Northern Economist 2.0

Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts

Thursday, 21 March 2019

Reflections on a Town Hall: Trudeau in Thunder Bay

Well, in the wake of the release of the 2019 Budget, Prime Minister Trudeau is off to Thunder Bay where he will be hosting a Town Hall on the campus grounds of Lakehead University on Friday March 22nd.  Indeed, the preparations for his arrival are already underway as the grounds of the C.J. Saunders Fieldhouse where the event will occur are being swept and tidied up from the accumulated grit of a harsh winter.  This is apparently Trudeau’s first visit to Thunder Bay since 2016 which is a signal that the election campaign is already underway.  The festivities get underway at 7 pm (but if you want a front row seat you need to register and arrive by 5:00 pm).

Thunder Bay can be considered a relatively politically safe place for the federal Liberals to have a Town Hall given the two ridings have returned mainly Liberals to Ottawa for nearly 100 years.  Thunder Bay voters are actually very conservative voters in the sense that they dislike change and always do the same thing – that is, return Liberals to Ottawa.  The only way they deviate from their inherent conservatism is to actually vote Conservative. Indeed, the last federal Conservative party politician who was elected was Robert Manion, who if memory serves me correctly, was around in the 1930s.  Of course, there was MP Joe Commuzzi circa 2007 – who started as a Liberal but then switched to the Conservatives and served as a Minister– but he was not elected as a Conservative so my initial point stands.

So what issues will Prime Minister Trudeau have to face in Thunder Bay? Well, the audience is likely to be filled with gushing supporters who will hang on his every word and engage in numerous standing ovations despite the recent disillusionment over the SNC-Lavalin-Raybould Affair.  Indeed, the Prime Minister is probably looking forward to an evening’s relief from the stress and acrimony of Ottawa.  There is nonetheless the potential for some fireworks and charged questions on a number of topics should the Town Hall decide to deviate from what is likely to be a large pep rally.  For those who might be interested, here are the parameters of just two interesting question areas.

What is the Federal Government going to do to help Thunder Bay address the December 2018 report by the Office of the Independent Police Review Director on relations between Indigenous People and the Thunder Bay Police Service? It is true that the local police are a municipal function and municipalities are creatures of the provinces, but it remains that First Nations and Indigenous peoples are a very important responsibility for the Federal government.  The recommendations for the Thunder Bay Police Service are going to involve a substantial increase in expenditures on an already stretched municipal tax base.  Is there any real federal financial assistance coming or is Thunder Bay on its own in dealing with this? Indeed, given that Thunder Bay is a regional centre for health and education services for area First Nations, what can the federal government do to assist in this regard?

As well, what is the Federal Government doing to actually implement its own growth plan for the  Northern Ontario economy?  All of us are familiar with the 2011 Northern Growth Plan released by the Ontario Liberal government which, over the course of the next 25 years, was supposed to assist the North in reversing its economic decline.  Well after five years of the provincial Northern Growth Plan – the plan to end all plans – the population of the North remains flat, employment is down and the value of new investment is also down.  

This lacklustre result has not deterred the Federal government from announcing its own Prosperity and Growth Strategy for Northern Ontario in April 2018 with twelve areas of action.  However, since then there really has not been much to be seen and heard as to specifics of what this strategy entails, aside from mentioning the strategy whenever there is an announcement of federal money from FEDNOR as was the case in Sudbury in December 2018.  Aside from this, there is little to be found in a Google News search when the term "Prosperity and Growth Strategy for Northern Ontario" is typed in.  So, is there an actual Federal action strategy for Northern Ontario or is it just another election marketing ploy?

I guess we will have to wait until tomorrow night to see if we learn anything new.  I for one expect there will indeed be some entertainment involved in this Town Hall Meeting.  Who knows, maybe we'll even get yet another announcement of federal support and commitment for the Ring of Fire? At the very least, in an election year one might expect some federal infrastructure dollars to finish four-laning the highway to Nipigon.

Thursday, 6 December 2018

Long Run Economic Performance: Comparing China, the UK and USA


In light of my recent contributions on China’s economic performance which have appeared in The Hill and on the Fraser Institute Blog, I thought it might be useful to provide the figures which underpin the longer-term analysis of their performance.  The data I used is from the Angus Maddison Database – the 2018 update – and the data is summarized in the accompanying Figures 1 and 2.

