Tillsonburg, ON

May 29, 2025

Highway 3: Ontario’s Expanding Industrial Corridor

Tillsonburg’s strategic location along a key transportation route is redefining growth and building on the Town’s manufacturing strength

Nestled along the North shore of Lake Erie, the Town of Tillsonburg offers a strategic location on Highway 3, Southern Ontario’s increasingly vital industrial corridor that connects Detroit-Windsor to Buffalo-Fort Erie. This placement on what the locals call “Ontario’s South Coast” gives the community distinct geographic advantages for both business and lifestyle, particularly as the region transforms into a hub for advanced manufacturing and Electric Vehicle (EV) Battery Cell and component production.

“Tillsonburg is located in the southern part of Southwestern Ontario. We’re on the north side of Lake Erie, just across from Ohio, New York state, and Michigan,” explains Cephas Panschow, Development Commissioner with the Town of Tillsonburg. “We’re in the part of Ontario often referred to, perhaps jokingly, as the banana belt. Typically, we get much less severe winters.”

Highway 3 Corridor and Advanced Manufacturing

With Canada emerging as a global leader in electric vehicle manufacturing, the Highway 3 corridor is rapidly transforming into a powerhouse for advanced manufacturing with Tillsonburg strategically positioned to capitalize on the industry’s exponential growth.

“Within Ontario, as in many other jurisdictions, there is a push to expand the market share of electric vehicles and charging infrastructure,” says Panschow. “When you look at the manufacturing commitments made for electric vehicles and supply chain, Canada is now number one in the world for electric vehicle supply, with investments exceeding $44 billion in Ontario alone in terms of electric vehicle and related supply chain investments.”

This dramatic shift in automotive manufacturing represents one of the largest industrial transformations in Canadian history, with significant implications for communities along Highway 3. The nearby PowerCo facility, a Volkswagen subsidiary, exemplifies this trend with its $7 billion investment in St. Thomas, just 30 minutes west of Tillsonburg.

“The PowerCo facility will be the largest industrial facility in Canada and one of the largest in the world,” Panschow notes. “Construction is already underway along Provincial Highway 3 in St. Thomas.”

Highway 3, which directly services Tillsonburg’s industrial areas, is increasingly viewed as a critical economic artery. The province is investing $138 million to double its size between Essex and Leamington, signaling its growing importance for industrial development.

The province is prioritizing ‘international traffic flow’ as a key consideration in the Highway 3 doubling project. This initiative connects strategically with the St. Thomas battery plant development, which includes constructing a ring road and realigning Highway 3 to optimize commercial transportation. Ontario’s Ministry of Transportation is actively identifying and implementing corridor improvements along Highway 3 to enhance the efficiency of cross-border trade movement.

Complementing these transportation developments, Tillsonburg offers robust digital infrastructure. “We’re a fully fibered community with multi-gigabit service available for pretty much anybody in town,” says Panschow. “We were recognized in 2021 as one of the best communities in Canada to live and work remotely.”

Manufacturing Hub and Van Norman Innovation Park

Despite the evolving role of manufacturing in the national economy, Tillsonburg has maintained its industrial strength while diversifying into emerging sectors along the Highway 3 corridor, creating a resilient economic base that weathered recent economic shocks.

“Tillsonburg is a manufacturing town. Even as manufacturing’s share of the broader North American economy has shifted over time, manufacturing in Tillsonburg continues to thrive as a robust and significant component of our local economy,” says Panschow.” A full one-third of our workforce is still employed in manufacturing. That’s manufacturing jobs from the production floor through management, quality control, engineering, and so forth. We tend to be fairly heavily weighted on the engineering side with many of our companies.”

This manufacturing concentration, significantly higher than Ontario’s provincial average of 12%, has evolved since the 2009 recession. The town has rebounded with a more diverse manufacturing portfolio that now includes food processing, building materials, and a more diversified automotive parts production sector.

“We’ve gone from about one food processing plant 20 years ago to approaching six or seven now. Our largest one is currently under construction—Schep’s Bakeries is building a 190,000 square foot cookie manufacturing facility, expanding their presence in the region” Panschow notes.

The town’s industrial land development strategy has seen remarkable success. The Van Norman Innovation Park (VIP) sold out its first phase in less than a year during 2021, prompting town council to approve a second phase that will bring 140 acres of industrial land to market over the next few years, further strengthening Tillsonburg’s position along the Highway 3 corridor. This strategic expansion demonstrates the town’s commitment to fostering economic growth and attracting diverse businesses to the region.

The first release of industrial land in Phase 2 of the Van Norman Innovation Park offers 15 acres in flexible 5-acre parcels, fully serviced with essential utilities. Strategically located along Highway 3 with access to Highway 401 and railways, the park provides excellent connectivity to markets across Southwestern Ontario and the GTA, representing exceptional value at $250,000 per acre.

Regional Importance and Economic Connection

The town’s position within the Great Lakes region provides economic leverage while offering residents recreational benefits. This combination has helped fuel Tillsonburg’s growth to approximately 21,000 residents over the past eight years, making it the third fastest growing community in its category according to the last census.

