Getting Ready for Budget Season: A look at Thunder Bay Municipal Indicators

 

Municipal budget season is well underway in Thunder Bay, but the main public theatrics over the 2025 budget should be transpiring over the next few months.  The most recent indication is that City Council is expected to target a 3.8 percent municipal tax levy increase.  There are budget pressures underway not the least of which is apparently an additional $5.6 million to cover wages and benefits. Putting budgets into context is always more useful if a long term is taken and fortunately the Ontario government does provide resources to track municipal spending.  Here, a useful tool are the multi-year financial reports provided from the Financial Information Returns which provide standardized reporting of a municipality’s financial activities as well as additional statistical information.

 

Figure 1 presents municipal property taxes per household and water and sewer charges per household since 2000.  While many other municipalities appear to have filed their 2023 returns, Thunder Bay appears to be lagging and therefore this long-term snapshot only goes to 2022.  From 2000 to 2022, municipal property taxes in Thunder Bay have nearly doubled going from $1,947 to $3,918.  The growth of water and sewer charges has been more pronounced going from $379 per household in 2000 to $1,158 in 2022 – a tripling of the average per household charge.

 

 

 

Figure 2 plots a dual scale chart with the total municipal workforce (full time, part time and seasonal) on the right size axis and the value of wages, salaries, and benefits per employee on the left axis.  Perhaps one of the reasons Thunder Bay is lagging in putting out its financial information is that it is a bit short staffed given that the total size of the municipal workforce has declined from a peak reached circa 2013 and has been pretty flat since 2016.  On the other hand, since 2000, the size of the municipal workforce has gone from 2,344 employees (there is a data  gap in 2003) to 3,404 in 2022 – an increase of 45 percent.  Over the same period, average wages, salaries and benefits per employee have grown from $46,978 to $83,799 – an increase of 78 percent.

 

 

 

However, these indicators and the increases over time are best placed in context to an assortment of other indicators and this is done in Figure 3 which plots the percent increase in an assortment of indicators from 2000 to 2022.  As one can see, prices in Thunder Bay as measured by CPI inflation have risen by 49 percent.  Own purpose property tax revenues (the total tax levy) has grown 122 percent while total grants revenues have only grown by 55 percent.  Municipal property taxes per household have grown 101 percent while water and sewer charges have grown 205 percent.  

 

 

 

Meanwhile the total taxable assessment has grown by 60 percent which when divided by the number of years works out to an annual average growth of 2.7 percent.  This seems at odds with the fact that published reports have been of average assessment growth over the last ten years of only 0.6 percent annually.  However, one suspects that the 0.6 percent is real growth – after inflation – because the average annual assessment growth of 2.7 percent minus the average annual inflation rate of 2.2 percent from 2000 to 2022 yields real average annual assessment growth of 0.5 percent.  Given that property prices have grown substantially in Thunder Bay over the last decade in particular, the nominal rather than inflation adjusted tax assessment has been growing in tandem

 

More interesting is the fact that between 2000 and 2022, the population of the City of Thunder Bay has actually decreased by 6 percent.  This also seems at odds with recent reports that Thunder Bay is over 130,000 people but it must be remembered that FIR deals with municipal finances and the population of the City of Thunder Bay is that within its city limits while the recent population reports are for the larger Census Metropolitan Area.  Essentially, growth in Thunder Bay has been occurring outside the city limits where they do not have to pay property taxes to the City of Thunder Bay.

 

And finally to round things off, the municipal workforce over the 2000 to 2022 period grew by 45 percent, the total compensation per employee grew 78 percent and the total value of building permits grew 85 percent.  However, after inflation of 49 percent, salaries and benefits per employee only grew in real terms by 29 percent while to end things,  the real total value of permits grew by 36 percent. 

