tag:blogger.com,1999:blog-64342658884627539532024-03-25T12:11:23.796-04:00NORTHERN ECONOMIST 2.0An Ontario economics and policy blog. Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comBlogger512125tag:blogger.com,1999:blog-6434265888462753953.post-86513145577800942072024-03-25T12:09:00.004-04:002024-03-25T12:10:51.671-04:00Ontario government’s fiscal history drenched in red ink <p> This post originally appeared on the <a href="https://www.fraserinstitute.org/blogs/ontario-governments-fiscal-history-drenched-in-red-ink">Fraser Institute Blog</a>, March 25th, 2024.<br /></p><h1 class="page-header">Ontario government’s fiscal history drenched in red ink </h1>
<div class="submitted">
— March 25, 2024 </div>
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<div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even"><img alt="Ontario government’s fiscal history drenched in red ink" class="img-responsive" height="400" src="https://www.fraserinstitute.org/sites/default/files/field/image/ont-flag-map_2.jpg" title="Ontario government’s fiscal history drenched in red ink" width="800" /></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>The
Ford government will table its next budget on Tuesday. But a
longer-term perspective on the evolution of Ontario’s government
finances provides some important context for today. Since Confederation,
Ontario has seen a massive expansion of its revenues, expenditures and
debt. And its fiscal performance in terms of balancing its finances has
oscillated over the years. Using data from the <i>Finances of the Nation</i>
database, assorted Ontario budgets, and the Fiscal Reference Tables, a
picture of change and variable fiscal responsibility emerges.</p><p>With
revenues of $2.3 million and expenditures of $1.2 million in 1868,
Ontario had a substantial surplus and no debt. Indeed, substantial
surpluses marked much of the pre-Second World War era. By 2023, the
Ontario government had spending of $199 billion and revenues of $193
billion for a deficit of nearly $6 billion and a net debt of $400
billion. Ontario government spending on a real per-capita basis was
relatively modest from 1867 to 1913 (despite province-building
activities such as roads and railroads) and was financed primarily by
federal government grants and natural resource revenues from forestry
and mining. The period after 1914 saw an expansion of both government
spending and revenues that was quite dramatic compared to the prior
period, but which paled in comparison with the post-1957 expansion into
health, education and social services.</p><p>With respect to revenue
composition, Ontario gradually shifted from a reliance on natural
resource rents and government grants to own-source revenues from income,
consumption and other assorted taxes. When compared to the federal
government—the only other Canadian government larger than Ontario in
terms of total revenues or expenditure—in real per-capita terms Ontario
spent less than the federal government until the early 1990s surpassing
the Ottawa in 1993 for the first time. By 2020, real per-capita Ontario
government spending was actually more than federal real per-capita
spending, though the pandemic years saw a reversal.</p><p>What’s truly
remarkable about Ontario’s finances is its growing reliance on deficit
financing since the 1970s. Over the entire 1867 to 2023 period, Ontario
ran an operating deficit in 70 out of 157 years or approximately 45 per
cent of the time. However, in the first 100 years from Confederation
(1867 to 1967) Ontario only ran 22 deficits—that’s 22 per cent of the
time. In the fiscal years from 1968 to 2023, Ontario ran 48 deficits in
55 years—or deficits 87 per cent of the time. Deficits have gone from
being a temporary departure for exceptional times to a near permanent
device.</p><p>The accompanying charts plot Ontario’s deficits, its
deficit-to-GDP ratio, its net debt and its net debt-to-GDP ratio from
1960 to the present. The first chart illustrates that Ontario maintained
its largely balanced budget approach to its finances for most of the
1960s but incurred deficits in the 1970s.</p><p><a href="https://www.fraserinstitute.org/sites/default/files/uploaded/2024/240322-blog1.gif" target="_blank"><img alt="Figure 1" class="img-responsive" height="311" src="https://www.fraserinstitute.org/sites/default/files/uploaded/2024/240322-blog1.gif" width="640" /></a></p><p>Its
three largest deficits were in 2010 ($19.3 billion), 2011 ($17.3
billion) and 2021 ($16.4 billion). As a share of GDP, the second chart
illustrates that Ontario’s three largest deficits were in 1992 (3.7 per
cent), 1993 (4.1 per cent) and 1994 (3.5 per cent). Ontario’s pandemic
deficit peak in 2021 came in at 1.7 per cent placing it lower than some
of the deficits of the 1970s and early 1980s.</p><p><a href="https://www.fraserinstitute.org/sites/default/files/uploaded/2024/240322-blog2.gif" target="_blank"><img alt="Figure 2" class="img-responsive" height="305" src="https://www.fraserinstitute.org/sites/default/files/uploaded/2024/240322-blog2.gif" width="640" /></a></p><p>Deficits
plus interest eventually result in accumulated debt and Ontario like
other provinces has added to that by borrowing for capital spending on
top of its operating deficit. As the final chart shows, in 1960 Ontario
had a net debt of $994 million and net debt-to-GDP ratio of 6 per cent.
Today, net debt tops $400 billion and the net debt-to-GDP ratio is about
36 per cent. The profiles for net debt and net debt-to-GDP suggest
Ontario’s net debt has grown in three phases.</p><p><a href="https://www.fraserinstitute.org/sites/default/files/uploaded/2024/240322-blog3.gif" target="_blank"><img alt="Figure 3" class="img-responsive" height="350" src="https://www.fraserinstitute.org/sites/default/files/uploaded/2024/240322-blog3.gif" width="640" /></a></p><p>The
accumulation of net debt takes off in the mid 1970s, then accelerates
in the 1990s and accelerates yet again after 2008. These periods of
acceleration have all coincided with periods of economic slowdown or
recession in the province—the low growth stagflation era of the 1970s,
the recession of the early 1990s and recession/financial crisis era of
2007 to 2009. In each of these periods of distress, deficits mounted,
yet even when the economy and revenues began to recover, spending growth
and deficits continued. In essence, the Ontario government ran deficits
during bad times and better times, giving a fiscal dimension to the
provincial motto “Loyal She Remains.”</p><p>As Ontario moves forward
from the pandemic era, it remains to be seen if the government will rein
in perpetual deficit financing and halt debt accumulation, or if the
government will embark on yet another cycle of mounting debt. In many
respects, the government has continued to spend at a rate well above its
economic ability and performance. Key to the issue is Ontario’s
productivity lag, which has resulted in <a href="https://www.fraserinstitute.org/blogs/ontarios-economic-decline-is-real-and-substantial">slow growth</a>
relative to the rest of the country. If the Ford government continues
to spend as if Ontario was still experiencing the high growth rates of
an earlier era, that’s not a sound recipe for fiscal responsibility.</p></div></div></div><br />Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-76968814676514290042024-03-18T11:38:00.004-04:002024-03-18T11:40:05.850-04:00What is a Provincial Government to Do?<p>
</p><p class="MsoNormal">Ontario is coming up to Budget Day next week on March 26<sup>th</sup> and it will be interesting to see what the provincial government does on a
number of issues because quite frankly the provincial government is in a bit of
a pickle when it comes to economic and fiscal policy<span style="mso-spacerun: yes;">. </span>Over the last decade, Ontario has been hit by
a productivity decline that has translated into slower economic growth.<span style="mso-spacerun: yes;"> </span>Since the pandemic, this has been combined
with a bout of inflation and a surge in population growth.<span style="mso-spacerun: yes;"> </span>When you start looking at Ontario fiscal and
economic indicators in real per capita terms, there are going forward disturbing implications
for our standard of living.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">If one compares the 2023-24 fiscal year forecast from the
Fall Economic Update with the 2018-19 fiscal year, total provincial government
revenues and expenditures are up approximately 30 percent respectively.<span style="mso-spacerun: yes;"> </span>Health expenditure is up 33 percent.<span style="mso-spacerun: yes;"> </span>The size of the provincial economy is up 22
percent.<span style="mso-spacerun: yes;"> </span>On the surface, this is
seemingly good news in the wake of the pandemic.<span style="mso-spacerun: yes;"> </span>The problem is that over the same period,
population in Ontario has grown by an estimated 12 percent while prices have
risen nearly 19 percent.<span style="mso-spacerun: yes;"> </span>Put another
way, the combination of population and inflation at nearly 30 percent has
outstripped nominal GDP growth while essentially matching the growth of government
revenues and expenditures and in particular health spending.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">The best way to visually illustrate these effects is to
create an index.<span style="mso-spacerun: yes;"> </span>Figure 1 uses data from
Statistics Canada, the Fiscal Reference Tables and the 2023 Ontario Fall
Economic Outlook and Fiscal Review to create real per person indices of
economic and fiscal performance setting 2013/14 as 100.<span style="mso-spacerun: yes;"> </span>Figure 1 plots real per capita (deflated
using the CPI-All Items Index) Ontario provincial government Own Source Revenue,
Federal Transfers, Total Revenue, Program Expenditure, Debt Service Costs and
Total Expenditures.<span style="mso-spacerun: yes;"> </span>Note that 2023-24 is
an estimate.</p><p class="MsoNormal"> </p><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEj2cmBcRIsTOmGVJgqPviMuQIBOtoeTK6XKHX4c7KFkVWaBkDJJJT9tYPzlaVgwVFOGQekgbLQ_AchhWdBaIYyD_y_SGZ8A-glsymqJNxC5fPBJ-vsbLywtbt2WQ5q6llGYKzea6an7vMBokRJHN4F4V0k_zYKUYIL2MVOKwAXwq_eNKyTzYQew5_jPaT-o" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEj2cmBcRIsTOmGVJgqPviMuQIBOtoeTK6XKHX4c7KFkVWaBkDJJJT9tYPzlaVgwVFOGQekgbLQ_AchhWdBaIYyD_y_SGZ8A-glsymqJNxC5fPBJ-vsbLywtbt2WQ5q6llGYKzea6an7vMBokRJHN4F4V0k_zYKUYIL2MVOKwAXwq_eNKyTzYQew5_jPaT-o=w640-h360" width="640" /></a></div><br /> <p></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">In real per capita terms, debt service costs have been a bright spot in that despite the continuing rise in both the provincial net
debt and interest rates, inflation and population growth have served to reduce
the real per capita burden of servicing Ontario’s debt.<span style="mso-spacerun: yes;"> </span>Indeed, the drop-in debt service has probably
been able to free up resources for program spending. On the other hand, compared to 2018/19,
real per capita revenues and expenditures are now below where they were.<span style="mso-spacerun: yes;"> </span>In other words, provincial government revenue
and spending have not kept up with inflation and more importantly population
growth. </p>
<p class="MsoNormal"> </p><p class="MsoNormal"> </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEjTtvsOBrMqCQ-GciTQrmv5jiS6ygnuxOUHe5fq4i0ltTV5thaiM0weBL2JlRBdPGRHQrxJi6bgdRF1PP7vQd7o40kamg80Ufe_Uiy03ZWRrarRO11EIicgqVp9-7lNdfq9DSktg95WWZJDsFxJFSKq06BIdUJ71CL5KuRj-wUONjwT4-9Nw2_CeQl8eog6" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEjTtvsOBrMqCQ-GciTQrmv5jiS6ygnuxOUHe5fq4i0ltTV5thaiM0weBL2JlRBdPGRHQrxJi6bgdRF1PP7vQd7o40kamg80Ufe_Uiy03ZWRrarRO11EIicgqVp9-7lNdfq9DSktg95WWZJDsFxJFSKq06BIdUJ71CL5KuRj-wUONjwT4-9Nw2_CeQl8eog6=w640-h360" width="640" /></a></div><br /><p></p><p class="MsoNormal"> </p>
<p class="MsoNormal">Figure 2 illustrates the decline in the Ontario way of life
a bit more succinctly.<span style="mso-spacerun: yes;"> </span>Does the health
care system feel strained?<span style="mso-spacerun: yes;"> </span>Real per
capita provincial government health care spending after the surge of the
pandemic is back to where it was in 2018/19.<span style="mso-spacerun: yes;">
</span>Indeed, it has not changed much since 2013/14. <span style="mso-spacerun: yes;"> </span>During that time, one imagines that labor
costs for health care have gone up pretty dramatically which means there are
indeed fewer doctors and nurses available to service a growing population. And
to top it all off, real per capita output in Ontario has not kept pace with either
inflation or population growth.<span style="mso-spacerun: yes;"> </span>While
real per capita GDP in Ontario grew somewhat from 2013/14 to the pandemic, it
has since declined.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Looking at Figure 2, if the average Ontario had to ask
themselves am I better off than a decade ago when it comes to my real per
capita income and health spending, the answer is one that should concern the
provincial government.</p>
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{page:WordSection1;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-36998061290581398452024-03-12T15:46:00.003-04:002024-03-12T15:52:08.653-04:00Will Thunder Bay Meet Its Housing Targets?<p>
</p><p class="MsoNormal">The Mayor’s <a href="https://www.tbnewswatch.com/local-news/mayor-touts-thunder-bays-strengths-in-state-of-the-city-address-8430373">State
of the City Address</a> last evening highlighted housing construction in
Thunder Bay particularly touting that Thunder Bay within Ontario had met its
target so far and ranking tenth amongst Ontario centers (See <a href="https://northerneconomist.blogspot.com/2024/02/ontarios-housing-woes-supply-side.html">here</a>
for a ranking).<span style="mso-spacerun: yes;"> </span>The Mayor reiterated
once again that in response to coming economic development and demand, Thunder
Bay needed more housing and has a target of 1,691 new homes over three years.<span style="mso-spacerun: yes;"> </span>Naturally, the question that arises is
whether or not Thunder Bay can indeed meet this target. Much depends on the ability
of the local construction sector to actually build that many homes in three
years as well as whether the demand will materialize.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Forecasting the future these days is a pretty perilous exercise
but some insight on the ability of Thunder Bay to build what amounts to nearly
600 new homes a year can be garnered from past performance. <span style="mso-spacerun: yes;"> </span>Figure 1 plots monthly Statistics Canada total
residential permit data by dollar value and number of permits from 2011 to 2023.<span style="mso-spacerun: yes;"> </span>The numbers fluctuate seasonally though there
is a spike in 2023. However, there are similar spikes in earlier periods.<span style="mso-spacerun: yes;"> </span>If you want to smooth things out by taking a average - Thunder
Bay has averaged monthly over the 2011 to 2023 period approximately 25 residential permits with
an average value of 6.5 million dollars.<span style="mso-spacerun: yes;"> </span>Converted annually, that 25 permits a month translates into 300 units - a bit short.</p><p class="MsoNormal"><br /></p><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEhKiBNBMWQktDMjy0lWIziq1LoRRhZ26n5T1JBAk_cNSZEPTfSJ7V-oXO5QjT2gss2vkjzGuvmOgNU24b8u2ASi04Zaqp8K5GfRpEZATqhGQ36lmzblLkg0f4HMLnUXEJAQCjK3d91SccfnwOtUzuVUeztT1D8nBnWh8pN7Lp9zNvrbr5kRPK-6whP2pwRj" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEhKiBNBMWQktDMjy0lWIziq1LoRRhZ26n5T1JBAk_cNSZEPTfSJ7V-oXO5QjT2gss2vkjzGuvmOgNU24b8u2ASi04Zaqp8K5GfRpEZATqhGQ36lmzblLkg0f4HMLnUXEJAQCjK3d91SccfnwOtUzuVUeztT1D8nBnWh8pN7Lp9zNvrbr5kRPK-6whP2pwRj=w640-h360" width="640" /></a></div><br /><br /><p></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Perhaps rather than permits issued, a better indicator of
Thunder Bay’s capacity and ability to build nearly 600 units annually is a
longer-term total housing starts series. Figure 2 plots this from January 1990 to January
2024 and includes a polynomial smooth to highlight trends.<span style="mso-spacerun: yes;"> </span>The results suggest that Thunder Bay is
indeed capable of building 600 units a year as we have done so in the past. Indeed, the early 1990s resulting in over 1,000 new housing starts annually.<span style="mso-spacerun: yes;"> </span>However, the major obstacle is likely to be
not building capacity or ability but demand for new units.<span style="mso-spacerun: yes;"> </span>As the smoothed series points point, we are
on an uptick that can see about 400 new homes being built in the next
year.<span style="mso-spacerun: yes;"> </span>Reaching 600 is possible based on the
recent past given the smoothed numbers going into the pandemic.<span style="mso-spacerun: yes;"> </span>However, as noted, the result is going to be
driven also by our economic growth.<span style="mso-spacerun: yes;"> </span>Thunder
Bay has been doing well economically over the last year but will require
sustained performance at this level to generate the needed demand for housing.</p><p class="MsoNormal"> </p><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEiiSPLK5ewYE6980KoTNmKaSgAq16Y2RZX_e9rsrt15VtFyPl3mRGpsXCFozigi0H3Hd82y96-Dll3tpM0LRn1QOiy66ciGopBd1nmgNCpqyiN0ZxiUwxOvWgbSNPf843Gp5DCv1FK0B7MIp-uemW6cG05UJxo4BEfCm9G050MsDs02TiJS1QxX4lIiCl1f" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEiiSPLK5ewYE6980KoTNmKaSgAq16Y2RZX_e9rsrt15VtFyPl3mRGpsXCFozigi0H3Hd82y96-Dll3tpM0LRn1QOiy66ciGopBd1nmgNCpqyiN0ZxiUwxOvWgbSNPf843Gp5DCv1FK0B7MIp-uemW6cG05UJxo4BEfCm9G050MsDs02TiJS1QxX4lIiCl1f=w640-h360" width="640" /></a></div><br /> <p></p>
<p class="MsoNormal"> </p>
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{page:WordSection1;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-87627015214249056192024-03-06T15:28:00.002-05:002024-03-06T15:28:21.194-05:00Ranking Recent CMA GDP Growth in Canada<p> In the wake of the pandemic, with inflation, lagging productivity growth and a slowing economy, it is sometimes useful to look back on what economic performance was like in the "before time" particularly amongst Canadian urban areas. Statistics Canada currently provides GDP estimates for Canadian CMAs for the period 2009 to 2020. While 2020 sees a dip in GDP for everyone, the 2009 to 2019 period provides a snapshot of which parts of the country were growing the fastest prior to the pandemic. The accompanying figure provides the growth rate in nominal GDP from 2009 to 2019 for Canada's 36 CMAs and ranks them from highest to lowest. </p><p>The expansion of GDP over ten years across these 36 CMAs averaged 45 percent and ranged from a high of 66 percent for Guelph, Ontario to a low of 16 percent for Saint John, New Brunswick. Three of the top five CMAs are in Ontario - Guelph, Kitchener-Cambridge-Waterloo and Toronto. At the same time, four of the bottom five CMAs are also in Ontario - Thunder Bay, St. Catharines-Niagara, Peterborough and oddly enough, the Ontario portion of Ottawa. Western Canadian CMAs in general did quite well with the exception of Victoria and Edmonton which placed in the bottom third. In northern Ontario, Sudbury fares substantially better than Thunder Bay while in southern Ontario, the worst performers are Peterborough and St. Catharines-Niagara along with London, Windsor and Kingston. </p><p> </p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEg2vECCKU4UZ98tdUwQgCILhIjQQcKf5tdGbZRRaU6uvOV7SOzKB3bmULBjYyf1LIVRnfohgxUUYN51pTs3yRKcK56I4QRLFL0aE-NaeWrqYYQZR4S82w9E_iT7IBqWILIeeihTAeCB53_vOGyDKD9B3wURsRLoVgzQ5wsjOlXN09GEQ0rQsP0kj40TASyL" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEg2vECCKU4UZ98tdUwQgCILhIjQQcKf5tdGbZRRaU6uvOV7SOzKB3bmULBjYyf1LIVRnfohgxUUYN51pTs3yRKcK56I4QRLFL0aE-NaeWrqYYQZR4S82w9E_iT7IBqWILIeeihTAeCB53_vOGyDKD9B3wURsRLoVgzQ5wsjOlXN09GEQ0rQsP0kj40TASyL=w640-h360" width="640" /></a></div><br /> <p></p><p>What happens as we continue to move forward from the pandemic will be interesting. Vancouver and Toronto until the pandemic were major areas of GDP growth with their economies also totaling over 600 billion dollars or over one-third of Canada's economy. If you add in Montreal, these three CMAs account for about half of Canada's economy. With the run-up in housing prices and rents during the pandemic as well as general labor shortages in pandemics wake, one wonders how successful they will continue to be as urban growth leaders in Canada's economy. <br /></p><p><br /></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-53171515107273247292024-02-25T11:10:00.001-05:002024-02-25T11:10:11.158-05:00Ontario's Housing Woes-a supply side problem<p> <b>This post originally appeared on the <a href="https://fraserinstitute.org/blogs/ontarios-housing-woes-a-supply-side-problem">Fraser Institute Blog</a>, February 24th, 2024.<br /></b></p><h1 class="page-header">Ontario’s housing woes—a supply-side problem </h1>
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<div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even"><img alt="Ontario’s housing woes—a supply-side problem " class="img-responsive" height="400" src="https://www.fraserinstitute.org/sites/default/files/field/image/family_four_4.jpg" title="Ontario’s housing woes—a supply-side problem " width="800" /></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>Housing
prices in Ontario, like in much of the rest of Canada, have soared
because of several factors including supply constraints combined with
rising demand fuelled by robust population growth. The most recent
installment in this ongoing saga is the federal government’s move to cap
international student visas to which Ontario has announced <a href="https://financialpost.com/real-estate/ontario-require-universities-colleges-guarantee-foreign-student-housing" target="_blank">measures</a> requiring universities and colleges to guarantee student housing—though how this is to be done is a good question.</p><p>These
