Grade by Grade
C. Managing Canada's Resources and Industries · Managing Canada's Resources and Industries

Why Industries Locate Where They Do

C1.5 A1.4About 70 minutes
Learning goals
  • I can identify the main factors that determine where industries locate.
  • I can explain how location factors interact for different types of industries in Canada.
  • I can use the ideas of weight-losing, weight-gaining and footloose industries.
  • I can describe how geographic information systems (GIS) help choose a site.

Words to know

location factor
Something that affects where a business chooses to locate, such as raw materials, energy, transportation, markets or labour.
weight-losing industry
An industry whose product weighs much less than its raw materials, such as a sawmill or smelter. It usually locates near the resource.
weight-gaining industry
An industry whose product weighs more than what it brings in (often by adding water), such as a beverage bottler. It usually locates near the market.
footloose industry
An industry that is not tied to a raw material and can locate almost anywhere, such as software development.
agglomeration
The clustering of related businesses in one area so they can share workers, suppliers and ideas.
infrastructure
Basic systems a place needs, such as roads, rail, ports, power lines, water pipes and internet.
GIS (geographic information system)
Computer software that stores, layers and analyzes map data.
incentive
Something offered to attract a business, such as a tax break, grant or cheaper electricity.

Hook: a factory in the wrong place

Imagine building a sawmill in downtown Toronto. Logging trucks would have to haul whole trees hundreds of kilometres through traffic, and land would cost a fortune. Now imagine a soft-drink bottling plant deep in the boreal forest, shipping heavy cans of mostly water to cities far away. Both would lose money.

Businesses think hard about location, because the right place can make the difference between profit and failure.

The main location factors

  • Raw materials: Is the resource nearby (logs, ore, fish, crops)?
  • Energy: Is there enough affordable power? Some industries need enormous amounts.
  • Water: for processing, cooling or shipping.
  • Transportation and infrastructure: highways, rail lines, ports, pipelines, airports and internet.
  • Markets: Where are the customers? Canada's largest markets are its cities and, next door, the United States.
  • Labour: Are there enough workers with the right skills, at a cost the company can pay?
  • Land: cost, size and zoning (whether the city allows industry there).
  • Government policies: taxes, incentives, environmental rules and trade agreements.
  • Agglomeration: being close to suppliers and similar businesses.
  • Quality of life: especially for knowledge industries, workers want good schools, health care and things to do.

These factors are interrelated. For example, a port provides transportation and attracts suppliers, which attracts more businesses.

Where to build the plant?Raw material(forest, mine)Market(city)sawmillbottlerWEIGHT-LOSINGproduct weighs much lessthan raw material:build near the resourceWEIGHT-GAINING / PERISHABLEproduct gains weight (water)or spoils quickly:build near the marketFOOTLOOSE industries (such as software) can locate almost anywherewith skilled workers, internet and a good quality of life
Comparing the weight of what goes in with what comes out helps predict where a plant will locate. Footloose industries follow people and connections instead.

Canadian examples

  • Sawmills and pulp mills (weight-losing) are near forests, often along rivers, in towns across northern Ontario, Quebec and British Columbia.
  • Smelters and mines: Sudbury processes nickel and copper ore close to the mines, reducing the weight before shipping.
  • Aluminum smelters in Quebec's Saguenay-Lac-Saint-Jean region import bauxite (the raw material) by ship. They locate there because making aluminum uses huge amounts of electricity, and the region has abundant, low-cost hydroelectricity. Energy outweighs raw materials as a factor.
  • Steel in Hamilton: the harbour on Lake Ontario lets ships deliver iron ore and coal, and the steel is sold to nearby manufacturers, including the auto industry.
  • Auto assembly in southern Ontario (for example Oakville, Alliston, Cambridge, Woodstock and Windsor): close to the huge U.S. market, Highway 401 and rail lines, skilled workers and hundreds of parts suppliers (agglomeration). New electric vehicle battery plants have been announced in Windsor and St. Thomas for similar reasons.
  • Food processing and bottling (weight-gaining or perishable) locate near markets: bakeries and dairies are close to the people who eat their products.
  • Fish processing happens in coastal towns close to where boats land their catch, because fish spoil quickly.
  • Technology companies (footloose) cluster in Toronto, Waterloo Region, Ottawa, Montreal and Vancouver, where universities provide skilled graduates.
GIS site selection: stacking map layers (schematic)Layer 1: highways and railLayer 2: land zoned for industryLayer 3: water and power supplyLayer 4: wetlands to avoidresult: the best site meets all criteria
A GIS overlays map layers. Each layer is one criterion; only places that pass every layer remain. Planners still visit the site and talk with the community before deciding.

