Northern Economist 2.0

Monday, 29 October 2018

Final Thunder Bay Municipal Election 2018 Analysis: Ward Races

It is now a week since the municipal election in Thunder Bay and as the dust settles I have been doing some retrospective looks at the races and outcomes and providing some vote tallies - first for the Mayoral race, then the At-Large competition and in this last election post - the races for the seven Ward councillors. Down below, I have seven figures detailing the distribution of the total vote in each of the wards and they differ from both the Mayor and At-Large results in that in most of them, the winners took a rather sizeable share of the vote - as high as 65 percent in one of the races.



A total of 39,222 ballots were cast for Ward councilors which is lower than the 41,108 cast for mayor.  This suggests that there were individuals who voted for mayor and not for their ward councilors.  This type of difference was also noted in the At-Large race as the total number of votes cast At-Large was smaller than the potential number given the total vote for Mayor.  As for the online/telephone and paper ballot results, there was not substantive difference in the ward outcomes across the two methods with the exception of Neebing where Lynda Rydholm had more paper ballots than Cody Fraser but Cody Fraser won with the online ballots.

The vote share of the winners ranged from a high of 65 percent for Shelby Ch'ng in Northwood to a low of 33 percent for Cody Fraser in Neebing. Current River and McIntyre had the next highest winning vote shares at 59 percent for Andrew Foulds and 50 percent for Albert Aiello.   After Neebing Ward, the next lowest shares were 42 percent for Brian Hamilton in McKellar and 44 percent for Brian McKinnon in Red River.  Kristen Oliver in Westfort won with 47 percent of the vote. On average, the winning vote share across these seven wards came in at nearly 50 percent  - 48.6 percent to be precise.



Given that the total vote share of the winning mayoral candidate was 34 percent while At-Large candidates won with 7 to 11 percent of total votes cast, it suggests to me that most Ward councilors can reasonably claim to have a stronger representative mandate from their respective constituencies than either the At-Large candidates or even the Mayor.  Of course, one of the reasons for the more fractured vote distribution in these other races was the large number of candidates.  Even in the ward races, there is some inverse correlation between the number of candidates and the vote share of the winner.  Neebing with the most candidates at five saw its winner take the smallest proportion of total votes while Northwood with only two candidates had the winner take the largest share.

Still, we have a system of 12 councilors and one mayor with five of the twelve councilors elected At-Large.  This hybrid system was due to the Larson compromise which attempted to deal with the strong interurban rivalries still around at Amalgamation in 1970 and the fear that having only ward based councilors evenly split between the two former cities would result in deadlocks.  We are nearly 50 years out from amalgamation and the case can be made that the time has come to revisit our municipal system of representation and consider whether we should go to either an all At-Large system or all Ward based system.  I think given how Thunder Bay has grown together over the last 50 years, there is less north-south antagonism and rivalry that needs the attention of At-Large candidates.  Moreover, I think the At-Large positions detract from the position of Mayor by adding 5 individuals who also have a city wide mandate.  There is less of a case to be made today for electing 5 mini-mayors especially given that the relative mandates and support for ward councilors is actually stronger.

There is also a case for reducing the number of councilors at the same time.  Thunder Bay has one municipal politician for approximately every 8,500 people while a City like Hamilton (with 15 councilors and a mayor) has one municipal politician for approximately every 33,500 people.  And then there is Toronto which given the latest reforms imposed by Premier Ford now has one municipal politician for about every 101,000 people.  Thunder Bay could easily go down to a system of either 10 councilors plus a Mayor or even 8 councilors plus a mayor with a redesigned set of ward boundaries.   While the actual costs saved are small, it would send a message of frugality to residents given the levels of property taxation were a much mentioned concern.

The new council has the opportunity to consider these types of changes especially as we draw near to 2020 and the 50th anniversary of Amalgamation and the creation of Thunder Bay.

