Economic Development Overview
Terrace Bay is a small township located in Northwestern Ontario, along the north shore of Lake Superior. Traditionally, its economy has relied heavily on the forestry sector, with the pulp mill serving as a central pillar of local industry. This mill has historically provided hundreds of direct and indirect jobs, acting as a key employer and economic anchor for the community. However, the closure of the AV Terrace Bay Pulp Mill in January 2024 has posed significant economic challenges, compelling the town to reassess its future development strategies.
AV Terrace Bay Pulp Mill Closure
The shutdown of the pulp mill has had an immediate and profound impact on Terrace Bay’s economy, as well as the regions, creating uncertainty for workers, families, and the local business community. As a primary employer, the mill’s closure led to job losses and a ripple effect on other sectors, including retail, service, and housing markets, which all relied on the mill’s workforce. The loss of this significant revenue source has forced local leaders to explore new pathways for economic revitalization.
Current Economic Development Landscape
Diversification
Following the mill’s closure, Terrace Bay is actively working to diversify its economy, a priority for both local leaders and regional development agencies. They are exploring opportunities in sectors such as:
Tourism
Strategically located on the Trans Canada HWY along the shores of Lake Superior, Terrace Bay offers great potential for tourism through a variety of outdoor recreational activities, including hiking, camping, fishing, and boating.
Attractions such as the Terrace Bay Lighthouse, Casque Isle Trails, Aguasabon Gorge, and the scenic beachfront draw visitors year-round.
Terrace Bay is a key stop along the Lake Superior Circle Tour, offering a stamp location for travelers completing the scenic drive around the lake. It is also part of the Lake Superior Water Trail, making it a destination for paddlers exploring the lake’s vast shoreline. Additionally, Terrace Bay is included in the Lake Superior Cycle Tour Waterfront Trail, providing a picturesque route for cyclists journeying along the waterfront.
A highlight for the community was hosting its first-ever cruise ship visit in the summer of 2024, which brought numerous tourists and economic benefits to the area. Plans are already underway for more cruise ship visits in the future to further enhance our tourism efforts.
Another initiative was the launch of our VisitTerraceBay website in January of 2024, which serves as a central hub for tourists to plan their visit and explore everything our area has to offer.
Renewable Energy
The growing focus on renewable energy in Northern Ontario has opened new possibilities for Terrace Bay. Wind energy and solar farm projects are being explored as potential areas for investment and job creation. With its natural resources and strong wind conditions, the region may attract investors in the clean energy sector.
Small Business
The community has been actively promoting entrepreneurship and the growth of small and home-based businesses. Local businesses in sectors like hospitality, retail, technology, active wellness, and services are expanding, driven by initiatives to encourage local shopping and attract regional tourism. The town also provides incentives for new businesses, including access to grants, low-interest loans, and a range of support services to help them establish and thrive.
Government Support
NOHFC and FedNor
Northern Ontario Heritage Fund Corporation (NOHFC)and FedNor have historically provided funding and support to stimulate economic development in northern Ontario. These agencies are expected to continue assisting the community during this transitional phase.
Superior North CFDC
Superior North Community Futures Development Corporation (CFDC) is a non-profit organization dedicated to supporting economic growth and development in Northern Ontario. It offers services such as business financing, advisory support, and community planning to help local businesses and entrepreneurs thrive. By fostering economic diversification and job creation, Superior North CFDC plays a key role in strengthening the region’s economy and building sustainable communities.
Labour Action Centre
Opened in July 2024, the Township of Terrace Bay, in collaboration with the Ontario Ministry of Labour, Immigration, Training, and Skills Development, launched the Terrace Bay Action Centre in response to the idling of AV Terrace Bay. The Action Centre is designed to support displaced workers from the community and surrounding areas by offering resources for resume building, interview preparation, skill-building workshops, and certification courses. It also serves as a bridge, connecting job seekers with potential employers. The Labour Action Centre will remain open until July 2025.
Infrastructure and Logistics
Terrace Bay’s location along the Trans-Canada Highway, a key route for trade and transportation across Canada, positions it well for economic opportunities. With access to both highways and CP Rail, its strategic placement could attract future logistics and transportation-related industries.
Healthcare and Public Services
Public sector jobs, including healthcare, education, and municipal services, are vital to the local economy, and the township continues to provide these essential services despite economic challenges.
Healthcare
Terrace Bay provides essential healthcare and government services to meet the needs of its residents. The McCausland Hospital serves as the primary healthcare facility, offering emergency care, outpatient services, and long-term care. Residents also have access to family health teams, which provide primary care and wellness programs.
Education
Terrace Bay is home to both elementary and secondary schools that provide quality education for local students. The Superior North Catholic District School Board operates St. Martin Catholic School, offering education from kindergarten to grade 8 with a focus on academic excellence and spiritual growth.
For secondary education, students attend Lake Superior High School, which is part of the Superior-Greenstone District School Board. The school provides a range of academic and extracurricular programs designed to prepare students for post-secondary education or the workforce. Both school boards are committed to fostering a supportive and inclusive learning environment.
École catholique Franco-Terrace is a French-language Catholic school and is part of the Conseil scolaire catholique du Nouvel-Ontario (CSCNO). The school provides education from kindergarten to grade 8, with a focus on delivering a high-quality curriculum in a French-speaking, faith-based environment. École catholique Franco-Terrace emphasizes both academic excellence and the promotion of French culture and language, while nurturing students’ spiritual development within the Catholic tradition. It serves as a valuable resource for Francophone families in the region, supporting bilingualism and cultural identity.
Government Services
Service Ontario in Terrace Bay provides a range of essential government services to local residents and businesses. Located within the community, this office offers convenient access to services such as health card renewals, driver’s licenses, vehicle registration, and other government documents. By offering these services locally, Service Ontario plays a crucial role in making government transactions more accessible to the residents of Terrace Bay and surrounding areas, eliminating the need for long-distance travel to larger urban centers.
Challenges
The economic challenges facing Terrace Bay include:
Population Decline
Like many northern communities dependent on resource-based industries, Terrace Bay faces a population decline, particularly among younger residents seeking employment elsewhere. With an aging population, the town also faces the challenge of attracting more young families to ensure its long-term sustainability and growth.
Limited Private Sector Growth
With the closure of the pulp mill, Terrace Bay is searching for private sector investment in sectors outside of forestry.
Retaining Skilled Workers
Retaining skilled workers who are being displaced by the mill closure is critical to ensuring the long-term stability of the township.
Investment Uncertainty
With the AV Terrace Bay Pulp Mill closed, there is hope for new ownership and revival of the mill. However, finding investors in the forestry sector or transitioning the facility to other industrial uses remains uncertain.
Conclusion
The economic development of Terrace Bay is driven by its strong ties to the forestry industry, growing tourism sector, and strategic location along a major transportation route. Efforts to diversify the economy and attract new investment, particularly in tourism and services, are essential for the town’s long-term sustainability. The challenges posed by population decline and reliance on a single industry are being addressed through strategic planning, emphasizing the town’s natural beauty and potential in various sectors.