Friday, 8 September 2017

Economic News Around the North: September 8th Edition

Summer is over, autumn is back and winter is coming.  It is the start of a new academic school year and life takes on a brisker pace here in Thunder Bay both on and off campus.  Traffic is noticeably up everywhere in town and the drivers are in a hurry.  So, without any more delay, here are the recent stories I feel have some economic significance for northern Ontario.

Vale to shut Clarabelle Mill Crushing plant. CBCNews Sudbury. September 7th, 2017.

As noted in another story in the Sudbury Star, Vale is not closing the mill itself, but only the crushing plant.  This is expected to affect 13 jobs but no plans for workforce reduction have been announced yet.  It should be noted that it has apparently been a good month for commodity prices.

Also in Sudbury...

Sudbury city councillor wants a closer look at de-amalgamation. CBCNews Sudbury, September 6th, 2017.

Sudbury city councillor Michael Vagnini wants to put forth a motion to re-examine the amalgamation of 8 areas that took place in 2001 to create Greater Sudbury.  Laurentian University economist David Robinson says amalgamation hasn't worked.  Vagnini notes that municipal employment in the former cities together has grown 30 percent since 2001 which suggests rising costs (and taxes) underpin his concerns.  Of course, breaking everything asunder after it has been put together will involve substantial transition and transaction costs and the key question should be what are the benefits and what are the costs.  If Sudbury explores this option, is Thunder Bay next?  One can make the case that having twin cities at the Lakehead led to economic competition that may have generated some growth and development benefits.  It could be more than a coincidence that amalgamation in 1970 which resulted in monopoly municipal government also coincided with the start of decades of slower economic growth.

Of course, Thunder Bay has enough issues on its plate without embarking on revisiting its own amalgamation.  If anything, it apparently could use some good news and this week has seen a spate of good news stories especially from its local CBC outlet.  There have been stories on the start of school, the excitement of the XXVIII WBSC U-18 Baseball World Cup 2017 which is being held in Thunder Bay and the community spirit it has brought to the fore as well as a story on making clowns feel better given that nasty Stephen King character.  However, the most interesting story has been a set of stories on why Thunder Bay is important to Canada and in particular, this one:

What makes Thunder Bay important? Economically, it's our location. CBCNews Thunder Bay, September 5th, 2017.

Its an upbeat boosterish piece not out of place with the pre-World War I brochures that used to extol Port Arthur and Fort William as the future hubs of the Dominion.   In many respects, little changes in Thunder Bay when it comes to its approaches to marketing economic development.  This morning also had an interview featuring young professionals noting all the potential that Thunder Bay has when it comes to opportunity and that the economy seems to be doing well because restaurants are opening. Don't get me wrong.  I think Thunder Bay is a great place to live and work but I think these types of self-obsessed feel good efforts directed at ourselves reflect a fundamental insecurity and an insular preoccupation with ourselves.  We really should be aiming any marketing campaign outside of the city, not at ourselves and I'm a bit surprised by the relentless onslaught of feel good stories by the local outlet of the national broadcaster.  Perhaps there has been a recent local management change or perhaps the PMO has sent the national broadcaster a directive that there must only be "sunny ways" stories in rural remote regions.

In other upbeat news with a more direct quantifiable economic impact:

Rainy River gold mine prepares to process ore. tbnewswatch. September 7th, 2017. 

Brookfield prepared to exit stake in North American Palladium as metal soars. The Globe and Mail. September 8th, 2017.

North American Palladium posts $8M profit in turnaround quarter. The Northern Miner. September 7th, 2017.

Indeed, the upbeat news from mining and the promised Ring of Fire Road has led to at least one First Nation being "anxious" for a gateway role in the Ring of Fire as this Chronicle Journal story notes.

In related mining news, it would appear the good news from the Ring of Fire has also caught the attention of other interests.  Indeed, it is infectious.

Should Ontario Northland be the railroader for the Ring of Fire? BAYTODAY.ca, September 7th, 2017.

City continues ferrochrome plant pitch. saultstar.com. August 29th, 2017. 

And in Timmins, more mining progress.

Sage Gold bulks up for mill sample. Northern Ontario Business. September 1st, 2017.

So, it looks like everything really is sunny in northern Ontario this week though even when it comes to the mining sector there are some critiques.  I guess we all need to make a conscious effort to spend more time out in the sunshine especially before the winter sets in.

And one last bit of good news, just out from Statistics Canada.  Canada's unemployment rate declined slightly to 6.2 percent.  Thunder Bay's rate for August is 6.5 percent (down from 6.7) and Sudbury's is 5.2 percent (down from 5.4)

 Have a great weekend.