Happy New Year to all!One must admit that 2023 has been a bit of a ride regionally, nationally,
and internationally.Regionally, Thunder
By and northern Ontario have had a reasonably good year economically
though many of the trends affecting the country and the world – the higher cost
of living, homelessness and a general angst and anxiety about the future – are also
part of life here. Sometimes, even the nature of “high
tech” 21st
century crime sometimes makes one wonder if the world has truly been turned
upside.
The country’s economy has slowed but there is no recession
yet.If anything, the Bank of Canada is
not given enough credit for engineering what to this point has been a soft
landing of higher interest rates, slower growth and falling inflation.As much as people complain about the cost of
housing in Canada and the seeming inability to get things done, it also seems
to be a feature of other countries such as the USA, the UK and Australia.Indeed, it is interesting how similar
debates around housing
issues are occurring in countries around the world.And of course, there is the international
front where a definitechallenge
is underway
from the CRINKs (China, Russia, Iran and North Korea) in three specific theatres
– Middle East, Ukraine and Taiwan – and
in the Cyber world to the EU-Anglosphere-Asia/Pacific Western Alliance.
Still, much of the global turmoil seems far removed from
Thunder Bay which is still in many respects still somewhat both removed and
integrated with life in the rest of province and country.Air travel is still the quickest and most
convenient way to get from here to anywhere but the pre-pandemic age of
numerous, cheap, and conveniently scheduled flights connecting Thunder Bay to Toronto
and ultimately the world has departed for now.As much as Thunder Bay is plugged into the modern world, we still seem
to wait a long time for things other places seem to get much sooner. After all,
we have been waiting for an Ikea and a Costco since at least the mid 1990s.As my running joke goes, Thunder Bay is
probably a great place to wait for the apocalypse.When the world ends, it will happen at least ten
years later in Thunder Bay.
Of course, as much as there seems to be constant change and
turmoil, after 33 years of teaching and research and nearly twice that number
of years being alive, one achieves a certain serenity from the patterns of constant
change. In many respects, one has seen it all. I reflect
that during my career, my teaching has gone from hand-written lecture notes and chalkboards
to electronic screens and PowerPoints while my research output was once typed
on a manual typewriter after organizing index card cards from research trips to the
library where sources were hunted down from a card catalogue. Today, I can surf
any number of libraries and digital sources for both data and output on my
laptop or iPad from the comfort of my own home. Writing - including blogging - is much faster than it ever was.
With all the new technology and social changes, one can sometimes start to feel like a dinosaur but the
trick to avoid that fate is of course to maintain a curiosity and enthusiasm
for the world around you, to see things in a different light, and to try new
things.After all, despite the gloom,
2024 should be the quintessential Canadian year.A year of beer as we celebrate the year of
20-2-4s.What could be more Canadian
than that?To a 2024 of hope and wonder
and if things go off the rails, there is always a beer.
It is budget time at Thunder Bay City Council and this year’s
discussion should be quite interesting given the coming together of the
pandemic, numerous water issues that have affected residents directly in their
pocket-books as well as the long-term effects of rising municipal expenditures
combined with a flat population profile and an essentially stagnant property
tax base.
The proposed 2021 municipal tax levy, which represents the
total amount of dollars that needs to be raised from property taxpayers to fund
City services, local boards and agencies and contribute to capital infrastructure programs, is
$203,682,300 - an increase of 2.15% or $4.3 million over the 2020 approved
municipal tax levy of $199,398,000. By comparison, in 2020 the municipal levy
increase was $5.3 million, representing a 2.73% increase over 2019. Not
included in the increase are costs associated with the COVID-19 pandemic, which
are proposed to be funded from the Stabilization Reserve Fund in 2021 and one
expects the millions of dollars in federal and provincial funds that have been
provided for the purpose.
As well, there are numerous user fee increases not least of
which is for water which comes in at 3.5 percent. The irony of a 3.5 percent increase for water
given the epidemic of residential pinhole leaks affecting thousands of
residents is notable. As well, the 2021 proposed capital budget is presented at
$51,607,300 gross of which $16,525,700 is funded by the tax levy representing
an increase of 8.6% compared to the 2020 budget.In terms of employment, the number of fulltime
equivalent positions (FTEs) rises from 1724 to 1758 which we are assured is temporary
because it has to do with cleaning costs associated with COVID.This increase of 34 FTEs in municipal employment
comes on the heels of 9 FTEs in 2020 and 10.5 in 2019.
