Thunder Bay City Council's Increasingly Out of Touch Vision for Thunder Bay

 

If history teaches us anything, it is that periods of pandemic are ultimately associated with eras of great economic and social change and disruption.  One only has to go back to the Black Death or The Spanish Flu to see the effects on labour markets and societal attitudes and ultimately all aspects of life.   Much like the wake of 9/11 which saw enhanced security measures entrenched forever, once the pandemic has subsided, there will not be a full return to the world we had before.

 

This era will be no different and in Thunder Bay all of these changes coincide with an increasing sense of disquiet many residents feel with respect to the direction the City has been taking.  Along with continuing high rates of crime, racism and mental illness, the lineups at food banks have been increasing and there seems to be a return to a wild west frontier mentality with the increasing number of people being stopped by police for driving under the influence. 

 

Moreover, there seems to be  an increasing sense of detachment from the public by the Mayor, City Councillors and Administrators whose recent decisions with respect to major capital projects such as the proposed Turf facility and new police facilities, the silence on the epidemic of home plumbing issues linked to City water, and a preoccupation with what seem to be superficial issues like tourism signs and future sporting events, all seem to conflict with what appear to be more pressing issues.  The discussion of rising taxes when other cities such as Kitchener or Edmonton have decided to keep their increases closer to zero provides another disconnect with residents.

 

The City is in the midst of major program reviews and yet City Councillors seem to shelve much of the advice provided while continually talking about the cost savings they have generated.  They are also being presented with a new master plan on regional paramedic services whose text underlines the ominous future of a city with stagnant population growth and yet ever rising needs for the services of paramedics due to aging as well as a population more prone to a variety of social ills.  With the 2021 budget coming, one is left with the impression that ultimately, the Mayor and Councillors are gearing up for another major tax hike to meet all of these needs given their unwillingness to prioritize.

 

So, the question is what kind of vision is driving the approach of successive City Councils and the Administrators and the policy apparatus in Thunder Bay?  One would venture that Thunder Bay City Council suffers from an increasingly stale 50-year old vision of what Thunder Bay needs.  That vision could be summarized as follows:  Thunder Bay is a regional center and strategically located full-service high-tech urban oasis set in a pristine natural wonderland with a wonderful quality of life on crucial east-west trade and transport routes whose full potential is unrealized.  Indeed, the entire City’s potential is unrealized and what Thunder Bay needs is continual infrastructure investment to attract people and effective communication of our potential to convey the message of how wonderful we are.  While Thunder Bay may have social problems, they are not any worse than other places and have been blown out of proportion by the national media. City residents need to have a positive attitude, stay the course on this strategy, and we need to invest in the public services and infrastructure to make it all happen.

 

This is in essence what has been driving policy in Thunder Bay since amalgamation.  Lost in this vision of the future is the fact that since 1970, the City has stayed static in population, its industrial mainstays have largely disappeared, and its grain transportation role fallen to a shadow of its former glory.   The fact that people often move to communities because of job opportunities seems lost on Thunder Bay’s governing elites.  Anyone pointing out the fact that the City has become a welfare dependency given that over 30 percent of employment is now public sector or tied to government grants is a “Negative Nellie.”  While there indeed has been some job creation in the knowledge economy and the health and education sectors that have helped provide a market for some entrepreneurs, it remains that this has been largely a rear-guard maintenance action that has had difficulty keeping pace with the employment losses.

 

Key to this vision is the level of municipal spending, employment and infrastructure investment designed to keep the economy going via construction projects.   This spending is financed by government grants and by tax increases levied increasingly on the residential tax base given the departure of the industrial mainstays who provided the base for the past development of a very generous level of municipal spending.  Tax increases are justified by “a build it and they will come philosophy” even though after fifty years we have built a lot and population is still the same.  When the point on practically zero population growth is mentioned, the response is to mention that we have large numbers of temporary residents whether they be students or visitors from outlying First Nations who need services.  However, we do not seem to have numbers documenting this aside from the numbers City Councillors and Administrators like to throw out - numbers like “20,000 or 30,000 more” during meetings without good empirical evidence.  Most importantly, there is the unanswered question as to why municipal ratepayers should even be providing these additional population services out of a local property tax base?  Where are the provincial or federal governments in all of this?

