommendations with the subsequent suggested timelines: 130

Short term (within 6 months) 1. NAN, municipal, provincial and federal agencies need to work together! 2. Government needs to acknowledge and financially support NAN Resolution #11/14 requesting the provincial government to delay its Northern Growth Plan process until NAN has the funding necessary to develop and implement a NAN economic model; 3. Government needs to increase business funding for entrepreneurs and Community Futures Development Corporations; 4. The criteria required for business funding needs to accommodate the capacity and equity challenges of NAN First Nations communities and entrepreneurs; 5. Government needs to provide a shipping subsidy to all NAN fly-in entrepreneurs and community essential services; 6. Resource Agreements and matching government funding could provide economic development opportunities for community members such as training and business funding; 7. Government business funding could foster more partnerships between NAN First Nation communities and municipalities; 8. Government business funding could foster more partnerships with non-Aboriginal people and NAN entrepreneurs; 9. The government has to stop passing restrictive legislative policies that limits the abilities of the NAN First Nation communities to govern their traditional homelands and pursue economic development (i.e. Bill 151 Ontarios Forest Tenure Modernization Act, Canadian Boreal Forest Agreement, Bill C-575 First Nations Financial Transparency Act, Bill 191 The Far North Act, Harmonized Sales Tax, Bill S-4 on Matrimonial Real Property, Mining Act Amendment Bill); 10. The Northern Growth Model has to be flexible and provide crucial investments for local businesses; and, 11. Government needs to provide a travel subsidy to all NAN fly-in students attending higher learning in an urban center. Mid-term (6 months to 2 years)

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1. Municipal, provincial and federal agencies need to provide cultural awareness funding and resources to educate the non-Aboriginal society concerning their co-responsibility to the treaties and the unique economic development challenges of the NAN fly-in communities encompassing 210,000 square miles; 2. Amendments to the Indian Act are necessary to enable NAN First Nation band members to acquire equity on reserve through home ownership; 3. Government needs to assist the NAN territory with Land Use Plans to identify other economic opportunities i.e. mining, tourism, forestry; 4. The government needs to cease issuing unlimited permits and licensing to mining exploration and forestry companies and eliminate the free-entry exploitation of NANs traditional homelands; 5. NAN First Nation communities, municipalities, the province and the nation need to invest in the education of NAN families including: support communities achieve provincial standards on reserve; providing living assistance to families supporting a family member to attend post-secondary institutions while off reserve; and, in the interim support communities to purchase expertise (for Agreements); 6. Government needs to financially support communities and entrepreneurs with business opportunities such as: infrastructure development; any support services for the mining industries; sharing the culture with other global visitors; and, any services currently provided by the mainstream society; 7. Government compensation needs to be provided to NAN entrepreneurs experiencing financial hardships due to the monopoly that the Northern Stores control; 8. Government needs to provide business subsidies for entrepreneurs and communities to access external management expertise; and, 9. Government needs to provide human resources subsidies to NAN First Nation communities to assist with the recruitment and retention issues: lack of housing, comparable salaries, pension packages, benefit packages and other incentives to encourage the community graduates to seek employment in their home communities. Long-term (2 years to 5 years) 1. Government needs to recognize its treaty responsibility to the people that are living in third world conditions and provide adequate funding to meet the growing population needs of the communities including amenities such as: infrastructure, housing, allweather roads, transportation, safe drinking water, and energy; and, 132

2. Government needs to ensure reasonable resource allocation and resource royalties are provided to NAN First Nation communities.

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JOINT TASK FORCE Mtis Regions 1 and 2 INFORMATION GATHERING SESSIONS

August 30, 2011

1490249 Ontario Ltd. O/A ECO CHOICE SYSTEMS CONSULTING

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North Western Ontario Regional Economic Planning Zone Pilot Project Northwestern Ontario Joint Task Force Northwestern Ontario Joint Task Force Report on information gathering sessions in Mtis Nation of Ontario traditional territories located in Regions 1 and 2. Region 1 is westward from the Quetico region to the Manitoba border including Mtis participants in Atikokan, Fort Frances Dryden and Kenora. Region 2 includes Thunder Bay and area (Kakabeka Falls to Nipigon) East to Greenstone and North Superior Hwy 17 east to Wawa.

Region 1

Region 2

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EXECUTIVE SUMMARY Introduction and background The objective of this research study was to identify shared economic development priorities, issues, barriers, successes and opportunities in the Mtis Nation of Ontario (MNO) Regions 1 and 2. These regions cover the traditional territories used by the MNO in Northwestern Ontario region covering an area from the Manitoba border to as far east as Wawa. Information gathered and compiled from the Mtis citizens and businesses for this report will help establish the basis for the development of a regional approach to economic development and a planning model. Limitations This report is represents preliminary research findings with Mtis leadership, citizens and businesses. Disclaimer The information in the report represents the work of the consulting team and the views of the participants, not the views of the Joint Task Force (JTF). As well, the recommendations in this report do not represent a consensus of the Mtis participants. Methodology The information gathering sessions include interviews with 7 Mtis communities, local Mtis leaders, businesses and citizens. (See Appendix A - Participants and Information shared). A general overview of the Northern Regional Economic Zones and the intent of the project were presented to each Mtis community. An explanation of the JTF priorities were presented with the additional McSweeney Report Keys to Success) (See Appendix B) After the power point presentation we focused on 5 questions (See Appendix C) which gave the group an opportunity to express their thoughts from a Mtis perspective and therefore provide an opportunity to hear similar issues, barriers, success stories and opportunities in their local economic zones. The key economic sectors from the Growth North Plan were used to stimulate questions and responses with regards to their local realities. Key Findings There are a number of common themes throughout Region 1 and 2 that effect economic development opportunities for the Mtis Communities. Key findings show that the plan has to be inclusive of the smaller rural communities. Communities such as Greenstone, in reality will 136

