Skip to content

Construction of new jail will 'electrify' Thunder Bay's economy

The Conference Board of Canada says Thunder Bay will lead the country in GDP growth thanks to construction of a $1.2 billion new jail.
Thunder Bay jail conceptual
An artist's rendering of the new Thunder Bay Correctional Complex (Govt. of Ontario)

THUNDER BAY — Real economic growth in Thunder Bay will ramp up significantly over the next two years, thanks to the construction of the new jail.

The Conference Board of Canada's updated economic outlook for the city predicts that the $1.2 billion dollar project off Highway 61 "will electrify" the local economy, even as Canada's economy cools.

"This is a huge project for the area. Real GDP growth will accordingly ramp up to 3.6 per cent in 2023 and 4.1 per cent in 2024," states the report released Tuesday.

It notes that these figures are up sharply from the board's previous forecast of real GDP growth of only 1.8 per cent t his year and 0.9 per cent next year.

The 345-bed jail is scheduled to be completed in late 2026.

The Conference Board of Canada is an independent, not-for-profit, applied research organization whose work includes studying economic trends.

Ted Mallett, director of economic forecasting, said the jail project "is certainly outsized, compared with other kinds of major projects we see across the country."

In an interview, he told TBnewswwatch, it will temporarily push Thunder Bay's economic growth rate to the highest among all the cities the board studies.

Between 700 and 800 workers will be required for the jail project at peak employment.

The board expects most of these jobs will be filled by area residents, but the project may also attract workers from outside the region.

Mallett said indirect spinoffs will generate a lot of business for other services and suppliers across the city, and for what he described as a "very strong" retail sector over the next couple of years. 

But the conference board report also strikes a cautionary note about the longer-term outlook, saying the jail project will partially mask Thunder Bay's ongoing economic challenges, which include a relatively small and aging population and a remote northern location.

A major concern, it says, is "poor prospects" at the Alstom rail car plant, which is currently working on smaller projects but "needs to land a major project to ensure its long-term survival."

The longer-term economic challenges could be alleviated in part, the report says, by a ramp-up in federal immigration targets, recent gravitation to remote working, and the city's affordable housing, all of which present an opportunity to attract newcomers to Thunder Bay.

"We know there's probably an incentive to flow into some of the areas where there's perhaps less of a constraint in terms of housing costs and availability," Mallett said.

He said the board expects Thunder Bay to receive a few hundred immigrants a year, which will help fill job openings.

Migration became a net contributor to the city's population in 2022, following two years of net outflows, spurred by an acceleration in arrivals from other countries, which rose for the second straight year.

Still, the jail project is so large in scope that once it's completed, Mallett said, Thunder Bay can expect to see a small decline in GDP immediately after "unless there are some additional major projects."

He said "The hope is that maybe some smaller projects can take place. They can turn on a much shorter time frame. If we're able to see some of those developments carrying on in the construction sector, they will have additional spinoff benefits later in our forecast."






Gary Rinne

About the Author: Gary Rinne

Born and raised in Thunder Bay, Gary started part-time at Tbnewswatch in 2016 after retiring from the CBC
Read more


push icon
Be the first to read breaking stories. Enable push notifications on your device. Disable anytime.
No thanks