 

When the high level of taxation is mentioned, the response is that yes, the tax rate is higher here but our cost of living is so much lower so it is “okay” to have local residents pay more on their property taxes to provide services comparable to other places.  From each according to their abilities, to each according to their needs.  However, by cost of living, City Councillors generally mean that we have lower average property prices without realizing that the reason we have lower property prices is because of the lack of population growth and the fact that higher tax rates have been capitalized into lower property values.  Indeed, property prices are as high as they are in Thunder Bay because of fairly effective supply management on new home building and low interest rates.  Then there is also the need to differentiate between costs and ability to pay for those costs.

 

Take for example a comparison between Toronto and Thunder Bay.  An average property in Toronto now sells for about one million dollars whereas an average property in Thunder Bay is closer to 300,000.  Given the average 2020 property tax rates of 0.599 in Toronto and 1.563 in Thunder Bay, the property taxes paid on an "average" property would be $4,689 in Thunder Bay and $5,990 in Toronto – 28 percent higher in Toronto.  The problem is that the basis of comparison should be similarly priced properties or similar properties (eg. a three bedroom bungalow in both locations) in which case the Thunder Bay home often pays substantially more.  If you have a $500,000 property in Thunder Bay – which many people now do – you are paying as much in property taxes as a property worth three times that in Toronto. 

 

And then there is the ability to pay for those taxes which is financed out of current income.   According to the NUMBEO cost of living comparison website, in Thunder Bay, the average monthly salary after taxes is $2,783 while in Toronto it is $4,214 – 51 percent higher in Toronto.  Aside from rent and commuting costs, the cost of living for just about everything else is not that much lower in Thunder Bay compared to Toronto. 

 

So, we have an expensive vision of local and regional municipal government spending based on an economic base that no longer exists.  That vision is justified by a “build it and they will come philosophy” which after 50 years, has yet to yield results.  When the Mayor and Council are criticized – and assuming they choose to respond and do not just ignore you or disparage you as a crackpot - they respond with dubious arguments about how our cost of living and property values are lower thereby resulting in lower taxes meaning they can be raised more because they are a bargain compared to Toronto.  Of course, if the cost of living here was truly lower resulting in a surplus for local residents in excess of what they need, why we might not want to keep money in our own pockets rather than simply hand it over to the local municipal-industrial-construction complex is a question that Thunder Bay politicians do not want to answer. 

We are now in a time of great change and Thunder Bay will need to adapt as well as deal with the legacy of its past decisions. And yet, the old inflexible vision goes on, and so unfortunately does the sense of alienation felt by many local residents.  Thunder Bay needs a new vision and one that is sustainable given the current tax base.

 

 

Input Into the Federal 2021 Budget Process

 I had the opportunity to present via Zoom at the House of Commons Standing Committee on Finance today. It was a very good experience with interesting questions and discussions afterwards. Here is the prepared text of the remarks I delivered during my five minutes:

Dr. Livio Di Matteo

Professor of Economics, Lakehead University, Thunder Bay, Ontario

 

Presentation for House of Commons’ Standing Committee on Finance, Pre-Budget Consultations in Advance of the 2021 Budget, December 11^th, 1-2pm

 

Good Afternoon:

 

Thank you for the invitation to speak at these Pre-Budget Consultations in Advance of the 2021 Budget. I commend the Committee for reaching out into the academic community of economists for public input on this important process.

 

It has been said many times that the COVID-19 pandemic is an unprecedented event in recent history, and this context frames my input into the federal budgetary process.

 

The Fall 2020 Economic Statement documented the unprecedented effects and response to the COVID-19 pandemic. For fiscal year 2020-21, real per capita revenues in $2014 will have declined by 20 percent from year previous while spending is up by 70 percent.  In real terms, this is the highest per capita amount ever spent in Canadian fiscal history (nearly $16,000 in 2014 dollars).  As a share of GDP, the projected deficits will be the second largest in Canadian fiscal history- exceeded only by World War II. 

 

The Fall Statement reveals spending eventually declining and a deficit approaching one percent of GDP by 2025-26 but also a federal net debt rising to $1.5 trillion and a net debt to GDP ratio remaining in excess of 50 percent. Despite current low interest rates making current debt look manageable, it remains that any sudden future shocks – to the economy or even interest rates - could be more difficult to manage as debt burdens rise.

 

The size of the initial fiscal response to the onset of the pandemic in the February to April period of 2020 was appropriate.  However, the continuing unprecedented fiscal response generated results that have not paralleled the fiscal support provided.  The fiscal assertiveness of the federal response to the pandemic was not matched by assertiveness in targeting the response as might have been afforded under the federal spending power or the power of quarantine that exists under the Constitution.  

 

Moreover, much of the spending went to individual income transfers in excess of the pandemic generated income losses.  After all of this unprecedented response, we are now in the midst of a more severe second wave that threatens the economic recovery that began over the summer.