short term reactive regulatory actions at both the federal and
provincial level will ultimately do little to solve the problem of
scarce and expensive housing because they do not address the root of the
problem—the supply side, particularly the high cost of building new
homes, which results in meagre efforts to build new housing stock.</p><p>Aside
from the recent labour shortages and run-up in construction costs in
the pandemic’s wake, there are two additional facets to the supply and
cost-side issues of housing in Canada in general and Ontario in
particular.</p><p>First, there’s the role of government in driving up
the cost of new housing through regulatory actions at the provincial and
municipal level. Housing in early 21st century Ontario has been treated
not as an investment but as a source of cash for governments, which
always seem to need more money. According to a <a href="https://www.cmhc-schl.gc.ca/blog/2022/government-charges-residential-development" target="_blank">CMHC report</a>,
government charges on new housing development via warranty fees,
municipal fees, development and permit fees easily add 20 per cent to
the cost of building a new home. Indeed, the regulatory charges for a
new home in a place such as <a href="https://financialpost.com/personal-finance/mortgages-real-estate/its-time-for-municipal-governments-to-lower-the-regulatory-burden-on-construction-of-new-housing" target="_blank">Markham</a>
can easily add up to $180,000 with some of the higher costs imposed on
higher density row homes and high rise units relative to single-detached
homes. This is not an inconsequential amount given housing prices in
Markham average about $1.3 million.</p><p>Second, housing supply has not
kept up with population growth. This is not a new story—the addition of
new per-person housing stock in Ontario peaked in the 1970s. The chart
below plots total housing starts for Ontario from 1955 to 2023. While
there have been cyclic highs and lows, the overall trend has been
upwards. Even so, the total number of starts peaked in 1973 at 110,536
starts. By way of contrast, 2023 saw 89,297 new home starts. In 1973,
Ontario’s population was 8.1 million people whereas by 2023 it was
estimated at 15.8 million.</p><div id="chartContainer1"><a href="https://www.fraserinstitute.org/sites/default/files/uploaded/2024/240224-blog-fig1.gif" target="_blank"><img alt="Fig. 1" class="img-responsive" height="205" src="https://www.fraserinstitute.org/sites/default/files/uploaded/2024/240224-blog-fig1.gif" width="400" /></a></div><p>When
one calculates the number of new starts per person and constructs an
index with 1955 equal to 100, it becomes clear that new housing starts
per person have been on a long-term decline. Compared to 1955, we’re
building 45 per cent fewer new homes per person. If you compare it to
the per-person peak in the 1970s, Ontario in 2023 built nearly 60 per
cent fewer new homes per person.</p><div id="chartContainer2"><a href="https://www.fraserinstitute.org/sites/default/files/uploaded/2024/240224-blog-fig2.gif" target="_blank"><img alt="Fig. 2" class="img-responsive" height="219" src="https://www.fraserinstitute.org/sites/default/files/uploaded/2024/240224-blog-fig2.gif" width="400" /></a></div><p>To
add to the stock of affordable housing, the Ontario government has set
the target of 1.5 million homes to be built by 2031. To this end, it
created a <a href="https://news.ontario.ca/en/release/1003400/ontario-making-progress-on-work-to-build-at-least-15-million-homes" target="_blank">Building Faster Fund</a>
that would provide up to $1.2 billion to municipalities that meet or
exceed the government housing target set for that community and provide
strong mayoral powers to municipalities to help cut through municipal
red tape and speed up construction. The government has also set housing
targets for municipalities to meet to receive the funding.</p><p>Keep in
mind that to reach a target of 1.5 million new homes by 2031, Ontario
would need to add 187,500 new homes a year until 2031. As the first
chart illustrates, since 1955 there has not been a single year where
Ontario has come close to that number. Indeed, if one compares housing
starts as a per cent of the target set by the provincial government
across municipalities based on data from its <a href="https://www.ontario.ca/page/tracking-housing-supply-progress" target="_blank">Housing Tracker</a>
(see chart below) it’s clear that as of late-January 2024, barely
one-quarter of municipalities had met their 2023 housing target. Not the
most auspicious start.</p><div id="chartContainer3"><a href="https://www.fraserinstitute.org/sites/default/files/uploaded/2024/240224-blog-fig3.gif" target="_blank"><img alt="Fig. 3" class="img-responsive" height="220" src="https://www.fraserinstitute.org/sites/default/files/uploaded/2024/240224-blog-fig3.gif" width="400" /></a></div><p>What’s
Ontario to do? The province’s housing availability and affordability
problem will likely get worse before it gets better. Along with boosting
the supply of skilled trades people to help construct more homes, it
must reduce the regulatory and zoning barriers that slow down the
construction of multi-unit residential projects, reduce the governmental
development charges particularly on “missing-middle” density builds
that emphasize family-sized units, and provide further tax incentives
geared to building high-rise multi-unit builds with family-sized units.
Governments should also increase efforts to leverage surplus public
lands at the federal, provincial and municipal levels to help construct
affordable housing as the current approach has paid little attention to
having a constant and ample supply of shovel-ready sites.</p><p>Only such a multi-pronged approach will have any hope of meeting the housing needs of Ontarians over time.</p></div></div></div>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-48610648780296859002024-02-12T11:19:00.002-05:002024-02-12T11:20:38.269-05:00Municipal Spending Evolution in Thunder Bay<p>
</p><p class="MsoNormal">As the 2024 municipal budget season wraps up, it is worth
looking at where Thunder Bay has been going over the last decade in terms of
the composition of its total municipal expenditures (all spending, tax and
grant supported, capital and operating). <span style="mso-spacerun: yes;"> </span>Using multi-year financial data (2002 to 2022)
from the Ontario Ministry of Municipal Affairs Financial Information Review,
one can obtain an overview of the trends.<span style="mso-spacerun: yes;">
</span>In 2012, total municipal expenditures in Thunder Bay were 505.4 million
dollars and in 2022 they were 599.8 million making for an increase of 19
percent.<span style="mso-spacerun: yes;"> </span>Compared to some other
municipalities, this was actually a rather modest increase as over the same
period, Greater-Sudbury saw an increase of 41 percent, Windsor 26 percent,
Barrie 29 percent and Kingston 41 percent.<span style="mso-spacerun: yes;">
</span>At the same time, over this entire period, Thunder Bay nevertheless still
managed to have <a href="https://northerneconomist.blogspot.com/2024/02/measuring-municipal-public-sector-size.html">the
largest</a> municipal expenditure to GDP ratio of these cities. <span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">What is more interesting is the evolution in functional composition.<span style="mso-spacerun: yes;"> </span>Figure 1 illustrates that in 2012, the City
of Thunder Bay spent 5 percent of its budget on general government, 14 percent
on protection of persons and property, 12 percent on transportation, 12 percent
on the environment, 5 percent on health and emergency services, 13 percent on
social and family services, 9 percent on cultural and recreation services, 2
percent on planning and development and 28 percent on "other".<span style="mso-spacerun: yes;"> </span>This last category reflects Thunder Bay’s
ownership of its municipal telecom utility (TBayTel) as well as differences in
the way Thunder Bay approaches social housing given we have a district board –
the District of Thunder Bay Social Services Administration Board.</p><p class="MsoNormal"> </p><p class="MsoNormal"> </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEj9-kW2amxACBivw19XOXDwWUc7Ipye8ZXJepH7vqD48eSqNJAzylk-JpISQ8AQKsA49jwWZ0WoM2lB3sadmT1RsC_un7F5DLR9YRu5r0J7wEwt302dMgkSf02JspiUU9aMAbgc_oAFKp9bQtT6lkMRA32nnTCLYg6NmFSGn3B7ZjOwxXTe2GYiv-9czKia" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEj9-kW2amxACBivw19XOXDwWUc7Ipye8ZXJepH7vqD48eSqNJAzylk-JpISQ8AQKsA49jwWZ0WoM2lB3sadmT1RsC_un7F5DLR9YRu5r0J7wEwt302dMgkSf02JspiUU9aMAbgc_oAFKp9bQtT6lkMRA32nnTCLYg6NmFSGn3B7ZjOwxXTe2GYiv-9czKia=w640-h360" width="640" /></a></div><br /><p></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Figure 2 presents the 2022 composition.<span style="mso-spacerun: yes;"> </span>General government showed a decline to 4
percent, protection to persons and property rose to 21 percent, transportation
remained at 12 percent as did the environment.<span style="mso-spacerun: yes;">
</span>Meanwhile, health and emergency services grew to 7 percent, social and
family services declined to 7 percent, and both recreation and culture and
planning and development remained the same at 9 percent and 2 percent respectively.<span style="mso-spacerun: yes;"> </span>Meanwhile, the "other" category's share declined to 26
percent.<span style="mso-spacerun: yes;"> </span></p><p class="MsoNormal"><span style="mso-spacerun: yes;"> </span></p><p class="MsoNormal"><span style="mso-spacerun: yes;"> </span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEiBxMLnXDTGs57FdnpxI4ZNSym4oJYowOQyQP9jTabPnor4aB7GOYY-8o791taD-yFR__MVZGlGn5DkKX4C7-5Q0eWId_IRx6F5r5OIgyq5BDs0cuJAAJp3rO1qnMUyi0gOPr4gieyRoFnmnQ6If6XvOB9NMAkWhZmQk_LX5A7XLO9PlmGkK909LfJBU_SN" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEiBxMLnXDTGs57FdnpxI4ZNSym4oJYowOQyQP9jTabPnor4aB7GOYY-8o791taD-yFR__MVZGlGn5DkKX4C7-5Q0eWId_IRx6F5r5OIgyq5BDs0cuJAAJp3rO1qnMUyi0gOPr4gieyRoFnmnQ6If6XvOB9NMAkWhZmQk_LX5A7XLO9PlmGkK909LfJBU_SN=w640-h360" width="640" /></a></div><br /><p></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Of course, for the composition to change, it means that
these categories have grown at different rates and so Figure 3 presents the
percent change in total spending by category over the 2012 to 2022 period.<span style="mso-spacerun: yes;"> </span>In accord with general local perceptions, the
largest increases in spending have indeed been in protection services and health
and emergency services at 76 and 73 percent respectively.<span style="mso-spacerun: yes;"> </span>Next is recreation and culture at 25 percent,
followed by the environment at 14 percent, planning and development at 13 percent,
"other" at 12 percent and transportation at 11 percent.<span style="mso-spacerun: yes;"> </span>There were two categories that saw declines
in total spending: general government fell by 6 percent (there have indeed been some administrative economies) while social and family
services fell by 32 percent.<span style="mso-spacerun: yes;"> </span></p><p class="MsoNormal"><span style="mso-spacerun: yes;"> </span></p><p class="MsoNormal"><span style="mso-spacerun: yes;"> </span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEh_NSX7trIZqg77ek_B5urQ1nSujy2Myxzv0_dO7dMv4ALeuUKsML24762ttG6hIjCREKePnv4nLRfphaTRE36ATFg9pzl2YRoov7kFmgkBH3mHhB6VIsH1N_fOOCwtC2vlBjeFNwSBMVXBSybhkEbD67e8RR9PCIAvUYUkMCUlYoOmrTgopQ3azmHVQcyP" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEh_NSX7trIZqg77ek_B5urQ1nSujy2Myxzv0_dO7dMv4ALeuUKsML24762ttG6hIjCREKePnv4nLRfphaTRE36ATFg9pzl2YRoov7kFmgkBH3mHhB6VIsH1N_fOOCwtC2vlBjeFNwSBMVXBSybhkEbD67e8RR9PCIAvUYUkMCUlYoOmrTgopQ3azmHVQcyP=w640-h360" width="640" /></a></div><br /><p></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Given that social issues have been front and center in
Thunder Bay over the last few years, this allocation does provide some insight into
how Thunder Bay is dealing with some of its social issues.<span style="mso-spacerun: yes;"> </span>Resource allocation appears to have targeted the
more direct outcomes and fallout of the assorted social ills afflicting the streets of
Thunder Bay.<span style="mso-spacerun: yes;"> </span>This is to be
expected.<span style="mso-spacerun: yes;"> </span>What is somewhat more disturbing
is that there has been an expenditure drop in family and social services which
one might expect would be a longer-term spending approach to addressing some of
the causes of social issues.<span style="mso-spacerun: yes;"> </span>Whereas, in
2012, 64.4 million was being spent on family and social services, this has
declined to 44 million by 2022.<span style="mso-spacerun: yes;"> </span></p><p class="MsoNormal"><span style="mso-spacerun: yes;"> </span></p><p class="MsoNormal"><span style="mso-spacerun: yes;">It is interesting to note that of the five cities mentioned at the start of this post, between 2012 and 2022, Thunder Bay saw the largest percent increases in dollars spent on protection to persons and property as well as health and emergency services. With respect to spending on family and social services, only Barrie saw a decline while Greater-Sudbury, Windsor and Kingston all saw increases. Windsor, Barrie, Greater-Sudbury, and Kingston also all increases in social housing spending (though Greater-Sudbury's was quite small). However, in the case of Thunder Bay it is difficult to tell from these numbers if we are indeed spending more in social housing in the "other" category. Ultimately, such differences across urban centers will provide an interesting laboratory experiment on how municipalities are dealing with issues like poverty, addiction and crime.<br /></span></p>
<p><style>@font-face
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{page:WordSection1;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-19452654913213668992024-02-04T10:14:00.001-05:002024-02-04T10:14:29.984-05:00Measuring Municipal Public Sector Size<p>
</p><p class="MsoNormal">Public sector size and its impact on the economy is a
long-standing research question in public finance.<span style="mso-spacerun: yes;"> </span>In the case of Canada with its federal system
of government, measures of public sector size often focus on either total
public sector size or break it down into measures of federal and/or provincial
public sector size.<span style="mso-spacerun: yes;"> </span>These measures
commonly take government spending or government revenues as a share of GDP to
estimate the size of the public sector footprint.<span style="mso-spacerun: yes;"> </span>Less common are attempts to related municipal
public sector size to the size of their local economies. </p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Data is always an issue when trying to get an empirical
handle on measuring things like public sector size.<span style="mso-spacerun: yes;"> </span>Fortunately, in the case of Ontario
municipalities, it is possible to get annual data on total municipal government
expenditures and revenues from the Ontario Ministry of Municipal Affairs Annual
Financial Information Returns which are filed by municipal governments.<span style="mso-spacerun: yes;"> </span>Also fortunate is that Statistics Canada now
provides some estimates of GDP for major census metropolitan areas going back
to 2009.<span style="mso-spacerun: yes;"> </span>While the data is a bit onerous
to compile and put together, the preliminary results for Thunder Bay and three
other Ontario municipalities are interesting.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Figure 1 plots total municipal expenditure as a share of CMA
GDP from 2009 to 2022 for Thunder Bay, Greater Sudbury, Windsor, and
Barrie.<span style="mso-spacerun: yes;"> </span>These are relatively smaller
Ontario urban centres well outside the GTA/Niagara region with two in northern
Ontario.<span style="mso-spacerun: yes;"> </span>Greater Sudbury is always an
automatic comparison for Thunder Bay on many levels given that it is the
largest city in northern Ontario with Thunder Bay second.<span style="mso-spacerun: yes;"> </span>Also, note that for 2021 and 2022, GDP was
estimated using the annual average growth rate of GDP for the 2010 to 2020
period.</p><p class="MsoNormal"> </p><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgasrlaX8mOOSXmGUYzgZ_lxhd8wkOWf64YqSCRAQnj_vpqU9ndNt0BuJ-XRKHUmJ8dWquIu255b62BlgNVRenlyRxsHfRwQGMVUd30N9rnM0MszCK88AdFzi1KfFU6-a2GLmx6X4Qd1cYKuAG-qSRa7iQzKvYtyRQ2s4ryF-16b__jvOxKMiUY_PUlVG3b" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEgasrlaX8mOOSXmGUYzgZ_lxhd8wkOWf64YqSCRAQnj_vpqU9ndNt0BuJ-XRKHUmJ8dWquIu255b62BlgNVRenlyRxsHfRwQGMVUd30N9rnM0MszCK88AdFzi1KfFU6-a2GLmx6X4Qd1cYKuAG-qSRa7iQzKvYtyRQ2s4ryF-16b__jvOxKMiUY_PUlVG3b=w640-h360" width="640" /></a></div><br /> <p></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">The results reveal that total municipal expenditures in
these four cities as a share of GDP reveal that Thunder Bay has a larger
municipal footprint than the other three.<span style="mso-spacerun: yes;">
</span>Over the entire period 2009 to 2022, Thunder Bay’s municipal expenditure
to GDP ratio averages 9 percent while Sudbury is at 6 percent, and Windsor and
Barrie each at 5 percent and 4.7 percent respectively.<span style="mso-spacerun: yes;"> </span>In terms of trends over time, since 2011,
Barrie has been trending slowly downwards, Windsor is stable, Sudbury has been
growing while Thunder Bay managed a small decline that was reversed during the
pandemic.<span style="mso-spacerun: yes;"> </span>Indeed, the two end points of
this chart are both associated with economic trauma in that the start is marked
by the aftermath of the Great Recession and Financial Crisis and the end by the
COVID-19 pandemic.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Nevertheless, the results suggest that based on this albeit
limited sample, the two northern Ontario municipalities have larger municipal
public sectors than ones in southern Ontario. Even within the north, Thunder
Bay is certainly in a league of its own when it comes to the size of its
municipal footprint.<span style="mso-spacerun: yes;"> </span>Some of these differences
across the cities can of course be ascribed to the generally more robust
southern Ontario economic environment and better economic growth performance
which naturally spills over into GDP.<span style="mso-spacerun: yes;"> </span>At
the same time, Thunder Bay is different, and the question as always is why?</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">One might argue that the municipal public sector in Thunder
Bay is larger than these other cities because it has a weaker economy.<span style="mso-spacerun: yes;"> </span>Given that so much municipal spending is
mandated or guided by the province, Thunder Bay does not spend more per se but
does relative to the size of its economy.<span style="mso-spacerun: yes;">
</span>This is the “province makes us do it defence”. <span style="mso-spacerun: yes;"> </span>On the other hand, one could argue that more
spending is also a choice and Thunder Bay and the Lakehead cities that preceded
it have always because of their isolation engaged in more municipal spending to
provide services they feel ought to be available. In this regards, part of the difference between Thunder Bay and other cities lies in municipal utilities given that the City of Thunder Bay essentially owns TBayTel- its own municipal telecom utility.<br /></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">In some sense, neither explanation is terribly flattering in
explaining why Thunder Bay’s municipal public sector can be nearly twice as
large as that in some other southern Ontario cities.<span style="mso-spacerun: yes;"> </span>We have a weak economy which despite all
efforts continues to be weak and our municipal government plays the role of an
economic stabilizer. <span style="mso-spacerun: yes;"> </span>Or, ownership of TBayTel aside, we may simply like
to spend more than other cities and are quite comfortable with the City of
Thunder Bay being as large an economic driver as it is.<span style="mso-spacerun: yes;"> </span>One suspects both these explanations are potentially
inconvenient truths no one in Thunder Bay really wants to hear.</p>
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{page:WordSection1;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-91956381166920970652024-02-02T18:20:00.001-05:002024-02-02T18:20:07.106-05:00Ontario Economic Decline is Real and Substantial<p> This post originally appeared in the <a href="https://www.fraserinstitute.org/blogs/ontarios-economic-decline-is-real-and-substantial">Fraser Institute Blog</a>.</p><p>A spectre is stalking Ontario, and it’s the spectre of decline. For
most of post-war Canadian economic history, Ontario has had a per-capita
real GDP substantially above the Canadian average. At the same time,
Ontario has had real per-capita GDP growth relatively close to the
Canadian average.</p><p>This dominance was rooted in Ontario’s role as
Canada’s industrial heartland that developed in the wake of
Confederation. Ontario was indeed a beneficiary of Canada’s national
economic development policies based on development of the Canadian
prairie wheat economy, a tariff wall to protect domestic manufacturing
and an east-west railway transport corridor. At the same time, Ontario’s
economy was also marked by prosperity driven by market-based economic
development best described in the words of economic historian Ian
Drummond as “progress without planning.”</p><p>Ontario’s performance can be summarized in two charts using data from the Macro-data Base of <a href="https://financesofthenation.ca/" target="_blank">Finances of the Nation</a>.
