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Commentary

Building Northern Ontario’s supply sector

September 1, 2009
by Dick DeStefano
In: Commentary, Dick DeStefano with 0 Comments

After waiting three years, the first wave of funding for a study of Northern Ontario’s mining supply and services sector has arrived. This funding will ultimately propel the industry from obscurity to the forefront.

It is needed to finally prove to all levels of government the value of this sector in order to attract programming dollars, tax considerations and other mining-related companies to locate in Northern Ontario.

SAMSSA and other interests in Northern Ontario required funding to do a major study by a credible organization to substantiate the potential growth and importance of this stable and expandable sector.

Ontario’s North Economic Development Corp. (ONEDC), whose membership is comprised of municipal development offices across Northern Ontario, has also identified the mining supply and service sector as one the foremost strategic sectors of the region’s economy.

These multiple partners are teaming up with the Ministry of Northern Development, Mines and Forestry for a major study expected to get underway in August 2009.

SAMSSA is part of this initiative. We successfully lobbied for major funding from the Northern Ontario Heritage Fund Corp. to undertake a comprehensive study of this critical support industry.  More financial support is expected from FedNor.

According to previous SAMSSA figures, there are an estimated 500 businesses in the region  that cater to the mining industry. Together, they employ between 12,000 and 15,000  people from Kenora to North Bay and Timmins. These companies contribute an estimated $9.6 billion a year to Ontario’s economy.

SAMSSA and its partners are currently identifying a consultant to start the study. It will be an intensive and wide-ranging exercise with more than 400 interviews, and could take as long as six months.

A 2005 study by Deloitte entitled, Northern Ontario Investment Strategy, identified the mining support service and equipment industry, among others, as one of the most promising sectors with the highest location quotients in Northern Ontario and one that has a natural advantage.  Deloitte reinforced its position by stating, “market-seeking companies that are likely to be attracted to Northern Ontario will, by and large, be companies attracted to serving the resource-based industries (mining and forestry).”

This pan-northern analysis called “Northern Ontario Mining Supply & Services Sector Opportunity Study” will provide the solid numbers and proof that mining suppliers are already a large and powerful business force in the North.

Recent evaluations have indicated that Northern Ontario has the most mining service businesses in Canada after Toronto and Vancouver. However, Northern Ontario is the only area that is primarily made up of local well-established and experienced mining supply industries.

Major mining producers receive government support and tax considerations, but that’s not generally the case for their suppliers. Supporting the mining service companies leads to a greater and more diversified regional industry sector that could potentially expand business opportunities beyond the borders of Ontario while maintaining job opportunities in Northern Ontario.

The study is expected to provide recommendations for further expansion of the sector, support for increased sales in global markets, and assistance to individual companies to enhance their global marketing capacity.

Northern Ontario has an identified and highly sophisticated mining cluster with its multiple private companies, community colleges, universities  and mining  research institutes that makes it unique on a global scale.

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About Dick DeStefano

Dick DeStefano is Executive Director of SAMSSA [email protected]

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