Rising Crime in Canada: Evidence from Thunder Bay

 

Rising crime and perceptions of rising crime in Canadian urban areas have become more concerning as media reports increase and a recent study by the MacDonald-Laurier Institute provides some evidence to back up the feeling that crime is up.  The report looks at the last decade’s worth of police reported crime data for nine major Canadian urban centers: Calgary, Edmonton, Montreal, Ottawa, Peel, Toronto, Vancouver, Winnipeg, and York Region.  Essentially, crime and especially violent crime is up in all of these cities with sexual assaults in particular showing large increases.  Of course, this study omits a lot of cities and so of course the question that arises for inquiring local minds is how Thunder Bay has been doing over the last little while?  Is crime rising in Thunder Bay? Well, it depends on the time span you want to look at as well as the specific type of crime.  But overall, the feeling that crime is rising here is not misplaced.

 

Using police reported crime data from Statistics Canada, here is a quick snapshot of how some crime rates in Thunder Bay (crimes per 100,000 population) have been performing. Figure 1 plots the crime rate for total violent crimes and total property crimes for the period 1998 to 2023.  Over the long haul, the trends do not seem particularly concerning.  The property crime rate in 1998 was 6,285 crimes per 100,000 population and after 2009 it began declining quite steadily followed by a spike in 2019 and then further decline.  Between 1998 and 2023, the property crime rate fell from 6,285 crimes per 100,000 to 3,117 per 100,000 – a 50 percent drop.  

 

 

 

Violent crime between 1998 and 2023 has also dropped but not by as much.  It went from 2,401 violent crimes per 100,000 to 2,195 per 100,000 -a nearly 9 percent decline.  However, the violent crime rate seems to be broken into two phases.  It went from 2,401 in 1998 to a low of 1,414 in 2015 – a decline of 41 percent.  Since 2015, it has grown and by 2023 was, as noted, at 2,195 – an increase of 55 percent.  While violent crime is lower than 1998 that is small consolation given what appears to be a fairly rapid increase in recent years.

 

 

 

Figure 2 presents the percentage change in crime rates over a ten-year period – 2013 to 2023 – for a select number of crime categories.  The results paint a more complicated picture.  The total crime rates (all criminal code violations including traffic) are down 2.5 percent over the last ten years.  This seems to be driven in part by a decline in property crimes as the total property crime rate over the same period is down 13.4 percent.  However, over a ten-year period, the total violent crime rate is up nearly 39 percent.  Homicides are up 120 percent from 2013 (though these are two points in time.  Using a three-year moving average for 2012 and 2022, homicides are only up 87 percent if that makes you feel better).  Total sexual assaults are up 68 percent while total assaults in general are up 31 percent.   Impaired driving is up about 5 percent while robberies are up 39 percent. 

 

So, are perceptions of rising crime justified?  I would think so given that while overall crime rates might be down or flat, the rates for more serious crimes such as homicides, assaults and robbery are up.  There you have it.

The Shape of Councils to Come

 

The Corporation of the City of Thunder Bay’s Council Composition Committee has after a number of months of deliberation and thought settled on two potential options for the reform of Thunder Bay City Council.  This is a topic with a long history and I have done several posts on it over the years the most recent one being in the wake of the decision to form an arm’s length committee to review the composition and structure of council.  The desire to look at the size and composition of council is rooted in the beliefs that there might be cost savings by reducing the size of council given that similar size cities often have fewer councillors or that council’s deliberations might be more efficient or effective if there were fewer councillors.  The current proposals if implemented would not be the first time that City Council has seen changes, but it is the first time in a long while.

 

When Thunder Bay was created in 1970 from amalgamation of the twin cities of Port Arthur and Fort William and the rural municipalities of Neebing and McIntyre, it began with a 12 councillor plus mayor council elected evenly across four wards.  However, interurban rivalry between the Williamites and Arthurites was still intense as was rural dissatisfaction and so in 1976 the four wards were revised to seven.  Then in 1985 there was the further revision that sought to balance north-south neighborhood concerns with the need to take the overall interest of the city into account known as the Larson compromise – after then councillor Rene Larson.  This created the current form of seven ward councillors plus five at large plus the mayor.  After nearly forty years, the proposals seek to change this.

