Housing in Thunder Bay is much more affordable because it's in the middle of nowhere. Beautiful place, great steakhouse but not exactly a start-up hotbed.

Of course, if you really only need an internet connection and a couch then it might actually be an advantage but for most start-ups (apparently outside the medical research ones but those are few and far between) access to facilities, a nearby university, a pool of schooled talent to pick from and capital are their lifeblood.