The first chart below plots real per-capita GDP separately for Ontario
versus the rest of the country (Canada without Ontario) from 1990 to
2022.</p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgY3XtdFGWpjbiykzZ4jH3bMWN58r3TvBsruGjPq5eNe6Xg_MQkO0bLBNqBFQTr8TY02vQMUIT44wykmArDmG-Ii2qy0KeLhChfapVfu6VcKl13IGjC_fvqz975LPu62TNl5SDUWO9fwwAwX19ofxERv-GDynTGkuGcM1qm9aWqepTneUA78Kz80-zzjPIL" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="1102" data-original-width="1678" height="420" src="https://blogger.googleusercontent.com/img/a/AVvXsEgY3XtdFGWpjbiykzZ4jH3bMWN58r3TvBsruGjPq5eNe6Xg_MQkO0bLBNqBFQTr8TY02vQMUIT44wykmArDmG-Ii2qy0KeLhChfapVfu6VcKl13IGjC_fvqz975LPu62TNl5SDUWO9fwwAwX19ofxERv-GDynTGkuGcM1qm9aWqepTneUA78Kz80-zzjPIL=w640-h420" width="640" /></a></div><br /> <p></p><div id="chartContainer2"><div class="canvasjs-chart-container" style="cursor: auto; position: relative; text-align: left;"></div></div><div class="canvasjs-chart-toolbar" style="border: 1px solid transparent; position: absolute; right: 1px; top: 1px;"></div><div class="canvasjs-chart-tooltip" style="border-radius: 0px; bottom: -94px; box-shadow: rgba(0, 0, 0, 0.1) 1px 1px 2px 2px; display: block; height: auto; left: 134px; pointer-events: none; position: absolute; transition: left 0s ease-out 0s, bottom 0s ease-out 0s; z-index: 1000;"></div><div id="chartContainer2"><div class="canvasjs-chart-container" style="cursor: auto; position: relative; text-align: left;"><a class="canvasjs-chart-credit" href="https://canvasjs.com/" style="color: dimgrey; font-family: Calibri, Lucida Grande, Lucida Sans Unicode, Arial, sans-serif; font-size: 11px; margin: 0px; outline: none; position: absolute; right: 2px; text-decoration: none; top: 526px;" tabindex="-1" target="_blank" title="JavaScript Charts">CanvasJS.com</a></div></div><p>The
second chart plots the average annual growth rate for Ontario, the rest
of the country and all of Canada for the 1990 to 2022 period and the
approximately 30-year period preceding it. The evidence suggests that
during the 1990s, Ontario fell dramatically below the rest of the
country in terms of its real per-capita GDP growth. In 2006, the rest of
the country surpassed Ontario’s real per-capita GDP and remained higher
for a decade before converging from about 2015 to the pandemic era.
However, in the immediate post-pandemic era, Ontario has once again
fallen behind the rest of the country.</p><p> </p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgnyJGhDgAphe_aZbzir5W8NKIpqw-3R26Xm6kPtTb1tBzxW4cY9wQmQv8YX3l4tgv2wiY47KKDz-F4N3hXZy-VxxDnpkIi5IG0gD-kGjEs8KpO1WNcvfsNBES8QLIl1UnEPCfR0pUJ04nXfaDgLgqAUQSwtlbUirx0EyZXBhBI5bl27uJQtE6rV0gHf8lw" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="1120" data-original-width="1604" height="446" src="https://blogger.googleusercontent.com/img/a/AVvXsEgnyJGhDgAphe_aZbzir5W8NKIpqw-3R26Xm6kPtTb1tBzxW4cY9wQmQv8YX3l4tgv2wiY47KKDz-F4N3hXZy-VxxDnpkIi5IG0gD-kGjEs8KpO1WNcvfsNBES8QLIl1UnEPCfR0pUJ04nXfaDgLgqAUQSwtlbUirx0EyZXBhBI5bl27uJQtE6rV0gHf8lw=w640-h446" width="640" /></a></div><br /> <p></p><div id="chartContainer1"><div class="canvasjs-chart-container" style="cursor: auto; position: relative; text-align: left;"></div></div><div id="chartContainer1"><div class="canvasjs-chart-container" style="cursor: auto; position: relative; text-align: left;"><div class="canvasjs-chart-toolbar" style="border: 1px solid transparent; position: absolute; right: 1px; top: 1px;"></div><a class="canvasjs-chart-credit" href="https://canvasjs.com/" style="color: dimgrey; font-family: Calibri, Lucida Grande, Lucida Sans Unicode, Arial, sans-serif; font-size: 11px; margin: 0px; outline: none; position: absolute; right: 2px; text-decoration: none; top: 526px;" tabindex="-1" target="_blank" title="JavaScript Charts">CanvasJS.com</a></div></div><p>During
the 30-year period prior to 1990, Ontario’s real GDP per-capita growth
was quite close to the overall Canadian average and that of Canada
without Ontario. What’s remarkable is what’s happened since.</p><p>Ontario’s
average annual growth rate of real per-capita GDP fell from 2.6 per
cent to 0.6 per cent. To be fair, a productivity decline has also marked
the rest of the country. Indeed, Ontario and the rest of Canada appear
locked as partners in a long-term productivity and growth decline, but
Ontario’s performance is both dire and unique. The rest of Canada since
1990 saw its per-capita income growth rate cut in half. While hardly a
sterling performance, compared to Ontario it was a veritable boom given
that Ontario’s post-1990 average annual growth rate was barely
one-quarter that of its 1960 to 1990 growth rate. One can argue that
Ontario is dragging down the overall Canadian growth rate.</p><p>One can
construct all kinds of palatable and soothing stories to explain why
this has happened and why it’s not as unflattering as these statistics
suggest. For example, one can argue that convergence of income is a good
thing as it provides for a more economically balanced federation and is
a logical outcome of economic development spreading across the country.
At the same time, convergence could also mean that once per-capita
incomes have equalized, growth rates should be similar, too, which is
not the case here.</p><p>One could argue that Ontario was exceptionally
hard hit by the economic adjustment its manufacturing base underwent
during the 1990s in the wake of the 1998 Canada-U.S. Free Trade
agreement and then NAFTA. Yet most of that adjustment was done in the
1990s and a breakdown of growth rates in the 1990 to 2022 period shows
1990 to 2000 had higher per-capita income growth than afterwards. One
could also argue that the real per-capita slowdown is an illusion
fuelled by rapid population growth. This of course ignores the reality
that Ontario’s population has been growing about the same as the rest of
the country and its share of total Canadian population today remains
pretty much the same as 30 years ago.</p><p>Another potential argument
is that the relatively better performance of the rest of the country is
the result of natural resources with Alberta, Saskatchewan and
Newfoundland and Labrador doing much of the heavy lifting. Yet this
ignores that Ontario, and especially its north, is resource rich with
abundant minerals and hydropower resources. Yet Ontario has been
planning for more than two decades to access its Ring of Fire and little
yet emerged. If the early 20th century could be characterized as
“Progress without planning” then the early 21st may as well be “Planning
without progress.”</p><p>Finally, one could argue it’s all just a rough
patch for Ontario and that things are about to turn around. At the 1960
to 1990 growth rate, Ontario’s per-capita income would double in about
30 years. At the post-1990 average annual growth rate, the next doubling
will take more than a century.</p><p>These are all ultimately
unconvincing stories strung together to provide a comforting and
bearable account as to why we shouldn’t worry and indeed shouldn’t do
anything at all. Yet the first step to a solution is acknowledging a
problem exists. Unfortunately, Ontario seems serene in the confidence it
does not have to worry. Ontario needs to wake up and realize it has a
problem.</p><p> </p><p><br /></p><p><br /></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-54941209846617953532024-01-27T14:14:00.004-05:002024-01-28T09:19:31.049-05:00Ranking Thunder Bay's Tax Levy and More...<p>
</p><p class="MsoNormal">It is municipal budget season in Ontario and Canada
and this year’s proposed budget increases appear to be quite large.<span style="mso-spacerun: yes;"> </span>T<a href="https://www.cbc.ca/news/canada/toronto/toronto-city-budget-launch-1.7078446">oronto</a>,
for example, has proposed a 10.5 percent tax increase while <a href="https://www.thespec.com/news/council/city-says-14-2-per-cent-tax-increase-looming-for-hamilton-next-year/article_ffc9dfd4-a2b4-5b32-aa46-0782804ed790.html">Hamilton</a>
initially was looking at a 14 percent increase. <a href="https://bc.ctvnews.ca/here-s-how-much-vancouver-s-property-tax-is-set-to-increase-in-2024-1.6685653">Vancouver</a>
is going up 7.5 percent while <a href="https://www.ctvnews.ca/canada/canadian-homeowners-face-large-increases-to-property-taxes-1.6722261">Montreal</a>
seems set to go up 5 percent which while seemingly modest given the comparisons
described here is nevertheless Montreal’s largest increase in 13 years. And
then there is <a href="https://www.cbc.ca/news/canada/thunder-bay/thunder-bay-budget-feeback-1.7095794">Thunder
Bay</a> which for 2024 is <a href="https://www.999thebay.ca/2024/01/19/citys-proposed-budget-released/">proposing
a 6.1 percent</a> increase in the total tax levy which “after growth” will be
5.5 percent.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">While one might argue that Thunder Bay's increase seems <a href="https://www.tbnewswatch.com/local-news/comparing-apples-to-apples-8153568">modest</a>
compared to these other metropolises, much like the case of Montreal, the more
apt comparisons are with the past rather than other cities. <span style="mso-spacerun: yes;"> </span>Even in the case of Ontario municipalities,
there are differences in municipal structure with Thunder Bay as a single tier
municipality not always directly comparable to other cities – the famous apples
versus oranges argument city administrators usually bring up at budget time.<span style="mso-spacerun: yes;"> </span>Ultimately, one needs to look at how Thunder
Bay’s tax levy and proposed levy increase stacks up against past ones.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Figure 1 plots a two-axis chart of the total tax levy as
well as the dollar change in the levy from year to year going from 1990 to the
proposed 2024 figures.<span style="mso-spacerun: yes;"> </span>In 1990, the tax
levy was 63.4 million dollars while today the proposed amount for 2024 is 231.7
million dollars.<span style="mso-spacerun: yes;"> </span>And of course, this is just
the tax levy and not the total budget which is funded by both tax levies and
government grants and comes in including operating and capital at a combined
total of approximately 538 million dollars.<span style="mso-spacerun: yes;">
</span>The trend has been upwards with an increase every year with the exception
of 1995 which appears to have seen a drop in the levy of 1.3 million
dollars.<span style="mso-spacerun: yes;"> </span>The proposed increase for 2024
is 13.3 million which is well above the average annual increase for the 1991 to
2024 period of 4.95 million dollars.</p><p class="MsoNormal"> </p><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEjj-6XRx4PccewkeL1_Oaf4pSlK_x1d91KT7edi_wyIuLjKCQK_WHWLGB18CxyrALacEiZvb4qIstFSPzu2CacNhrSLOt7sV3ID-VJ_7fdctW5RTzhV0wrn_jZHM1oaTZx5wrmVSskxB6Mv8K5polGxyho53z48e16KMS88Zr6owzfSFzlqAJ3pW4myfGQR" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEjj-6XRx4PccewkeL1_Oaf4pSlK_x1d91KT7edi_wyIuLjKCQK_WHWLGB18CxyrALacEiZvb4qIstFSPzu2CacNhrSLOt7sV3ID-VJ_7fdctW5RTzhV0wrn_jZHM1oaTZx5wrmVSskxB6Mv8K5polGxyho53z48e16KMS88Zr6owzfSFzlqAJ3pW4myfGQR=w640-h360" width="640" /></a></div><br /> <p></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">How does this year’s percentage increase in the tax levy
stack up to past ones? Figure 2 plots each percent increase in the total tax
levy from 1991 to 2024 ranking them from highest to lowest and at 6.1 percent,
the proposed 2024 levy increase is the 5<sup>th</sup> highest in over thirty
years (but second highest in strict absolute dollar terms). The increases range from a high
of 21.8 percent in 1998 to a low of -1.7 percent in 1995.<span style="mso-spacerun: yes;"> </span>All other things given this year’s proposed
increase is at the higher end of the range in percentage terms.</p><p class="MsoNormal"> </p><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEhDOSiKXZbEDrrg2WfTREkzCctJh9ffsyxnnzA2rJvJw2pVRmeBBLyNTsgA5u7DYdaPi4m9cDZN14AtdPsD65w1uPa22Twe5FvzlGqk6Anw5k6WjBPoI6D-YS6nB4-jyfb0IO6zHjFGhZk7gkIltNdbrZvueCBck58sQSK_9gzjzNJpwRhmzCJecfuffRI3" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEhDOSiKXZbEDrrg2WfTREkzCctJh9ffsyxnnzA2rJvJw2pVRmeBBLyNTsgA5u7DYdaPi4m9cDZN14AtdPsD65w1uPa22Twe5FvzlGqk6Anw5k6WjBPoI6D-YS6nB4-jyfb0IO6zHjFGhZk7gkIltNdbrZvueCBck58sQSK_9gzjzNJpwRhmzCJecfuffRI3=w640-h360" width="640" /></a></div><br /> <p></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Of course, it is often argued that the reason taxes go up
apart from new needs or mandated responsibility increases from the province is
a general rise in costs driven by inflation. Inflation certainly has been in
the headlines the last year, so it is worth checking out the correlation
between the CPI inflation rate for Thunder Bay and the percent change in the
tax levy.<span style="mso-spacerun: yes;"> </span>Oddly enough, when a linear
trend is fitted to the scatter plot of tax levy increases versus the inflation
rate, the relationship appears to be slightly negative – that is, <i>higher
inflation rates were correlated with lower tax increases</i>.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">However, one could argue that these results are driven by
1998 with its 21 percent levy increase (If you recall the late 1990s was an era of municipal restructuring with changes in how taxes were allocated between residential and business and also local education and of course social service downloading).<span style="mso-spacerun: yes;">
</span>However, if you omit that year as an outlier, what you get is
essentially a flat curve.<span style="mso-spacerun: yes;"> </span>That is, the
rate of inflation does not seem to drive the rate increases.<span style="mso-spacerun: yes;"> </span>They are being driven by other factors and
since we don’t know what we don’t know, those factors are best left up to city
administrators who are in the know about what they may or may not know.<span style="mso-spacerun: yes;"> </span>Nevertheless, do not expect a straightforward
answer as the factors over and above inflation are indeed complicated.</p><p class="MsoNormal"> </p><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEghnQQ0dStvLQs3YoTYg1sRsLAoPMm-SM0qLjXPV05TZbJPFHDn9cZ_j3ZE1MCs7hBniu3PAk5-joZXDFgSo3Smrmvlei2uw3sv7rSjzCwEtKQnXcsYg9GImgdi2XOv3dTSeYkLGgfvAhB42A5Y_bdUQ6j74ISKksaAUe3-sjWytuto1PbUFxqtc1tT3tyW" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEghnQQ0dStvLQs3YoTYg1sRsLAoPMm-SM0qLjXPV05TZbJPFHDn9cZ_j3ZE1MCs7hBniu3PAk5-joZXDFgSo3Smrmvlei2uw3sv7rSjzCwEtKQnXcsYg9GImgdi2XOv3dTSeYkLGgfvAhB42A5Y_bdUQ6j74ISKksaAUe3-sjWytuto1PbUFxqtc1tT3tyW=w640-h360" width="640" /></a></div><br /> <p></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Many people find the budgeting process of the City of Thunder Bay (and indeed municipal governments in general) rather
arcane and overly complicated.<span style="mso-spacerun: yes;"> </span>Indeed,
even those of us with a public finance background find <a href="https://www.cdhowe.org/public-policy-research/show-us-our-money-fiscal-accountability-canadas-cities-2022">municipal budgets particularly confusing</a> and exasperating as they are indeed laid out in a manner that does
not inspire clarity. <span style="mso-spacerun: yes;"> </span>They look nothing
like a federal or provincial budget which a least provide a one- or two-page
table easily summarizing revenues and expenditures. <span style="mso-spacerun: yes;"> </span>Now one may argue that this is not good for
local democracy if ratepayers do not understand municipal finances because they
are not readily transparent.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">This is where the ratepayer errs.<span style="mso-spacerun: yes;"> </span>This is actually not about democracy.<span style="mso-spacerun: yes;"> </span>It is about the needs of the corporation and
corporations are perpetually lived entities with limited liability and
interested in their own financial preservation.<span style="mso-spacerun: yes;">
</span>They respond more often to the money rather than to voter pressure.<span style="mso-spacerun: yes;"> </span>The phrase “You Can’t Fight City Hall” does
not exist for no reason.<span style="mso-spacerun: yes;"> </span>Remember, like
other municipalities, our city government is <i>The Corporation of the City of
Thunder Bay</i>.<span style="mso-spacerun: yes;"> </span>Despite popular
sentiment and belief, municipalities in Canada are not independent tiers of
government but creatures of the provinces.<span style="mso-spacerun: yes;">
</span>Local service provision has essentially been contracted out by
provincial governments to municipal corporations.<span style="mso-spacerun: yes;"> </span>The democratic accountability for municipal government
ultimately lies in provincial elections rather than local ones.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">City councils are essentially boards of directors, and they
serve to demonstrate responsibility for corporate direction but little
else in terms of day-to-day finance and operations. <span style="mso-spacerun: yes;"> </span>True, ratepayers engage with the corporation
by selecting the board of directors in elections and participating in numerous
surveys and public consultations but then any corporation worth its salt always
is doing customer satisfaction surveys. <span style="mso-spacerun: yes;"> </span>The
real business and complex operations geared around the financial operations of
the corporation is conducted by its officers and employees and generally behind closed doors.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">The members of the board - our councilors – are essentially
a large focus group attempting to promote public relations engagement in a theatrical
setting for the people the corporation ultimately derives its revenue from and
provides services to. That usually explains why so much of council meeting’s
time is usually taken up by discussion of minor manners that galvanize emotions
(time to change street names again anyone?) and complicated large multi-million-dollar
decisions seem to occur quickly on the advice of administration.<span style="mso-spacerun: yes;"> There are exceptions when fate delivers exceptionally persistent and informed councilors - witness the turf facility debate to date - but corporate administrations play the long game and eventually wear out the opposition.<br /></span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Even the current review of the size and structure of Thunder Bay City Council is largely designed to create a sense of public engagement with the
process rather than any actual decision making.<span style="mso-spacerun: yes;">
</span>Remember, Thunder Bay was created by an act of the provincial government.<span style="mso-spacerun: yes;"> </span>Thunder Bay can certainly try and change its
system of municipal representation and structure, but the province will have
the ultimate say and the corporation will implement that.<span style="mso-spacerun: yes;"> </span>Remember Toronto in 2018? <span style="mso-spacerun: yes;"> </span>The number of wards <span style="mso-spacerun: yes;"> </span>(and councilors) <a href="https://www.cbc.ca/news/canada/toronto/doug-ford-supreme-court-ward-ruling-1.6194241">was
reduced</a> nearly 50 percent in the middle of a municipal election but not as
a result of a grass roots consultation but by the provincial government because they wanted to and they could.<br /></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">The point of all this?<span style="mso-spacerun: yes;">
</span>The City of Thunder Bay needs a 6.1 percent in the total tax levy to
fund its operations and tinkering around the edges aside, will get most of that
increase.<span style="mso-spacerun: yes;"> </span>And will we get a revamped
municipal ward and councilor structure? Certainly. But only if the province goes
along with it.</p>
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{page:WordSection1;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-73262391005034655912024-01-17T15:21:00.006-05:002024-01-18T09:40:44.627-05:00Reforming Thunder Bay City Council: The Journey Begins<p>