Geospatial technologies (A1.4)

A GIS can layer data such as roads, zoning, flood zones, wetlands, population and power lines, then find areas that meet all criteria. Free tools such as the Government of Canada's open maps, Ontario's GeoHub, or online maps let you explore some of these layers yourself. GIS is a decision-support tool: people still need to check data quality and consider community views.

Worked example

Modelled example: score three sites

A company wants to build an electric-vehicle battery parts plant. It weights four criteria out of 10: transportation (×3), skilled labour (×3), low-carbon electricity (×2), land cost (×2). Site scores (out of 5): Site A (near Highway 401 in southwestern Ontario): transport 5, labour 4, electricity 4, land 2. Site B (small northern town): transport 2, labour 2, electricity 4, land 5. Site C (outside a big U.S.-border city): transport 5, labour 5, electricity 3, land 1. Which site wins?

  1. Multiply each score by its weight.
  2. Site A: 5×3 + 4×3 + 4×2 + 2×2 = 15 + 12 + 8 + 4 = 39.
  3. Site B: 2×3 + 2×3 + 4×2 + 5×2 = 6 + 6 + 8 + 10 = 30.
  4. Site C: 5×3 + 5×3 + 3×2 + 1×2 = 15 + 15 + 6 + 2 = 38.
  5. Interpret: A and C are close. A small change in weights (for example, if land cost mattered more) could change the result, so the company should test different weightings.

Site A wins with 39 points, just ahead of C (38). The scores show how factors interact: excellent transportation and labour can outweigh expensive land.

Hands-on activity

Industry detective in your community

You need: an online map (or a printed local map), paper and coloured pencils.

  1. With a grown-up, find 5 to 8 businesses or industries in or near your community (a factory, a warehouse, a farm, a quarry, a call centre, a bakery).
  2. Mark each on a sketch map. Also mark highways, rail lines, rivers or lakes and the town centre.
  3. For each business, decide its two most important location factors and whether it is weight-losing, weight-gaining, market-oriented or footloose.
  4. Look for clusters. Are warehouses near highway interchanges? Is the quarry outside town?
  5. Write a paragraph explaining the pattern you found.
Just for fun

Real estate agents say the three most important things are location, location, location. Industrial geographers agree, but they add a fourth: transportation to the location.

Your turn

1

List six location factors for industry.

2

Explain why a sawmill is a weight-losing industry.

3

Why do bakeries and dairies locate close to cities?

4

Explain why Hamilton became a steel centre.

5

What is agglomeration? Give an example.

6

Recalculate the battery-plant example if land cost had a weight of 4 instead of 2. Which site wins now?

More practice: warm-up

1

Is a software company footloose or resource-oriented?

2

Which location factor is most important for an aluminum smelter?

3

What does GIS stand for?

4

Name one place in Ontario where cars are assembled.

5

Is a beverage bottler weight-gaining or weight-losing?

More practice: on your own

1

Why are fish processing plants located in coastal towns?

2

How can government policy change where an industry locates? Give an example.

3

Explain how energy can matter more than raw materials for some industries.

4

Why do tech companies cluster near universities?

5

Give one limitation of using a GIS to choose a site.

Challenge

1

Explain how three location factors interact to explain the growth of the auto industry in southern Ontario.

2

Some people argue that remote work makes many knowledge jobs completely footloose. What geographic factors might still matter?

3

Predict how the switch to electric vehicles could change the geography of Canadian industry.

Check your understanding

Quiz

1.

A pulp mill turns many tonnes of logs into fewer tonnes of pulp. Where is it most likely to be built?

2.

Why are aluminum smelters located in Quebec's Saguenay-Lac-Saint-Jean region even though the raw material (bauxite) is imported?

3.

Which is a footloose industry?

4.

What is agglomeration?

5.

Which set of factors best explains why the auto industry clusters in southern Ontario?

6.

In GIS site selection, what does overlaying map layers do?

For parents and teachers

This lesson connects the 'why here?' question to factories and businesses. The weighted scoring example is real decision-making math: check that your teen multiplies each score by its weight before adding. Common difficulties: listing factors without explaining how they interact; mixing up weight-losing and weight-gaining; assuming GIS makes the decision by itself. A car trip is a great time to spot clusters of warehouses near highway interchanges and ask why.