The Federal Election Results: Northern Ontario

The people have spoken, and Canada has a minority Liberal government.  In my home community of Thunder Bay, there will be double representation on the government side as both ridings went Liberal.  This however was not the result of strategic voting or a calculated decision by the local electorate to go with what they saw as the winning side but the outcome of ingrained behaviour.  Thunder Bay always votes Liberal at both federal and provincial levels except on occasion when it goes NDP because the voters feel the Liberals ought to be punished.  However, their NDP support is a temporary dalliance and they ultimately return to their original faith.   

If Monday’s election had yielded a Conservative minority or majority, then Thunder Bay would have been on the outs and of course complaining incessantly about the lack of government attention. Yet, loyalty to one party by a smaller and more remote community does not always ensure you will get what you want if your team is in power.  If your support is always assumed to be there, than that can also work against you when it comes to getting your issues on the table.

Electing a variety of representatives over the years based on calculation rather than political faith or loyalty is another approach to collective voter wisdom and diversity in outcomes over time is one way of ensuring your support is not taken for granted.  While Thunder Bay generally always votes the same way, nearby Kenora is much more flexible and over the years has voted in representatives at the provincial and local level affiliated with all three of the major parties.  This time, they switched from Liberal to Conservative at the federal level.   

While parts of northern Ontario seem to be closed shops when it comes to voting patterns, the region as a whole, has actually elected a diverse portfolio of representatives with the balance what one might term centre-right rather than centre-left - if you assume the Liberals are more centrist than the other two parties.  Given that the Liberals and NDP generally term themselves as “Progressive” the region as a whole is probably more centre-left.  One can only imagine what the “Progressives” would now term themselves if the federal Conservatives had not rebranded and retained their “Progressive Conservative” label.

In terms of results for the 10 ridings, they are:

Kenora: Conservative

Thunder Bay-Rainy River: Liberal

Thunder Bay-Superior North: Liberal

Timmin-James Bay: NDP

Algoma-Manitoulin-Kapuskasing: NDP

Sault Ste. Marie: Liberal

Nickel Belt: Liberal

Sudbury: Liberal

Nipissing-Timiskaming: Liberal

Parry Sound-Muskoka: Conservative

 

On a map, electoral northern Ontario is a bit of an oreo sandwich made up of two conservative graham wafer borders -Kenora and Parry Sound-Muskoka - and a rather large dollop of Liberal cream accented with some additional NDP filling.  Obviously, northern Ontario voters as a whole like their electoral food spiced with diversity even if smaller regions within prefer more monotonous diets.  However, if one takes a pan-northern view, the north is greater than the sum of its local parts when it comes electoral wisdom and has made sure it has its bases covered.

On a final note, a special congratulations to Eric Melillo who pulled ahead of incumbent Bob Nault to win the Kenora riding.  Eric is a graduate of the Economics program at Lakehead University and I am thrilled to see him do well.  Eric was a hardworking and keen student in Economics and a very pleasant young man and I wish him all the best.

CNEH 2019 Wraps Up in Thunder Bay

The Canadian Network for Economic History (CNEH) successfully concluded its 2019 Meetings sponsored by Lakehead University in Thunder Bay and held at the historic Prince Arthur Waterfront Hotel. The three-day event from September 27th to 29th, 2019 included three days of sessions, two keynote speakers and also provided keynote Professor Ann Carlos from the University of Colorado-Boulder as the speaker for the Lakehead Faculty of Science and Environmental Studies September 26th Science Speakers Event.  The event was met with sunny crisp autumn weather that highlighted the scenic Sleeping Giant out in the harbour.

The conference theme was the economic history of Indigenous communities, and interactions between Indigenous and non-Indigenous economies in Canada and the conference attracted Canadian and international scholars. The Mary MacKinnon Memorial Lecture was given by Donna Feir (Federal Reserve Bank of Minneapolis and University of Victoria) and was titled “Economic History and Reconciliation”.  The Saturday evening keynote by Ann Carlos (University of Colorado-Boulder) was on “Globalization and the Fur Trade.”  Elder Gerry Martin from Mattagami First Nation shared his insight and wisdom with opening and closing remarks.  A theme that emerged from all speakers as well as the specific sessions dealing with Indigenous and European interaction, Indigenous health and well-being was that more effort must be made to bring the Indigenous perspective into our research and teaching on Canadian and North American economic history. 

Generous financial support was provided by the Canadian Economics Association, the Alan Green Memorial Fund, Lakehead University's departments of history and economics, the Faculty of Science and Environmental Studies at Lakehead and the Lakehead University Office of the Vice Provost of Aboriginal Initiatives.  Special thanks to administrative assistants Jennifer McKee (Lakehead) and Sharon Sullivan (Queen's) for their hard work in putting everything together.

Plans are for the next CNEH to be held in Vancouver in the Spring of 2021.  From the mid-coast to the west coast.  See you there!

