Thunder Bay has embarked on a plan to build
and diversify the municipal tax base and attract more residents. This plan for growth is seen as an imperative
given that Thunder Bay’s economy while not shrinking in absolute terms is
nonetheless growing less slowly than Ontario and Canada. For example, over the 2010
to 2024 period, Thunder Bay’s average annual real GDP growth was 1.8
percent compared to Canada’s 2 percent or Ontario’s 2.1 percent. Employment has also shown this differential
given that between 2006 and 2024; Thunder Bay added 9 percent more jobs to its
economy while Ontario and Canada both added about 27 percent more jobs.
So, the focus is on growth and a large part of that growth
is on growing our population. Population
growth is of course correlated with economic growth as more people usually
means more economic activity and therefore a larger economy which in turn
should spillover into growth of taxable assessment. This is a key concern for the City of Thunder
Bay given that it is the anemic growth in taxable assessment that have helped shift an ever-larger tax burden onto the
residential tax base given the decline in the industrial tax base of forest
product mills and grain elevators over the last tree decades.
Of course, simply growing population in Thunder Bay is not
the panacea that one might think when it comes to increasing taxable
assessment. The reality is that
population in the Thunder Bay area is increasing and has been for some
time. However, the population of the City
of Thunder Bay has not been increasing relative to its surrounding areas. If more people live around Thunder Bay but
they are not owning homes and businesses within the confines of the City of
Thunder Bay, then the impact on the city’s taxable assessment is going to be
rather muted at best. As the
accompanying figure shows, there is a difference between population growth in
the City of Thunder Bay and the Thunder Bay Census Metropolitan area. Population statistics for the CMA are from Statistics
Canada counts while the City of Thunder Bay’s population is taken from the Ontario
Ministry of Municipal Affairs Financial Information Returns.
The results are plotted for the period 2001 to 2024 and are quite
interesting. According to the official numbers compiled by the Ontario government, the
City’s Thunder Bay’s population in 2001 was surprisingly just over 115,000 while the CMA population
was about 126,000. During the first
decade of the 21st century – the period of the forest sector crisis –
the CMA population declined by 1.2 percent while the city proper itself
declined by 5 percent. Since 2010, there
has been growth in the CMA population going from 125,000 to 133,000 for an
increase of 6 percent. The city population
itself has gone from 109,140 in 2010 to 108,843 in 2023 – a slight
decline. However, since 2016 – which is
when population began to grow more robustly in the CMA, the city population has indeed grown by about 1 percent.
The point is that Thunder Bay is growing but not necessarily
where the taxable assessment needs to be to broaden and diversify the municipal tax
base.
True, if the CMA population goes
up, more businesses are likely to open in the city thereby expanding the business
tax base, but a lot of growth is nevertheless occurring outside of the city
boundaries.
What is more interesting
according to these numbers is the following. Between 2001 and 2023, the Ontario
Ministry of Municipal Affairs numbers put Thunder Bay’s population going from
115,000 to about 109,000 – a decrease of about 5 percent.
Municipal taxes per household have gone up
from $1,947 dollars in 2001 to $4,070 in 2023 – an increase of over 100 percent
- while water and sewer charges have gone from $379 in 2001 to $1,195 in 2023 –
an increase of over 200 percent.
Meanwhile, total municipal employment over the same period went from
2,344 (FT, PT and Seasonal) to 3,122 – an increase of 33 percent.
Is it any surprise that population outside of the city
boundaries has grown while the city proper has either declined or remained
stagnant? When choosing where to live in
the Thunder Bay area, there has clearly been a substantial number of people
voting with their feet. The surrounding
townships offer a lower municipal tax burden while providing access to whatever
Thunder Bay proper has to offer. If the
City of Thunder Bay itself is to grow its population and economy, it will need
to address the fundamentals that have fostered this shift outside the city.