</p><p class="MsoNormal">It appears that Thunder Bay City Council has finally decided
to get serious about looking at its size and composition with the move to appoint
a <a href="https://www.tbnewswatch.com/local-news/terms-set-for-city-council-review-7171739">six-member
citizen committee</a> that will lead a review process over the next year that
might actually result in changes in time for the 2026 municipal election.<span style="mso-spacerun: yes;"> </span>The committee will have a far-reaching
mandate to explore the size of council, their status as full or part-time
membership as well as the structure of the current at-large and ward hybrid
model that has governed Thunder Bay municipal politics since the 1980s.<span style="mso-spacerun: yes;"> </span>When Thunder Bay was created it 1970, it
began with a mayor and 12 councillors elected evenly across four wards which
was revised to seven wards in 1976 and then took its current form of seven ward
and five at large councillors in 1985.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">This is coming about nearly three years after a previous
council began <a href="https://www.tbnewswatch.com/local-news/city-council-opens-door-to-changing-size-composition-2732640">to
explore</a> the issue and which ultimately generated <a href="https://northerneconomist.blogspot.com/2021/10/?m=0">this post</a> which
concluded: “<i>it would be better if more of an effort was made to commission
an independent arm’s length panel to review the situation and present options
to counci</i>l.”<span style="mso-spacerun: yes;"> </span>Well, a committee has finally
been appointed by City Council and is made up of six members.<span style="mso-spacerun: yes;"> </span>The committee is chaired by former councillor
Rebecca Johnson and vice-chaired by another former councillor Cody Fraser as
well as citizens Riley Burton, Wayne Bahlieda, Heather McLeod and Carlos
Santander-Maturana.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">The committee will conduct a <a href="https://www.thunderbay.ca/en/news/public-encouraged-to-share-views-on-city-council-composition.aspx">two-phase
consultation</a> with the public.<span style="mso-spacerun: yes;"> </span>The
first phase includes a survey to ascertain how the public engages and interacts
with City Council and examining if they have a desire to see changes to the
composition of council. Phase two will include discussion and consultation with
the public on potential options that could result in changes to council
composition and/or the ward boundaries.<span style="mso-spacerun: yes;">
</span>The committee will then take all of this information and “<i>provide a
report to City council with recommended changes to the composition of council
or the ward system next year</i>”.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">The wording on the City of Thunder Bay website seems to
imply that there will be changes and the chair of the committee in a
TBTNewswatch story seemed to say that she believed that this time there were going
to be changes made.<span style="mso-spacerun: yes;"> </span>Indeed, phase two already
says it is about options for change even before phase one has ascertained a desire for change<span style="mso-spacerun: yes;"> </span>This
is somewhat disconcerting because it suggests that someone or somebody
somewhere has already decided that changes will be made, and the only real question
is what those changes might be.<span style="mso-spacerun: yes;"> </span>When put
alongside a less than <a href="https://www.netnewsledger.com/2023/11/15/thunder-bay-council-composition-committee-launches-seeks-public-input-and-research-for-future-changes/">transparent
process for committee member selection</a> that were apparently “carefully
chosen” and a survey that requires registration, one begins to wonder if the
result is already a foregone conclusion.<span style="mso-spacerun: yes;">
</span>Of course, one should be charitable on an issue that has reared its head
up numerous times over the years and has only finally resulted in a serious
attempt to examine it.<span style="mso-spacerun: yes;"> </span>Given the length
of time it has taken to get to this point, I suppose one should simply be
grateful a committee has been struck even if the process seems akin to foxes guarding
the hen house.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">It is fair to ask what possibly an economist could contribute
to a debate on municipal governance? <span style="mso-spacerun: yes;"> </span>However,
barring the reality that economists are municipal citizens too, it remains that
economists are fully capable of examining the costs and benefits of institutional
arrangements and their evolution as well as public finance aspects.<span style="mso-spacerun: yes;"> </span>It is
not an incursion into new territory to be staked out but rather an extension of
what many institutional economists and economic historians already do.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>In the
case of the size, structure, composition and representativeness of the current institutional
arrangement, there needs to be a framework for the decision making as well as
an examination of what issues need to be addressed with the change.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">A change in the current arrangements of municipal council represents
an institutional change or innovation and such changes should be made if the
perceived net benefits of the new arrangement exceed the net benefits of the
previous one plus the costs of transitioning to a new arrangement – both social and
economic costs.<span style="mso-spacerun: yes;"> </span>It requires in the end an
analysis of the current system and its benefits and costs not just economically
but in terms of effectiveness in democratic representation and decision
making as well as community spirit and engagement.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">What is not functioning under the current arrangement?<span style="mso-spacerun: yes;"> </span>What could be improved?<span style="mso-spacerun: yes;"> </span>What are the advantages of the current system
of seven ward and five at-large representatives plus a mayor and what are its
drawbacks?<span style="mso-spacerun: yes;"> </span>In other words, what exactly
are we trying to fix or improve.<span style="mso-spacerun: yes;"> </span>What is
driving the need to make changes to city council?<span style="mso-spacerun: yes;"> </span>For example, simply being unable to get a consensus
on building a new turf facility is not a reason to change the decision-making
mechanism. Similarly, rancorous meetings are also not a reason to reform city
council if the debate results in things getting done or poor decisions avoided.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Much of the debate in the past has focused on issues like
ward councillors being too focused on their wards and not seeing the “bigger
picture” when it comes to city issues.<span style="mso-spacerun: yes;">
</span>Other times, there have been concerns that at-large councillors by not
being tied to a ward and its needs were somehow shirking their duties by
picking and choosing what they wanted to focus on.<span style="mso-spacerun: yes;"> </span>Indeed, Thunder Bay politics at the municipal
level has occasionally seemed like council consisted of a mayor, five mayors in
waiting and seven dwarf councillors left to do a lot of the heavy lifting on
local issues.<span style="mso-spacerun: yes;"> </span>On the other hand, one
could also argue that having five at large councillors allowed for citizens to
go beyond their immediate ward councillor when lobbying if they felt they had
not had their issue addressed.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">And the hybrid system itself with two types of councillors
is rather unique – why is it that Thunder Bay cannot have either a system of
all ward councillors or all at large councillors?<span style="mso-spacerun: yes;"> </span>What was the original purpose of going to a
hybrid model and have those reasons shifted?<span style="mso-spacerun: yes;">
</span>Then, there is the issue of the total number of councillors given the
population size as on a per capita basis Thunder Bay probably has more
councillors than many other cities in Ontario.<span style="mso-spacerun: yes;">
</span>Burlington, for example, with a population nearly double that of Thunder
Bay, has six ward councillors plus a mayor.<span style="mso-spacerun: yes;">
</span><a href="https://www.cityofkingston.ca/city-hall/city-council">Kingston</a>,
on the other hand, which is one and a half times Thunder Bay’s population, has
a mayor representing “<i>the city as a whole</i>” and twelve district
councillors.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Perhaps fewer councillors but all full-time rather than the
current part-time might make for better decision making.<span style="mso-spacerun: yes;"> </span>However, that would likely mean a higher
stipend and part of the argument for reducing the size of council is a belief
that somehow there are going to be cost savings.<span style="mso-spacerun: yes;"> </span>If you are indeed looking at cost savings in municipal
government, reducing the number and salaries of councillors is merely symbolic
as the real savings lie elsewhere. On the other hand, one can argue that being
a councillor is about community service and the money should not matter. </p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Would having all councillors as ward councillors make the
council too parochial as each seeks only to look after neighborhood concerns?<span style="mso-spacerun: yes;"> </span>Or will having all at-large councillors undermine
the position of mayor as all councillors can claim to have a city-wide mandate
from the electorate?<span style="mso-spacerun: yes;"> </span>Indeed, if all the councillors are at large, why elect a separate mayor at all? Make the mayor the at-large councillor with the most votes. Or, if we move to
an all-at-large approach, will only high-profile individuals and financially better
off individuals being able to run for council given that ward races can favour
ward residents with close neighborhood ties while city wide campaigns are more
expensive to mount?<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">And all of this of course is intertwined with the issue
about whether we need to or should redesign our ward system given the current imbalances
in population across wards as populations in the city have shifted.<span style="mso-spacerun: yes;"> </span>Should we go to eight or ten numbered as
opposed to named wards with approximately equivalent populations, as well as a
mayor?<span style="mso-spacerun: yes;"> </span>Should the councillors be all at-large or all ward based or some new type of hybrid?<span style="mso-spacerun: yes;"> </span>What should the borders of the new wards
be?<span style="mso-spacerun: yes;"> </span>Will changing the number of wards
and councillors as well as redesigning borders lead to better democratic
accountability?<span style="mso-spacerun: yes;"> </span>More citizen
involvement? And on top of all of this – do we want a first past the post
system electing our councillors?<span style="mso-spacerun: yes;"> </span>Ranked or
weighted ballots – especially for at-large candidates?</p>
<p class="MsoNormal"> </p><p class="MsoNormal"> </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEjD4ar8YfmZPyBABUNz7JBRNsSb5fZAUyvtUL0nxyXnfbzHzznk8F41uu5NJKhN9GLzN_TqQgJpZ9aGAaoaVMW7xFNemuVyJrqcD83LngPw-9xsOLKtDRZF5yIQDZ9UZ6mDywtT8J3qdvDnLsohyPE5Dz7JIRibGfhiQyjnXhRdehJYPJ7LQ2_r9DRkZoUk" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEjD4ar8YfmZPyBABUNz7JBRNsSb5fZAUyvtUL0nxyXnfbzHzznk8F41uu5NJKhN9GLzN_TqQgJpZ9aGAaoaVMW7xFNemuVyJrqcD83LngPw-9xsOLKtDRZF5yIQDZ9UZ6mDywtT8J3qdvDnLsohyPE5Dz7JIRibGfhiQyjnXhRdehJYPJ7LQ2_r9DRkZoUk=w640-h360" width="640" /></a></div><br /><p></p><p class="MsoNormal"> </p>
<p class="MsoNormal">As mentioned before, all of this is really not new territory
for an economist.<span style="mso-spacerun: yes;"> </span>Institutions and their
quality are fundamental to successfully functioning economies.<span style="mso-spacerun: yes;"> </span>Has Thunder Bay been hurt economically by its
current municipal institutions? Indeed, one could in a moment of introspection go further and ask if amalgamation was responsible for the
economic slowdown after 1970 given a monopoly one-city government replaced what
were a set of competitive municipalities.<span style="mso-spacerun: yes;">
</span>There can be a lot at stake here as change for the sake of change without
understanding the reasons for change as well as the long-term ramifications can
leave us worse off.<span style="mso-spacerun: yes;"> </span>Borrowing from the words
of our outgoing City Manager, if you “<i>don’t know what you don’t know</i>”, then
how can you know that what you are doing is the best decision possible?<span style="mso-spacerun: yes;"> </span>The committee indeed has its work cut out for
it and one hopes that they are independently minded enough to be able to know what
questions to ask, when to ask them and more importantly, when to suggest to do something
and when to do nothing.</p>
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{page:WordSection1;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-39390149965535179572024-01-15T10:25:00.006-05:002024-01-15T10:27:14.304-05:00Thoughts on Canada's Economic Future<p>I was invited to make a contribution on Canada's economy and its future by <a href="https://thefutureeconomy.ca/">TheFutureEconomy.ca </a>which is an <a href="https://thefutureeconomy.ca/about-us/">online media outlet </a>"that produces interviews, panels, and op-eds featuring leaders from
industry, government, academia and more to define a strong vision for
our future economy." My piece on Canada's economic challenges in coming years was published January 8th and titled:"<a href="https://thefutureeconomy.ca/op-eds/canada-21st-century-challenges-livio-di-matteo-lakehead/">Childhood's End: Canada's 21st Century Challenges.</a>"It was a privilege to be asked to contribute to this site given the range of leaders from across Canada who have also contributed their thoughts. There is also a <a href="https://thefutureeconomy.ca/op-eds/canada-21st-century-challenges-livio-di-matteo-lakehead/">nice promotional link</a> with a bio and describing Lakehead University. The piece starts below and you can link to the site for the remainder:<br /></p><p><i>In the pandemic’s wake, Canada finds itself in a world changed yet again
with forces afoot that threaten its standard of living as well as its
security and way of life. After nearly 150 years of operating under the
umbrellas of relatively benign global superpowers, Canada needs to
prepare for a multipolar world with respect to trade and economic growth
opportunities that are linked to its foreign policy and defence
capabilities. In many respects, Canada’s long adolescence has come to a
rude end, and it must now learn to make its way in the world in a more
adult fashion. This awakening, however, comes at a time when its
economic indicators suggest economic weakness. <a href="https://thefutureeconomy.ca/op-eds/canada-21st-century-challenges-livio-di-matteo-lakehead/">Canada came to be</a>...</i><br /></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-37514683059916034202024-01-08T15:03:00.004-05:002024-01-08T15:03:46.513-05:00The Perils of Northwestern Ontario Roads<p>
</p><p class="MsoNormal">The holiday season has seen a spate of accidents on the
highways of northwestern Ontario - seven between December 29<sup>th</sup> and
January 6<sup>th</sup> according to stories reported on <a href="https://www.tbnewswatch.com/">TBnewswatch</a>. <span style="mso-spacerun: yes;"> </span>This has resulted in a number of deaths and
highway closures as well as an outage of service for <a href="https://www.tbnewswatch.com/local-news/highway-collision-caused-a-tbaytel-outage-8070401">TbayTel</a>
with numerous customers losing phone, internet and television service.<span style="mso-spacerun: yes;"> </span>Indeed, since mid-December at least five
people have been killed in highway collisions in the region across ten major
accidents. Indeed, according to a <a href="https://www.cbc.ca/news/canada/thunder-bay/safety-on-northwestern-ontario-highways-remains-an-issue-after-deadly-accidents-1.7076903">CBC
report</a>, 34 people were killed on northwestern Ontario roads in 2022.<span style="mso-spacerun: yes;"> </span>This has made road safety a major issue and
it has been exacerbated by what appear to be an increasing number of collisions
involving transport trucks. Collisions involving transport trucks on area highways appear <a href="https://www.tbnewswatch.com/local-news/fatalities-from-collisions-on-nw-ontario-highways-increased-sharply-in-2021-5066035">to
have grown</a> from 13.4 percent of the total in 2016 to 21.3 percent in 2021. </p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Of course, whether or not it is more dangerous to drive in
northwestern Ontario relative to the rest of the province invariably requires not
absolute numbers, but relative comparisons based on rates of fatalities that
are population adjusted.<span style="mso-spacerun: yes;"> </span>For example, using
data from <span style="mso-spacerun: yes;"> </span>Ontario Road Safety <a href="https://www.ontario.ca/document/ontario-road-safety-annual-reports-orsar">Annual
Reports</a>, <span style="mso-spacerun: yes;"> </span>in 2022, Ontario as a whole
had <span style="mso-spacerun: yes;"> </span>592 fatalities on its roads while
northwestern Ontario had 34. However, while northwestern Ontario accounts for
1.5 percent of Ontario’s population, it accounted for over 6 percent of its persons
killed in collisions in 2022 based on these numbers. </p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">The trend is even more stark if one plots these road deaths
per 100,000 population constructed from data available since 2015 from the
Safety Reports combined with population data for Ontario and the northwest.<span style="mso-spacerun: yes;"> </span>It should be noted that the 2021 and 2022
reports are still preliminary and therefore do not include the official
regional numbers.<span style="mso-spacerun: yes;"> </span>While there are
numbers for Ontario as a whole for those two years, the rate per 100,000 was
also estimated using population figures for those years. <span style="mso-spacerun: yes;"> </span>Thus, 2021 and 2022 for northwestern Ontario
and Ontario are “estimates” based on Ontario population, the reported total by CBC for 2022 and a calculation for
2021 done based on the average from 2015 to 2022 of northwestern Ontario to
Ontario fatalities.</p><p class="MsoNormal"> </p><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEio2jy3Il3A72GbNxkSiMA4bTiqNHpMCTutBeKY_2WYUTCVT2AGQms_1JOfey-RyERXLNVEUQ1A2pR58K3r0SxUEur7qf_ERy0rN9rpoLSYW4QSVmCoBMgioGPX295q_RRZY7M5_Azq9ZVSXhMrY-P6CBRKMlCBoz3vw_KozJk4MkmvhjXoTXkUzgEQZz5h" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEio2jy3Il3A72GbNxkSiMA4bTiqNHpMCTutBeKY_2WYUTCVT2AGQms_1JOfey-RyERXLNVEUQ1A2pR58K3r0SxUEur7qf_ERy0rN9rpoLSYW4QSVmCoBMgioGPX295q_RRZY7M5_Azq9ZVSXhMrY-P6CBRKMlCBoz3vw_KozJk4MkmvhjXoTXkUzgEQZz5h=w640-h360" width="640" /></a></div><br /> <p></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">The results show that when done per 100,000 population there
are substantially more deaths on northwestern Ontario roadways than Ontario as
a whole.<span style="mso-spacerun: yes;"> </span>From 2015 to 2022, average
fatalities per 100,000 population were 8.7 for the northwest while for Ontario
as a whole they were 4.0.<span style="mso-spacerun: yes;"> </span>In other words,
the roadways of the northwest are twice as deadly compared to the Ontario
average. <span style="mso-spacerun: yes;"> </span>And, while Ontario appears
stable over this time period, one could argue that the northwest is seeing an
overall upward trend. <span style="mso-spacerun: yes;"> </span>Is this a problem?
