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You can’t get there from here

It is no good knowing where to turn if you aren’t in the driver’s seat.
David Robinson, director, Institute for Northern Ontario Research and Development

The road network in Northern Ontario is a metaphor for our economic development problem. We want to go from a resource-based economy that is shedding jobs to a diversified economy that is creating new kinds of jobs. How do we get from A to B?

The problem is that communities in Northern Ontario are way out in the sticks, not just geographically but also in terms of the economic system. In the centre of the economy there are thousands of related products. If you are producing a car with steel bumpers, it is just half a block to producing a car with plastic bumpers, a car with GPS, and two blocks to producing an electric car or a car that drives itself. The central economy is like a city with a dense network of roads leading to opportunities in almost every direction.

The journalist and activist Jane Jacobs was one of the first to notice that these dense connections between people and between businesses in cities are what drives growth. The dense transportation networks of big cities are really a reflection of these economic connections.

Northern Ontario is the opposite of Jacobs’ ideal. The road network of our region is thin, reflecting an economy with few connections and few products. There are communities here with only one exporting industry and only one road out of town. In the northwest there are communities with no roads. Those communities are barely part of the world economy.

If you ask an economist how to get from being a logging town to a town that can creates 21st century jobs for young people, she might say, “You can’t get there from here.” There are very few new products nearby. In “Why some regions will decline: A Canadian case study with thoughts on local development strategies,” Polèse and Shearmur argue that regions like Northern Ontario are doomed to decline.

It isn’t because of the people: “To imply that peripheral regions of the type portrayed here are declining due to a lack of social capital or of deficient local entrepreneurship and innovation is not only misleading, but may also be counterproductive.” So what is the problem? 

The problem is that the province controls the wood in Northern Ontario. Ontario’s system of forest tenure prevents development. It shuts out the creative people in communities across the North. It ensures that profits leave the region; it is biased toward low value-added commodities and big international companies. The provincial government blocks the road to development for many Northern communities.

It is time for Kathryn McGarry, the minister of natural resources and forestry, to change the game. The only workable long-term strategy is to announce that, over the next 20 years, as current tenure arrangements run out, the province will turn the forests over the people who live in them. Once Northern communities know that they decide where the wood goes, they will start looking for the roads and trails that lead to new value-added products.

Communities have a huge stake in promoting local value-added wood products. In 2001, Wilson, Stennes, Wang, and Wilson estimated that they could create up to 19.8 value-added jobs per thousand cubic metres of wood. Ontario currently generates fewer than five jobs per thousand cubic metres with more than half of those jobs in the south.

In the 1990s, Canada generated U.S.$123 of GDP per cubic metre of harvested wood, less than a quarter of what Germany and Japan generated, and less than half of what the U.S. generated during the same time period. Ontario does better than B.C. but worse than Québec. No matter how you slice it, Ontario’s system has failed to get full value for its forests.

Transferring tenure rights to communities and First Nations will work because only local people know what products they can produce with local wood and local skills. Only they know the local roads and trails. Provincial bureaucrats, corporate managers and even Kathryn McGarry may have the `big picture,’ but it takes a detailed local map to identify the small opportunities that make development possible. And it is no good knowing where to turn if you aren’t in the driver’s seat.