likely be a major hub for the Ring of Fire Project. The Mtis Community wants assurances that a regional approach to a Northern Economic Zone will benefit the smaller communities and not just the major centre such as Thunder Bay Ministries such as Ministry of Transportation (MTO), Ministry of Natural Resource (MNR) and Ministry of Environment (MOE) work independently, yet each one affects the other when business opportunities arise. This silo approach causes a lot of frustration for those that are looking for answers to questions and information regarding business ideas. The common idea recommended was to have a one stop shop to help one clear through the bureaucracy without being passed from one Ministry to another. These Ministries are viewed more as regulators versus facilitators. Other major points of discussion specific to the Mtis community concerns dealt with high transportation costs, hydro costs, energy costs overall. Lack of investment capital to support Mtis Entrepreneurs and more important is lack of knowledge of the existence of Mtis communities and families that have been in their communities before the Province and country existed. The need for education on some of the historical facts regarding Mtis communities and family ancestries would clarify a lot of the confusion about the Mtis people and their respective territories. The general feeling from the majority of Mtis citizens that participated in the sessions felt that Governments Provincial, Federal and First Nations do not respect Mtis collective rights. There is a misconception that Mtis do not exist in the communities and if they do, their rights were extinguished many years ago. Another misunderstanding of First Nations leadership involves aboriginal rights protected under the Constitution Act. The MNO represents one of Canadas recognized aboriginal peoples under the Constitution s. 35 in the Constitution Act, 1982, which recognizes 3 distinct aboriginal people First Nations, Mtis and Inuit. It is been communicated to Government officials and proponents that Treaty rights somehow trump all other aboriginal rights. This has been a major barrier in moving forward with Mtis economic development opportunities with proponents that have a duty to consult with the Mtis communities. They do not place equal importance on their duty to consult with the Mtis and with very little support from the Government Ministries to hold proponents accountable; Mtis communities are often an afterthought and end up with the short end of the stick. Leadership at all levels has to listen with an open mind and gain an appreciation for the contributions that the Mtis had made when building Ontario and Canada. Knowing many of the issues and barriers for economic development that have been identified through these sessions, we recognize that the initial research has also found support of some successes and areas for future opportunities. The greatest opportunities that were identified under the following sectors: mining, added value forestry, service industry tourism and health 137

care. Potential opportunities exist for the Mtis to participate in these sectors to create successful practices in Northwestern Ontario. Conclusion In conclusion, the initial information gathering sessions have shown a strong collective Mtis voice that want to contribute in the successful economy of Northern Ontario. The Mtis community and region territories are blessed with natural resources and want proponents to approach these potential projects with the utmost respect for the air, land and water. Where there is a duty to consult obligation triggered as a result of affecting the Mtis Way of Life they expect the same respect as other aboriginal communities at the table. The Mtis community respects the rights of the First Nation Communities and their current negotiations with Governments and Proponents. They only ask for the same respect in return. As a result of the recent announcement of the 30 million dollar Mtis Voyageur Economic Development fund Mtis entrepreneurs and businesses want to seize opportunities in the resource sector. It is important to learn from what is already working and apply these success templates to the up-and-coming opportunities. The aboriginal population is the fastest growing population in the north and will most likely be the potential employees of the future economy. Government and Proponents can play an important role in training opportunities in all sectors. Opportunities for the Mtis can be best achieved by simplifying the regulatory environment; make decisions in the North for the North. Proponents and Governments can truly participate as partners in profit sharing and job creation for Mtis people. Respect the duty to consult in a meaningful way and include Mtis earlier in the process so there is time for full understanding of the implications and an opportunity to respond with meaningful input.

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Appendix E Competitive Advantage by Economic Sectors MANUFACTURING Thunder Bay Oil Sands Consortium, recently re-branded as Thunder Bay Metal Fabricators Association (originally focused on Alberta and oil sands; now focused on Saskatchewan and oil, uranium and potash developments and Manitoba hydro construction opportunities). Announcements by the local Bombardier Plant in the media in May 2010 over its success on winning new contracts for the Toronto Transit, speaks volumes of the distinctive competencies in the manufacturing sectors, and bodes well for the future. The recent establishment of Global Sticks in Oliver Paipoonge also speaks well of the type of regional collaboration that allowed a China-based company to move into Northwestern Ontario. MINING Renewed exploration driven by the surge in commodity prices and global demand from emerging countries, has forged a new era of collaboration in the region through the creation of a Mining Task Force, focusing on capturing the economic benefits of an estimated $2.1 billion investment required to realize a strategically important chromium deposit in the Ring of Fire. The resources and capabilities available in Northwestern Ontario in this growing sector of the economy can provide a sustainable competitive advantage for years to come. FORESTRY Regional players including CEDC have worked collaboratively with strategic partners including NOHFC to bring new value added forestry manufacturers to the Northwestern Ontario i.e. Global Sticks. Such initiatives have recently attracted national press and present excellent opportunities to build a marketing program to create an emerging value added forestry cluster. Forestry is changing but the wood fibre is still here in the North. To the extent by which the region can use the emerging sector of bio-refinery to create new products, and attract value-added small manufacturing companies like Global Sticks and Aspenware, it can transform itself and still provide a sustainable competitive advantage. A $25 million allocation from the province for the new Thunder Bay-based Bio-economy Research Centre focused on forestry was announced in the media by Northern Development and Mines Minister Michael Gravelle on March 26, 2008 but it is geared more towards research (Chronicle Journal, March 26, 2008). TRANSPORTATION -. Resource rich areas such as Northwestern Ontario must make a commitment to 21st century infrastructure (road, rail, port and air) if they are to capitalize upon the efficient movement of commodities. In the past two (2) years, the region is witnessing the movement of new products through the port destined for the west (i.e. upgraders and windmills). The city and region must understand the opportunity for participation in rapidly evolving supply chains and regain its competitive advantage it has in transportation by maximizing the use of the presently underutilized port and rail. ENERGY and GREEN ENERGY Northwestern Ontario has the makings of a green energy 139