The Town’s retail gap analysis for the downtown commercial sector revealed positive results. The town is experiencing growth, with the downtown sector expanding alongside increases in the 29- to 39-year-old demographic. Additionally, the child population has increased by 500 compared to five years ago, indicating successful attraction of young families—a key factor for organizations seeking readily available workforces.

“Toronto drives a tremendous amount of economic activity in Canada and within the Midwest. Detroit is one of those anchor cities as well. This whole area is part of the Great Lakes region that encircles the lakes,” Panschow notes. The unique positioning within this economic corridor, particularly along Highway 3, has created a community that balances industrial strength with quality of life, attracting both businesses and families seeking alternatives to larger urban centers.

From Lake Erie to Local Amenities

Tillsonburg’s recreational infrastructure forms the backbone of its community development strategy, positioning the town as a magnet for active families and sports enthusiasts seeking small-town charm with big-city amenities.

“Within half an hour’s drive of Tillsonburg, you have access to great beaches, swimming, boating, and other water sports,” says Panschow. “Within Tillsonburg, we have a smaller lake called Lake Lisgar for smaller water recreational activities from fishing to non-motorized boating, canoeing, and kayaking. We have a rowing club based on the lake that conducts their training there as well.”

The town’s commitment to recreation extends well beyond its natural surroundings. Tillsonburg is currently completing a $6 million upgrade to its recreational complex, pointing to a community-wide prioritization of sports infrastructure. This aligns with provincial trends that show communities investing in recreational facilities as differentiators in the competitive landscape for attracting new residents and businesses.

“Tillsonburg has many recreational amenities from theater to museum to a large recreational complex,” Panschow explains. “This community is invested in sports and recreation. We have a large soccer field complex that is the envy of many of our neighbors, including communities much larger than ours. Tillsonburg is a great community, especially for families and young children interested in sports and recreation.”

Cultural offerings complement the town’s sports infrastructure. “The arts and culture are a growing area for us. The Station Arts Centre is a hub for arts and various recreational clubs for our community,” says Panschow. “Every community is trying to build economic development and complete communities. This community certainly has a head start over many others, and we’re continuing to look at what can be added to maintain our lead in recreational amenities.”

Housing Growth, Affordability, and Future Developments

As housing shortages and affordability challenges plague communities across the country, Tillsonburg sees itself as a growth leader with innovative approaches to expanding its housing stock while maintaining some affordable options; critical factors in attracting residents and businesses to this growing industrial region.

“The good news is that we have a track record of success in that regard. Starting in 2018, we began to experience a significant increase in residential growth that intensified substantially through the pandemic.”

With approximately 8,000 housing units existing, the town has approved plans that will dramatically expand its housing capacity in the coming years.

“We have up to 3,700 units approved, representing strong growth off of our existing unit base that’s projected to come to Tillsonburg in the next five to 15 years,” Panschow explains. “There’s a lot of residential growth coming our way.”

Unlike many communities where housing development focuses exclusively on market-rate options, Tillsonburg is leveraging public-private partnerships through its community improvement plan to address affordability concerns. The town provides tax rebates to qualifying development projects that include below-market units.

“In a particular project, they’re building a 132-unit building where 29 units are affordable or attainable—approximately 20% at below market rates,” says Panschow. “Affordability is critical and a big part of the discussion. In Tillsonburg, we’re making it happen with the support of the council and the leadership of our private sector builders.”

This approach aligns with emerging best practices in municipal housing development, where communities increasingly require mixed-income components in new developments to maintain economic diversity. Housing experts point to such integrated approaches as more sustainable than creating separate affordable housing developments, fostering more cohesive community development while distributing affordable units throughout new neighbourhoods.

Regional Partnerships and Municipal Services

In an era when municipal resource constraints demand creative solutions, Tillsonburg’s collaborative approach to service delivery and economic development along the Highway 3 corridor has generated efficiencies that benefit both the town and its regional partners.

“Everything in today’s world seems to be about cooperating. There’s a word often used in economic development to describe what we do called ‘coopetition,'” explains Panschow. “Even when you’re looking to attract investment, you typically are cooperating to a certain point and then perhaps competing at the last mile. Similarly in municipal government, we look to our neighboring communities and ask, ‘Can we partner on this?’ Whether it’s through fire services, recreation, or economic development.”

This philosophy has transformed Tillsonburg’s fire communications system into a regional asset that generates service improvements and cost efficiencies.

Tillsonburg has been building a very competitive fire communication system over the last few decades and now offers fire dispatch services to over 50 municipalities in Ontario. The town is partnering with those communities, helping them lower their costs by not having everyone provide the same level of communication center, which is very costly. At the same time, it is helping to lower costs for Tillsonburg taxpayers.

The town extends this collaborative approach to economic development through partnerships with Oxford County communities and the Southwestern Ontario Marketing Alliance, creating a regional approach to business attraction that has proven effective in the competitive landscape along Highway 3.

As Tillsonburg continues its growth trajectory, this balance of competition and collaboration exemplifies how mid-sized communities along the Highway 3 corridor can maximize their impact while maintaining the small-town character that attracts residents and businesses, proving that strategic partnerships can be the foundation for sustainable community development in Ontario’s evolving economic landscape.