Thunder Bay's Evolving Waterfront

  

It was recently reported that another portion of the former CNR waterfront iron ore trestle will soon be coming down to make room for an expansion for Midcontinent Terminals cargo shipping facilities. The economic benefits of expanding port activity in terms of additional cargo and job creation notwithstanding, there is a certain amount of wistfulness associated with watching the grand structure shrink further.  True, it can be seen as a barrier and an eyesore, but it also represents a rather impressive structure built during an era where it seems Canada was still capable of quickly building large, impressive structures as part of its industrial development.  

Designed by C.D. Howe’s engineering firm, the trestle was built at the end of World War II to ship iron ore by rail out of the Steep Rock Mine at Atikokan and the end of the mine along with signalling the decline of Atikokan also ended the need for the trestle. Of course, the right of way and run up to the main dock facilities are long gone but the remnants are still quite impressive in terms of their sheer size especially when one is out in the harbour and sailing by.  A number of years ago, had the pleasure of a harbour boat tour with friends and took some pictures of the trestle. Enjoy.

 

 

 

 

 

 

 

BC and Toronto Economy Studies Released

Ontario is not the only Canadian province that has been buffeted by lacklustre economic performance in recent years.  Two studies released by the Fraser Institute today highlight both Ontario and British Columbia.  The Ontario study by Nathaniel Li and Ben Eisen focuses on Toronto and its role as both Ontario and Canada's economic engine.  The other study and accompanying commentary which I have authored looks at British Columbia's economic performance within the context of whether or not BC is headed towards another "lost decade" akin to the performance of the 1990s. See below for the commentary which appears on the Fraser Institute web site with a link to the study itself. 

Study and accompanying commentary on the British Columbia economy recently released by the Fraser Institute.

Commentary

February 12, 2026

B.C. government faces another ‘lost decade’ unless it pivots to pro-growth policies

By: Livio Di Matteo

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With its inviting climate and magnificent natural setting, British Columbia has long attracted residents. The province’s robust population growth rates, historically above the national average, have been seen as a signal of economic opportunity and success.

However, in recent years, economic growth per person—an important measure of living standards—has stagnated (after adjusting for inflation). In 2025, more British Columbians left the province than moved to it, with a population decline for the first time on record. While B.C. maintains a relatively successful economy with per-person income at or above the Canadian average, it faces numerous economic challenges. In its upcoming February budget, the Eby government should prioritize economic growth.

Again, B.C. has traditionally been among the more prosperous Canadian provinces, but the 1990s and the early 2020s stand out as particularly poor economic periods based on per-person economic growth (inflation-adjusted). The 1990s were known as a “lost decade” in B.C., with per-person economic growth averaging barely one-fifth of one per cent annually (again, after adjusting for inflation).

The spectre of a lost decade has again reared its head as the 2020s have seen per-person economic growth (inflation-adjusted) averaging 0.4 per cent (for perspective, it’s been as high as 1.7 per cent in the 2000s). There are several economic factors driving the slowing growth rate. Critical is the role of business investment. In B.C., gross fixed capital formation in machinery and equipment (as a share of the economy) has declined sharply, from a peak of 28.2 per cent in 1998 to 10.2 per cent by 2023. Moreover, much economic activity in the province is still tied to residential construction and real estate, and while these sectors support many jobs, they’re not at the heart of building a productive, globally competitive economy.

Exports are a key driver of prosperity in a small open economy such as B.C., but as a share of the provincial economy, total exports peaked at 48.1 per cent in 2000 and then declined, reaching 37.5 per cent by 2023. The average annual growth of inflation-adjusted per-person exports was highest in the 2010s at 2.1 per cent, but the 2020s to date has only seen 0.6 per cent average annual growth. These findings point to a significant decline in the strength and dynamism of B.C.’s export base.

Of course, many will argue that despite these trends, employment growth has been quite respectable. However, much of that growth reflects an expanding government sector, with its employment growing by an average of 5.5 per cent annually since 2020, while private-sector employment has grown at just 1.3 per cent annually and self-employment has declined outright. Private-sector employment (including self-employment) is critical to generating the wealth for achieving higher living standards, and the brisk expansion of B.C.’s government-sector employment has come with burgeoning deficits and skyrocketing government debt—pointing to the likelihood of higher taxes down the road.