region; the largest natural fresh water lake on the planet (the world is increasingly running short of clean water), vast quantities of boreal forest (for powering biomass energy) and the longest days of sunshine (for the advancement of solar technologies). The greatest asset and a competitive advantage over other cities and regions is the fact that the city is the only shareholder of Thunder Bay Hydro and affiliated companies and can take full advantage of the tremendous opportunities provided through the Green Energy Act. HEALTH SCIENCES - The TBRHSC and TBRRI are increasingly becoming established economic development engines, creating spin off companies and acting as a magnet to both retain and attract well educated and highly skilled professionals to the area. The TBRRI has secured $50 million in government and industry partnered funding since 2007. Recent investments by Tornado Medical Inc. in Thunder Bay offer the potential of creating up to 200 new high-tech and medical research job in the city and continue to add strength and distinctive competencies in this emerging field, and help reposition the City and region for the future. (Source: CEDC Strategic Plan 2010) BACK OFFICE Thunder Bay and region offer a competitive advantage to call centres and administrative offices due to its lower cost of labour and operations. The back office sector has experienced severe contraction and consolidation in the past 24 months, with significant migration now occurring to Costa Rica and the Philippines. However, the recent OLS win has attracted industry wide attention and there exists opportunities for (albeit) smaller back office operations. Organizations like Superior Propane have opened a second administrative services office at 40% lower costs than their main operation in Edmonton. (Source: CEDC Strategic Plan 2010) TELECOMMUNICATION One of the greatest competitive advantages that the city and region have is through its ownership of Thunder Bay Telephone. It ranks as the largest public owned telephone utility in Canada, providing over 400 direct and 100 indirect good paying jobs. It pays a yearly dividend of $17M to the City, and it has done so consistently through direct competition with the national telecom like Bell Canada, Telus, and Rogers, as well as new entrants. Its mandate includes one of economic expansion through regional collaboration which is allowing Northwestern Ontario to eliminate geographical and economic isolation and compete with the rest of the world.

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Appendix F Comparison of Canadian Hydro Rates

Utility Rate Comparisons

Survey of Canadian Electricity Bills Effective May 1, 2011 Source: http://www.hydro.mb.ca/regulatory_affairs/energy_rates/electricity/utility_rate_comp.shtml

General Service (Large Industrial Loads) One month bill for: Customer-Owned Transformation Service at Transmission Voltage Exceeding 100 kV 100% Power Factor 100,000 kW / kVA 62,000,000 kWh 1) Toronto Hydro-Electric System Ltd. 2) Hydro One Networks Inc. Maritime Electric 3) Nova Scotia Power NB Power SaskPower BC Hydro Hydro Quebec Newfoundland & Labrador Hydro Manitoba Hydro $5,909,360 $5,375,260 $5,163,800 $4,597,480 $4,237,000 $3,472,061 $2,862,989 $2,793,330 $2,460,420 $2,207,800 /kWh 9.531 8.670 8.329 7.415 6.834 5.600 4.618 4.505 3.968 3.561

Note:

1. Based on an average energy price of 6.87 /kWh. 2. Based on an average energy price of 6.67 /kWh. Transmission customers billed by the IESO. 3. Assumes load is interruptible.

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General Service (Small Loads) Comparison @ 5,000 kWh per Month 20 kW Cities Charlottetown PE Englehart ON Halifax NS Moncton NB Saint John NB Toronto ON St. John's NL Saskatoon SK Regina SK Edmonton AB Kenora ON Calgary AB Vancouver BC Montreal QC Winnipeg MB (22.2 kVA) 5,000 kWh $783.57 $693.06 $671.41 $624.43 $609.60 $596.73 $561.17 $527.95 $527.77 $503.52 $498.95 $466.02 $457.29 $451.33 $366.25 15.671 13.861 13.428 12.489 12.192 11.935 11.223 10.559 10.555 10.070 9.979 9.320 9.146 9.027 7.325 /kWh

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Residential Comparison @ 750 kWh per Month One Month Bill For: Cities Charlottetown PE Englehart ON Halifax NS Regina SK Saskatoon SK Moncton NB Toronto ON St. John's NL Edmonton AB Kenora ON Saint John NB Calgary AB Vancouver BC Winnipeg MB Montreal QC 750 kWh /kWh

$114.95 15.327 $111.92 14.923 $104.88 13.984 $98.86 $98.85 $93.61 $92.92 $86.26 $83.77 $83.49 $83.03 $82.85 $58.06 $56.50 $52.62 13.181 13.180 12.481 12.389 11.501 11.169 11.132 11.071 11.046 7.741 7.533 7.016

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Canadian Utilities Surveyed Location Calgary AB Charlottetown PE Edmonton AB Englehart ON Halifax NS Kenora ON Moncton NB Montreal QC Regina SK Saint John NB Saskatoon SK St. John's NL St. John's NL* Toronto ON Utility ENMAX Corporation Maritime Electric EPCOR Energy Alberta Inc. Hydro One Networks Inc. Nova Scotia Power Kenora Hydro NB Power Hydro Quebec SaskPower Saint John Energy Saskatoon Light & Power Newfoundland Power Newfoundland & Labrador Hydro Toronto Hydro-Electric System Ltd.