Friday, 26 October 2018

Municipal Election Analysis 2018: Thunder Bay At-Large Race

The results of the October 22nd municipal election in Thunder Bay also saw the election of five At-Large Councilors from a rather large pool of 26 candidates.  There are three new At-Large councilors though given two are former councilors (Giertuga and Bentz) there is really only one new face – Peng You.  Most of the actual change in the composition of Thunder Bay City council came at the ward level where there are four new faces (Aiello, Hamilton, Fraser and Oliver) out of the seven positions.  The new council in the end represents a significant amount of change that will contribute new ideas and approaches but not an overwhelming amount that might lead to a more bumpy ride.

To me this also suggests that dramatic change in council composition may be easier at the Ward level because name recognition is much more important in the At-Large races given the large number of candidates – especially this time around.  In many respects, the race for an At-Large seat is really a race for five mini-mayor positions as once elected they can claim to speak for the entire city whereas ward councilors can be seen as representing specific ward interests.  Every voter gets to vote for five making the total number of votes greater than the actual number of voters creating different dynamics than a ward election.

Figure 1 presents the ranked total ballots for each of the At-Large candidates and they range from a maximum of 20,346 votes for Peng You to a low of 973 votes for Frank Wazinski.  After the two leading candidates - Peng and Aldo - there is a drop off to the next three with not that many votes separating them – Giertuga at 11,718, Johnson at 11,692 and Bentz at 11074 – and then another drop to 8,807 with Larry Hebert.  Thus, given this particularly large pool of candidates, the critical number of votes to win was just over 11,000 or just under 7 percent of the total votes cast (172,523) for At-Large candidates.  This perhaps explains why so many choose to run for Councilor At Large – given that there are five votes per elector – one can win a seat on council with a relatively low percentage of the total votes cast.  Ward races on the other hand seem to have stiffer competition and a larger share of the total is required to win.


Figures 2 to 4 plot some rather dizzying figures of the distribution of the vote for the paper ballots, online telephone ballots and total ballots and they generally parallel each other pretty closely.  Unlike the mayor's race which I examined in my last post, there was no major difference between online and paper ballots among the front runners.  Peng You essentially captured about 12 percent of the total ballots cast which in the end does not seem like a particularly strong mandate.  On the other hand, perhaps the better point of comparison is the number of votes cast for Mayor which provides a more accurate estimate of the number of voters participating.  Of the 41,108 individuals who cast a ballot for mayor, one can argue that 20,346 of them cast a ballot for Peng You or nearly 50 percent of voters.  




Interpreted this way, Peng’s accomplishment is quite astounding because if one looks at the race for mayor, the winner only captured 34 percent of votes cast.  In the same manner, the next highest At-Large candidate – Councilor Ruberto at 14,745 – captures nearly 36 percent of the voters –also slightly better than the mayor’s performance.  Of course, what is also of note is that if one takes the number of votes for mayor – 41,108 – and multiplies by the number of votes you are allowed to cast At-Large, you get at pool of At-Large votes equal to 205,540.  However, the total number of votes cast At-Large was only 172,523 – about 16 percent less meaning that some chose to vote for fewer than five At-Large candidates.

In the end, these results are interesting because they suggest that at least two of the At-Large winners may be more popular than the mayor which all but ensures they may want to consider a run for mayor the next time around.  However, that is four years away and a lot can happen during four years that can erode your political capital. It is always risky to be more popular than the boss and standing out can also make you more of a political target.  Still, one cannot deny that the stand out feature of this year’s At-Large race was the victory of newcomer Peng You given the energy of his campaign and the size of his win.  I suppose local sentiments may be best summarized borrowing from the words of the immortal Alexandre Dumas – it was All for Peng and Peng for All!

Wednesday, 24 October 2018

Municipal Election Analysis 2018: Thunder Bay Mayoral Race

The results are in and former provincial Liberal Cabinet Minister Bill Mauro will be the next Mayor of Thunder Bay.  Congratulations to Mayor Mauro as well as all the hard-working candidates who chose to run for office.  Thanks also to outgoing council members who have seen years of public service.  Public service is never easy and putting your name forth as a candidate and serving as an elected official is an important act of participation in our democracy.