 

The Federal 2021 budget must learn from the past and better target any additional projected fiscal response with a view to long-term economic recovery and growth.  The additional spending must be directed towards productivity boosting investments.  Even prior to the pandemic, the business investment to GDP ratio had been faltering.  While the short-term income support provided at the peak of the pandemic was important, if we are to continue to spend at these record levels, then there must be more to show for it.

 

Government spending priorities should be directed towards initiatives for boosting our long-term productivity via investment in physical and human infrastructure. Public infrastructure in roads and transport, bridges, communications, schools, health care, water, sewer and environmental systems require investment.  Education has taken a major blow during the pandemic and we need to ensure that students at the elementary, secondary and post-secondary level, do not fall behind in educational achievement and opportunities and reduce future labour productivity growth. 

 

Then, there is the matter of our national defense and security in a more multi-polar and unstable world that requires equipment and resources and vision.  And there is a need for private sector investment in sectors producing goods and services that we can export and continue to earn our way in the world. If our export markets falter and our incomes drop, there will be no international emergency response benefit payments offered to us.  The federal government, therefore, should work with the private sector in assessing its investment needs.

 

Historically, excessively large amounts of government spending are not well correlated with long-term economic growth.  It is not that government cannot help the economy.  However, effective government requires knowing when to spend and when not to spend and more importantly, what to spend the money on. 

 

If we are to embark on a program of infrastructure spending, we must ensure that projects with the best return are selected. Assorted public projects should be assessed by an arms-length panel of key leaders with expertise in business, accounting, engineering and economics who can make recommendations in areas of national interest. It would be extremely unfortunate if federal infrastructure money flowed to community or sports centres rather than say roads and sewers simply because "shovel ready" plans exist for the former but not the latter.

 

Thank you.

 

 

Dealing with the Real Issues at Thunder Bay City Council

 

Thunder Bay City Council has a packed agenda this week but among all the items there is not one mention of the crucial issue now affecting close to 3000 residents in the city – the issue of the continued plague of leaky pipes and resulting damage to homes and businesses.  Compounding all that has been happening on this front,  is that there are increasing reports of heavier chlorine smells in city tap water.  There is no point in asking your City Councillor why that is as they have probably been advised by the City’s lawyers not to talk about anything related to water.  So, as usual we are left having to surmise what is going on and my educated guess is that there have been so many line breaks and repairs in the city water system that they have upped the disinfecting of the water to prevent potential contaminants from getting in to the water.  We are fortunate that Thunder Bay's Mayor and council is not responsible for information updates on the local COVID-19 situation given their stoic reticence on issues affecting public health and welfare.

 

However, the City does not want to talk about water so we will have to focus on other issues in their hefty agenda this week.  Among the pressing issues on the Monday evening agenda are: waterfront trail development, an update on protective shields for transit drivers, and advocacy for a federal basic income program. Of these, having the City advocate for a federal basic income program is the one where Thunder Bay City Councillors have the most expertise.  After all, Thunder Bay has been running a basic income program for the members of Thunder Bay City Council since 1970 and we are still evaluating the value for money of the program given the annual spending on a mayor and twelve councilors. So I suspect that several hours will be devoted to discussing basic income and there will be many eloquent words on the need to alleviate suffering and hardship that is not related to the provision of basic municipal water and sewer infrastructure.

 

The more interesting item later this week will be the discussion of responses to the Grant Thorton Program Review that will be provided to council by City Administration.  Unfortunately, given that Superior North EMS and the TB Fire Rescue are undergoing their own separate strategic planning processes, they are not included in the report which seems paradoxical given that it is a systematic review of the entire city’s operations.  One could ask either the Mayor or the councilors about this but they have probably been advised by their lawyers not to respond. 

 

The responses from administration have been divided into implement, further review and no further action.  The most interesting items in this report are the further review because they contain some of the most contentious and larger ticket cost items and include: discontinuing private child care, moving city run Pioneer Ridge to an alternative model of care, the sale or closure of the Jumbo Gardens Community Centre, Vale Community Centre and Boulevard Lake Beach, “service adjustments” (which one suspects is adminspeak for reductions) for Chippewa Park and the Canada Games Complex, the closure of both remaining city owned golf courses and finally, water and sewer operations.   

 

The last item in particular is understandable as still under review as there has probably been advice from lawyers to the city of Thunder Bay not to deal with any water and sewer issues publicly.  Indeed, one suspects the Mayor and Council would probably be most  happy if their lawyers would advise them not to discuss or answer any questions at all about anything in the program review.