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Canadian Utilities Surveyed Location Vancouver BC Winnipeg MB BC Hydro Manitoba Hydro Utility

* Only Large Industrial Rates provided for the Island interconnected area. Notes 1. 2. Each participating utility calculates bills based on its rates as of 2011 05 01. All bills are net of discounts, income tax rebates, etc. and no GST, provincial or municipal taxes or surcharges are included. Newfoundland Power does however include a Municipal Tax and Rate Stabilization Adjustment which is built into their rates. 3. ENMAX Residential and Small Commercial ( 5000 kWh) bill calculations are based on the May 2011 Regulated Rate Option (RRO) energy charge of 6.555 /kWh. ENMAX Medium and Large Commercial bill calculations are based on the annual average Alberta electricity spot market pool price. 4. 5. EPCOR bill calculations are based on the May 2011 Regulated Rate Option (RRO) energy charge of 6.299 /kWh. Ontario Bill calculations for Residential are based on an average seasonal commodity price. Calculations for General Service Medium and Large are based on an average estimated price for energy which varies among utilities surveyed. All bill calculations include a debt retirement charge. The bill calculations for Residential and General Service Small (< 50 kW) include the Ontario Clean Energy Benefit (OCEB) which provides a 10% discount on the entire bill.

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Appendix G Review of NWO Strategic, Official and Economic Plans Introduction and Summary A review of the official plans, strategic plans, and economic development plans of communities across Northwestern Ontario (NWO) shows common trends and therefore great potential for a regional economic development program. The review also shows, however, that many communities do not have active economic development programs or strategic plans in place. The engagement of communities with limited resources spread across a large region, certainly presents a challenge in realizing the potential opportunity of regional economic development. A sub-regional approach is therefore recommended to identify opportunities and support economic development throughout the region. Municipal interest in economic diversification is almost universal and although the level of economic development activity varies greatly from community to community, it is consistently found across the region. Regional economic development trends are not difficult to find in municipal plans, and many communities with economic development programs have similar strategies in place to build stronger local economies. Defining sub-regions with Northwestern Ontario may help to address the variation in economic development activity between communities, and make sure that the unique needs and opportunities in different areas are being addressed. The cooperation of the provincial government in the economic development efforts of communities across the region is critical to the success of these efforts. Provincial ministries exert control over the natural resources that provide communities a competitive advantage in priority sectors for economic development, and they are frequently mentioned in municipal plans. Description of the Planning Documents Planning is intended to focus and inform actions taken by communities to develop their economies, however, the choices that a community makes do not necessarily reflect their plans. Unforeseen opportunities or challenges and changes in the economic and political environment since a plan was created are outside of the scope of this review. This review summarizes the common economic development priorities, trends and issues in the official plans, strategic and economic plans for municipalities within Northwestern Ontario. The plans (where available) were reviewed of each municipality of Northwestern Ontario. Official Community Plans (OCP) are created by each Municipality to provide policy direction for community planning within a 20 year timeframe. OCP generally provide guidance in the areas of land use planning, protecting environmental resources and supporting the local economy. Official Plans lay the groundwork for Economic Development Planning with a long term view.

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Strategic Plans are often created by Municipalities to outline the communitys vision for the future, mission statement, key objectives, and strategies to achieve them. Municipal strategic plans often have a shorter timeframe than Official Community Plans, such as five to ten years. Economic Development Plans are developed by communities to identify areas of strength and areas of opportunity for economic development. The strategy often has a similar timeframe to the community strategic plan and outlines strategies and timelines specifically related to economic development. Findings Engagement in economic development, community partnerships and a regional approach All communities do not engage directly in a regional economic development program, even though they see a need for economic diversification. Economic diversification is consistently identified as a goal for municipalities throughout the region in almost every planning document that was reviewed. However, the level of action in municipal planning and economic development varies greatly among communities. Only 60% of communities had a strategic plan or economic development plan available to be reviewed, and the extent of the economic development sections in these plans varies greatly. The reasons for this variation should be further investigated; however, resources may play a role. Larger communities, with more resources, tend to have more strategic plans. Urban communities and district hubs show more interest in being directly engaged in regional economic development. The communities that mention regional collaboration in their planning documents tend to be urban centres, or identify themselves as district hubs. A district hub is defined here as a community that provides commercial and government services to a group of surrounding communities; for example, it would often be the location of the district hospital. Community Futures Development Corporations (CFDCs) should be supported as a vital component of a regional approach to economic development, given their role in providing economic development services to sub-regions. The CFDCs currently deliver economic development services within regional territories throughout Northwestern Ontario. For communities with limited resources, the local CFDC is the main provider of economic development services to the business community. Broad support for partnerships with neighbouring communities, and specifically with Aboriginal communities, exists in municipal strategic plans. Many communities express the importance of engaging neighbouring First Nation communities as partners in economic development projects. This theme is occasionally found in official community plans but partnership is more frequently mentioned in strategic plans and economic development plans. Common Trends and Issues across Northwestern Ontario Across Northwestern Ontario the following themes relevant to economic development are seen in municipal planning documents: 148