The new Mayor-Designate took 34 percent of the 41,108 votes cast for mayor edging out soon to be former City Councillor Frank Pullia who took 32 percent of the vote.  The choice of mayor was in many respects part of a general desire for change at the municipal level given that both of the higher profile council incumbent candidates for mayor went down to defeat.  Indeed, the new council represents a significant but not overwhelming amount of change with a number of new faces as well as new but familiar faces – as in the example of the new mayor.

Yet, the aspect of this race I found the most interesting was the collapse of the protest vote which saw Shane Judge garner only 5,155 votes (13 percent of the total) compared to his 2014 total of 9,531 which was a 26 percent share of the total.  Even more interesting was the collapse of support for Iain Angus who as a Councillor at Large in 2014 won with 15,861 votes and who as a candidate for mayor in 2018 was only able to manage about a third of that at 5,816. 

One wonders if this signals a general rightward shift in the Thunder Bay electorate given at least my perception of the generally left of center positions of Iain Angus.  Indeed, this may reflect a weakening of the labour vote in general given that Angus was endorsed by the Thunder Bay District Labour Council for Mayor and none of the five at large candidates endorsed by the Labour council won either.   Only three of the Labour Council ward endorsements won (Foulds, Ch’ng and Oliver). Or it may reflect a shift in voter priorities towards lower property taxes given that taxation was continually brought up as an issue during this campaign.The new mayor and several of the winning candidates have emphasized that taxation rates were an issue.

Figure 1 presents the ranked votes by mayoral candidates and most starkly illustrates how despite there being four high profile candidates, it was essentially a two-person race.  Indeed, one wonders what results would have been like if the provincial liberals had won the spring election and Bill Mauro had not entered the municipal race.  It is possible that in the absence of Bill Mauro’s entry, Frank Pullia might very well be the mayor today.  

Much is being made of the success of the new online/telephone voting system so a breakdown by type of ballot is interesting.  While voter participation is up above 50 percent this election and voter totals are up I would not venture to say that more convenient online voting options have resulted in a dramatic surge in participation.  Those who want to vote will vote no matter what the system is and the chief advantage of the new system is that it is more convenient for many people. While 41,108 ballots were cast for mayor this election, last time it was 37,123.  The result was an additional 3985 ballots cast – an increase of 13.4 percent.  This is actually a respectable increase but whether it was due to an appetite for change or the convenience of online voting will take a few more elections to see if the increase is sustained.

Of the 41,108 ballots cast for mayor, 15,249 - 37 percent- were paper ballots while 25,775 – 63 percent – were online/telephone ballots.  The preference does appear to be for the convenience of online/phone voting.  Figure 2 shows the distributions of the paper mayoral ballots. 

Figure 3 shows the distribution of the online/telephone ballots and Figure 4 the total distribution.  The results for the paper and the online/telephone ballots generally parallel each other but a closer examination shows that among the paper ballots, Frank Pullia had 33 percent of the vote and Bill Mauro 32 percent while in the online/telephone results it was 35 percent for Bill Mauro and 31 percent for Frank Pullia.  Overall, Bill Mauro became Mayor with 34 percent of the total vote and Frank Pullia was second with about 32 percent.



This is quite an interesting result because it raises the question as to whether the outcome might have been different if only paper ballots (which incidentally are also tabulated electronically) had been used.  It does appear that Frank Pullia had an edge with more traditional medium voters while Bill Mauro’s edge was with online voters.  This is also interesting given that the Pullia campaign was very social media intensive meaning it was fully engaged with the new technology.

This is also an interesting result because given the overall turnout – about 51 percent – and the number of candidates splitting the votes resulting in the winner only holding 34 percent of the total vote.  It means the mayor in the end was elected by about 17 percent of eligible voters.  This is not Bill Mauro’s fault by any stretch of the imagination.  People who are unhappy with small pools of voters rather than a majority deciding their leaders should make sure they get out and vote. On the other hand, perhaps recognition of this low effective support is why the incoming mayor seems relatively low key and unambitious given that his goal is to focus on one or two soft infrastructure projects - like an indoor tennis facility - rather than roads and bridges. I suspect many voters will be surprised to find out a tennis facility is going to be one of the new mayor's priorities.