If one wants some comparisons, Figure 1 plots the total
municipal tax levy from 1990 to the current forecast for 2021 with the trend readily
apparent. As well, while we know that Thunder Bay in 2020 had the second highest
property tax rate of 35 Ontario cities, Figure 2 looks at the per capita
levy in 2020 for 27 Ontario cities. It
turns out, that at $1783 per capita, Thunder Bay is the fourth highest.For those purists who say it is unfair to
compare us with cities like Toronto, very well, let us just look at the five major
northern Ontario ones.Here, Thunder Bay
is ranked first – primus inter pares – above North Bay, Timmins, Sudbury
and the Sault.
If City Council is to be guided on what to do this year it
may want to heed the results of its own budget survey which had nearly 500
respondents though one expects that the expert statisticians resident on City
Council will simply discount the results as based on a small and biased sample
of negatively minded people not representing the true mind of the City of which
only City Councillors have the divine power to ascertain.Still, the survey results were quite telling
as the general tenor of the responses was to focus on core services.
As the report reads: “While there was a wide variety of
topics covered, the strongest message and overarching theme centred around not
spending money on extras considered ‘wants’ and instead focusing on essential
‘needs’. For example, not spending money on new capital projects such as the
Multi-use Indoor Turf Facility, a waterfront sign, roundabout, or art gallery,
and instead investing in existing City infrastructure (roads, facilities,
fixing water pipes), and social services such as crime prevention and
supporting vulnerable populations. It was also conveyed that citizens have
experienced financial hardship because of the pandemic and do not want to see
their taxes raised at this time – especially not to support new capital
projects. Citizens outlined they would like to see the City invest in what we
currently have and support the core needs without increases taxes – understanding
this means giving up those items which would be nice to have but are not
essential services.”
Indeed, based on a ranking of what is considered “very
important or important,” the top programs and services in the city should be:
emergency services, winter maintenance, drinking water, road maintenance and
construction, garbage and recycling.Included at the bottom are transit, child-care, libraries, recreation
programs and facilities, animal services, and economic development.There certainly does not seem to be a
groundswell of support in this survey for new capital projects that do not
reflect a core services mandate.
What should the City of Thunder Bay do this budget
season?Well, that is the $203,682,300
question.First, it probably is time for
Thunder Bay to visit the concept of core services in a more substantial manner.Given our tax base, running the expansive set
of services that we have is increasingly difficult given the size of the tax
base. If the province wants us to fund an expansive set of community and social
services on a local and regional level perhaps, they should foot more of the bill. Second,
the 2.15 percent proposed increase does represent a retreat from the 4 percent
or more number that was being bandied about earlier in the year.While it may seem that City Councillors and
administration have seen the light, it is unfortunately an oncoming freight
train in a dark tunnel and more needs to be done.
While 2 percent does mirror the rule of keeping increases to
the sum of the rate of inflation (approximately 2 percent) plus population
growth (pretty much zero), it should represent an upper bound rather than a
flexible target.There is more to be done to get
levy growth even lower. Third, given that approximately 70 percent of costs are often associated
with employment levels, there really needs to be a program of reduction via attrition
and redeployment and retraining of staff.For the next three years, for every two municipal employees that retire or resign,
there should only be one replaced.That
FTE footprint needs to start coming down to where it was a few years back – say
1700 as in 2017.At 100,000 per employee
– which is not an unreasonable estimate of what each municipal FTE costs when salaries and benefits are combined, that
would eventually reduce spending by $5 million a year.
Of course, all this talk of numbers and reductions is
probably a lot for more upbeat members of council and one certainly one would
not wish to bore them to death as they are perfectly capable of doing that to
themselves during their marathon five and six-hour meetings.A better way of framing all of this is via a
simple analogy from the world of nature.Simple stories are often the best ones as they can reduce complicated
issues to the essentials needed for understanding.