This is not a recipe for healthy economic growth and is again reminiscent of the 1990s, which saw 10 consecutive provincial government deficits. The B.C. government is projected to run deficits until at least 2027/28, with provincial net debt rising from $71.3 billion in 2023/24 to $155.8 billion by 2027/28. The net debt-to-GDP ratio—an important measure of the sustainability of debt—is in turn projected to rise over this period from 17.4 per cent to 32.4 per cent, indicating a rapidly deteriorating fiscal position.

Halfway through the 2020s, one can argue that the decade is not yet a lost one for B.C., but the recent trends are discouraging. With weak growth in inflation-adjusted per-person economic growth, a decline in important components of business investment, a weakened export sector, dismal private-sector employment growth, and record budget deficits, it’s time for the Eby government to focus on pro-growth policies in its upcoming budget. Otherwise, British Columbians may indeed face another lost decade.

 

 

 

Budget Season in the GTHA

  

In municipalities across Ontario, it is budget season and the GTHA is no exception with the City of Toronto the latest to unveil its proposed 2026 budget.  The Toronto Budget unveiled today proposed a 2.2 percent residential tax hike which the lowest property tax increase since 2020 and down from the 6.9 percent increase last year and the 9.5 percent increase the year previous.  Needless to say, it must be a municipal election year given the moderation in taxation that is marking this year’s Toronto budget season.  Down the lake in Hamilton, the election is also weighing heavily on the Mayor and Council given early intimations of increases over 8 percent in September are now replaced with a proposed tax increase of 4.25 percent which is also lower than the increases of the last two years which were 5.6 percent in 2025 and 5.8 percent in 2024.

Of course, a longer-term perspective is also useful in looking at the evolution of municipal taxation in these two largest GTHA municipalities.  Figures 1 to 3 provide several municipal taxation comparisons of Toronto and Hamilton and as an added bonus Thunder Bay is thrown in simply to illustrate how we stack up with the largest centers in the GTHA.  Figure 1 constructs an index of the total tax levy from 2000 to the proposed 2026 budget estimates with the year 2000 set equal to 100.  Figure 2 does the tax levy in nominal per capita dollars.  Figure 3 presents the annual percent growth rates in the total tax levy.  The data is mainly from the Financial Information Returns with the last few years based on currently available budget data.

Figure 1 shows the tax levy index pretty much rising about the same for all three municipalities. Between 2000 and the 2026 budget estimate, the total tax levy in Toronto will have grown 150 percent while Hamilton’s will have grown 174 percent while Thunder Bay’s somewhat more middling at 168 percent growth.  Figure 2 converts the tax levy into a somewhat more personal measure by dividing the municipal population into the levy for an estimate of the tax levy per capita.  In dollars per capita, Toronto’s tax levy exceeded that of Hamilton or Thunder Bay from 2000 to about 2005.  From 2005 to 2010, all three municipalities had pretty much identical per capita tax levies, but divergence has occurred since then fueled mainly by the more rapid population growth in the GTHA.  From 2000 to 2025, Toronto’s municipal population grew almost 40 percent, Hamilton’s 34 percent and Thunder Bay’s 3 percent. By 2026, it is estimated that the per capita municipal tax levy in Thunder Bay will be at $2,148 per capita, followed by Hamilton at $2,060 and Toronto at $1,852. 

 

 

 

Finally, Figure 3 plots the annual growth rates in the tax levy and again, they all move approximately in tandem.  Over the entire 2001 to 2026 period, the average tax levy increase in Toronto was 3.6 percent, Hamilton was 4 percent and Thunder Bay 3.9 percent.  However, since 2020, Thunder Bay has averaged 3.8 percent compared to an average of 5.1 percent for both Toronto and Hamilton.

 

On average, the increases in the tax levy have been fairly similar over the last 20 years which is to be expected given these are all municipalities in Ontario and subject to similar rules and financial pressures from the provincial government. At the same time, their economies and population growth rates have differed substantially making for differences when tax levies are adjusted for population growth.