Role of the Provincial Government The importance of natural resources, highway corridors and rural areas containing Crown Lands for economic development and community sustainability is consistent across the region. It follows that the cooperation of provincial government ministries who manage these areas is critical to the success of economic development in Northwestern Ontario. Specifically the Ministry of Natural Resources, the Ministry of Transportation, the Ministry of Northern Development Mines and Forestry and the Ministry of the Environment are the most often mentioned as critical partners in economic development. Small and Medium Business/Enterprise (SME) Development Many communities include the development of small and medium business as their strongest strategy for diversifying the local economy. Fifty eight percent of communities with a strategy in place have a business development strategy. Cultivating a spirit of entrepreneurship and support for local business in the community, as well as attracting new entrepreneurs are often identified as important steps towards SME development. When communities have a vibrant retail and service sector, residents and tourists can purchase what they need locally. Internet based businesses, arts and culture, or information technology businesses, for example, tend to be smaller in size than traditional manufacturing but may be areas of growth in the future. Niche businesses in the natural resource sectors, such as value added forestry, also tend to be small or medium sized businesses. Priority Sectors The sectors that are most consistently identified by communities as making up the base of local economies across Northwestern Ontario include: extractive industries (forestry, aggregate & mining); tourism; highway commercial; retail; government services; transportation; and agriculture. Natural resource based industries are mentioned in every municipal planning document. The benefits and challenges that these industries bring to a community are both highlighted. The benefits that mining and forestry businesses contribute to communities, such as tax revenues and local employment, are highly valued. At the same time, the cyclical nature of extractive industries and the potential to disrupt the local economy is acknowledged. Tourism is an important area for the many communities throughout Northwestern Ontario, and it is a sector where communities work together on a regional basis already through the new Regional Tourism Organization (RTO 13C). Over sixty five percent of communities with a strategy in place identify tourism marketing as a strategy for economic diversification. This is a sector that could be a model for regional collaboration in other sectors. Most of the economic benefits related to tourism are attributed to tourism commercial development, cottage development and rural residential development. Emerging Sectors including renewable energy technologies, bio-fuels, research and innovation, information technology, arts and culture, and the health sector are all mentioned as emerging 149

areas of economic opportunity. Compared to forestry, mining and tourism, emerging sectors are not as consistently mentioned in planning documents. However, this may be misleading, since niche industries still have potential to contribute to the development of small communities. A good example of an emerging opportunity would be the spin off effects of Thunder Bays strategic goal of developing a knowledge based economy. A regional approach to economic development may be more effective in addressing business opportunities in emerging sectors. Attracting New Residents Rural residential development is a priority in many rural communities and municipalities with large rural areas. Communities near urban centres and district hubs are experiencing increasing populations because workers in the urban centre prefer a rural lifestyle. Communities where rural residential development is a priority sometimes limit development activities in the interests of maintaining the rural character of the community. This may include cultivating tourism recreation in rural areas and cottage development. Active retirees are a target market for new residents by many communities. Generally this group includes mature entrepreneurs and outdoor enthusiasts from urban centres and from outside of Northwestern Ontario. Residential properties and business opportunities advertised on the internet have succeeded in attracting migrants and communities are targeting these migrants. Providing services and programs for new residents, as well as developing housing that appeals to retirees are examples of actions that are intended to make communities more attractive places to live. Implementation of Strategies There are trends in the strategies that communities are using to develop their local economies across the region. Below is a summary of the strategies that are most commonly mentioned in municipal strategic plans. The chart shows the number of times that the strategy is found in municipal planning documents, expressed as a percentage of the number of municipalities whose planning documents were reviewed. The percentages are approximate, as not all plans are current or available to be reviewed, and more thorough study is recommended in this area.

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Common Economic Development Strategies in Northwestern Ontario

0% Business Marketing Tourism Marketing BR&E Housing Development Industrial Site Preparation Waterfront Development 20% 40% 60% 80% 100%

Business Marketing strategies are intended to interest potential investors in locating in a particular community. Seventy nine percent of communities with strategic plan(s) include business marketing in their strategy. There are many ways to approach business marketing, but it often involves identifying business clients and persuading them to locate in a particular community. Prospects are often identified through inquiries, advertising, trade shows, research and networking. Information of interest to investors is assembled and made available through community profiles, website marketing and real estate information. Tourism Marketing strategies are intended to increase the number of tourists who visit a particular area or community. Sixty three percent of communities with strategic plan(s) include tourism marketing in their strategy. Municipalities often use their website, magazine advertisements, social media, brochures, trade shows, and other marketing techniques to highlight the reasons for tourists to visit. Business Retention and Expansion programs usually involve visits to individual businesses to identify changes in the local economy and barriers to business that the community may be able to do something about. Fifty eight percent of communities with strategic plan(s) include BR&E in their strategy. Housing Development is a very common strategy where communities aim to attract new residents. The strategy may be retirement housing, residential neighbourhoods, condominium development, or cottage development, depending on the needs of that community. 58% of communities with strategic plan(s) include housing development in their strategy. Industrial Site Preparation involves the preparation of fully serviced sites that are ready for the investment of a new business. Fifty three percent of communities with strategic plan(s) include the preparation of industrial sites in their strategy. Waterfront Development is a priority in forty seven percent of the municipalities who have 151

strategic plans in place. Northwestern Ontario contains a wealth of waterways and bodies of freshwater including Lake Superior and countless inland lakes and rivers. Many of the communities who do not have this strategy in place do not have waterfront to develop, which makes this percentage more significant. Community Improvement Policies are in place in the majority of official plans, but not often implemented. When a municipality has community improvement policies in place, a Community Improvement Plan (CIP) can be implemented in a particular area, including incentives for property owners and the private sector in some cases. However, we do not see many CIP in place and therefore this strategy is not expressed in the graph. Trends in the Regional Districts An approach to regional economic development that identifies variation in the economic base of sub-regions is critical. The sectors are identified as priorities by communities across the region; however, how much a particular sector is a priority varies between districts. For each sector, the nature of the economic opportunity varies as well. Greenstone Ring of Fire mining development is a high priority Renewable energy is mentioned in addition to mining and forestry Populations are reported as decreasing Kenora and Rainy River Districts Forestry, mining and aggregates are important sectors in the economy although contractions are being experienced in some areas Tourism commercial development is well established in rural areas, and communities mention Sunset Country as a regional tourism identity Waterfront development on inland lakes is a priority where suitable bodies of water are located Population changes are mixed; urban centres are relatively stable, some rural communities are experiencing decreasing populations while others have slightly increasing populations. North Shore Communities Forestry, mining and aggregates are important sectors, and spin off benefits from the Ring of Fire mining development is identified as a future opportunity Tourism is an area of opportunity based on the attraction of Lake Superior, but the sector is not as well established as in the western area of the region The former Great Lakes Heritage Coast initiative and the Lake Superior National Marine Conservation Area currently proposed by Parks Canada are regional tourism opportunities Waterfront Development is a strategic priority Generally populations have decreased due to contractions in the forestry and mining 152