I would think so.<span style="mso-spacerun: yes;"> </span>The roads of the
northwest – in particular its highways - are not just regional roads but
national conduits for travel and commerce.<span style="mso-spacerun: yes;">
</span>This is a provincial problem with local and national implications given
the number of lives being lost. Drivers beware.<br /></p>
<p><style>@font-face
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{page:WordSection1;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-57018442127789347272024-01-02T12:12:00.000-05:002024-01-02T12:12:11.738-05:00Reflections on the New Year<p>
</p><p class="MsoNormal">Happy New Year to all!<span style="mso-spacerun: yes;">
</span>One must admit that 2023 has been a bit of a ride regionally, nationally,
and internationally.<span style="mso-spacerun: yes;"> </span>Regionally, Thunder
By and northern Ontario have had a reasonably good year <a href="https://northerneconomist.blogspot.com/2023/12/thunder-bays-economy-year-forward-and.html">economically</a>
though many of the trends affecting the country and the world – the higher cost
of living, homelessness and a general angst and anxiety about the future – are also
part of life here.<span style="mso-spacerun: yes;"> Sometimes, </span>even the nature of “high
tech” <span style="mso-spacerun: yes;"> </span><a href="https://www.bbc.com/news/world-us-canada-67861852">21<sup>st</sup>
century crime</a> sometimes makes one wonder if the world has truly been turned
upside.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">The country’s economy has slowed but there is no recession
yet.<span style="mso-spacerun: yes;"> </span>If anything, the Bank of Canada is
not given enough credit for engineering what to this point has been a soft
landing of higher interest rates, slower growth and falling inflation.<span style="mso-spacerun: yes;"> </span>As much as people complain about the cost of
housing in Canada and the seeming inability to get things done, it also seems
to be a feature of other countries such as the USA, the UK and Australia.<span style="mso-spacerun: yes;"> </span>Indeed, it is interesting how <a href="https://www.wsj.com/world/oceania/australias-housing-costs-have-hit-new-highs-officials-see-migrants-as-part-of-the-problem-5879b4ec">similar
debates</a> around <a href="https://www.businessinsider.com/canada-housing-crisis-bubble-imploding-real-estate-prices-rent-decline-2023-11">housing
issues</a> are occurring in countries around the world.<span style="mso-spacerun: yes;"> </span>And of course, there is the international
front where a <a href="https://www.bloomberg.com/opinion/articles/2023-06-18/us-can-t-depend-on-ukraine-coalition-to-stop-china-niall-ferguson">definite</a>
<a href="https://abcnews.go.com/International/wireStory/china-reaffirms-military-threats-taiwan-weeks-islands-presidential-105961320">challenge</a>
is <a href="https://www.wsj.com/world/middle-east/iran-hoped-to-profit-from-israel-hamas-war-but-big-gains-still-elude-it-1b295587">underway</a>
from the CRINKs (China, Russia, Iran and North Korea) in three specific theatres
<span style="mso-spacerun: yes;"> </span>– Middle East, Ukraine and Taiwan – and
in the Cyber world to the EU-Anglosphere-Asia/Pacific Western Alliance.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Still, much of the global turmoil seems far removed from
Thunder Bay which is still in many respects still somewhat both removed and
integrated with life in the rest of province and country.<span style="mso-spacerun: yes;"> </span>Air travel is still the quickest and most
convenient way to get from here to anywhere but the pre-pandemic age of
numerous, cheap, and conveniently scheduled flights connecting Thunder Bay to Toronto
and ultimately the world has departed for now.<span style="mso-spacerun: yes;">
</span>As much as Thunder Bay is plugged into the modern world, we still seem
to wait a long time for things other places seem to get much sooner. After all,
we have been waiting for an Ikea and a Costco since at least the mid 1990s.<span style="mso-spacerun: yes;"> </span>As my running joke goes, Thunder Bay is
probably a great place to wait for the apocalypse.<span style="mso-spacerun: yes;"> </span>When the world ends, it will happen at least ten
years later in Thunder Bay.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Of course, as much as there seems to be constant change and
turmoil, after 33 years of teaching and research and nearly twice that number
of years being alive, one achieves a certain serenity from the patterns of constant
change. <span style="mso-spacerun: yes;"> </span>In many respects, one has <a href="https://www.youtube.com/watch?v=0S--62PaiJE">seen it all</a>. I reflect
that during my career, my teaching has gone from hand-written lecture notes and chalkboards
to electronic screens and PowerPoints while my research output was once typed
on a manual typewriter after organizing index card cards from research trips to the
library where sources were hunted down from a card catalogue. Today, I can surf
any number of libraries and digital sources for both data and output on my
laptop or iPad from the comfort of my own home. Writing - including blogging - is much faster than it ever was.<br /></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">With all the new technology and social changes, one can sometimes start to feel like a dinosaur but the
trick to avoid that fate is of course to maintain a curiosity and enthusiasm
for the world around you, to see things in a different light, and to try new
things.<span style="mso-spacerun: yes;"> </span>After all, despite the gloom,
2024 should be the quintessential Canadian year.<span style="mso-spacerun: yes;"> </span>A year of beer as we celebrate the year of
20-2-4s.<span style="mso-spacerun: yes;"> </span>What could be more Canadian
than that?<span style="mso-spacerun: yes;"> </span>To a 2024 of hope and wonder
and if things go off the rails, there is always a beer.</p><p class="MsoNormal"> </p><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEipnMLRBcnwVAz0_CdsWoHd5m4hsVYIlL4ujUFGZl0WZMowhYuHKDb17FAfqrRRPrP_A1p82akaSKvqQ8wf1J7Q1syrS4mqg2l8647xs6E1QNvwivZBxXOVtvt0sgHOgybu-oc8EwJAZb5ORUsJaZazvh21nJoe6WWn7WQWzSsGizjsquGHAatqD_rPv1yH" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEipnMLRBcnwVAz0_CdsWoHd5m4hsVYIlL4ujUFGZl0WZMowhYuHKDb17FAfqrRRPrP_A1p82akaSKvqQ8wf1J7Q1syrS4mqg2l8647xs6E1QNvwivZBxXOVtvt0sgHOgybu-oc8EwJAZb5ORUsJaZazvh21nJoe6WWn7WQWzSsGizjsquGHAatqD_rPv1yH=w640-h360" width="640" /></a></div><br /> <p></p>
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{page:WordSection1;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-26094793915749441312023-12-02T10:05:00.004-05:002023-12-02T11:08:59.996-05:00Thunder Bay's Economy: The Year Forward and Back<p>
</p><p><span style="font-size: small;"><span style="font-family: "ArialMT", serif;">As 2023 winds
down and 2024 arrives, a retrospective combined with a look ahead on the economy
is a timely exercise.<span> </span>The economic
indicators to date for 2023 suggest that Thunder Bay has had a very good
year.<span> </span>Average monthly employment in 2023
to date is up about 3 percent over 2022 – representing nearly 2,000 new jobs.<span> </span>However, while average monthly employment
appears to have recovered from the pandemic, it has yet to permanently surpass the 2018
level.<span> </span>However, on the plus side, the
accompanying figure suggests that Thunder Bay’s employment does appear to be on
a modest longer-term upward growth trend after years of being seemingly flat.<span> </span>As well, the seasonally adjusted
unemployment rate remains around 5 percent and the average for 2023 is lower
than 2022 which suggests that the local labor market does not have a lot of
slack in it.<span> </span></span></span></p><p><span style="font-size: small;"><span style="font-family: "ArialMT", serif;"><span> </span></span></span></p><div class="separator" style="clear: both; text-align: center;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEh5hAPC5dcMuGHUiCdL7aOldGKYRCT7TJNw0sotlnw7vOvreL6Q7z6mPAZgL8gPqfqhKlIMMUdQh5M3NDG28cL9-T3lTLX-XhZGt0fd4KHdbla__M6L1Xx-kRTQECAGh-I11VFKENS0ubQedVX5t4MaAkE7M7EHyNVa4glQHaTi7rfQFTFP9PSIkLzgsHB5" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEh5hAPC5dcMuGHUiCdL7aOldGKYRCT7TJNw0sotlnw7vOvreL6Q7z6mPAZgL8gPqfqhKlIMMUdQh5M3NDG28cL9-T3lTLX-XhZGt0fd4KHdbla__M6L1Xx-kRTQECAGh-I11VFKENS0ubQedVX5t4MaAkE7M7EHyNVa4glQHaTi7rfQFTFP9PSIkLzgsHB5=w640-h360" width="640" /></a></span></div><span style="font-size: small;"><br /></span><p></p><p><span style="font-size: small;"><span style="font-family: "ArialMT", serif;"><span> </span></span></span></p>
<p><span style="font-size: small;"><span style="font-family: "ArialMT", serif;">Along with employment
opportunities being generated in large public sector construction projects in
both the city and the region, there is also substantial activity in the local
retail and tourism /hospitality sector with the opening of new retail and food service
outlets as well as a very successful cruise ship season.<span> </span>The port has also seen growing grain
shipments as Thunder Bay resumes much if its traditional role in Canada's grain transport network.<span> </span>On the housing front, while
starts are not at historic highs, there nevertheless has been substantial activity
particularly in the multi-residential unit sector.<span> </span>Overall, Thunder Bay has seen healthy
economic activity despite the recent rise in interest rates. This is the result of
continued activity in its traditional sectors of construction, forestry and
port activity combined with activity on the mining front. As a result,
population can be expected to grow albeit at rates still well below provincial
and national growth rates.</span></span></p>
<p><span style="font-size: small;"><span style="font-family: "ArialMT", serif;">Perhaps the
biggest impact locally is the construction of Thunder Bay’s $1.2-billion provincial jail which
until completion in 2025 will drive Thunder Bay’s labor market and economy
even if the Canadian economy slows down in 2024. At the same time, the massive
project has complicated the availability of local trades people with lengthy
waiting lists for electricians, plumbers and carpentry services for smaller
projects and home renovations assuming that you can even get trades people to agree to come.<span> </span>However, completion of the jail project will
likely see a ramping down of economic growth in the economy and in the absence
of equally large new projects some alleviation of a relatively tight labor market particularly
in building trades. </span></span></p>
<p><span style="font-size: small;"><span style="font-family: "ArialMT", serif;">According to the Conference
Board of Canada, housing starts in Thunder Bay are expected to grow but the
numbers in their forecast seem unlikely to meet the 275 annual units required
to meet provincial targets.<span> </span>Nevertheless,
Thunder Bay appears to be pressing forward with plans to apply for federal
funding to build two thousand homes over the next three years - over 600 new units a year.<span> </span>An average of 600 to 700 new homes a year is
an amount that has not been seen in Thunder Bay since the baby boom years of
the 1960s and 1970s.<span> </span>Ultimately the
success of such a grand scheme depends on local demand and this depends on what
interest rates are like, what the state of the economy is and whether people
have the incomes and purchasing power to pay for the housing.<span> </span>Never mind if enough building trades people
are available to actually do the work. </span></span></p>
<p><span style="font-size: small;"><span style="font-family: "ArialMT", serif;">Going into 2024
and as noted in the most recent Conference Board Report, one can expect to see employment growth in construction, transport and warehousing,
health care and social assistance, accommodation and food services and public
administration.<span> </span>Other sectors such as
manufacturing, utilities, professional and scientific services, and educational
services are expected to remain flat or even decline slightly.<span> </span>Declines can particularly be expected in the
areas of educational services given regional demographics and public funding
levels, as well as the local FIRE sector (finance, insurance, real estate) given
the rise in interest rates.<span> </span>The post-secondary
sector in Thunder Bay is also in uncertain territory given the dependence on volatile
flows of international students and lack of clarity from the provincial government
as to what directions in funding it may pursue in the wake of the Blue-Ribbon
Panel Report. While the Blue-Ribbon Report called for increases in tuition and
the provincial government grant to post-secondary institutions, the
government’s response to date has been to continue to seek efficiencies which
means the structural problems of university finances are unlikely to be
resolved anytime soon.</span></span></p>
<p><span style="font-size: small;"><span style="font-family: "ArialMT", serif;">Going forward
there is also some economic uncertainty on several fronts.<span> </span>It remains to be seen what the long-term
outcome of the sale of Resolute Forest Products to Atlas Holdings will be on both
local production and employment levels.<span> </span>The
future of the Alstom plant is also always precarious in the absence of a major
transit project to generate longer-term employment.<span> </span>As for the future of lithium refining in the
region by companies such as Rock Tech Lithium, Toronto’s Avalon Advanced
Materials and Green Technology Metals of Australia, there are positive
expectations that these projects will finally trigger the long-awaited mining
boom given the flurry of recent announcements and media stories.<span> </span></span></span></p>
<p><span style="font-size: small;"><span style="font-family: "ArialMT", serif;">However, despite
purchases of waterfront land, to date these are all plans, and the industry
appears to be waiting for public money to assist their development.<span> </span>It is unclear if any of these companies will
be able to raise the necessary funds either publicly or privately to finance
their activity in the face of international competition in the industry with
other players with their infrastructure needs already in place.<span> </span>As well, demand for fully electric vehicles –
a key driver of the demand for lithium – has also been exhibiting weakness
given the cost of the vehicles, their range, the availability of charging
facilities and competition from alternatives such as hybrids as well as
traditional gasoline powered vehicles.<span>
</span>As a result, the lithium refining industry in Thunder Bay and Canada while hopeful in its signs, may
remain a work in progress for the foreseeable future.</span></span></p>
<p><span style="font-size: small;"><span style="font-family: "ArialMT", serif;">Of course, in
terms of what Thunder Bay can do to deal with all these changes and the
economic uncertainty does not have a simple answer.<span> </span>Thunder Bay, much like Canada as a whole, is
a small economy unable to influence global economic and political trends beyond
its borders.<span> </span>Nevertheless, given the
current buoyancy in the local economy, it is important to make hay while the
sun shines.<span> </span>Going forward, Thunder Bay
must continue to make itself as attractive a jurisdiction for business investment
as it can.<span> </span>That means continuing to
provide quality of life amenities, a range of useful and timely services for
all demographic groups and a competitive local municipal service and tax
environment.<span> </span>Needless to say, at
particularly at the municipal level, there will be a need to provide more while
keeping the tax burden down – a tall order to fill at the best of times.</span></span></p>
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{page:WordSection1;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-28617891454187043872023-11-22T11:25:00.000-05:002023-11-22T11:25:24.457-05:00What the Federal Economic Statement Did Not Highlight<p>
</p><p class="MsoNormal">Well, the Federal Fall Economic Statement for 2023 is out
and soon to be relegated to the collections of fiscal and economic
history.<span style="mso-spacerun: yes;"> </span>There is a lot out there <a href="https://www.theglobeandmail.com/politics/article-fiscal-update-2023-highlights/">summarizing</a>
the economic and <a href="https://www.theglobeandmail.com/politics/article-freeland-fiscal-update-2023/">fiscal</a>
situation facing the federal government. Briefly, for 2023-24 it looks like
revenues of $456 billion and expenditures of $489 billion for a deficit before
actuarial losses of $32.5 billion and a deficit with actuarial losses of $40
billion.<span style="mso-spacerun: yes;"> </span>Inflation this year will be
about 3.8 percent and next year the outlook is for 2.5 percent while real GDP growth in
2023 is now forecast to end up at a lower 1.1 percent and for next year at a
paltry 0.4 percent.<span style="mso-spacerun: yes;"> </span>On the bright side,
there are measures to create more housing, but they add up to perhaps 300,000
homes by 2031 which given the country apparently needs 3.5 million means the
housing shortage is going to be around for some time to come.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Two things the numbers on the fall statement do not
highlight.<span style="mso-spacerun: yes;"> </span>First, when one factors in
population growth going forward at about 2.5 percent annually and the
government's inflation and GDP growth forecasts, real per capita GDP is going to
continue declining over the next five years.<span style="mso-spacerun: yes;">
</span>As Figure 1 shows, by 2028, inflation adjusted output per person by 2028
will be lower than it was in 2014.<span style="mso-spacerun: yes;"> </span>Given
the anemic business investment in Canada and the resulting weak productivity
performance of the Canadian economy and its inability to grow faster than
population, falling real GDP per person means a declining standard of living.<span style="mso-spacerun: yes;"> </span>We are looking at essentially a lost decade
or more if nothing happens to ramp up growth.</p><p class="MsoNormal"> </p><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEjZBDduaQxsswVpIlOronNOTqsG0mw8LSlCCRoqLtT8H1GPWkuLYN5sgpcRvTwd5I5DrFMucFj9zZngNcPWL4rasjCNGWKyR32L8DPOhvpGBQ177-g3OWjeuHfRwEOaePiGj4jwS6zToZvfSHh9FUEiIEem5HcoA5EOfrmGjFY8bkegCnBeX6gmcCR1dZG8" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEjZBDduaQxsswVpIlOronNOTqsG0mw8LSlCCRoqLtT8H1GPWkuLYN5sgpcRvTwd5I5DrFMucFj9zZngNcPWL4rasjCNGWKyR32L8DPOhvpGBQ177-g3OWjeuHfRwEOaePiGj4jwS6zToZvfSHh9FUEiIEem5HcoA5EOfrmGjFY8bkegCnBeX6gmcCR1dZG8=w640-h360" width="640" /></a></div><br /> <p></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Second, a fiscal anchor or guardrail set as a deficit to GDP
ratio of 1 percent means that there will be perpetual deficits for years to
come of at least 30 billion dollars.<span style="mso-spacerun: yes;"> </span>Put
more starkly as Figure 2 illustrates, federal revenues and expenditures will
continue to grow in tandem like ships traveling alongside in the night but
never actually meeting.<span style="mso-spacerun: yes;"> </span>This will result
by 2028 in a net federal debt of almost $1.5 trillion and debt service costs of
about $60 billion annually which as a share of federal revenue will account for
about 10 percent of revenue.</p><p class="MsoNormal"> </p><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEhW2kDiDmHB5fdqQraoLbSCVyJ605A1k1OrNXHjV4aBGumq9QCQavdcYgVVRkumGUbhrn9uZn3UC62VQSpJ_vBHdqP0W1VEEcnFQgWeARFkgDvUln35N1Pgf0oKfEED2v1vp055WwT8cXDSaxOHMd6XRNPVLg97DJwOn0zqgLB_oe2WQk6VEkD87kKPJnny" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEhW2kDiDmHB5fdqQraoLbSCVyJ605A1k1OrNXHjV4aBGumq9QCQavdcYgVVRkumGUbhrn9uZn3UC62VQSpJ_vBHdqP0W1VEEcnFQgWeARFkgDvUln35N1Pgf0oKfEED2v1vp055WwT8cXDSaxOHMd6XRNPVLg97DJwOn0zqgLB_oe2WQk6VEkD87kKPJnny=w640-h360" width="640" /></a></div><br /> <p></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Needless to say, it is not surprising that these types of
projections are not front and centre from the perspective of a government facing
slowing growth and rising spending.</p>
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{page:WordSection1;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-73291269144741007482023-11-18T12:55:00.006-05:002023-11-18T19:30:17.170-05:00Solving the Homelessness and Housing Crisis<p>
</p><p class="MsoNormal">As rents soar in Canada and encampments spring up in cities
across the country, it is evident that the country faces a housing crisis which
to date seems intractable.<span style="mso-spacerun: yes;"> </span>Even the
recent slowdown in home prices does little to improve the situation given that
average housing prices in Canada remain just shy of <a href="https://wowa.ca/reports/canada-housing-market">$700,000</a> with prices varying
across the provinces. Average <a href="https://www.crea.ca/housing-market-stats/canadian-housing-market-stats/national-price-map/">housing
prices</a> in Greater Vancouver are just shy of $1.2 million while Greater Toronto
is slightly less at $1.1 million.<span style="mso-spacerun: yes;"> </span>And
while at an average of $322,000, Thunder Bay seems more affordable compared to Toronto
and Vancouver all of these averages mask the variation in prices around the
average that realistically means something half decent that you may actually like
is always substantially above the average.<span style="mso-spacerun: yes;">
</span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">However, the housing and homelessness crisis and what has
been termed the housing shortage is not really just about the price of an
average house.<span style="mso-spacerun: yes;"> </span>There are a number of
issues here.<span style="mso-spacerun: yes;"> </span>First, there is actually
not a “shortage” of houses and apartments per se as a glance at any real estate
listing in cities shows that there are always houses for sale or apartments for
rent. <span style="mso-spacerun: yes;"> </span>However, the price or rents of
those housing units are well above what individuals are either able or willing
to pay especially given the recent rise in interest rates which has increased
the cost of home ownership in particular. One could term this a crisis in affordable
housing rather than a shortage of housing. Second, there is the issue of
homelessness which has manifested itself with rising numbers of people in
cities across the country living in <a href="https://www.tvo.org/article/a-tale-of-two-tent-cities-what-rulings-in-ontario-and-bc-mean-for-homeless-encampments">tents
and encampments</a>.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Solving these issues requires a two-prong solution.<span style="mso-spacerun: yes;"> </span>First, dealing with affordable housing.<span style="mso-spacerun: yes;"> </span>The sudden drive to expand the supply of
housing to make it affordable is certainly a potential long-run solution. However, in the end building more $1,000,000 homes in suburbs, which developers
like to do because they can make a lot of money, really does
not solve that problem. Moreover a $1,000,000 new build home program does not solve the
housing affordability problem unless it is done so incompetently by the private
sector that they create a glut that drives prices down which seems
unlikely.<span style="mso-spacerun: yes;"> </span>Developers across the country
over the years have learned that you just do not build a couple of hundred
homes in a subdivision and then sell them – you build on spec with a large
deposit.<span style="mso-spacerun: yes;"> </span>Basically, every new home built
already has someone lined up for it.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">The solution to the affordable housing is the building of either
rent-geared-to-income housing or the building of standardized-government
subsidized housing units (much like the Wartime Homes Program) whose design,
construction and sale is also geared to income.<span style="mso-spacerun: yes;">
</span>One example of this is the <a href="https://news.gov.bc.ca/releases/2023HOUS0158-001798">standardized house
designs</a> being put forth by the government of British Columbia which could
serve as a template for other provinces. This will enable homes to be built
more quickly but it could also serve as a model for lower cost housing designs.