In any event, these results should provide food for thought for many analyses to come. Next time, I will take a look at the At-Large results.

Sunday, 21 October 2018

Pictures of a Presentation

I did my Lakehead University In Conversation presentation in the Fireside Room at the Brodie Library yesterday.  My talk was titled "Going from Chicago to Duluth of the North: Thunder Bay’s Economy in the Past, Present, and Future," and was quite well attended with about 30-35 members of the community present including old friends, new friends and even several candidates for municipal office.  Lakehead's In Conversation series is a very important venue for sharing university research and expertise with the broader community and an important form of engagement. A couple of pictures below including some shots of your Northern Economist in action.  Thanks to Peter Boyle for passing on some of the shots.

And of course, a photo with Peng You.

I will be posting the slides sometime later this week here on my LU Department web page.

Wednesday, 17 October 2018

Thunder Bay's Economic Evolution: A Brief History

From its origins as a fur trade company headquartered at Fort William, to the development of the grain and forest sectors, Thunder Bay’s economy has seen ebbs and flows over the course its history.  Key to its modern economic development was the federal government decision to route the Canadian Pacific Railway through the Lakehead and the arrival of the transcontinental railway in the 1880s.  Indeed, without this explicit government intervention it is unlikely Thunder Bay would have developed into a city as large as it is today.  Government action in assorted forms has been one of the pillars of Thunder Bay’s economy. 

Transportation is another pillar of Thunder Bay’s economy.  During the first decade of the twentieth century, there was a massive boom rooted in infrastructure building for the transport needs of the western Canadian grain economy that saw the twin Lakehead cities of Port Arthur and Fort William become the largest grain port in the world.  At its peak, over 30 grain terminals lined the waterfront.  Indeed, growth was so rapid that many believed the Lakehead would become the Chicago of the North.  Population quadrupled between 1901 and 1911 and the real per capita value of new construction was never higher than during this period.

Yet, as the twentieth century wore on, there was growing realization that as well as Thunder Bay was doing, it was not going to be the Chicago of the North.  The remainder of the twentieth century saw continued but slower growth and Thunder Bay’s ultimate evolution was more akin to Duluth Minnesota – the American Lakehead – rather than Chicago.  Thunder Bay’s economic growth slowed in the wake of World War I and the Great Depression and resumed during the resource boom of the 1950s and 1960s.  Indeed, natural resource extraction and processing whether forestry or mining have always been another pillar of Thunder Bay’s economy.

Port Arthur and Fort William amalgamated to form Thunder Bay in 1970 ending the urban competition that in retrospect appears correlated with better economic performance given the economic slowdown that ensured.  After 1970, labor saving technological change, aging capital stock, a shift in world grain markets and increasing international competition also eroded the competitiveness of Thunder Bay’s grain transport and forestry sectors culminating in the forest sector crisis, which saw substantial job losses in Thunder Bay and the surrounding region.  These job losses were aggravated by high energy costs with respect to electricity which were especially damaging to the energy intensive pulp and paper sector.  Total employment in Thunder Bay has never recovered from the peaks reached in the first years of the twenty first century.

In the wake of the forest sector crisis, recent years have seen a stabilization of the Thunder Bay economy and a shift in its composition towards employment in research, regional health and social services, and higher education.   This base continues to support a growing range of retail and service activities particularly in hospitality and accommodation oriented around a growing tourism scene that has drawn some international attention.  Nevertheless, economic growth has been slower compared to the rest of Canada and Ontario. While the unemployment rate in Thunder Bay is low, it is because the labor force has shrunk faster than employment as a result of an aging population and youth out-migration.  Population in Thunder Bay peaked in the 1990s and has declined slightly since.   While the First Nation’s population has been expanding, its future economic engagement hinges on the long-term success of initiatives to expand human capital via education and training.


