Oops, I forgot to provide some contexts.

(1) The underlying assumption is that the entire divided 4 lanes will be a freeway. That said, access will only be via interchanges most of the time or RIRO's in some cases. Whether or not it is ever realistic is a different matter.

(2) MTO intends to widen the current stretch of 11-17 through Nipigon's business area from 2 to 5 lanes (including a center turning lane).
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The south route passes quite close to the Hospital and the Helicopter airspace, not to mention the expense of acquiring all the property from businesses and residential owners.
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In North Bay, the Bypass (undivided 4 lanes) also gets very close to the hospital, in fact, even closer than this proposal will be to Nipigon Hospital. It seems that MTO will just add a median barrier there and call it a day...? (@swimmer_spe do you know?) But who knows, maybe the future freeway there will be aligned slightly to the south.
My thought is this: If the freeway's close enough to the hospital (without getting too close, that is), if any crap happens on the freeway, the ambulances can respond in no time.
As for the airspace, I just measured: There should be 100 m between this proposed alignment and the airspace. In Markham, the minimal distance between Buttonville Airport and Highway 404 is only 85 m. Unless helicopters require more sightlines, I guess this won't be too big of an issue?
Property-wise, this proposal will also have Highway 585 extended further south to Maata's Road and an interchange between 585 and the bypass. I guess the properties can be relocated to 585 extension (to appease the town)?
I heard (was it from you actually?) that the town fought tooth and nail to keep the bypass option off the table, so I was simply trying to propose something where the businesses along the current route remain visible to travellers on the bypass.
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The North route is my preferred route but the terrain on that edge is far more exposed Canadian Shield. The cost of construction there would be very expensive but, ultimately, cheaper than the south route.
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Lol, I agree that this route is the cleanest.

Terrain seems only harsh on the east end of the business strip, but sometimes it may help (i.e. if flyover ramps need constructing). I just fear that business owners from 585 to the beginning (or end) of the divided 4 lanes will complain due of lack of visibility.
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The third route right through the middle is easiest to complete, easiest to sell to residents, slowest for traffic speeds, and the worst compromise in my mind. It will really solve none of the issues.
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Now, finally, this one.
The current ROW through the business area doesn't seem sufficient to accommodate another 3 lanes, so MTO will need to move abutting properties back a bit.* I'm curious what the width of the future ROW will be (particularly, whether there will be sufficient right shoulder for both directions). If it's 24 m in general (and 32 m around Highway 585), it's possible to just add service roads on both sides, put in a median barrier all the way to Nipigon bridge, build an interchange at Highway 585, and call it a day.**
* @F. Lionel do you know the approximate route of the proposed freeway between Kakabeka Falls and Shabaqua Corners? (@vid can only confirm the route between Thunder Bay and Kakabeka Falls.) I suspect that, between Kakabeka Falls and Mokomon, MTO will simply move the properties abutting the current highway back, add service roads, and twin and grade-separate the highway. It's not that uncommon a practice (though people hate it lol).
https://www.cbc.ca/news/canada/thunder-bay/four-laning-shabaqua-kakabeka-1.3415119
** Disclaimer: I am no road engineer. It simply seems to me that a ROW of 24 m (32 m around interchanges) will suffice unless drainage's problematic.
*Phew* That was a long post.