sectors, although the rate of decrease varies Thunder Bay District City of Thunder Bay focused on developing a knowledge based economy Rural communities are experiencing demand for rural residential development and increasing numbers of recreational properties being converted to residences and increasing demand for housing commuters from the city Rural communities seek to attract businesses that benefit from being on the periphery of an urban centre, such as waste treatment, transportation, and businesses requiring large areas of land. Including the agricultural sector Population of rural communities within the Thunder Bay District is expected to decrease slowly Summary of Planning Documents Reviewed Of the 33 communities whose plans were reviewed, only 19 have a strategic plan or an economic development plan in place that could be located. Where n/a is indicated, the plan either does not exist or was not provided.

Community

Official Plan

Strategic Plan

Economic Development Plan n/a

Alberton Atikokan Chapple Conmee Dorion Dryden Ear Falls Emo Fort Frances Gillies Greenstone n/a n/a n/a n/a n/a n/a n/a

n/a n/a n/a n/a

n/a n/a

n/a 153

Ignace Kenora La Vallee Lake of the Woods Machin Manitouwadge Marathon Morley Neebing Nipigon O'Connor Oliver Paipoonge Pickle Lake Rainy River Red Lake Red Rock Schreiber Shuniah Sioux Lookout Sioux Narrows - Nestor Falls Terrace Bay Thunder Bay n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

n/a

n/a n/a n/a n/a

n/a n/a

n/a

n/a

n/a

n/a n/a

n/a

n/a n/a

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Appendix H Review of Northwestern Ontario Aboriginal Economic Strategies Review of Northwestern Ontario Aboriginal Economic Strategies As noted earlier, Statistics Canada listed 124 census subdivisions in Northern Ontario as Indigenous Reserves in 2006; there are also 16 Mtis community councils. In Northwestern Ontario, 87 First Nations communities and 11 Mtis community councils share the land. They are members of different Treaties, belong to numerous political organizations, Community Charters, Tribal Councils or are unaffiliated, but they have many economic development and job creation strategies in common. This section summarizes the common economic development priorities, trends and issues for these communities within Northwestern Ontario. Economic development strategies were reviewed, where those strategies were available. Aboriginal Organizations This review has included the following: Treaties: Robinson Superior Treaty (1850) Treaty 3 (1873) Treaty 9 (James Bay) Political Territorial Organizations: Grand Council of Treaty 3 Nishnawbe Aski Nation Union of Ontario Indians Mtis Nation of Ontario Tribal Councils: Anishinaabeg of Kabapikotawangag Resource Council Bimose Tribal Council Independent First Nations Alliance Keewaytinook Okimakanak Matawa First Nations Mushkegowuk Council Nokiiwin Tribal Council Pwi-Di-Goo-Zing-Ne-Yaa-Zhing Advisory Services Shibogama First Nations Council Wabun Tribal Council Windigo First Nations Council Individual First Nations: Aroland First Nation Attawapiskat First Nation Bearskin Lake First Nation Mtis Community Councils: Atikokan and Surrounding Area Interim Mtis Council Chapleau Mtis Council Geraldton and Area Mtis Council Kenora Mtis Council Mtis Nation of Ontario - Timmins Council North Bay Mtis Council Northern Lights Mtis Council Northwest Mtis Nation of Ontario Council Sunset Country Mtis Council Superior North Shore Mtis Council Thunder Bay Mtis Council

Beaverhouse First Nation Big Grassy River First Nation Big Island First Nation 155

Bingwi Neyaashi Anishinaabek First Nation Brunswick House First Nation Cat Lake First Nation Chapleau Cree First Nation Chapleau Ojibway First Nation Constance Lake First Nation Couchiching First Nation Deer Lake First Nation Eabametoong First Nation Eagle Lake First Nation Flying Post First Nation Fort Albany First Nation Fort Severn First Nation Fort William First Nation Ginoogaming First Nation Grassy Narrows First Nation Gull Bay First Nation Hornepayne First Nation Kasabonika Lake First Nation Kashechewan First Nation Kee-Way-Win First Nation Kingfisher Lake First Nation Kitchenuhmaykoosib Inninuwug Koochiching First Nation Lac Des Milles Lac First Nation Lac La Croix First Nation Lac Seul First Nation Lake Nipigon Ojibway First Nation Long Lake 58 First Nation Marten Falls First Nation Matachewan First Nation Mattagami First Nation McDowell Lake First Nation Michipicoten First Nation Mishkeegogamang First Nation Missanabie Cree First Nation Mocreebec Council of the Cree Nation Moose Cree First Nation Muskrat Dam First Nation Naicatchewenin First Nations Namagoosisagagun First Nation

Neskantaga First Nation Nibinamik First Nation Nigigoonsiminikaaning First Nation North Caribou First Nation North Spirit Lake First Nation Northwest Angle No. 33 First Nation Northwest Angle No. 37 First Nation Ochiichagwe'babigo'ining Ojibway Nation Ojibway Nation of Saugeen Ojibways of the Pic River First Nation Onigaming First Nation Pays Plat First Nation Pic Mobert First Nation Pikangikum First Nation Poplar Hill First Nation Rainy River First Nations Red Rock Indian Band Rocky Bay First Nation Sachigo Lake First Nation Sandy Lake First Nation Seine River First Nation Shoal Lake No. 39 First Nation Shoal Lake No. 40 First Nation Slate Falls First Nation Stanjikoming First Nation Taykwa Tagamou Nation Wabaseemoong First Nation Wabauskang First Nation Wabigoon Lake First Nation Wahgoshig First Nation Wapakeka First Nation Washagamis Bay Wauzhushk Onigum First Nation Wawakapewin First Nation Webequie First Nation Weenusk First Nation Whitefish Bay First Nation Whitesand First Nation Whitewater Lake First Nation Wunnimum Lake First Nation

