Investing in Remote Regions: Building the Business Case


EditorialTHUNDER BAY – Out of the Canadian Chamber of Commerce comes a new report titled “The Business Case for Investing in Canada’s Remote Communities”, which argues that Canadians need to start looking at remote communities somewhat differently. Despite the perception (and often the reality) that remote communities are dependent on government assistance for their survival, the new reality is that as the demand for resources rises and the international community flocks to Canadian resources in remote areas, these remote communities are wealth generators that will enhance the living standards of all Canadians.  Moreover, the aboriginal population is concentrated in these areas and resource development is an important tool to improve their economic welfare.

There are of course challenges. As the report notes:

“There is no doubt that many remote communities-which are often difficult to reach, have challenging geographies, harsh climates, limited infrastructure and sparse populations – face significant challenges to their long-term social and economic sustainability.”

At the same time, the presence of natural resources in these remote regions offers an opportunity for future economic development but investment is required for these communities to take advantage of the resource opportunities.  This investment need not necessarily be from government – there can be business investment in remote communities.  According to this report, business investment can bring more effective, faster and less costly economic development but to build the case for business investment, these communities must have marketable products as well as a skilled workforce and capital infrastructure.  Public policy is critical here in ensuring education, access to health care, transportation and communications links.  The challenge in an era of deficit reduction to providing this critical infrastructure can be met according to the report by having government and business build partnerships.  For example, federal and provincial infrastructure projects should consider the commercial benefits of location when considering their human capital and infrastructure investments in remote areas.  Their spending should be seen as an investment rather than a subsidy particularly if linked to the exploitation of market opportunities by the private sector.  The report goes on to make a number of recommendations – first of which is for the federal government to review and improve the funding formula for aboriginal education to ensure parity with the provincial funding model in each province.  Education for First Nations is critical given their young demographic profile and their concentration in remote resource areas.

This report is of course advocacy for Canada’s remote communities but it makes an important point.  Canada has a vast geography with a wealth of natural resources that are in growing demand but to access and harvest and process those resources, people do need to live in remote areas.  It is bad for business to have remote communities without adequate transport or broadband links, poor schools and hazardous drinking water.  About 15 percent of Canadians still live in areas considered rural/remote – nearly five million people.  Five million is a lot of people to have treated as second-class citizens, particularly given they are indispensable when it comes opportunities on Canada’s resource frontier.

Livio Di Matteo

Di MatteoLivio Di Matteo is an economist in Thunder Bay, Ontario specializing in public policy, health economics, public finance and economic history.  Livio Di Matteo is a graduate of the Fort William Collegiate Institute (1898-2005) whose school motto “Agimus Meliora” has served as a personal inspiration.  Livio Di Matteo holds a PhD from McMaster University, an MA from the University of Western Ontario and an Honours BA from Lakehead University.   He is Professor of Economics at Lakehead University where he has served since 1990.  His research has explored the sustainability of provincial government health spending, historical wealth and asset holding and economic performance and institutions in Northwestern Ontario and the central North American economic region.  His historical wealth research using census-linked probate records is funded by grants from the Social Sciences and Humanities Research Council of Canada.  He has constructed, assembled and analyzed nearly 12,000 estate files for Ontario over the period 1870 to 1930.  Livio Di Matteo writes and comments on public policy and his articles have appeared in the National Post, Toronto Star, the Winnipeg Free Press and Thunder Bay Chronicle-Journal and  Livio Di Matteo has had an entry in Canadian Who’s Who since 1995.

This article was originally posted on Livio Di Matteo’s NORTHERN ECONOMIST Blog at

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