As for the future, tomorrow is yesterday as Thunder Bay’s economic future will still rely on its traditional three pillars – government, transportation and natural resources.  These pillars will of course make use of new knowledge and technology and will require innovative entrepreneurial vision to recognize and implement new opportunities. Thunder Bay’s transportation infrastructure and its pivotal location on the east west transport corridor, the role of regional government services and the ongoing potential of the mining sector combined with information technology and the knowledge economy will be the economic forces propelling its future.

A version of this article was originally composed for Lake Superior News appearing there October 16th in advance of the October 20th Lakehead University In Conversation Talk at Brodie Library titled Going from Chicago to Duluth of the North: Thunder Bay’s Economy in the Past, Present, and Future.  

Friday, 12 October 2018

Municipal Spending Ranges by Key Categories in Northern Ontario Cities

Given the ongoing municipal election campaigns in Ontario, I have been focusing a fair amount of my blogging activity on municipal public finance issues.  In a recent post, I looked at the Net Municipal Levy Per Capita (NMLPC ) for the five major northern Ontario cities for the years 2007 and 2017. In 2007, the NMLPC was highest in Thunder Bay at $1,216 and lowest in Sudbury at $1,041.  By 2017, spending was highest in Timmins at $1,651 (with Thunder Bay second at $1,641) and lowest in Sault Ste. Marie at $1,434.  If one compares the growth rates in the per capita levy, they were actually highest in Timmins at an average of 4.6 percent annually and lowest in Thunder Bay at 3.5 percent annually.  I also compared the growth of the NMLPC to household income growth and showed that per capita municipal spending has been rising faster than average household income raising the question of sustainability.

In this post, I want to drill down a bit in the total expenditure numbers and compare spending for these five major northern Ontario cities in a number of key municipal expenditure categories.  The data is from the 2017 BMA Consulting Municipal Report and was available for key expenditure categories in terms of the levy for the category per $100,000 of municipal tax assessment.  In order to standardize comparison, I have reproduced the net levy graph (Fig 1) but per $100,000 of assessment rather than per capita as in the last post.  To this I have added graphs comparing general government (Fig 2), fire (Fig 3), police (Fig 4), paved roadway spending (Fig 5) and winter control (Fig 6).  Keep in mind that this is data for only one year and there are differences in population size and geographic spread across these five cities as well as any unique local circumstances that may affect spending.



Nevertheless, the results are illuminating in that there is no one size fits all pattern of spending across these five communities when it comes to these key municipal expenditure categories.  The net levy per $100,000 of assessment ranges from a high of $2,136 in Timmins to a low of $1,482 in Sudbury.  Thunder Bay spends the most on general government (i.e. administration) at $257 per $100,000 of assessment and Timmins the least at $65.  North Bay spends the most on fire services at $283 per $100,000 of assessment and Sudbury the least at $160.  In terms of policing, Thunder Bay spends the most at $503 per $100,000 of assessment and Sudbury the least at $320. 



When it comes to paved roadway expenditure, Sudbury spends the most at $258 per $100,000 of assessment and Sault Ste Marie the least at $101.  Finally, all five of these cities experience harsh winters and the need to plow roads and when you look at winter control spending, Timmins spends the most at $237 per $100,00 of assessment and Thunder Bay the least at $48 per $100,000 of assessment.  This last category however is the most likely to be the subject of large fluctuations from year to year given local weather conditions.  My guess is the winter of 2017 was pretty bad in Timmins. 

Overall, there are large differences in spending across these categories across these five cities.  The spending in these categories on average across these five cities in 2017 accounted for about two-thirds of the net levy – a significant proportion.  It would be interesting to know what the incidence of fires is in North Bay and Thunder Bay given the size of the expenditure in these communities compared to the others.  Given high homicide rates in Thunder Bay, it is understandable perhaps why it spends the most of police of these five cities.  Yet, given that the average proportion spent on governance in these five cities is about 8 percent of the net levy, one wonders why Thunder Bay spends 14 percent and the Sault is at 11 percent compared to say 3 percent in Timmins or 9 percent in Sudbury. 

Ratepayers in each community should be asking themselves how their community compares to the others and what may be driving the differences.  Is the best value for money being provided?