Figure 1 plots total real GDP from 1820 to 2016 in 2011 USD for the United States, the United Kingdom and China.  In 1820, China had a vastly larger economy than either the US or the UK with a real GDP of $325 billion compared to $69 billion for the UK or $21 billion for the USA.  Indeed, for much of economic history, China has always been the biggest economy in the world as a result of its massive population.  In 1820, China had a population of 381 million people compared to 10 million for the United States and 21 million for the UK.  However, the 19th century was not kind to China and by 1870, China’s economy had shrunk to $270 billion but it was still larger than the United States at $150 billion and the UK at $179 billion. 

 

Total GDP of both the US and the UK grew quickly as a result of late nineteenth century industrialization with the US matching the UK in 1878 and then pulling ahead in terms of total GDP.  By 1887, the US economy at $306 billion was larger than China at $274 billion and the UK at $228 billion.  By the eve of the First World War in 1913, the US economy at $791 billion was nearly twice the size of both the UK and China at $368 billion and $344 billion respectively. In the period since WWI, the United States grew rapidly and by the mid 1970s was over five times the size of the UK economy and about five times larger than China’s economy.

China had a Communist revolution in 1949 but economic performance in its aftermath - while substantial - was not as robust when compared to the last forty years.  From 1950 to 1975, China real GDP grows from $348 billion to $1.2 trillion – a tripling of output.  However, things for China really take off with the first economic reforms and liberalization of the 1970s and from 1975 to 2016, its economy expands from $1.2 trillion to $17.3 trillion.  Over the 1975 to 2016 period, the US economy expanded from $5.6 trillion to 17.2 trillion while the UK expanded from $1 trillion to $2.5 trillion.

In 2016, China re-assumed its historical role as the world’s largest economy.  Yet, as I pointed out in my oped pieces, this is not the end of the story.  Despite its impressive and rapid economic growth in terms of total output, China still lags when it comes to per capita output. As Figure 2 shows, over the entire 1820 to 2016 period, China has always had a lower per capita GDP than either the UK or the US and the relative gap has not changed all that much despite the rapid growth of the last 40 years.  In 1820, per capita GDP in China was about 26 percent that of the UK and 41 percent that of the USA.  By 1975, its per capita GDP was 7 percent that of the UK and 5 percent that of the United States.  After the robust growth of the post 1975 period, by 2016 per capita Chinese GDP now stands at 34 percent that of the UK and 24 percent that of the US.

 

So, China has done very well but it still has a long way to go.  Its rapid extensive growth masks the fact that large swaths of its population are still quite poor.  Its economy is showing signs of economic and political fragility given its aging population, large debt levels and economic inequality and this has global implications.  Such fragility is probably a reason for its more authoritarian turn in recent years under President Xi Jinping.  After the rapid growth and improvement in living standards of the last few decades, any economic slowdown may create a politically volatile domestic mix of discontent.

Tuesday, 6 November 2018

Natural Resource Resurgence in the Northwest


There has been good news when it comes to the forest sector in northwestern Ontario in the wake of nearly a decade of doom and gloom.  Softwood lumber prices have rebounded and there is expanded production underway at sawmills in Ear Falls and Kenora with the two plants now providing about 250 jobs.    In White River, the previously closed sawmill has now been operating for about five years.  Resolute Forest Products just announced its third quarter profits were up and  it would pay a special dividend and its optimism for the future recently translated into an announcement that it would invest $53.5 million on its northwestern mill operations. 

According to the MNR, in 2006, there were 40 large active sawmills in Ontario (mills that processed more than 50,000 cubic metres annually) of which 34 were in northern Ontario.  There were 58 medium size mills (processing 5,000 to 50,000 cubic metres annually) in Ontario of which 14 were in northern Ontario. There were nearly 60 small sawmills in Ontario (less than 5,000 cubic metres in production annually) of which 19 were in northern Ontario.  The sawmill industry was distributed throughout the province, but large employment intensive mills were concentrated in the north.  By 2012, Ontario was down to about 97 mills – a 40 percent reduction from 158 to 97 sawmills. 