 

The meetings tonight and later this week will feature a lot of talk and posturing but in the end little of substance will transpire in the public sessions.  

 

 

The Shape of Federal Fiscal Things to Come: Chrystia Freeland’s 1 Percent Solution

 

Yesterday’s Federal Fall Economic Statement is actually quite a remarkable document. On the one hand, given the expectations being raised that the deficit for 2020-21 might reach $450 billion, coming in an $381.6 billion has probably caused many to heave a sigh of relief.  That was probably the intention. Of course, that $381.6 billion figure is the lower bound estimate given economic assumptions and could be as high as just under $400 billion.  Moreover, none of the scenario deficit projections were factoring in the $70-$100 billion in stimulus spending that was to be spread over 3 years once the pandemic was brought under control.

 

The Fall Economic Statement appears to be as much a political as it was an economic and fiscal document in that it continues federal spending and support for the pandemic as well as positions the government for substantial spending announcements of stimulus spending in the spring probably in advance of a federal election once the pandemic appears to be under control – which it currently is not. 

 

If one takes the base case scenario, revenues for 2020-21 will be $275.4 billion and spending $641.6 billion for a deficit (after actuarial adjustment of federal liabilities – the recent twist in federal finance reporting) of $381.6 billion.  For 2021-22, revenues are expected to rise to $335.9 billion and spending decline to $441.5 billion for a deficit of $121.2 billion.  After that, deficits will continue to decline reaching $24.9 billion by 2025-26 and returning us to the deficit range of the 2018 to 2019 period.  This period of deficits will take the federal net debt from $772.1 billion in 2018 to reach $1.494 trillion by 2025.

 

The document is quite clever because it lays out a fiscal plan with a target – which critics have been clamouring for – without actually stating there is a fiscal target.  The pandemic is essentially a dis-equilibrium situation for the federal government’s finances and the federal government hopes to return to its version of equilibrium finances by 2025 at which point revenues will be higher at $417.3 billion and spending at $484.4 billion.  

 

 If one takes their GDP growth forecasts into account, the deficit to GDP ratio for 2020-21 is actually just over 16 percent but will decline to 5 percent the year after and then essentially reach 1 percent.  Prior to the pandemic, a deficit to GDP ratio of 1 percent was what the federal government saw as perfectly reasonable given low interest rates and GDP growth rates and that is what they want to get back to.  It is the 1 percent solution.

 

To place all of this in very long term visual perspective, data from the Jorda-Schularick-Taylor MacroHistory Data Base, Statistics Canada, my federal fiscal history and the 2020 Fall Economic Statement is used to generate figures 1 and 2 below. Figure 1 shows real per capita federal revenues and spending from 1870 to 2018 and then forecasts from 2019 to 2025.   

 

 

 

If all pans out as forecast, then the surge in spending and revenue collapse of the pandemic will subside with real per capita revenues and spending eventually up 2.5 percent and 3.4 percent respectively from their 2018 amounts.  That will be viewed as a perfectly acceptable growth when spread over 5 years. Figure 2 presents the deficit to GDP ratio with the pandemic showing the second largest deficit to GDP ratio in history but with a return to roughly where it was just prior to the pandemic.

 

 

 

This is the shape of federal fiscal things to come, assuming the federal government’s vision pans out.

 

 

 

 

Thunder Bay Residents Fight Back with a $350 Million Lawsuit

 

After months of silence on the part of their municipal government, residents of Thunder Bay affected by the leaky pipe pandemic have finally decided to launch a $350 million lawsuit against the City of Thunder Bay and have retained the services of a Toronto law firm that specializes in class action lawsuits.  Needless to say, this probably could have been avoided if the City of Thunder Bay had made some effort to acknowledge the financial hardship and inconvenience of affected property owners by rendering them some assistance.   Yet, on the advice of the City of Thunder Bay’s legal advisors, they chose to do nothing.  The result? When you have lawyers on one side telling you to do nothing, the best solution is to get a bigger lawyer.

 

In the end, I think a key issue here will not even be the addition of sodium hydroxide to the water per se as a lead control option but why sodium hydroxide was used rather than orthophosphate given so many other cities in Ontario use orthophosphate.  Another key issue is that after problems emerged, the city of Thunder Bay took so long to acknowledge there was even an issue and stopped adding the chemical to the water and followed up by rendering no assistance – doing and saying absolutely nothing aside from filling City coffers with additional water use and water shutoff revenues. A case in point, a pinhole leak problem became apparent in Folsom, California this summer and that city hired a consulting firm and by the fall proposed a solution.  Meanwhile, after nearly a year of leaks, Thunder Bay won’t even speak to the problems. And, this lawsuit probably does not deal with any potential health effects – physical or mental – that the addition of sodium hydroxide may cause.