Tuesday, 9 October 2018

Trying to Understand Thunder Bay's 2018 Municipal Election Campaign

It is perhaps a sign of advancing age that I am finding it increasingly difficult to understand what Thunder Bay’s municipal election campaign is actually about.  I found the 2014 municipal election to simply be a wasted election as despite issues like municipal fiscal sustainability, the Kam River Bridge, and the sale of public assets, the entire election was simply fixated on the events centre.  This time around, the long-term fiscal sustainability of municipal finances is still an issue as is the Kam River Bridge to which can be added the city’s social fabric as well as Thunder Bay’s economic development and yet to date it appears to have become – and here I suppose I am dating myself again - a Seinfeld Election.  That is, despite what are acknowledged by many to be a host of issues, it appears to be an election about nothing in particular.

Aside from campaign signs dotting the landscape at strategic street corners, I have met only one candidate on my doorstep and only two have left literature.  I have yet to become aware of any scheduled public debates.  This is during the course of a campaign with a record number of candidates – 11 for the position of Mayor alone with another 26 vying for the At-Large councilor positions – which no doubt complicates the traditional debate framework.  Indeed, how can we have a meaningful discussion in which 11 candidates for Mayor can outline how they see the state of the city and offer analysis and solution?  Incumbents for the At-Large positions must be silently laughing all the way to the proverbial bank given the difficulty of numerous candidates swimming like so many salmon upstream to stake out a position and gain visibility.   

With traditional election campaigns difficult to conduct, this appears to have become Thunder Bay’s truly first complete social media election campaign which complements the debut of internet voting nicely  Many of the candidates – but not all - appear to have developed extensive web presences and have Facebook profiles full of photos and videos showing smiling candidates in assorted municipal action poses.  There are catchy slogans and mission statements that describe themselves as accountable community activists, serious leadership, concerned with the social fabric, and even showing transformative leadership.  

There are candidates claiming to be working for you, others putting Thunder Bay first or working together for a Thunder Bay that works, some posing with old family friends and seniors, and many updated profile photos showing youthful smiling vigour.  If they have received endorsements, they are highlighted along with any favorable media coverage. Indeed, if one were to judge Thunder Bay by the Facebook profiles of its municipal candidates one could only conclude that our community is definitely one big happy place full of wonderful smiling people whose major source of gainful employment is posing for pictures. 

There are even some alliances being formed between candidates as they campaign together.  There is one slate of five councilor At- Large candidates that aims to put people and the planet first under a time for change slogan.  Then there is another alliance between one incumbent and one new entry in the At-Large race that is marketing itself as political twins working for you.  I suppose this is a political variant of a two for the price of one marketing ploy.  Or perhaps, vote for one, get one free.

In the end, all of this seems to me to be mainly style over substance.  Needless to say, election campaigns have always been dominated by style over substance with serious policy discussion seen as a dangerous luxury – especially for incumbents.  In the end, polite conversation at least in the social circles I move in appear to have narrowed down the issues in this election to three: a need for major change in representation given that many on council are long in the tooth, taxation rates and cost-effective municipal services, and social issues with an emphasis on crime and public safety.  If this is not be another wasted election, we need candidates to address how they would reduce crime and improve the social fabric and how they would pay for it given what has been a steadily rising municipal tax burden that has shifted largely to the residential ratepayer. We cannot afford to waste another election.

Thursday, 4 October 2018

Thunder Bay's Tax Levy Debate

It would appear that the municipal election campaign is starting to heat up with the outgoing Mayor taking issue with the Thunder Bay Chamber of Commerce's recent election policy document which among things argues that the City of Thunder Bay's tax levies have increased by an annual average of 3.36 percent over the last decade.  Their graph is for the period 2012 to 2022 which includes projections for the 2018 to 2022 period which is not exactly the last decade. The Mayor maintains that the average tax levy change over the past eight years is only 2.4 percent - after new growth in the tax base was factored in.