In reviewing those economic development areas of websites that were available (of the 113 organizations in total, 38 had no website or 33.6%; of the 87 individual First Nations, 29 had no website or 33.3%), 63.7% 156

(or 72 of the 113 total organizations) had a dedicated Economic Development Officer (EDO) or Economic Development Department. The percentage of individual First Nations whose website indicated a dedicated EDO or Economic Development Department was slightly higher at 67.8% (or 59 of 87 First Nations). Of the 11 Mtis Community Councils, only 2 or 18.2% had websites. No Mtis Community Council had an Economic Development Department. Universal Areas of Commonality In the review of the Northwestern Ontario Aboriginal communities and organizations, the universal areas of commonality were the following shared aims: respect of traditional practices protection of Aboriginal, Constitutional and Treaty rights duty to consult open communication preservation and enhancement of the natural environment capacity-building that will help to build a strong and self-sufficient community encouragement of the entrepreneurial spirit the realization of community economic growth, skill development, and employment, specific to the particular needs of each community Interest in Joint Ventures/Partnerships/Collaborative Efforts in Economic Development There is a strong common interest throughout the Northwestern Ontario Aboriginal organizations to pursue partnerships, with other Aboriginal organizations, with government, with industry and the private sector. Memoranda of Understanding with different ministries (e.g. Ministry of Natural Resources) have been prepared in many cases to ensure fairness and that cultural values and traditions are addressed when Aboriginal organizations have dealings with the government. Many Aboriginal communities welcome and encourage partnerships. Waaskiinaysay Ziibi Inc., is a successful partnership of 5 First Nations in the Lake Nipigon area; the Little Jackfish River Project is one of its economic development initiatives. Community Plans, Economic Strategies Many Aboriginal organizations are in the process of developing true Economic Strategic Plans, a process which takes much time and effort in order to accurately assess the needs of the particular community. Fort William First Nation, for example, had a five-year plan which has recently expired, and is working at developing a new one. Nishnawbe Aski Nation is building its Economic Strategy carefully, as evidenced in the preceding document. The Mtis Nation of Ontario and its Community Councils look to their Statement of Prime Purpose to guide them in their economic development activities and plans. The Grand Council of Treaty 3 bases its economic development initiatives on The Great Earth Law, Manito Aki Inakonigaawin. Many individual First Nations have developed their own guidelines, such as the Taykwa Tagamou Nations Consultation and Accommodation Protocol, or Pikangikums Community Based Land Use Planning process for the Whitefeather Forest Planning Area. Not all First Nations communities have dedicated Economic Development Officers or Departments. All of the major political/tribal organizations do, however. Not all Aboriginal communities or organizations have websites or even broadband access. Communication - or the lack of it and isolation have been identified as major barriers to economic development, but this is now being addressed and it is hoped that all communities will be able to benefit from the availability of connectivity.

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Common Priority Areas in Economic Development for Aboriginal Organizations Tourism Mineral Exploration Mineral Extraction Energy Green Energy Forestry Small Business/Entrepreneurship Other Business Development Development of Commerce Entities (development corporations)

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Summary of Review as of August 30, 2011 Note: N/A indicates that there was no website; therefore it is unknown whether there is a dedicated Economic Development Officer or Economic Development department or plan. This information was accurate at the time of writing (November 2011).

Aboriginal Community/Organization
Anishinaabeg of Kabapikotawangag Resource Council Aroland First Nation Atikokan and Surrounding Area Interim Mtis Council Attawapiskat First Nation Bearskin Lake First Nation Beaverhouse First Nation Big Grassy River First Nation Big Island First Nation Bimose Tribal Council Bingwi Neyaashi Anishinaabek First Nation Brunswick House First Nation Cat Lake First Nation Chapleau Cree First Nation Chapleau Mtis Council Chapleau Ojibway First Nation Constance Lake First Nation Couchiching First Nation Deer Lake First Nation Eabametoong First Nation Eagle Lake First Nation Flying Post First Nation Fort Albany First Nation Fort Severn First Nation Fort William First Nation Geraldton and Area Mtis Council GiNoogaming First Nation Grand Council of Treaty 3 Grassy Narrows First Nation

Treaty/Mtis
Treaty 3 Treaty 9 Mtis Nation of Ontario Treaty 9 Treaty 9 Treaty 9 Treaty 3 Treaty 3 Treaty 3
Robinson Superior Treaty

Website

Economic Development Department/ EDO

No

N/A

No No

N/A No

No

No

Treaty 9 Treaty 9 Treaty 9 Mtis Nation of Ontario Treaty 9 Treaty 9 Treaty 3 Treaty 9 Treaty 9 Treaty 3 Treaty 9 Treaty 9 Treaty 9
Robinson Superior Treaty

No No No No

N/A N/A N/A

Mtis Nation of Ontario Treaty 9 Treaty 3 Treaty 3

No

N/A

No

N/A 159

Aboriginal Community/Organization
Gull Bay First Nation Hornepayne First Nation Independent First Nations Alliance Kasabonika Lake First Nation Kashechewan First Nation KeewaytiNook Okimakanak Kee-Way-Win First Nation Kenora Mtis Council Kingfisher Lake First Nation Kitchenuhmaykoosib Inninuwug Koocheching First Nation Lac Des Milles Lac First Nation Lac La Croix First Nation Lac Seul First Nation Lake Nipigon Ojibway First Nation Long Lake 58 First Nation Marten Falls First Nation Matachewan First Nation Matawa First Nations Mattagami First Nation McDowell Lake First Nation Mtis Nation of Ontario Mtis Nation of Ontario - Timmins Council Michipicoten First Nation Mishkeegogamang First Nation Missanabie Cree First Nation Mocreebec Council of the Cree Nation Moose Cree First Nation Mushkegowuk Council Muskrat Dam First Nation Naicatchewenin First Nations Namagoosisagagun First Nation Neskantaga First Nation