 

The silence of the councilors on this issue is appalling given they are our elected representatives.  They remain silent because they have been advised to do so by the City of Thunder Bay’s lawyers?  Really?  They are not the board of directors of a private business – they are elected by the people to represent their constituents.  What are they thinking?  During the current pandemic do provincial premiers or the Prime Minister not publicly acknowledge the loss of life or hardship people are facing as individuals or residents of long-term care homes?  What kind of elected representatives hide behind their publicly tax funded lawyers during a time of crisis and then proceed to debate fireworks restrictions, new tourism signs, or new construction projects?  Are they inspired by popular perceptions of the legacy of Marie Antoinette?

 

The scale of the problem is evident from the number of people who have registered on the Leaky Pipe Club Facebook page.  Moreover, the problem is not over yet and will likely continue over the winter and into the spring.  The problem is city wide as Figure 1 (data from Thunder Bay Leaky Pipe Club poll) shows with higher incidence in the Northwood, Red River Wards and McIntyre Wards. Approximately one-third of reports are from the Northwood ward followed by 21 percent in Red River and 18 percent in McIntyre.  Of course, given the vintage of many homes in these neighborhoods, the local chatter has mentioned that it is homes from the 1970s that are to blame.  However, a reason so many homes from the 1970s have been affected is that there are so many of them in Thunder Bay.  As much as one-third of Thunder Bay’s current housing stock was built in the 1970s – particularly in the area of multi-unit dwellings like apartments.  Indeed, the $350,000 pin hole leak lawsuit filed by St. Joseph's Care Group for the PR Cook Apartments is probably the tip of the iceberg for apartments.  The other older neighborhoods all have more lead pipes - ironically, the people the sodium hydroxide was to help through lead effect mitigation.

 

 

 

Given the City is planning to spend over $40 million on a soccerplex and is considering a new $50 million police station, they obviously are not short of financial resources with which to provide help.  Homeowners in Thunder Bay are not only facing the prospect of catastrophic damage and the expenses for repairs, but home insurance rates will skyrocket across the city.  How is a city that is trying to attract investors reconcile a city with this infrastructure chaos as a “good place to set up business?” Obviously, the City of Thunder Bay thinks a $350 million lawsuit is fine but added onto the $375 million class action lawsuit from the 2012 flooding, one wonders what they are thinking?  Are the councilors throwing up their hands and somehow hoping the City can declare bankruptcy or the province appoints an administrator to bail them out? Is it time for the province to take over and defund Thunder Bay City Council?

Updated November 26th.

Thunder Bay City Budget 2021: And Now for New Police Facilities

Thunder Bay is surveying its residents for input into the 2021 budget and as part of the budget input process a virtual town hall was held Wednesday this week to overview and answer questions.  Surprisingly, no questions were answered about the pinhole leak problem but then it was not a live phone or zoom in but one with “submitted questions” and this careful screening undoubtedly eliminated such awkward inquiries.  As part of its new autocratic behaviour, Thunder Bay City Council is rapidly overtaking the Communist Party of China for the breathtaking nature of its staged theatrical consultations. 

The 2021 budget includes a tax supported infrastructure deficit estimated to be $21.7 million annually, while the rate supported infrastructure deficit is estimated at $7.6 million annually.  The budget process is still advancing the prospect of a two per cent tax levy increase.  However, that does not factor in expenses related to the ongoing COVID-19 pandemic which would result in a 6 percent tax levy increase.

While the town hall noted that the City will be looking to reserves and other sources to mitigate the impact of COVID-19 it remains that the words of the Finance Committee Chair alone are not enough to keep the levy at 2 percent.  Many of the councilors will be happy with exploring an increase between 2 and 6 percent as part of a convoluted political ballet of creative manoeuvre to pursue additional spending agendas.  

In terms of spending, along with the coming Turf Facility (with a cost range of anywhere from $30 to $42 million), many have forgotten that new police facilities are also coming down the pipeline and Monday night’s meeting will see a needs assessment study with a veritable alphabet soup range of options -  A,  B, B1, B2, C, C1, D and E – with options B1 and B2 in particular reminiscent of beloved  Australian children’s television characters.