Picture if you will, our municipal government as a Physalia
physalis – also known as a Portuguese Man O’ War – floating serenely in a large
aquarium.It is essentially a large jelly
like inflated bladder that in the end is rather brainless and feeds instinctively
on the small fish and creatures in the aquarium via the lethal stingers in its
tentacles.Along with being rather
brainless, it also really has no anus so it is probably recycling its own waste
matter which can eventually get monotonous and a little stale given the size of
its environment.
As it sits in its limited environment and exhausts its food
supply, it really is not capable of doing what needs to be done.The solution is either to expand the size of
the aquarium and restock it with new prey or replace the current Physalia
Phyalis with a new and much smaller one or perhaps even an entirely new creature.The current creature of course behaves by
instinct and really is not capable of altering its size or its environment.It is not capable of expanding the size of
its environment – economic growth and an expanded tax base – and it does not
appear to be capable of shrinking on its own.I suppose that a solution has to be done by forces external to the situation.I guess that is where the voters will ultimately come
into the picture.
We are about six
months away from Thunder Bay’s next municipal election and the race for the
mayor’s chair and council spots represents an opportunity to examine directions
and priorities.The last election was
obsessed with the event centre and the issue was a distraction from important
issues such as the sale of municipal public assets, economic development, the
city’s economy, the sustainability of municipal finances as well as the ongoing
saga of infrastructure renewal and in particular the James Street Bridge which
has now been closed to vehicular traffic since 2013.
Sadly, with the
exception of the events centre, which has ridden off into the sunset for the
time being, all of these other issues are still ongoing.And of course, added to all of these issues
are those with respect to relations with First Nations as well as court cases
involving the city’s politicians and administration. Needless to say, Thunder
Bay has garnered an inordinate amount of negative attention on the national
stage in areas under the purview of municipal government and such attention is
certainly not a magnet for business investment.
When it comes to
economic development and the city’s economy, it remains that both population
and employment
levels in the city have been flat for the last four years.The low unemployment rate in the city results
from a labour force that has shrunk faster than employment and of itself is not
a positive harbinger for the future.Waiting
for the Ring
of Fire to kick start the economy appears to be a process akin to Waiting for Godot
and all the talk of smelter locations in the world will be of no avail given low
current chromite prices.As for the
current trappings of prosperity in the city, they are largely the result of a
large public sector and associated public spending which after the June
provincial election could very well come to a crashing halt.
Of course, even without
long term private sector wealth creation, the illusion of prosperity created by
public sector spending has helped fuel municipal
government spending and tax increases which over the last few years have
averaged above the city’s inflation and GDP growth rates.Moreover, there has been a continued shift of
the tax burden onto the residential ratepayer and they now account for about 70
percent of tax revenues.Added to this
are the continued steep increases in user fees and charges which given the talk
about “rainfall
taxes” show no sign of abating anytime soon.
Indeed, the thirst for
residential tax revenues also results in city council giving the go ahead to
new urban residential developments outside core areas that while adding to the
tax base in the short term also add to urban sprawl and require municipal servicing
whose maintenance will add to city expense in years to come.The sustainability of this type of short term
development formula should be a topic for debate and discussion but again it is
an issue the politicians are happy to ignore when it comes to an election year.
So, what is to be
done? Well, for starters Thunder Bay residents need to pay closer attention to
the fiscal, economic and social issues affecting the city and ask candidates more
pointed questions about what solutions might help address the situation.Perhaps one should ask why anyone might want to buy
a new house in Thunder Bay if the property tax bill for a new bungalow is going
to be in the range of $5000 to $7000 onto which will be added another $1000 a
year in water and sewer charges.
Given the length of
tenure that many current members of council have had, a legitimate question is
whether or not Thunder Bay might not be better off with a substantial transfusion
of new blood on City Council with new ideas and new energy to look at new ways
of doing things.After all, current
members of City Council have generally been the most comfortable with solutions
that involve raising taxes and spending more money.While the claim is often made that millions
in efficiencies and savings have been implemented, the fact is the tax levy continues
to grow which means total spending is going up and not down.
Making Thunder Bay’s
next municipal election count requires making an effort to create real change
in the way municipal issues are dealt with and that requires some new blood. It
truly is time for change.