Treaty/Mtis
Robinson Superior Treaty

Website
No No

Economic Development Department/ EDO

N/A N/A

Treaty 9 Treaty 9 Treaty 9 Treaty 9 Treaty 9 Treaty 9 Mtis Nation of Ontario Treaty 9 Treaty 9 Treaty 9 Treaty 3 Treaty 3 Treaty 3
Robinson Superior Treaty

No

N/A

No

N/A

Treaty 9 Treaty 9 Treaty 9 Treaty 9 Treaty 9 Treaty 9 Mtis Nation of Ontario Mtis Nation of Ontario
Robinson Superior Treaty

No

N/A

No

N/A

Treaty 9 Treaty 9 Treaty 9 Treaty 9 Treaty 9 Treaty 9 Treaty 3

Robinson Superior Treaty

No No

No No

Treaty 9 160

Aboriginal Community/Organization
Nibinamik First Nation Nigigoonsiminikaaning First Nation Nishnawbe Aski Nation Nokiiwin Tribal Council North Bay Mtis Council North Caribou First Nation North Spirit Lake First Nation Northern Lights Mtis Council Northwest Mtis Nation of Ontario Council Northwest Angle No. 33 First Nation Northwest Angle No. 37 First Nation Ochiichagwe'babigo'ining Ojibway Nation Ojibway Nation of Saugeen Ojibways of the Pic River First Nation Onigaming First Nation Pays Plat First Nation Pic Mobert First Nation Pikangikum First Nation Poplar Hill First Nation Pwi-Di-Goo-Zing-Ne-Yaa-Zhing Advisory Services Rainy River First Nations Red Rock Indian Band Rocky Bay First Nation Sachigo Lake First Nation Sandy Lake First Nation Seine River First Nation Shibogama First Nations Council Shoal Lake No. 39 First Nation Shoal Lake No. 40 First Nation Slate Falls First Nation

Treaty/Mtis
Treaty 9 Treaty 3 Treaty 9
Robinson Superior Treaty

Website
No

Economic Development Department/ EDO

Mtis Nation of Ontario Treaty 9 Treaty 9 Mtis Nation of Ontario Mtis Nation of Ontario Treaty 3 Treaty 3 Treaty 3 Treaty 3
Robinson Superior Treaty

No No No No No No N/A N/A N/A N/A N/A N/A N/A

No No

Treaty 3
Robinson Superior Treaty Robinson Superior Treaty

Treaty 9 Treaty 9 Treaty 3 Treaty 3

Robinson Superior Treaty Robinson Superior Treaty

Treaty 9 Treaty 9 Treaty 3 Treaty 9 Treaty 3 Treaty 3 Treaty 9

No

N/A

No No No

No N/A N/A

161

Aboriginal Community/Organization
Stanjikoming First Nation* Note: Changing name to Mitaanjigamiing First Nation Sunset Country Mtis Council Superior North Shore Mtis Council Taykwa Tagamou Nation Thunder Bay Mtis Council Union of Ontario Indians Wabaseemoong First Nation Wabauskang First Nation Wabigoon Lake First Nation Wabun Tribal Council Wahgoshig First Nation Wapakeka First Nation Washagamis Bay Wauzhushk Onigum First Nation Wawakapewin First Nation Webequie First Nation Weenusk First Nation Whitefish Bay First Nation Whitesand First Nation Whitewater Lake First Nation Windigo First Nations Council Wunnimum Lake First Nation

Treaty/Mtis
Treaty 3

Website

Economic Development Department/ EDO

Mtis Nation of Ontario Mtis Nation of Ontario Treaty 9 Mtis Nation of Ontario Treaty 3 Treaty 3 Treaty 3 Treaty 3 Treaty 9 Treaty 9 Treaty 9 Treaty 3 Treaty 3 Treaty 9 Treaty 9 Treaty 9 Treaty 3 Treaty 9 Treaty 9 Treaty 9 Treaty 9

No No No

N/A N/A

No

No

N/A No

No No No

N/A N/A N/A No

No No No

N/A N/A

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LIST OF FIGURES AND TABLES Figures Figure 1 Top Management Role and Governance in Organization Direction, Design, and Effectiveness Figure 2 Northern Ontario Regions by District Figure 3 Thunder Bay Population by Age Figure 4 The Ring of Fire Belt Figure 5 Residential Tax Rate Figure 6 Commercial Tax Rates Figure 7 Industrial Tax Rates Figure 8 Distinctive Competencies and Competitive Advantage Figure 9 Emergent and Deliberate Strategies Figure 10 Relationship between Mandate, Structure and Functionality Figure 11 A Northwestern Ontario REDA Model Figure 12 Northwest REDA Board Framework

13 17 23 34 35 36 36 52 62 85 89 91

Tables Table 1 Gross Domestic Product Table 2 Employment Sector Details Northwest Economic Region Table 3 Population Changes Table 4 Median Age of Population Table 5 Percentage of Population 65 and over in 2006 Table 6 Percentage of the population over 15 with varying levels of education Table 7 Income Characteristics Table 8 Taxation Comparison: Northern Communities and Rest of the Province Table 9 Taxes as a Percentage of Income in Comparison with rest of Province Table 10 Thunder Bays Tax Ratios Compared to Provincial Average Table 11 Comparison of Canadian city Corporate Taxation Table 12 Performance Indicators Table 13 An Integrated Implementation Plan 18 18 20 22 22 24 26 37 37 50 51 88 102

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