As for rent -geared-to-income, all new apartment builds should have portions of
the building ranging from 10 to 20 percent of rent geared to low and middle
incomes with government social housing subsidies providing the incentive to
builders. This is preferable to simple erecting mega projects of low-income
apartments in neighborhoods that essentially creates clusters of low-income
individuals.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">In a sense, the Ontario government’s current approach to
increasing housing supply by providing incentives and powers to municipalities to
simply expand housing stock does not follow either of the above
approaches.<span style="mso-spacerun: yes;"> </span>Take the case of Thunder Bay
where the target is to build over 2000 homes by 2031 according to the
provincial target but given that the target has been exceeded in 2023 it is now
seeking to build (with federal funding of course) 2000 homes over the next
three years.<span style="mso-spacerun: yes;"> </span>The optics tout this as <a href="https://www.cbc.ca/news/canada/thunder-bay/thunder-bay-s-mayor-wants-to-build-over-2-000-homes-in-3-years-but-needs-46m-from-ottawa-to-do-it-1.7032257">a
success story</a> and the start of a housing boom fueled by mining but the 167
units for 2023 (which exceed the target of 161) is largely driven by projects
already planned or underway and 60 of the units (plus another 60 which have
started) are apartments being marketed as “luxury” apartments.<span style="mso-spacerun: yes;"> </span>It means the rents for the smallest units
will easily be over $2000 a month.<span style="mso-spacerun: yes;"> </span>This
will not be ‘affordable” housing given the cost-of-living crisis that has
gripped the nation and its media.<span style="mso-spacerun: yes;">
</span>Moreover, the target going forward <a href="https://northerneconomist.blogspot.com/2023/09/strong-mayors-and-housing-thunder-bay.html">is
ambitious</a> given the past track record of housing starts in Thunder Bay to
date which given the cities rate of population growth to date has been modest.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">The other housing crisis – homelessness. -will not be solved
by new suburban housing developments, neighborhood infill, or luxury
apartments.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>It is an entirely different problem all
together.<span style="mso-spacerun: yes;"> </span>The solution here is best modeled
on what has been done in Finland where a non-governmental organization (NGO)
called <a href="https://vvary.fi/in-english/">No Fixed Abode</a> founded in
1986 reduced the number of homeless in Finland from 20,000 to about 3500 at
present. Note that Finland’s population is 5.5 million and there are currently
3500 homeless people estimated.<span style="mso-spacerun: yes;"> </span>In
Canada, just Hamilton Ontario with a population of 579,000 has an estimated
1,500 homeless.<span style="mso-spacerun: yes;"> </span>As well, since 2008 Finland
has also embraced another program called <a href="https://www.economist.com/europe/2019/12/21/finland-has-slashed-homelessness-the-rest-of-europe-is-failing?ppccampaignID=18798097116&ppcadID=&gad_source=1&gclsrc=ds&gclsrc=ds">Housing
First</a> which creates flats in social housing complexes that along with serving
as places to live also provide a fixed address for those requiring access to
government services and supports. </p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Now, Finland is not Canada and simply grafting another
country’s solution to solve your problem can generate all kinds of problems.
However, there is something here that needs to be explored.<span style="mso-spacerun: yes;"> </span>Some of all the money that is going to be
thrown at simply increasing housing stock irrespective of whether or not people
can afford it needs to be directed to what I would term Transitional Emergency
Housing.<span style="mso-spacerun: yes;"> </span>People living on minimum wage
or are evicted from apartments and have no place to live need some place to get
back on their feet. <span style="mso-spacerun: yes;"> </span>Boarding houses with
rooms to let used to be a place where people of limited means often ended up til
they got back on their feet, but no such places really exist anymore. People
who are homeless need to be housed and housed without questions being asked.<span style="mso-spacerun: yes;"> </span>Creating a complex or dispersed network of complexes of <i>transitional emergency
housing</i> with very small personal units combined with social support such as
a community kitchen, social workers and even a nurse practitioner and mental
health workers and basic security on site would be one way of dealing with the
homelessness crisis.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p><p class="MsoNormal"> </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEjoNAgOPf2J9fAJ4HP970IhHuAuwc3P6RBmT0hjGK2jhgR2jxoMoQWSba2hAwud5UqicR6QioCQ7wX_BiRsX1BSVmp8abJGFA4T5QffEe7iFyceEpGD6xqku9eBYGHqF172ex7T41Z1twB_YD6-yZZiwHA7ELECfSkXUAFz5pPWuidisCHJ0deD4uNKEYIW" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEjoNAgOPf2J9fAJ4HP970IhHuAuwc3P6RBmT0hjGK2jhgR2jxoMoQWSba2hAwud5UqicR6QioCQ7wX_BiRsX1BSVmp8abJGFA4T5QffEe7iFyceEpGD6xqku9eBYGHqF172ex7T41Z1twB_YD6-yZZiwHA7ELECfSkXUAFz5pPWuidisCHJ0deD4uNKEYIW=w640-h360" width="640" /></a></div><br /><p></p><p class="MsoNormal"> </p>
<p class="MsoNormal">Where to locate such complexes?<span style="mso-spacerun: yes;"> </span>They need to be built on a scale that reflects
their local neighborhood and are close to where many homeless choose to locate
because of amenities – often downtown cores.<span style="mso-spacerun: yes;">
</span>Most municipalities own land in their downtown cores that could be used
for such a purpose. They will not be cheap to operate but realistically what
else is the solution?<span style="mso-spacerun: yes;"> </span>Simply leaving the
problem to grow does not solve the problem.<span style="mso-spacerun: yes;">
</span>Throwing money on market rent apartments and suburban subdivisions does
not solve homelessness, never mind, really create affordable housing. Using
resources in a wise and targeted way is the solution to both housing
affordability as well as homelessness. True, perhaps these are the ravings of simple economist who does not fully grasp the complexity or enormity of the problem. On the other hand, perhaps not.<br /></p>
<p><style>@font-face
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{page:WordSection1;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-37234545008998100632023-11-17T11:43:00.001-05:002023-11-17T11:43:05.037-05:00House Prices Are Coming Down<p>
</p><p class="MsoNormal">The latest house price figures have been released by the
<a href="https://housepriceindex.ca/2023/11/october2023/">Teranet-National Bank House Price Index</a> for major Canadian metropolitan centres
in Alberta, British Columbia, New Brunswick, Manitoba, Nova Scotia, Ontario,
and Quebec. According to Teranet:</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal"><i>After adjusting for seasonal effects, the
Teranet-National Bank Composite House Price Index™, which covers the country’s
eleven largest CMAs, declined by 0.4% from September to October, the first
decrease following five consecutive monthly increases. In October, four of the
11 CMAs included in the index experienced decreases: Toronto (-1.6%), Edmonton
(-1.2%), Vancouver (-1.1%) and Ottawa-Gatineau (-1.1%). Conversely, notable
increases were recorded in Montreal (+3.7%), Halifax (+1.1%) and Winnipeg
(+1.0%). On the other hand, decreases were observed in 11 of the 20 CMAs not
included in the composite index for which data are available in October. The
biggest monthly decreases were seen in Saint John (-5.3%), Trois-Rivières (-3.3%)
and London (-2.5%). Conversely, the biggest increases were in Moncton (+4.6%
after a 2.3% drop the previous month), Kingston (+3.8%) and Peterborough
(+2.6%).</i></p>
<p>
<span style="font-family: "Calibri",sans-serif; font-size: 12.0pt; mso-ansi-language: EN-CA; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">The month over month figures for October show
decline in most centres but the more interesting numbers are the declines from
the peak price.<span style="mso-spacerun: yes;"> </span>Peak price for most of
these cities occurred in Spring of 2022 though Calgary and Saint John appear to
have seen peaks in 2023. The accompanying figure shows that no one has seen a
price increase since the peak though Sherebrooke, Quebec City, Moncton,
Lethbridge, and Calgary appear to be perfectly flat since their peak.<span style="mso-spacerun: yes;"> </span> </span></p><p><span style="font-family: "Calibri",sans-serif; font-size: 12.0pt; mso-ansi-language: EN-CA; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"> </span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgBXxJFvzcjuCC-f8vabh1NJSe8aH84yOHzAyOwf_eyca2O2ZFzcZ2158Auzia4veOr_Havt0Ip5wSDIRlXx1YQLbTVt9yg4RbU5jPF8Syxch2P0DYslkzh7jaefRSe1cZ9VcQ_8wFKWwI7imgmjIggdDBCn5qqeyouXp8OVxcOdisoKpBMFFzX91ciab-p" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEgBXxJFvzcjuCC-f8vabh1NJSe8aH84yOHzAyOwf_eyca2O2ZFzcZ2158Auzia4veOr_Havt0Ip5wSDIRlXx1YQLbTVt9yg4RbU5jPF8Syxch2P0DYslkzh7jaefRSe1cZ9VcQ_8wFKWwI7imgmjIggdDBCn5qqeyouXp8OVxcOdisoKpBMFFzX91ciab-p=w640-h360" width="640" /></a></div><br /><p></p><p><span style="font-family: "Calibri",sans-serif; font-size: 12.0pt; mso-ansi-language: EN-CA; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">As for the remaining cities, the percent
change since peak price range from -2.7 percent for Montreal to -18.6 percent
for Brantford. <span style="mso-spacerun: yes;"> </span>Thunder Bay is in the
company of cities with relatively small declines coming in at -3.6 percent
while Sudbury is a bit more coming in at -9 percent.<span style="mso-spacerun: yes;"> </span></span>
</p><p><style>@font-face
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{page:WordSection1;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-33645888500343150082023-11-13T13:43:00.001-05:002023-11-13T13:43:29.229-05:00Tracking Thunder Bay’s Economy: Another View<p>
</p><p class="MsoNormal">As 2022 begins to wind up, it is worth taking a look at how
Thunder Bay’s economy is doing using less traditional indicators to shed
light not only on its economic performance but the perennial question of whether its
population is growing or not.<span style="mso-spacerun: yes;"> </span>One way of
looking at Thunder Bay’s economy and making some comparisons to other centers
is the use of Tax Filer data available from Statistics Canada. The number of T1
Tax Filers can be used as a correlate of not only population numbers but also incomes
and economic activity.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Figure 1 plots the number of tax filers by year from 2000 to
2001 in the Thunder Bay CMA with a linear trend. <span style="mso-spacerun: yes;"> </span>There has definitely been some growth in the
number of tax filers over the last few decades. From 88,240 T1s filed in 2000
to 92,660 in 2021, Thunder Bay has seen a 5 percent increase in the total
number of tax filers between those two years though numbers do fluctuate from
year to year.<span style="mso-spacerun: yes;"> </span>Thunder Bay’s CMA population
in the 2001 Census was 121,986 and its CMA population in the 2021 Census was 123,258 – an increase
of 1 percent.<span style="mso-spacerun: yes;"> </span>One would expect the
number of tax filers reporting income is somewhat a more robust count than the
number of people filling out the census at least in terms of compliance.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p><p class="MsoNormal"> </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEiES82-sW0iftRz9k2ywkIpTUfBUl6PC7_hEREabGxG_vxamxj2Lt8y9w1VqUCliGJ1GBoUgyR-zJ17vOJgN2BT9dgUPJqkwTIbhyIO0oSc5FWTtNk5aJe_jz9M54flkY_xjem-MU9uK8KlCraUdzlCVZjE4gsZwilCiFzjqGOE42ObLdKRG3KNM6RIcQ75" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEiES82-sW0iftRz9k2ywkIpTUfBUl6PC7_hEREabGxG_vxamxj2Lt8y9w1VqUCliGJ1GBoUgyR-zJ17vOJgN2BT9dgUPJqkwTIbhyIO0oSc5FWTtNk5aJe_jz9M54flkY_xjem-MU9uK8KlCraUdzlCVZjE4gsZwilCiFzjqGOE42ObLdKRG3KNM6RIcQ75=w640-h360" width="640" /></a></div><br /><p></p><p class="MsoNormal"> </p>
<p class="MsoNormal">If the 5 percent growth Tax Filer growth rate was applied to Thunder Bay’s
population in 2001, then in 2021 one would have a CMA population of 128,085.<span style="mso-spacerun: yes;"> </span>So, in response to the question of whether or
not there are more people living in Thunder Bay than the official census count
states, the answer it is perhaps so.<span style="mso-spacerun: yes;"> </span>Even so,
it is not the tens of thousands of people that seems to have seized the
imagination of local politicians lobbying for more resources.<span style="mso-spacerun: yes;"> </span>At least that is assuming that these tens of
thousands of additional people have employment and are reporting an
income.<span style="mso-spacerun: yes;"> </span>Of course, if they are not
working and therefore not reporting an income or are working and not reporting an income, well
those are entirely different matters that should definitely concern the federal
and provincial governments.</p><p class="MsoNormal"> </p><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgvDdj2q6V29kHAMxFsKR0JkmNB6tBbSlanr23Fq_waPMn6td57_loIdXlbedSJxomhG5-g78pxKGTv8XF7TYenz0D3Uo6EqXj3pLR_1iL9TDiBmCdfBOcx_wHxk24DaCbvu5qDdqFcMUMcKn3BRUd0MEsjzp6YsWPL7d-HTMKv628FBVf_5Bl8rk5BzKbs" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEgvDdj2q6V29kHAMxFsKR0JkmNB6tBbSlanr23Fq_waPMn6td57_loIdXlbedSJxomhG5-g78pxKGTv8XF7TYenz0D3Uo6EqXj3pLR_1iL9TDiBmCdfBOcx_wHxk24DaCbvu5qDdqFcMUMcKn3BRUd0MEsjzp6YsWPL7d-HTMKv628FBVf_5Bl8rk5BzKbs=w640-h360" width="640" /></a></div><br /> <p></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Delving deeper into the numbers, Figure 2 plots the average
annual growth rate of the number of T1 Tax filers over the period 2001 to 2021
for Thunder Bay, as well as Toronto, Hamilton, Greater Sudbury, and Ontario as
a whole.<span style="mso-spacerun: yes;"> </span>It appears that Thunder Bay’s
average annual tax filer growth rate is well below that for Ontario and Toronto
but also Hamilton and Greater Sudbury.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>Thus, another indicator that while we are growing, we are not
growing as quickly as other population centres. </p><p class="MsoNormal"> </p><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEjPSHbF50c0yErX-6N_4zd13vmpjLOqASkflciK_FHjYe5rTRrArQAjwGyjm5FW1DHaiXy1CRogwvStIzTFzd9pDMh1Gq36rh5hj7J2z-kKlQBxwlCWXnmIbXiSOjRzof7uAh9rLtdRkiwqUUNXBmf6ZxsOjnBb9w8Tyo1iRGbBlMqDytLqhRth3s54iAMB" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEjPSHbF50c0yErX-6N_4zd13vmpjLOqASkflciK_FHjYe5rTRrArQAjwGyjm5FW1DHaiXy1CRogwvStIzTFzd9pDMh1Gq36rh5hj7J2z-kKlQBxwlCWXnmIbXiSOjRzof7uAh9rLtdRkiwqUUNXBmf6ZxsOjnBb9w8Tyo1iRGbBlMqDytLqhRth3s54iAMB=w640-h360" width="640" /></a></div><br /> <p></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Finally, Figure 3 plots average annual T1 Tax Filer Income and it
illustrates that while average income has grown, Thunder Bay is below Ontario
and also below the other three comparison cities in the chart.<span style="mso-spacerun: yes;"> </span>As of 2021, average tax filer income in
Thunder Bay is $53,289 compared to $56,691 in Greater Sudbury, $57,936 in
Hamilton and $59,410 in Toronto with the average for Ontario at $56,893. Given
that average rents and cost of living in Thunder Bay have grown to levels not
incomparable to southern Ontario cities, this would suggest that many in
Thunder Bay are currently quite stretched when it comes to their finances.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">So, there you have yet another set of performance indicators
on Thunder Bay’s economy.<span style="mso-spacerun: yes;"> </span></p>
<p><style>@font-face
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{page:WordSection1;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-29326250445976290822023-11-08T13:00:00.005-05:002023-11-08T13:00:41.539-05:00Adam Smith and the Federal Carbon Tax<p>
</p><p class="MsoNormal">Canada’s modern tax system is really the result of over a
century of impromptu tax policy driven by the events of the day.<span style="mso-spacerun: yes;"> </span>After all, the modern system was hastily
thrown together in about a five-year period from 1916 to 1921 in order to
generate revenues for pursuing Canada’s role in the Great War and gave us the
personal income tax, the corporate income tax, and the federal sales tax.<span style="mso-spacerun: yes;"> </span>The most serious efforts at some type of
over-arching and comprehensive tax reform driven by principles, theory and
analysis were probably the Royal Commission on Taxation or Carter Commission
(1962-1967) and the White Paper on Tax Reform Wilson Reforms (1987).</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">With respect to the Carter Commission, commentators of the day
remarked it was “<i>marked by lucidity of analysis, candor in exposing its
presuppositions, fairness in the presentation, of alternatives, and modesty in
disclaiming infallibility. It is, in short, not a White Paper designed to prop
up a debatable fait accompli, but a work of scholarship, culminating in recommendations
for action, that frankly acknowledges when it moves beyond the boundaries of
objectivity and expertise, rather than seeking to blur or shift these limits</i>”
(<a href="https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=3588&context=uclrev">Bittker</a>).