Ontario Budget 2019: Some Spending Details

Well, the dust is settling from the April 11^th 2019 Ontario provincial government budget and it is time to spend a little more time looking at some of the details in spending.  There are many stories in the media about assorted cuts coming down the pipeline, but it remains that overall spending is up and projected to continue rising though at a much lower rate.  Indeed, as discussed in my previous post, total spending is expected to rise from $162.5 billion in 2018/19 to reach $164.4 billion representing an overall increase in spending of 0.6 percent. This of course is a much lower growth rate in spending than was the case under the previous government.

What is more interesting is what a more detailed analysis by ministry expense category reveals.  Approximately two-thirds of ministry expense categories are expected to decrease while one-third have actually experienced an increase. Table 1 lists the ministry expenses by ranked percentage increases whereas Table 2 does it by ranked expenditure decreases. Increases in spending range from 550 percent for the Treasury Board Secretariat Capital Contingency Fund to 0.5 percent for the Training, Colleges and University Base Budget. Despite what may seem to be very large increases for the Treasury Board Secretariat they are on amounts that represent less than one percent of total spending. With respect to the Treasury Board Secretariat, the government also notes that: “The Province has put in place a prudent Operating and Capital Contingency Fund housed in the Treasury Board Secretariat. This fund is the main driver of the increase in the Ministry’s 2019–20 budget, in addition to an increase in employee pension benefits paid.” (Ontario 2019 Budget, p. 298).  Other increase of note also include Infrastructure (Base) (261%), Total Transportation (10.9 %) and Interest on the Debt (6.4%).

It should be noted that Health and Long-Term Care and Education (Primary & Secondary) together represent in 2019/20 a total of $95 billion or about 60 percent of the spending total.  While there are changes within both these categories underway designed to create efficiencies it remains that Education is going to grow by 2.6 percent and Health by 2.2 percent.  It is fairly simply math to realize that if categories representing 60 percent of government spending are going to grow by over 2 percent when total spending is growing by 0.6 percent, then there are going to have to be reductions in many other categories which account for the other 40 percent of spending.

 
Here the list is much larger (therefore two tables) and some of the percentage increases also larger.  Reductions range from -0.4 percent for the base budget of Municipal Affairs and Housing to -67.1 percent for Natural Resources and Forestry Emergency Forest Fire Fighting.  However, the total budget for Natural Resources and Forestry is declining by -19 percent while the base budget is declining by -3.2 percent.  While the Total Budget for Training, Colleges and Universities is declining by -6.1 percent, its base budget is actually growing by 0.5 percent while the student assistance component is declining by -33 percent.

To its credit, the provincial government has embarked on what appears to be a pretty substantial review and restructuring of government spending in all categories.  Within expenditure categories it is choosing what to increase – albeit at a lower rate than in the past – and what to substantially reduce.  Some categories have been hit immediately with some large reductions.  Some of these reductions include the winding up of one-time funding and therefore appear quite large for the coming year which is why a comparison of base budget rather than overall totals might be more appropriate.  However, the ultimate aim appears to be a substantial restructuring with priorities being selected.  It would appear the priority is to deal with the province’s fiscal situation while ensuring that overall budgetary cuts do not occur particularly in the key areas of health and education.  Indeed, all things considered, the transfer partners in the municipalities, universities, schools and hospital sectors (MUSH) have gotten off relatively lightly.  This naturally means larger declines in the remaining 40 percent of government spending. It cannot realistically be otherwise.

An Economic Look Ahead to 2019

Given the international economic tumult of trade wars, rising interest rates and Brexit, everyone is interested in what 2019 may bring for the global economy and here are my thoughts as laid out in a short post for Focus Economics:

"The only certain things about the world economy in 2019 are uncertainty and volatility given the current state of trade relations between the world’s two largest economies at a time when economic growth in both also appears to be slowing down.  The United States had a strong 2018 and is likely at the top of its economic cycle.   Despite President Trump’s protests directed at the Federal Reserve, interest rates are projected to continue rising and if there is continuing disruption to U.S. and world trade the U.S. economy may enter a mild recession.  Compounding this are the potential negative wealth effects on spending by consumers and investors of an increasingly volatile stock market which is reacting to a high degree of political and economic uncertainty.  As for China, its rate of growth while still robust by European or North American standards is nevertheless slowing down and this is being exacerbated by the impact of US tariffs as well as a massive amount of Chinese debt that will constrain future prospects for infrastructure spending.  Naturally, a resolution of the current trade disputes between the U.S. and China would go a long way in improving the world economic outlook.  With respect to Europe, growth there has also been slowing and the ultimate impact of Brexit remains a large source of economic uncertainty.   Meanwhile Japan continues to expand but very weakly. And of course, it remains that the recovery from the 2008-09 recession is incomplete given that fiscal stimulus and easy money have in the end generated an even larger global debt pile.  Based on all this, the optimistic projection for 2019 is that overall growth will remain positive but slow from rates achieved in 2017 and 2018.  The pessimistic projection for 2019 is that continued trade disputes, gradually rising interest rates, debt overhang and economic uncertainty will come together to tip the global economy into recession"

There are other viewpoints in this Focus Economics blog post and you can of course check them all out here.