In brief, with estimated construction and separate total project costs at the end of each option, here are the nominees:

OPTION A Base Case New HQ any location $45,025,668 / $ 49,875,204

OPTION B New Central HQ with South Satellite (south core satellite includes Exhibits, Comm Services) $48,638,522 / $ 54,117,483

OPTION B1 New Central HQ with South Satellite (south core satellite includes Patrol & Comm Services) $49,568,285 / $ 55,068,311

OPTION B2

New Central HQ with South Satellite (South core satellite includes Patrol) $48,736,702 / $54,078,066

OPTION C

Existing HQ with South and North Satellites (perhaps they will be named Deimos and Phobos though being associated with Mars they are also the Greek Gods of fear, panic and terror and therefore probably not appropriate names to be associated with modern policing) (South core satellite includes Exhibits, Range North core satellite is covert (no public access) $50,939,978 / $ 62,626,447

OPTION C1 Existing HQ with South & North Satellites (south core satellite includes Comm Services Support Bldg includes Exhibits, Range, Comm Services) $49,133,748 / $ 62,878,096

OPTION D
New South HQ with North Satellite (satellite is covert (no public access) includes Range) $48,371,662 / $ 53,581,582

OPTION E

New South HQ with North Satellite (north satellite includes Comm Services). $46,635,047 / $51,791,507

This is going to be a fairly complicated decision but the long and short of it is that new police facilities will have a total cost of anywhere from $ 49,875,204 to $62,878,095 and that is before any of the inevitable cost overruns that usually characterize public sector construction projects in Thunder Bay. Some of us are now old enough to have seen it all and examples of cost overruns include the new hospital – whose costs ultimately more than doubled from initial estimate to final project - to most recently the Marina Park pedestrian overpass refurbishment which is now $500,000 overbudget – an increase of 38 percent.   

The direction of the project is definitely towards a new build, not only because the word “new” appears in 6 out of the 8 options but because the existing HQ with north and south satellite options (C and C1) seem to have the largest spread between construction and total project costs and ultimately the highest total costs.

So, the die is cast.  Not only is $40 million dollars or more headed towards a new turf facility but another $50-$55 million dollars is headed towards a new police facility which is close to $100 million in new capital infrastructure spending before the inevitable costs overruns of which only 30-40 percent is probably a lower end estimate.  It is no wonder Thunder Bay City councillors and staff are remaining silent on fixing the leaky pipe infrastructure – they have other priorities for Thunder Bay’s tax dollars which incidentally are financed by the second highest residential tax rates of 35 Ontario municipalities.

 

 

 

COVID-19 and Hospital Capacity in Ontario

 

This morning, Ontario reported 1,418 positive COVID-19 cases bringing the total to 100,790 cases to date.  Breaking the 100000-case ceiling will be seen as a milestone of sorts. Of these 100,790 cases, 84716 cases are considered resolved meaning that the number of active cases is currently 16,074.  Of these cases, 518 are presently in hospital with 142 of them in the ICU.  What this means is that of the current number of active cases, about 3.2 percent currently require hospitalization. 

 

Many Ontarians going about their daily lives have probably made similar calculations and concluded the risk of COVID-19 is small. Even if you catch it, they think the odds of requiring hospitalisation are slim and skewed towards an older or health compromised demographic.  Constant warnings to social distance and not engage in unnecessary social activities are going in one ear and out the other because most have concluded the risk of something bad happening is small.

 

However, the flip side of this behaviour is the potential of exponential increases in cases and, when combined with Ontario’s diminished hospital capacity, it is this where the real risks lie.  In 1990, Ontario had close to 35,000 acute care hospital beds and a population of 10.3 million people. By 2000, after a decade of fiscal crisis and “health care reform”, the number of acute care beds had declined dramatically to approximately 22,000 - about a 35 percent decline - and have remained practically constant at that level ever since.  However, by 2019, Ontario’s population had increased to 14.5 million – an increase of 41 percent while the population aged 65 and over had increased by over 70 percent.  As a result, acute care beds per capita in Ontario have declined to practically the lowest levels in Canada but in the OECD.  

 

While COVID-19 may appear manageable at current rates of new cases, if the number of active cases doubled every week, the system would rapidly be overwhelmed even if only 3.2 percent of active cases require hospitalization.  Here is the math:

 

 

Essentially, by Week 3 there would be crisis as nearly 10 percent of acute care beds in the hospitals would have to be given over to COVID cases – and this does not factor in any regional differences in severity of the active case count or the need for ICU beds.  By Week 5, essentially 40 percent of acute care beds would be needed for COVID and by this stage the system would not need to reach Week 6 to essentially collapse.  Having 1990 acute care bed numbers would help but only buy you a week or two.  And this is the result of only a doubling of active cases every week.  If cases tripled every week or they doubled in less time, the system would be overwhelmed even more quickly.