<span style="mso-spacerun: yes;"> </span>The Carter Commission stressed simplicity,
fairness and balance but opposition to the specific reforms proposed was
intense and implementation was generally lacklustre though the current
integrated approach to personal and corporate taxation was a long-term result (<a href="https://www.policymagazine.ca/why-tax-reform-is-politically-perilous/">Norquay</a>).<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">The Wilson White Paper, despite the view of some that it was
to justify a fait accompli, on the other hand was a much more successful effort
at tax reform and it implemented the Carter Commission mantra that the base for
income taxation be broadened and the rates lowered (Norquay) and created a
three-bracket personal income tax system with lower rates than the previous
system with many more brackets and higher rates.<span style="mso-spacerun: yes;"> </span>Key principles underlying the reforms were
fairness, equity, and incentives for work and investment.<span style="mso-spacerun: yes;"> </span>However, the Wilson reforms were two pronged and
along with income tax reform it also replace the flawed Federal Sales Tax known
as the Manufacturer’s Sales Tax (MST) with the new GST.<span style="mso-spacerun: yes;"> </span>The benefits of the income tax changes were
quickly forgotten when the GST came along several years later with political
repercussions for the governing party of the day that are now history.<span style="mso-spacerun: yes;"> </span>While the GST was a well-designed tax that
broadened the base, it was highly visible replacing the hidden MST which was
built into the price of manufactured items and a millstone around the
manufacturing sector’s competitiveness. Despite the analysis and principles,
the Wilson Reforms ultimately paid a political price though they remain in
effect for the most part today. </p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Which brings us to the current federal carbon tax or more
specifically the recent federal intervention exempting home heating oil from
the federal carbon tax in Atlantic Canada which has generated a wave of dissatisfaction
<i>a mare usque ad mare</i>. The basic economic principles behind the current
federal carbon tax were generally sound.<span style="mso-spacerun: yes;">
</span>Most economists agree that if you want more of anything, you should
subsidize it whereas if you want less of anything, you should tax it. <span style="mso-spacerun: yes;"> </span>Public finance theory puts forth in the case of
activities with negative external effects such as pollution, the <a href="https://en.wikipedia.org/wiki/Pigouvian_tax">Pigouvian</a> tax which
raises the cost of the offending activity and therefore internalizes the
externality.<span style="mso-spacerun: yes;"> </span>Now the federal carbon tax
was designed to discourage the use of fossil fuels and help fight climate
change and is generally a pretty good example of a Pigouvian tax though with
the added twist of rebates primarily to lower incomes to help with the more
regressive effects of consumption type taxes.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">The decision by the Trudeau government to placate Atlantic
Canada generally undermines the role of the current carbon tax as a tool
against climate change and indeed threatens to unravel the whole thing.<span style="mso-spacerun: yes;"> </span>Hell, hath no fury like a taxpayer not exempted
from a tax when others are, and the federal government will likely reap a
political price for what seems to be a pretty brazen attempt to shore up
regional political support.<span style="mso-spacerun: yes;"> </span>All of this
would have been avoided if the federal government had paid just the least bit
of attention to past efforts at tax reform and tax change offered by the Carter
Commission or the Wilson Reforms.<span style="mso-spacerun: yes;"> </span>Terms
like “fairness and balance” or “fairness and equity” come to mind from those
past forays into taxation changes.<span style="mso-spacerun: yes;"> </span>Perhaps
those efforts were too complicated for the current federal government?</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">One can go further back for tax advice, all the way to Adam
Smith’s Wealth of Nations where he elucidates quite clearly and simply on what
makes a good tax system and provides the four: “Maxims of Taxation.” Namely:</p>
<p class="MsoNormal"> </p>
<p class="MsoListParagraphCxSpFirst" style="margin-left: 54.0pt; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -36.0pt;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">I.<span style="font: 7.0pt "Times New Roman";">
</span></span></span>The subjects of every state ought to contribute
towards the support of government, as nearly as possible, in proportion to
their respective abilities. (Equality)</p>
<p class="MsoListParagraphCxSpMiddle" style="margin-left: 54.0pt; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -36.0pt;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">II.<span style="font: 7.0pt "Times New Roman";">
</span></span></span>The tax which each individual is bound to pay
ought to be certain, and not arbitrary. (Certainty)</p>
<p class="MsoListParagraphCxSpMiddle" style="margin-left: 54.0pt; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -36.0pt;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">III.<span style="font: 7.0pt "Times New Roman";">
</span></span></span>Every tax ought to be levied at the time, or in
the manner in which it is most likely to be convenient for the contributor to
pay it. (Convenience of payment).</p>
<p class="MsoListParagraphCxSpLast" style="margin-left: 54.0pt; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -36.0pt;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">IV.<span style="font: 7.0pt "Times New Roman";">
</span></span></span>Every tax ought to be so contrived as both to
take out and to keep out of the pockets of the people as little as possible,
over and above what it brings into the public treasury of the state. (Economy
in collection).</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">The Trudeau government’s move to exempt home heating oil in
Atlantic Canada but not all sources of home heating wherever they may be in the
country adds porosity to the tax that will create a clamour for more exemptions
given that many view the current exemption is both unfair and arbitrary.<span style="mso-spacerun: yes;"> </span>One can debate whether it takes out of people’s
pockets as little as possible.<span style="mso-spacerun: yes;"> </span>If fighting
climate change is as important as the government claims it is, then this
exemption illustrates a retreat from core principles.<span style="mso-spacerun: yes;"> </span>In the end, fighting climate change when
necessary but not necessarily fighting climate change suggests not a principled
government but an opportunistic one. </p><p class="MsoNormal"> </p><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEg_h5I9DDO2h7lcYFoih6FY8r2PSKcK0Y9xwhzdgD44h5vhIHwk0fedJSovoSIEQma3foIRv_iSlXBxN2S2XZLL78AzIwYDbuJWBRdVvxpBdGORLQjn3LU0zOs4tY7ekuf41r-ZCPrEnMIVHJqRosOkiyNC4n7CHdMBMsmB_CcwegHALqgZrCsdt9nxfwXv" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEg_h5I9DDO2h7lcYFoih6FY8r2PSKcK0Y9xwhzdgD44h5vhIHwk0fedJSovoSIEQma3foIRv_iSlXBxN2S2XZLL78AzIwYDbuJWBRdVvxpBdGORLQjn3LU0zOs4tY7ekuf41r-ZCPrEnMIVHJqRosOkiyNC4n7CHdMBMsmB_CcwegHALqgZrCsdt9nxfwXv=w640-h360" width="640" /></a></div><br /> <p></p>
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{margin-bottom:0cm;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-67864860659724556482023-11-03T15:26:00.004-04:002023-11-03T15:27:36.659-04:00Ontario’s 2023 Fall Economic and Fiscal Statement: Some Thoughts<p>
</p><p class="MsoNormal">Finance Minister Bethlenfalvy released Ontario’s fall 2023
fiscal and economic update and a perusal of the numbers tells a number of
stories.<span style="mso-spacerun: yes;"> </span>First, the province is expecting
the economy to slow down with consequent effects on its revenues though the
current outlook for the current fiscal year 2023-24 shows tax revenues up just
over 3 percent while 2024-25 and 2025-26 are currently projected at growth of
3.3 and 6.1 percent respectively.<span style="mso-spacerun: yes;">
</span>Indeed, the period from 2022-23 to 2024-26 is expecting to see total
revenues up 14 percent.<span style="mso-spacerun: yes;"> </span>Over the same
period total program spending is expected to rise by 8.5 percent, debt
interest by 22.6 percent and total expenditure will be up by 9.4 percent.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Thus, revenues are projected to grow faster than expenditures
but the gap between revenues and expenditures will persist until 2025-26 when a
small surplus of 500 million dollars is forecast.<span style="mso-spacerun: yes;"> </span>However,
given spending that year includes a reserve of $2 billion set aside, it is
likely the surplus that year will be much bigger. An economic slowdown
notwithstanding, the province appears to want to keep a deficit on the books
for as long as possible no doubt in part as a cautionary measure given economic
uncertainty but also to quell demands for more public spending.<span style="mso-spacerun: yes;"> </span>And as for economic uncertainty, employment
is expected to grow each year until 2026 and the unemployment rate at its
highest will reach 6.6 percent before declining to 5.8 percent by 2026. Hardly the
recessions and downturns of yesteryear.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">However, two items did catch my eye.<span style="mso-spacerun: yes;"> </span>First, for 2023-24, the net public debt is
expected to take a bit of a leap to $416 billion.<span style="mso-spacerun: yes;"> </span>From 2018-19 to 2023-24, the net debt will
have grown from $338 billion to $416 billion, an increase of 78 billion dollars
or 23 percent.<span style="mso-spacerun: yes;"> </span>However, deficits over
that same period only sum to $42 billion.<span style="mso-spacerun: yes;">
</span>In other words, an amount over and above the sum of accumulated deficits
of $36 billion has been added to the net debt.<span style="mso-spacerun: yes;">
</span>While this is of course likely the result of current government
accounting practices that book capital and infrastructure expenditures
separately from the operating expenditures, it is nevertheless a sizeable increase to see.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">More seriously, is the following. <span style="mso-spacerun: yes;"> </span>If one takes past, current, and projected
nominal GDP for Ontario, factors in inflation using the CPI as well as assumes
population growth going forward at the medium Finance Ministry scenario of
250,000 people a year (about 1.7 percent), one gets a picture of real per
capita GDP in Ontario that suggests that by 2025, real per capita GDP will be no higher than it was in 2017.<span style="mso-spacerun: yes;"> </span>If one looks at the accompanying figure, despite
ebbs and flows (with a particularly large ones circa the pandemic) as well as the early 1990s) real per
capita GDP growth has been noticeably slower since about 2000.<span style="mso-spacerun: yes;"> </span>The average annual growth rate in real per
capita GDP from 1960 to 1999 averaged 2.1 percent while from 2000 to what is
projected by 2025 the growth rate is 0.5 percent.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p><p class="MsoNormal"> </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEiPeQxrnnF5San_1iHhBZNytPm2GyvvMXLy9pmDvze5h_LKwi9ovLtkZMlUXtu7ckTY8za6Gr-LcWQSAUo3dFGfyP7rQSMKasFtOxNSchOA067PX73_rtMyyE3HlDr6wCQ-AYnOR89TqX1Gq_xZ_hynCbZMw9gMFqSt7UpD8UydrjM35660AJCLnI7bjnSQ" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEiPeQxrnnF5San_1iHhBZNytPm2GyvvMXLy9pmDvze5h_LKwi9ovLtkZMlUXtu7ckTY8za6Gr-LcWQSAUo3dFGfyP7rQSMKasFtOxNSchOA067PX73_rtMyyE3HlDr6wCQ-AYnOR89TqX1Gq_xZ_hynCbZMw9gMFqSt7UpD8UydrjM35660AJCLnI7bjnSQ=w640-h360" width="640" /></a></div><br /><p></p><p class="MsoNormal"> </p>
<p class="MsoNormal">You can blame some of this on population growing more
quickly over the last few years, but the real culprit is that productivity
growth in Ontario is lack lustre.<span style="mso-spacerun: yes;"> </span>The long-term
effects of productivity decline have begun to manifest themselves in our
standard of living.<span style="mso-spacerun: yes;"> </span>Real per capita GDP
in 2022 in $2020 is $64,170.<span style="mso-spacerun: yes;"> </span>If since
2000, real per capita GDP had grown at the average annual rate from 1960 to
1999, in 2022 it would be about $86,000 – that is a difference in output of
nearly $22,000 per Ontarian.<span style="mso-spacerun: yes;"> </span>It is not
apparent that this stark difference has sunk in yet across political and policy
circles in Ontario. We have foregone a lot of output given our productivity decline and in the absence of a shift, that amount will only continue to grow.<br /></p><p class="MsoNormal"> </p><p class="MsoNormal"> </p>
<p><style>@font-face
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{page:WordSection1;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-54736040148143148112023-10-27T10:45:00.002-04:002023-10-27T10:45:27.101-04:00Monster Mash or Cournot Nash?<p>
</p><p class="MsoNormal">Well, the season of Halloween is upon us and the music of the
season is certainly something that we all have memories of over the years.<span style="mso-spacerun: yes;"> </span>Of course, one of the most famous songs was <a href="https://en.wikipedia.org/wiki/Bobby_Pickett">Bobby “Boris” Pickett’s</a> <a href="https://www.youtube.com/watch?v=vNuVifA7DSU">Monster Mash</a> which was a
smash hit in 1962.<span style="mso-spacerun: yes;"> </span>This was his most
famous song and later attempts to emulate its success were not <a href="https://www.youtube.com/watch?v=KSZD45fXTek">as successful</a>.<span style="mso-spacerun: yes;"> </span>Nevertheless, it has inspired a host of replications
and imitations ranging from this one on <a href="https://www.youtube.com/watch?v=UtJTi2vPPck">Sesame Street</a> to <a href="https://www.youtube.com/watch?v=1Nw3kFw7zkQ">this</a> one or <a href="https://www.youtube.com/watch?v=AxcM3nCsglA">even this</a>.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>Well, I
have been feeling particularly whimsical this week and in the spirit of the season,
with a little help from my AI, I decided to see if I could adapt the lyrics to
an economics theme - specifically a song about Cournot-Nash equilibrium.<span style="mso-spacerun: yes;"> </span>After all, Monster Mash-Cournot Nash – they both
have a certain lilt to them.<span style="mso-spacerun: yes;"> </span>So, without
further ado, take a look at the results.<span style="mso-spacerun: yes;">
</span>Of course, please feel free to perform it, make a video and send it
along!</p>
<p class="MsoNormal"> </p><p>
<i><span style="font-family: "Calibri",sans-serif; font-size: 12.0pt; mso-ansi-language: EN-CA; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">In the land of game theory, where minds collide,<br />
There was a concept, Cournot-Nash, they could not hide.<br />
Firms strategized, each aiming to improve their gains,<br />
Seeking equilibrium, where competition remains.<br />
<br />
They did the Nash, they did the Cournot Nash,<br />
The Cournot Nash, it was an equilibrium bash.<br />
They did the Nash, it was a game theory smash,<br />
The Cournot Nash, a most strategic clash.<br />
<br />
Players in a market, with goods they'd supply,<br />
In Cournot's world, they chose how much to magnify.<br />
Each one anticipating, their rival's every move,<br />
Balancing their choices, in a dance they would prove.<br />
<br />
They did the Nash, they did the Cournot Nash,<br />
The Cournot Nash, it was an equilibrium bash.<br />
They did the Nash, it was a game theory smash,<br />
The Cournot Nash, a most strategic clash.<br />
<br />
Fierce competition, but still a sense of peace,<br />
Cournot equilibrium, where conflicts find release.<br />
Finding the optimal output, they would ascertain,<br />
With profit maximization, the ultimate aim.<br />
<br />
They did the Nash, they did the Cournot Nash,<br />
The Cournot Nash, it was an equilibrium bash.<br />
They did the Nash, it was a game theory smash,<br />
The Cournot Nash, a most strategic clash.<br />
<br />
So let's explore the strategies, in this grand parade,<br />
Game theory teaches us, how choices are made.<br />
In Cournot's footsteps, we can understand the game,<br />
And dance to the beat of equilibrium's fame.<br />
<br />
They did the Nash, they did the Cournot Nash,<br />
The Cournot Nash, it was an equilibrium bash.<br />
They did the Nash, it was a game theory smash,<br />
The Cournot Nash, a most strategic clash.</span></i></p><p><i><span style="font-family: "Calibri",sans-serif; font-size: 12.0pt; mso-ansi-language: EN-CA; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"> </span></i></p><p><i><span style="font-family: "Calibri",sans-serif; font-size: 12.0pt; mso-ansi-language: EN-CA; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"></span></i></p><div class="separator" style="clear: both; text-align: center;"><i><a href="https://blogger.googleusercontent.com/img/a/AVvXsEiyaDQPr4bYNbbH29l5qSKNFQnpIpE42rLbFURWRl8j3_dAHLOujYiQepRlco6c-QA9ZFD7GdTSaasCAcqEuLd8TdRAM9laIxHULeQYlChLv-89TQrEUKtwIQ-ERuTg68_pQnr1oWb4Yt1bqpN2WzRwaKDhg-PXZw3bBH0PK3qmxPMeDW3BnpVZU2u4EjMB" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEiyaDQPr4bYNbbH29l5qSKNFQnpIpE42rLbFURWRl8j3_dAHLOujYiQepRlco6c-QA9ZFD7GdTSaasCAcqEuLd8TdRAM9laIxHULeQYlChLv-89TQrEUKtwIQ-ERuTg68_pQnr1oWb4Yt1bqpN2WzRwaKDhg-PXZw3bBH0PK3qmxPMeDW3BnpVZU2u4EjMB=w640-h360" width="640" /></a></i></div><i><br /> </i>
<p></p><p><style>@font-face
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{page:WordSection1;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-6594765136494467242023-10-22T12:37:00.004-04:002023-10-24T13:32:08.605-04:00A New Research Project in the North and for the North<p>
</p><p class="MsoNormal">Northern Ontario has faced demographic and labour force
challenges for several decades now.<span style="mso-spacerun: yes;">
</span>Northern Ontario accounts for 90 percent of the province’s land mass but
only about 6 percent of its population and though overall population appears to
have stabilized since 2016, that share of population continues to decline as
the rest of Ontario grows faster than its north.<span style="mso-spacerun: yes;"> </span>To this long-term trend has been added the
impacts of technological change and the digital economy as well as the effects
of the COVID-19 pandemic. As a result,given its aging population structure, issues
of labour shortage have also come to mark the northern Ontario economy.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">How to attract and retain labour in northern Ontario in both
the short and long term is a pressing issue for the future growth and welfare
of this diverse and sparsely populated region. To date, much of the literature on labour force shortages and
migration has been descriptive.<span style="mso-spacerun: yes;">
</span>What factors are important in attracting and retaining population and
labour forces in northern Ontario?<span style="mso-spacerun: yes;"> </span>Given
the presence of a substantial post-secondary education sector in the region,
what factors and determinants are crucial in retaining skilled graduates for
the labour force of the future.? To this effect, a pan-northern research team
(of which I am pleased to be a member of) has begun a research project to
address these questions and has obtained Social Sciences and Humanities
Research Council of Canada (SSHRC) grant funding to help obtain some answers. </p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">The project is titled “<i>Northern Ontario Labour Force
Retention and Attraction in a Post-Pandemic, Digital Economy</i>.”<span style="mso-spacerun: yes;"> </span>This is a broad-based survey project building
on a pilot study that investigated factors influencing local graduate retention rates for Algoma University in Sault Ste. Marie. The pilot developed and tested a survey and then completed
a review on labour retention policy in the region. This research project scales up
the investigation of graduate retention and contributing factors to migration
in Northern Ontario, and the retention rates of all the region’s post-secondary
institutions to identify factors influencing the regional retention of
graduates qualified to fill labour shortages. Of special interest are the
region’s unique demographic patterns, push and pull factors, migration networks,
labour attraction and retention policies, and leveraging graduates’ temporary
work permits.<span style="mso-spacerun: yes;"> </span>A combination of student and
graduate surveys, focus groups, and secondary data will be used to examine the
significant factors of graduate retention and ultimately aims to develop
recommendations for how the region can retain more of its existing skilled
labour pool and attract more skilled migrants. The study will also investigate
the effectiveness of the Rural and Northern Immigration Pilot (RNIP) program in
graduate retention.</p>
<p class="MsoNormal"> </p>
<p style="background: white; margin: 0cm; text-align: justify;"><span face=""Calibri",sans-serif" style="color: black;">The research team is
interdisciplinary and includes social and community development experts,
Northern Ontario economists, and labour market experts. The
university-based research team includes Dr. Nusrate Aziz (Algoma) as Principal Investigator, Zeel Patel (Algoma) as Senior Research Assistant,
Dr. Sean Meades (Algoma), Dr. Sadequl Islam (Laurentian), Dr. Livio Di Matteo
(Lakehead) and Dr. Natalya R. Brown (Nipissing).<span style="mso-spacerun: yes;"> </span>To date the project has also hired two
students (Alex and Kashfia) – one based at Laurentian University and the other based at
Lakehead University - to assist with the conduct of surveys targeting students enrolled in
3<sup>rd</sup>, 4<sup>th</sup>, and 5<sup>th</sup> year (graduate) studies as
well as focus groups involving university and college level staff and
