Thunder Bay’s per
capita municipal debt rose from $1,618 in 2015 to $1,839 in 2018 – an
increase of 14 percent. Over the same
period, its provincial municipal counterparts on average went from $699 per
capita to $758 – an increase of 8 percent.
As a result, by 2018, the per capita municipal debt in Thunder Bay was
essentially more than twice that of the average in Ontario. One might creatively argue that a reason for
our higher debt levels is that we have been keeping our property taxes below
the provincial average in an effort to be competitive with other municipalities. However, it turns out that is really not the case once you adjust for population.
The accompanying figure takes data from the Ontario
Financial Information Returns and past City of Thunder Bay Budgets to make a
comparison of average per capita own purpose municipal tax revenue for Ontario
and Thunder Bay. For Ontario as a whole,
between 2009 and 2020, per capita property taxes rose from $1,176 to $1,492 –
an increase of 27 percent. (Note that the Ontario tax revenue numbers for 2019
and 2020 are estimates based on linear extrapolation as the FIR provincial numbers
go to 2018. Population was obtained from Statistics Canada). Meanwhile, Thunder Bay’s per capita municipal
tax revenue over the same period goes from $1,320 to $1,879 – an increase of 42
percent. Thus, Thunder Bay not only has
more municipal taxes being paid per person in every year since 2009 but it has
increased faster than the provincial average.
In 2009, the average municipal taxes per person were $144
higher than the provincial average whereas by 2020 they were $387 higher. Put another way, Thunder Bay’s per capita municipal
taxes were 12 percent higher than the provincial average in 2009 and are now 26
per cent higher. It has not helped that since
2009 Thunder Bay’s population – that is the City of Thunder Bay and not the CMA
– has declined by 1 percent whereas Ontario’s has grown 13 percent. Total municipal tax revenue (as opposed to
per capita) between 2009 and 2020 has actually grown 44 percent in Ontario and
41 percent in Thunder Bay but Ontario’s increase in being spread over a larger
population while Thunder Bay’s is being spread over a stagnant population base –
hence the surge in per capita municipal taxes. Creative councilors and administrators at the City might reply that municipal property taxes are not paid per capita, that they are paid per "bungalow" and we are "mid ranked" there. My response to that is ultimately, people pay taxes and not their bungalows.
So, not only are we a higher debt municipality but we are
also a higher tax municipality and a slower growth municipality. The sustainability of rising taxes on
essentially a stagnant resource base given the dearth of major industrial and
commercial development is a serious issue but one that rarely seems to be at
the fore of debate at municipal council.
City Administration now is apparently on the basis of “new and emerging information”
recommending
that the vote on the new $33 million Indoor Turf Facility be postponed until
November 2021. Given that there is an
anticipated COVID-19 budgetary shortfall, economic uncertainty, a failure to date to obtain financial
support from higher levels of government for the facility, a high debt level and a program
spending review under way (not to mention the private sector is already building
a similar facility) it stands to reason that they take a pause on this one - for now.
It is not that Thunder Bay would not benefit from new all
season sports facilities for its population but at what price? Are we willing to accept even higher debt and
taxes at a time when we already have more of both relative to the provincial
average? Do we want a “special one-time tax
levy” to deal with COVID-19 and an indoor turf facility? Our municipal finances are already quite
special when compared to the provincial average as are our other problems ranging from crime to our water system travails. How much more special do we want to be?