Manufacturing, lithium face headwinds: expert

Local Journalism Initiative
·3 min read

The construction of the $1.2-billion jail continues to be an important economic driver for Thunder Bay along with federal immigration targets, according to the latest Conference Board of Canada economic outlook for the city.
However, Robin Wiebe, a senior economist with the Conference Board — an independent economic think tank — painted a grimmer picture as prospects for a new lithium-processing plant fade, sales of electric cars stall and the market for lithium, a key battery input for them, has collapsed.
Thunder Bay's manufacturing industry is set to fall 2.2 per cent in 2024, after falling by 1.3 per cent in 2023.
"The jail construction provides a decent amount of employment, but the provincial investment is certainly a big component of it," Wiebe said.
"Spending $1.2 billion on a jail is a big deal in a place like Thunder Bay because we estimate that the construction output (there) is typically around the $500-million mark, so to plunk down a project that is almost three times our estimate of Thunder Bay construction output, it's a very big deal."
Hopes for Thunder Bay to become a "lithium mining hub" are dwindling along with the falling price of lithium.
"Avalon Advanced Minerals' financial prospects have deteriorated, their stock prices are falling and it's even lower now," he said. "The company doesn't seem to be particularly healthy and the lithium market is kind of soft. So that makes me think that the future (of their proposed) lithium plant is uncertain."
Wiebe added that the issues stem from electric car sales stalling due to their high cost, falling demand for them, and range uncertainty. He said the relative lack of charging stations around adds to the uncertainty because "people just don't know where they are."
"There's a lot of uncertainty about electric cars and the market is kind of soft. I also heard that the automakers are losing money (on EV cars) so that's not a great advertisement for the cars," he said.
According to Statistics Canada, Wiebe said the latest data for immigration to Thunder Bay is between 2022 and 2023.
"At that point, Thunder Bay saw 902 immigrants arrive and that's up from 848 the previous year," he said. The previous five years averaged about 220 people arriving each year.
Alternately, emigration, or people leaving Thunder Bay, has also picked up. From 2022-2023, 117 left the city; in 2022, 113 left, and in the previous three years an average of 68 people left the city.
Wiebe said people chose to leave Thunder Bay because the economic prospects are uncertain and it is relatively isolated.
Thunder Bay's manufacturing sector output fell by 2.2 per cent this year, and Wiebe said that's what we can expect again for next year. In 2023, it fell by 1.2 per cent. He said the decline in output from the Alstom plant contributed to these numbers.
"This kind of stuff is not new to Thunder Bay, which has had a falling manufacturing output for a couple of years," Wiebe said. "Just before the financial market collapse in 2009, Thunder Bay's manufacturing output fell for seven straight years."

Sandi Krasowski, Local Journalism Initiative Reporter, The Chronicle-Journal

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