administrators involved in recruitment and retention initiatives.<span style="mso-spacerun: yes;"> </span>The surveys have begun, and the subsequent
pool of data will yield a rich source of socio-economic data on a demographic
vital to the future prosperity of northern Ontario. If you are contacted by our
team for input, we hope you will take the time to help us out. </span></p><p style="background: white; margin: 0cm; text-align: justify;"><span face=""Calibri",sans-serif" style="color: black;"> </span></p><p style="background: white; margin: 0cm; text-align: justify;"><span face=""Calibri",sans-serif" style="color: black;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEhKIw5l7tM5G2AITBS7gEKaAoVEbgvyBPYpfptmhg0MCAFWpo1cQbp3XatgK6ei3NRFjlQEXDy6I-mPKFCnKQei26q_0pjbwfGiQnblabeqTRbfQbhIZfak29HYHkoKu0yAxI0T_TvsxYjQpYw4ZjzR3A0ieDiAo_7f2TXckPvJOrq9RTgkliAhKL9ItN3c" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="507" data-original-width="877" height="370" src="https://blogger.googleusercontent.com/img/a/AVvXsEhKIw5l7tM5G2AITBS7gEKaAoVEbgvyBPYpfptmhg0MCAFWpo1cQbp3XatgK6ei3NRFjlQEXDy6I-mPKFCnKQei26q_0pjbwfGiQnblabeqTRbfQbhIZfak29HYHkoKu0yAxI0T_TvsxYjQpYw4ZjzR3A0ieDiAo_7f2TXckPvJOrq9RTgkliAhKL9ItN3c=w640-h370" width="640" /></a></div><br /> <p></p>
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{page:WordSection1;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-67155823959354787442023-10-07T13:33:00.004-04:002023-10-07T13:52:17.166-04:00The Recession That Was Not There<p>
</p><p class="MsoNormal"><b><i>Yesterday upon the stair,</i></b></p>
<p class="MsoNormal"><b><i>I saw a recession that was not there,</i></b></p>
<p class="MsoNormal"><b><i>It was not there again today, </i></b></p>
<p class="MsoNormal"><b><i>I wish, I wish, it would go away.</i></b></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal"><b><i>With apologies to William Hughes Mearns, Antigonish
1899.</i></b></p>
<p class="MsoNormal"><b><i> </i></b></p>
<p class="MsoNormal"><b><i> </i></b></p>
<p class="MsoNormal">The release of yesterday’s <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/231006/dq231006a-eng.htm">employment
numbers</a> by Statistics Canada once again threw a wrench into the ranks of
those who have been predicting a recession by revealing a continued resilience
to the Canadian economy’s job generation machine.<span style="mso-spacerun: yes;"> </span>Total employment in September of 2023 was
20,270,000 – an increase of 0.3 percent over the previous month with 64,000
jobs created.<span style="mso-spacerun: yes;"> </span>There were of course both
gains and losses across regions and sectors with Quebec and British Columbia seeing
the biggest employment increases while Alberta and New Brunswick saw
declines.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">As well, there were increases in employment in education,
transport and warehousing and declines – not surprisingly given the slowing
housing market – in finance, insurance, and real estate.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>Nationally,
the unemployment rate remains unchanged at 5.5 percent.<span style="mso-spacerun: yes;"> </span>When one adds to this the fact that the <a href="https://www.bls.gov/news.release/empsit.nr0.htm">U.S. economy in
September</a> added over 300,000 jobs and their national unemployment rate
remained unchanged at 3.8 percent, one has to come to the conclusion that the North
American economy is still quite robust despite the unprecedented surge in
interest rates over the last year.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Despite the <a href="https://markets.businessinsider.com/news/bonds/bond-market-recession-us-economic-outlook-yield-curve-inversion-treasurys-2023-10">ever
present</a> and <a href="https://www.bloomberg.com/news/articles/2023-10-01/6-reasons-why-a-us-recession-is-likely-and-coming-soon#xj4y7vzkg">mentioned</a>
<a href="https://ca.finance.yahoo.com/news/most-canadians-expect-a-recession-to-hit-in-coming-year-new-survey-finds-100044841.html">spectre</a>
of <a href="https://www.bnnbloomberg.ca/is-canada-still-heading-for-a-recession-in-2023-1.1927694">recession</a>
with numerous forecasts and projections painting dire scenarios it remains that the recession is not here
yet unless of course we are planning to redefine the context within what the
definition of a recession is.<span style="mso-spacerun: yes;"> </span>After all,
the most recent GDP release also showed that as of July 2023, the economy was
flat, neither up nor down. And one <a href="https://www.theglobeandmail.com/business/economy/article-canadian-economy-to-get-back-on-its-feet-next-year-deloitte-canada/?gad=1">forecaster</a>
has said the economy will get “back on its feet” next year after a few negative
quarters that will see the unemployment rate hit 5.9 percent followed by an easing
of interest rates to the 3 percent range.<span style="mso-spacerun: yes;">
</span><span style="mso-spacerun: yes;"> </span>If a 5.9 percent unemployment
rate is the worst this recession will bring, then one must wonder if a
recession has simply become a psychological mindset perpetuated by endless
speculation and anxiety of hard times to come.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">After all, as the accompanying figure shows, both interest
rates and unemployment rates have been much higher during past recessions.<span style="mso-spacerun: yes;"> </span>The 1981 and 1991 recessions both had much
higher interest and accompanying unemployment rates than anything at
present.<span style="mso-spacerun: yes;"> </span>And notwithstanding the COVID
spike in unemployment, unemployment rates have trended down since the 1990s and
remain at close to historic lows bettered only by those of the mid 1960s. I
suppose the only remaining case for a recession coming is that in both of those
recessions, interest rates spiked and remained high for quite some time before
unemployment finally surged.<span style="mso-spacerun: yes;"> </span>Still, a
forecast of 5.9 percent unemployment because of the current spike in interest
rates does not seem like a recession at all when placed in historical context.</p><p class="MsoNormal"> </p><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEiBWn9HC0wGw4m7_6VWkGssNC2sUd4W6SbJFdDSdULgyIb3F8UQpC1MhDULOURZrAEpYTbO5Im46dro1T8pY8DG15PsHAUTMb9NFVRaO__hvs2w3q2GQFcsp3_fzm5L8E54xLd-ekWQ1SE5Zm6IwYzdOkW3Ie6aguKKQRfa-OCIJSONTCp48ciZ0ocAQFoS" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEiBWn9HC0wGw4m7_6VWkGssNC2sUd4W6SbJFdDSdULgyIb3F8UQpC1MhDULOURZrAEpYTbO5Im46dro1T8pY8DG15PsHAUTMb9NFVRaO__hvs2w3q2GQFcsp3_fzm5L8E54xLd-ekWQ1SE5Zm6IwYzdOkW3Ie6aguKKQRfa-OCIJSONTCp48ciZ0ocAQFoS=w640-h360" width="640" /></a></div><br /> <p></p>
<p class="MsoNormal">Still, the Bank of Canada’s next interest rate decision has
been complicated by this much stronger economic performance and inflation still in the four percent range.<span style="mso-spacerun: yes;">
</span>Moreover, with the sudden new instability in the Middle East, one can
expect oil and gasoline prices to spike meaning inflation is unlikely to go
down anytime soon.<span style="mso-spacerun: yes;"> </span>Inflationary pressure
is also being fueled by wage increases in the 5 percent range.<span style="mso-spacerun: yes;"> </span>Indeed, Statistics Canada reported that
incomes in general have been rising particularly in the <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/231004/dq231004a-eng.htm?HPA=1">bottom
two income deciles</a> as a result of wage gains for workers as well as
increased benefits for retirees.<span style="mso-spacerun: yes;"> </span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Indeed, when one factors in all transfers to individuals including
not only higher social security benefits and what is essentially a basic income for lower incomes with children via the
Child Tax Benefit, it appears that disposable income in the bottom 20 percent has
increased 20 percent. And, much of this goes to consumption spending as studies
have suggested that lower income deciles have <a href="https://www.investopedia.com/terms/m/marginalpropensitytoconsume.asp">higher
marginal propensities to consume</a> and <a href="https://www.rba.gov.au/publications/workshops/research/2017/pdf/rba-workshop-2017-christopher-carroll.pdf">lower
propensities to save</a>.<span style="mso-spacerun: yes;"> </span>Meanwhile, another
Statistics Canada report suggests that the economy is doing better because of <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/231005/dq231005a-eng.htm?HPA=1">rising
exports</a>. Given the strength of the U.S. economy, that is not a surprise. Then there is the rising population and its associated demands on
the economy.<span style="mso-spacerun: yes;"> </span>Put it all together, and
one cannot but help conclude that there is still a lot of inflationary stimuli
being pumped into the economy.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Recession?<span style="mso-spacerun: yes;"> </span>At
present, the coming recession is a mere spectre, a mythical beast that is
conjured up but is not there. </p>
<p class="MsoNormal"> </p>
<p><style>@font-face
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{page:WordSection1;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-5330000790334931632023-10-01T13:04:00.001-04:002023-10-01T13:04:49.729-04:00Thunder Bay, Burlington, Windrows and Civic Darwinism<p>
</p><p class="MsoNormal">Winter is approaching and it continues that compared to
Thunder Bay, some southern Ontario municipalities are way ahead of the game
when it comes to dealing with the lethal combination of climate change and
aging populations.<span style="mso-spacerun: yes;"> </span>In recent years,
Thunder Bay has been getting heavier and wetter snowfalls which in the aftermath are quickly
compacted into thick ice on residential streets.<span style="mso-spacerun: yes;">
</span>Once the city snowploughs come through the neighborhood, usually several
days after the snowfall, the result is a windrow at the end of one’s driveways.<span style="mso-spacerun: yes;"> </span>Notwithstanding the snow already in one’s
driveway, increasingly, we are not looking at six inches to a foot of snow left
behind but massive walls of ice and snow which even a heavy duty snowblower is
challenged to deal with.<span style="mso-spacerun: yes;"> </span>The result for
young and old alike is a period of massive exertion to exit one’s driveway
which increasingly has been found to culminate in <a href="https://ottawa.ctvnews.ca/recent-snowstorm-led-to-uptick-in-heart-attacks-overnight-1.5745038">cardiac</a>
<a href="https://www.cbc.ca/news/health/snow-heart-1.3979828">events</a> not <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5305403/">conducive</a> to
one’s longevity.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Now this blog has brought the issue of windrows up before
but obviously to little avail in Thunder Bay.<span style="mso-spacerun: yes;">
</span>A <a href="https://northerneconomist.blogspot.com/2021/01/why-can-ignace-get-nice-things-and-not.html">2021
blog post</a> noted that even Ignace Ontario was apparently getting its
municipal snow grader outfitted with a “<a href="https://www.cbc.ca/news/canada/thunder-bay/ignace-ontario-snowgate-1.5881255">snowgate</a>”
while at the time it was noted that other cities in southern Ontario such as Richmond
hill, Markham and even Toronto had windrow removal programs in place.<span style="mso-spacerun: yes;"> </span>To this list can now be added the City of Burlington
Ontario which according to a story in the <a href="https://www.thespec.com/news/burlington-expands-program-to-clear-snow-left-by-plows/article_38cef915-b4db-550b-a05b-17c20b15c6a1.html">Hamilton
Spectator</a> appears to have moved beyond a targeted windrow removal program
(for seniors or people on disabilities) to a more general program that
naturally comes at a charge.<span style="mso-spacerun: yes;"> </span>As the
story reads:</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal"><i>Burlington city council has approved enhancements to its
program to clear snow left behind by plows, including increasing the number of
available spots from 200 to 1,000 driveways.</i></p>
<p class="MsoNormal"><i>In addition, service boundaries will expand to include
all areas of the city.</i></p>
<p class="MsoNormal"><i>As part of the city’s windrow program, crews will clear
windrows within 36 hours of snowfall stopping and within 12 hours of
residential road plowing. A windrow is the pile of snow that is left at the
bottom of driveways by roadway plows.</i></p>
<p class="MsoNormal"><i>Residential road plowing only occurs after accumulation
of 7.5 centimetres or more of snow. Windrow-clearing services will run from
Dec. 1, 2023, until March 31, 2024. A non-refundable fee of $125 plus HST per
driveway entrance for the entire season must be paid at the time of
registration.</i></p>
<p class="MsoNormal"><i>In years past, the program was only offered to people
with disabilities and individuals unable to clear their windrows. As part of
the program’s expansion, the city now has the capacity to offer spots to any
resident.</i></p>
<p class="MsoNormal"><i>The city will continue to focus on providing spots to
people with disabilities. Previous registrants will be contacted over the next
week to secure a spot in the program. Following that, advanced registration for
people with disabilities will open on Oct. 5 at 9 a.m. Registration for
residents city-wide will open on Oct. 19 at 9 a.m.</i></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Now, one is not asking for the city of Thunder Bay to
provide free windrow removal.<span style="mso-spacerun: yes;"> </span>After all,
Thunder Bay has pretty clearly stated what its priorities are when it comes to
tax funded or assisted municipal services.<span style="mso-spacerun: yes;">
</span>While Thunder Bay does spend <a href="https://northerneconomist.blogspot.com/2021/01/thunder-bay-simply-spends-morea-lot-more.html?m=0">one
of the highest per capita amounts</a> of major Ontario cities, it has chosen to
prioritize three things: general government, police, and fire services.<span style="mso-spacerun: yes;"> </span>Indeed, of 27 major Ontario municipalities,
Thunder Bay historically spends the most dollars per capita of its of its tax
levy supported operating budget on these three items. <span style="mso-spacerun: yes;"> </span>Indeed, historically nearly 60 percent of Thunder Bay’s operating
tax levy is spent on <a href="https://northerneconomist.blogspot.com/2021/01/why-can-ignace-get-nice-things-and-not.html">these
three items</a> - again, the highest of these 27 major municipalities.<span style="mso-spacerun: yes;"> </span>However, the City of Thunder Bay does not
even appear interested in pursuing an approach like that of Burlington where
one could essentially pay for the windrows to be removed so after the
residential street is ploughed.<span style="mso-spacerun: yes;"> </span>It is probably too entrepreneurial an approach for a gvoernmental body in Thunder bay to attempt. On the other
hand, given Thunder Bay’s municipal cost structure, one suspects that even if
such a service were offered, it would be substantially more expensive than what
Burlington is planning to offer.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">So, there you have it.<span style="mso-spacerun: yes;">
</span>Winter is coming and with it Thunder Bay’s survival of the fittest
approach to retirement living.<span style="mso-spacerun: yes;"> </span></p><p class="MsoNormal"><span style="mso-spacerun: yes;"> </span></p><p class="MsoNormal"><span style="mso-spacerun: yes;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgiEJ4v1wE9mG4SxD08pFe3sjM3i9JlVhuVwUrqkCl8tVVhE-A2pAZte7X-e4jl4KuRpGjHqwnSrMaWf7_5ibsT3zhFFSfEWxqRTR0sxDcrJKmaWlWWfORLrWXDuzc3z1hdt1kx5wUVFCQFUrHacPHGXF7_ALrrfa5DfYtXiID5grD60_aKmfSREtYX6ify" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEgiEJ4v1wE9mG4SxD08pFe3sjM3i9JlVhuVwUrqkCl8tVVhE-A2pAZte7X-e4jl4KuRpGjHqwnSrMaWf7_5ibsT3zhFFSfEWxqRTR0sxDcrJKmaWlWWfORLrWXDuzc3z1hdt1kx5wUVFCQFUrHacPHGXF7_ALrrfa5DfYtXiID5grD60_aKmfSREtYX6ify=w640-h360" width="640" /></a></div><br /> <p></p>
<p><style>@font-face
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{page:WordSection1;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-6434265888462753953.post-54682609962254695252023-09-20T14:13:00.005-04:002023-09-20T14:13:41.237-04:00Strong Mayors and Housing: Thunder Bay Edition<p>
</p><p class="MsoNormal">Thunder Bay City Council this week <a href="https://www.cbc.ca/news/canada/thunder-bay/ontario-strong-mayor-powers-thunder-bay-1.6971673">did
not support</a> Mayor Ken Boshcoff’s desire to acquire “strong mayor powers” in
a quest to meet provincial targets for housing and reap the benefits of
associated funding support.<span style="mso-spacerun: yes;"> </span>In some respects,
this is not a surprise, not so much because members of council are so concerned
about local democracy but because it does represent an erosion of their power
given that strong powers on offer allow mayors to pass bylaws with the support
of just one third of council, as well as veto bylaws passed by council on
matters involving provincial priorities. In addition, the mayor will be able to
propose the city budget, reorganize city departments and hire or fire the city
manager and even some department heads.<span style="mso-spacerun: yes;"> If anything, this represents a major potential increase in workload for the Office of the Mayor and one suspects there will eventually be some hiring to provide the necessary support.<br /></span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Thunder Bay City Council because of its unique structure of
at-large and ward councillors has always had councillors whose electoral mandate
pretty much matched that of the mayor given they were elected by city-wide
voters.<span style="mso-spacerun: yes;"> </span>What the new changes mean in
Thunder Bay and indeed in municipalities across the province is that the power
structure has been unilaterally changed by the province in an effort to get the
provincial housing agenda kick-started.<span style="mso-spacerun: yes;">
</span>Indeed, going down the road, what some future mayor might do with such powers
is a real concern. Nevertheless, it would appear that the mayor is going to ask
for those powers with or without council support because the mayor wants to
commit Thunder Bay to a target set by the province of 2,200 new homes by 2031.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">This target is an interesting one because it means that over
the next eight years (2024 to 2031), Thunder Bay needs to build an average of
275 new housing units annually.<span style="mso-spacerun: yes;"> </span>The
accompanying figure plots the annual number of housing starts from 1972 to 2023
and also plots the annual target set at an average of 275 units per year.<span style="mso-spacerun: yes;"> </span>The 2023 estimate is incomplete given that
the numbers from Statistics Canada only go to August and the monthly average based
on January to August is used to fill in the rest of the year.<span style="mso-spacerun: yes;"> </span>Even that total seems an underestimate given
the couple of large apartment projects that have emerged that might double the
total for 2023.<span style="mso-spacerun: yes;"> </span></p><p class="MsoNormal"><span style="mso-spacerun: yes;"> </span></p><p class="MsoNormal"><span style="mso-spacerun: yes;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEiOh1OEJuF8y_O38ZhHOTpGJ5aKRVst7xFEh7fUOWUrEeavc76eRMOfC78uDngvOIGYMUjw9k57L2Onpr-T8sZ4WwiVhjlaB9mrvooXroGh5aIZxNrsTVEV2rN8TEVIBWWbc5tVXfCcMOEEzTZ_GANGGURr3DVrkEmclyQBGDeNEtm2gvt4ixX3I6XBWkd_" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="405" data-original-width="720" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEiOh1OEJuF8y_O38ZhHOTpGJ5aKRVst7xFEh7fUOWUrEeavc76eRMOfC78uDngvOIGYMUjw9k57L2Onpr-T8sZ4WwiVhjlaB9mrvooXroGh5aIZxNrsTVEV2rN8TEVIBWWbc5tVXfCcMOEEzTZ_GANGGURr3DVrkEmclyQBGDeNEtm2gvt4ixX3I6XBWkd_=w640-h360" width="640" /></a></div><br /> <p></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Needless to say, the target is an ambitious one given that
since 2000, the annual average works out to about 105 units per year.<span style="mso-spacerun: yes;"> </span>In other words, going forward, it will be expected
that Thunder Bay has to achieve just over 2.5 times the number of starts than
it has managed on average over the last two decades.<span style="mso-spacerun: yes;">
</span></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Can a strong mayor somehow wield the influence and power to
more than double the number of housing starts in Thunder Bay?<span style="mso-spacerun: yes;"> </span>Given the shortage of building trade workers
as well as the fact that for the houses to be built, there has to be a demand
for the housing and interest rates have spiked at the moment, it will be a challenge.<span style="mso-spacerun: yes;"> </span>Then there is the ability of developers to earn
a profit on the new builds whether single detached houses, apartments, or
condos, even with whatever financial support the province has in mind.<span style="mso-spacerun: yes;"> </span>Again, one suspects this target may be a tough one to
reach.<span style="mso-spacerun: yes;"> </span>A lot depends on whether or not
there really are a lot more people in Thunder Bay than official counts say
there are and if those people are actually interested in permanent housing in
Thunder Bay and more importantly have the ability to pay for it either as owners or renters.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">One suspects that in the end, the real influence of strong
mayor powers in Thunder Bay will not be so much on the future housing stock but
on things like the city budget and even senior staffing.<span style="mso-spacerun: yes;"> </span>The mayor’s position is about to get more
important and as the adage goes, with great power comes great responsibility.</p>
<p><style>@font-face
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{page:WordSection1;}</style></p>Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.com