 

The average member of the public may think that only 3 percent of active cases needing to be hospitalized is a small number and with currently just under 1500 new cases a day it is not so bad.   So they carry on paying lip service to any rules and figure there are no consequences to their behavior.  Think again. 

 

 

 

 

 

The COVID-19 Surge in Ontario and Thunder Bay District

 

The COVID-19 case count is surging in Ontario and is even affecting more remote parts of the province that saw a relatively mild first wave – such as the Thunder Bay District. It has been a while since I plotted my provincial and local numbers with trend and presented a visual update, so here it is. Figure 1 plots the daily number of cases in Ontario with a LOWESS smooth that highlights the trend.  The second wave of cases is as known already much larger than the first and is definitely poised to continue surging. Based on the trend line, one can easily expect to see 3,000 cases per day within three weeks which brings us the early December.  More ominous is the rise in death rates shown in Figure 2 and here while there is an upward trend, the second wave so far has seen a milder death toll than the first wave.  However, if one extrapolates that trend line, one could see the death toll hit the levels of the first wave in about three weeks also.  Needless to say, the trends are not pointing to a good place.

 

 

 

 

As for Thunder Bay,  one expects the smugness should be over but Thunder Bay is a stubborn place.  Many in Thunder Bay have been carrying on in their splendid isolationism as if they were somehow exempt from infectious spread given the low number of cases and only one death to date.  As Figure 3 shows, the District was largely spared during the first wave not so much by superior behavior but by geographic distance, low population density and good luck.   

 

 

 

The luck seems to have ended given the large number of close contact cases over the last week.  There has finally been a local super spreader event though the demographic affected at this point appears to be a younger one.  Whether this can be contained and spread to more vulnerable demographics prevented remains to be seen.  If nothing happens to curtail the current trend, at the current trend rate of increase, within three weeks one can expect 25 to 30 cases per day.  And, eventually there will be more deaths.

More Information Is Better: Too Bad Politicians Seem to Have a Double Standard

 

Several days ago, a member of Thunder Bay City council raised the issue of asking the Thunder Bay District Health Unit for a more detailed breakdown of location when it came to the reporting of COVID-19 cases.  In particular, the councilor in question wanted the numbers and cases just for Thunder Bay alone reported separate from its surrounding communities given that with a population of 109,000, there was no real way of ascertaining identities and he felt it would be helpful for residents to know.  While one might be tempted to conclude it was simply a slow evening at City Council, in fact this has become more of an issue in recent days given the spike in cases.

 

The councilor in question has a point.  At present, the TBDHU provides only the broadest of descriptions of where individuals reside and the circumstances around the exposure.  At the same time, the TBDHU has actually been announcing specific locations associated with outbreaks within the region when necessary – a case in point this week as 17 COVID-19 cases were connected to the Adult Teen and Challenge facilities in Thunder Bay. However, a breakdown of location to Thunder Bay, Thunder Bay Surrounding Area, District Communities and First Nation Communities does not appear to be a violation of privacy laws.  Moreover, when travel is mentioned as a source of the infection, it would be helpful to know if it was travel within northern Ontario, travel outside northern Ontario but within the province of Ontario, inter-provincial travel or international travel.

 

While the councilor’s call for more information is laudable, he is in some respects being inconsistent - to say the least.  After all, along with the COVID-19 pandemic underway, Thunder Bay is also experiencing a pandemic of plumbing and water line leaks which may be linked to the introduction of sodium hydroxide into city water in 2016 to mitigate lead.  Despite numerous pleas for assistance and information, the City of Thunder Bay has provided no information as to the extent of the problem, how many homes have been affected, or what neighborhoods are most affected.  Such information might help homeowners know if they are at greater risk of leaks than others and take mitigating steps but instead, we are all being left to social media to acquire information.  If the City of Thunder Bay was managing COVID-19 information in this manner, more people would die.

 

If the Thunder Bay District Health Unit in the face of mounting cases of infection refused to provide any information whatsoever, it would be seen as irresponsible and contributing to the spread of the disease and its mortality and morbidity.  However, in the case of pinhole leaks in Thunder Bay, the City is collecting information and shares nothing.  The councilor who raised the issue of more information from the District Health Unit has a double standard.  What is good for the goose is good for the gander and he should advocate for the people paying the taxes that support his role as a councilor. 