This is all really quite entertaining because what matters is the increase in the total tax levy - that is what is being drawn from the tax base and used to fund spending.  The tax levy is essentially an expenditure estimate for taxpayer assisted spending and in the end what matters is the total amount of the revenue taken in and its growth and not whether some of it comes from the existing base and some of it is coming from new assessment growth.  The latter argument is really only being advanced to deflect attention from the overall increases.

So, what are the numbers?  Well, here is my two cents worth.  The accompanying figure plots the annual tax levy increase for the period 2008 to 2018 based on total tax revenue numbers from the Financial Information Returns from the Ministry of Municipal Affairs and Housing (with the exception of the last couple of years which come from City of Thunder Bay budget documents).  If you take the average, it comes out to comes out to 3.3 percent which is pretty close to the Chamber estimate.  If you take the average for only the 2011 to 2018 period, you get an average of 3.4 percent.  The last four years average out to 3.7 percent which is a rate well in excess of the rates of inflation and income growth in this city but the number is skewed by the 5.7 increase in 2015 - the year right after the last election. In the end, the tax levy in Thunder Bay has increased at an average of over 3 percent annually for the last decade and based on the chamber numbers is projected to continue doing so.

Monday, 1 October 2018

Municipal Election 2018: Spending in Northern Ontario Cities

We are about three weeks out from the municipal election and across northern Ontario, voters will be looking for information on which to base their decisions.  Inevitably, some of that decision making will be based on comparisons of how municipal ratepayers feel they fare relative to other similarly sized cities.  Taxes are often the basis of such comparisons, but municipal property taxes are a function of what municipalities spend so another basis for comparison is expenditure.

Among the many municipal statistics provided in the annual BMA Municipal Study is fairly detailed comparisons of spending on municipal services.  The aggregate number on which any comparison can begin is what is known as the net municipal levy per capita (NMLPC).  This is an estimate of what the spending need for a municipality is to provide its services – as determined by the city administration and elected council – and ultimately is what feeds into required tax revenues.

Now the BMA reports are quite explicit in qualifying what a NMLPC measure can and cannot do and what its limitations are.  Spending per capita can vary as a result of different service levels as well as type of service.  There are also demographic and socio-economic reasons why spending may vary across cities and per capita spending is simply an aggregate and not an indicator of value for money.  However, the BMA maintains that changes in per capita spending reflects changes in total spending relative to population and “Increasing per capita expenditures may indicate that the cost of providing services is outstripping the community’s ability to pay, especially if spending is increasing faster than the resident’s collective personal income.”

So, the accompanying figure 1 shows the NMLPC for the five major northern Ontario cities for the years 2007 and 2017. In 2007, the NMLPC was highest in Thunder Bay at $1,216 and lowest in Sudbury at $1,041.  By 2017, spending was highest in Timmins at $1,651 (with Thunder Bay second at $1,641) and lowest in Sault Ste. Marie at $1,434.  If one compares the growth rates in the per levy, they were actually highest in Timmins at an average of 4.6 percent annually and lowest in Thunder Bay at 3.5 percent annually.

However, in all of these cities, per capita spending grew faster than population suggesting that there was a deepening of per capita spending.  That could be the result of a desire to improve services or it can reflect a weakening economic base and the spreading of costs across fewer people.  Over the last ten years, population actually shrank in four out of five of these cities – the exception being Sudbury which saw its population rise 2.3 percent over the last ten years.  Yet even in Sudbury, spending rose faster than population given t per capita expenditure is growing.

More interesting, is figure 2 which plots the average annual growth rates of the net municipal levy per capita (from 2007 to 2017) and average household income (2010 to 2017). In all of these cities, per capita municipal spending has been rising faster than average household income.  So, it would appear that in all of these cities, municipal spending has generally risen faster than both population and income.  This suggests that recent years have seen municipal spending outstrip the resource base in these communities as measured by population and income.  Indeed, sustainability for sub-national governments has been outlined as a key concern in a recent federal PBO reportMunicipal ratepayers in all five of these cities should be asking how candidates for their ideas on how they plan to address the fiscal sustainability of their cities?