 

There are two proposals.  The first, interestingly enough, seems like a tomorrow is yesterday proposal given that it features four wards.  The proposal puts forth four east-west wards running parallel from north to south numbered 1 to 4 that basically give each ward a rural area, urban area as well as some industry and waterfront in the geographic and population composition of the ward.  Each ward would have two ward councillors for a total of eight. Plus, there would be two at-large councillors and a mayor.  This proposal is apparently also being recommended by city administration and the committee chair and former city councillor Rebecca Johnson feels it is “quite exciting” given that each ward combines all aspects of the community. The other option is a full at large system with ten at-large councillors – no wards - plus the mayor. There will now be public consultations and information sessions that the committee will use to narrow down the options to just one and this will then be submitted to council for approval and then will hopefully be in place for the October 2026 election.

 

 

 

So, what to make of all this.  Well, in terms of cost savings, going from a current council of 13 members to one of 11 under either option is simply a cosmetic cost saving.  While theatre is important in politics, pointless cost saving theatre is a waste of time.  What is more important is whether the new format is an improvement on representation and decision making in terms of having balanced representation of all city interests as well as a more streamlined decision-making process.  Having fewer members on council is again more of a cosmetic streamlining as a council of 11 is as likely to have long winded grand-standers as a council of 13.  The savings on time and committee streamlining is marginal at best.  As for the idea that having wards cutting east west and spanning rural, urban, industrial and waterfront areas, that is actually more interesting and certainly an intriguing change.  Of course, one has to ask if any perceived dysfunctions of council currently are due to having somewhat more homogeneous rather than diverse wards under the present system or simply a function of personalities and issues.

 

One item that seems odd is why a vestige of the hybrid ward/at-large system is still being retained in the recommended proposal?  An all at-large system in a sense would ultimately lead to a lack of democratic representation as the ability to mount a city-wide campaign \would increasingly relegate council positions to higher income individuals or those with support from key interest groups.  However, the purpose of city government is to provide services to ratepayers. Having geographic wards with councillors attached to those wards as focal points and accountable to voters in their ward is superior to at-large councillors who under the pretense of representing the “whole” city – which by the way is the mayor’s job – can essentially dodge neighborhood issues they are not as interested in.  Why have a council with eight ward councillors and two at large plus a mayor?  Why not simply go to eight ward councillors plus a mayor thereby saving another two councillor salaries – as miniscule as those savings are in a $200 million dollar a year operating budget.

 

In the end, the preferred option – like all the council options and changes of the past – is likely going to be a political compromise.  The current council essentially must approve the final option and going from 13 to 11 means some dear colleagues must inevitably be bade farewell come October 2026.  Council voting to reduce its size and create redundancy for some of its members may be a challenge. The fact that the number of ward councillors goes from seven to eight will probably secure the votes of the majority of current seven ward councillors.  While that is a majority, it would leave a bitter taste if all five at-large councillors vote against the new regime so having a couple of at-large councillors in the new arrangement should placate enough of them, even if it makes them an endangered species. 

 

However, what is more interesting will be the public reaction to the recommended proposal especially in the rural wards.  The Neebing and McIntyre wards essentially have two dedicated rural voices on council.  What the proposed four ward structure does is essentially divide the rural areas into four bits and place them in a minority position within each of the largely urban wards.  While the Larson Compromise of 1985 in the end addressed north-south rivalry issues and the need for “Thunder Bay views”, it also dealt with the interests of the two rural municipalities that were once independent.  Essentially what the compromise did was allow for specific ward representation including specific rural interests as well as provide the overarching at-large councillors.  While Thunder Bay has largely come together in the case of the old Port Arthur/Fort William split, the rural-urban differences with respect to taxation and service levels is probably still an issue now.

 

The political mix at the moment is that five of the current seven ward councillors are most likely to support the recommended model.  I would be surprised if the Neebing and McIntyre councillors supported the new model.  As five councillors is not a majority, this leaves the balance of the decision to the five at-large councillors to decide if the proposal becomes reality.  It should make for some interesting Monday night political theatre this winter.