 

 

Municipal Autocracy is Alive and Well in Thunder Bay

 

The Mayor and Council of the City of Thunder Bay grow ever more divorced from the needs and interests of the public they are supposed to serve with their behaviour sometimes reminiscent of 19^th century Russian aristocrats.   They pursue grand public schemes and profess concern for the public but are deaf to plights raised that diverge from their own views of what is best for the city.  In this, they are aided and abetted by their administrators whose chief interest seems to be maximizing revenues and spending – at least in areas where they see fit. 

 

The situation of ratepayers and homeowners in Thunder Bay often seems to be akin to the welfare of  Russian peasants whose fate was the lot of the ‘unfortunates’ to whom ‘God is high above and the Tsar is far away.’  Just ask the homeowners whose pleas about the damages they are incurring to their property from pipes leaking are met with silence.  Indeed, there may be a lot in common in the general attitudes of the Mayor and Council of Thunder Bay and the Czar and his assorted Grand Dukes given that Czar Nicholas II filled in his occupation during the 1897 Russian Census simply as “The Owner of the Russian Land.”  I suppose the leaky pipe protestors last week should consider themselves blessed that the Mayor and Council did not summon mounted police to disperse them.

 

Nowhere is this autocratic arrogance more blatantly demonstrated than in the 2021  “Budget Survey” that Council is now asking input for on its website.  It begins by asking for a line by line ranking of programs in terms of importance to you that include: Roads, Winter Maintenance, Drinking Water, Wastewater (Sewer), Stormwater Management, Garbage and Recycling, Long Term Care Services, Parks, Recreation Programs and Facilities, Child Care, Libraries, Economic Development, Communication and Resident Engagement, Animal Services, and By-Law Enforcement. 

 

This is ceremonial accountability at its best as it allows for input on items so broadly defined that a ranking is meaningless.  Honestly, are we being threatened with an end to clean drinking water or garbage collection or a shut-down of City long-term care facilities, if we refuse to hand over our taxes?  Everyone knows that choices need to be made but there is a difference between explaining  the options and implicit threats of service cuts that smack of bullying ratepayers.

 

However, the most striking question is the one that brings the impact of COVID-19 into the budgetary discussion.  As the section reads:

 

“The financial impact of COVID-19, due to revenue losses and increased costs, has been estimated at over $8 million for 2021 (4.2% of the municipal taxes levy). City Administration will be presenting City Council with options to address these costs. To cover these increased costs, what option(s) would you support?

 

a.         Temporarily reduce/modify services in 2021

b.         Temporarily increase user fees in areas that have increased costs due to COVID-19

c.         Increase taxes in 2021

d.         Draw from the reserve fund that is set aside for emergencies and budget to replenish in future years.”

 

Take careful note of the nuances here.  First, the financial impact of COVID-19 for 2021 is set at $8 million but nowhere is there mention of the nearly $9 million dollars that has been received in pandemic aid to date from higher levels of government that has apparently resulted in a $1 million operating surplus for 2020. 

 

Second, the mention of these costs as 4.2 percent of the municipal tax levy is a hint that what the City probably really wants is a 4.2 percent tax increase.  This is an increase in spending on the 2020 tax levy of $199.4 of an additional $8.4 million and assumes there will be no additional assistance or support from the provincial or federal government in 2021.  Given that they did not have to draw down on emergency reserves for 2020, doing it in 2021 is a legitimate option that should be given greater weight.

 

In light of the twin pandemics of both COVID-19 and leaky pipes that have hit the homeowners and taxpayers of Thunder Bay, The City of Thunder Bay needs to limit its tax levy increase this year to no more than 2 percent as mentioned earlier this year.  Instead of bullying taxpayers by implicit threats to reduce their garbage collection or snow removal if they don’t get their 4.2 percent, they should look at making core services like roads, water, sewer, sanitation a priority while reducing their emphasis on other things or by looking for ways to do them more efficiently.  As to how to do it, it is indeed up to the administrators to provide the options and for the councilors to choose among the options - that is what they are being paid for.

 

And as a final point, they do need to provide affected homeowners some assistance with respect to the leaky pipe pandemic.  Without commenting on the situation or compromising their “legal position” they could in recognition of the economic and mental burden of the pandemic temporarily suspend the hundreds of dollars in fees they charge homeowners to turn off and turn on the water when faced with ruptured pipes.  Continuing to do so means they are treating the misfortune of the leaky pipe situation as simply an opportunistic source of municipal revenue.