As for the pulp and paper mills, Canada as a whole saw a decline from 50 to 30 pulp mills between 2000 and 2014 – a reduction again of 40 percent.  Approximately over the same period, total employment in logging, paper and wood products in Canada fell from 308,664 to 190,651 – a loss of 118,000 jobs or a drop of about 38 percent.  As for northern Ontario, in 2003 there were 12 large pulp and paper mills in northern Ontario while by 2012 the number had gone down to 7 – a drop of 42 percent.  Since then, the mill in Iroquois Falls has also shut down and while there were plans for redevelopment it has since suffered an unfortunate fire.

The forest sector crisis in northern Ontario saw the loss of over 20,000 jobs in the northwest part of the province alone.  It was not just a downturn but in many respects the end of an entire way of life.  Well-paying industrial jobs in many small communities that supported a small-town friends and family oriented lifestyle vanished. After the destruction of the forest sector crisis that saw pulp and sawmills shuttered and significant employment losses, we are now seeing new investment and some employment recovery.  However, despite this recovery in investment and employment, it is unlikely that the size of the industry well ever again return to its former glory.


The following figures present an overview of the evolution of employment in northwestern Ontario’s resource sector.  Figure 1 plots the number of resource occupations defined by Statistics Canada as production, supervisors, technical, laborers and harvesting in natural resource, agriculture and related activities.  Note that these numbers include all resource activities and not just forest sector ones.  Still, the good news is that the number employed in resource occupations bottomed out in 2012 and has since been on an upward trend with the last few months of 2018 showing a distinct surge. In 2012, monthly resource employment in NW Ontario averaged 5600 whereas in 2018 to date it has been 7270 – an increase of almost 30 percent.  Much of this has been due to the mining sector but forestry has also played a role.

Figure 2 shows a similar trend, but it is annual resource employment by industry rather than occupation with resource industries defined as forestry, fishing, mining, quarrying, oil and gas.  Needless to say, for northwestern Ontario this would mainly be forestry and mining.  Here, the rebound seems to date from 2014 with annual employment going from 3000 in 2014 to 5100 in 2017 – an increase of 70 percent.  However, from 2002 to 2009 total employment plummeted from 9000 to just under 3000 - a drop of about 67 percent.

So resource employment is on the rebound, but we are nowhere near the peaks reached in the period from 2000 to 2003 just before the forest sector crisis took hold.  The remaining firms are more efficient and capital and technology intensive and therefore will not employ as many people for similar levels of output as produced a decade ago.  Still, the sector has survived and in some respects is even thriving which is good news.

Saturday, 3 November 2018

So What Is the New Plan for Northern Ontario's economy?


As the Ford government forges ahead, we should soon expect to see evidence of what its plans for boosting the economy of northern Ontario will be.   Given the change of government, the previous Northern Growth Plan is gone and will not be mourned given that evidence of its positive impact was hard to come by.  The Northern Growth Plan was essentially a form of palliative policy care given that despite the lack of progress on the economic front, there were nevertheless numerous press releases and announcements to the effect that many things were happening in the north -usually announcements of government funding - and we should feel good.  As a strategy, it has even been embraced by the federal government.

Ontario is now apparently open for business and while that can certainly be beneficial for northern Ontario, it is necessary for the government to demonstrate what that actually means for the North.  During his recent visit to northern Ontario, the Premier reiterated his “open for business mantra” and stated a commitment to sectors like steel, mineral exploration and forestry.  His visits in late October to the steel facilities in the Sault, the opening of Harte Gold’s new Sugar Zone mine near White River and Thunder Bay for Resolute Forest Products investment announcement provided excellent photo opportunities for economic success but these were projects that have been in the works for some time.

It is now time for the Premier to demonstrate his commitment to growing the northern Ontario economy.  As to what the new approach will be, one can start by an examination of the election platform that brought the provincial Ford conservatives to office.  The northern platform was a five-point plan that involved:

  • Developing Northern Resources, including the Ring of Fire.
  • Moving forward with resource revenue sharing from mining, forestry and aggregates to help Northern towns and Indigenous communities share in resource development
  • Ensuring hunting and fishing revenues go toward their stated purpose of conservation
  • Cutting the aviation fuel tax for the North to reduce the cost of living in the North and,
  • Bringing back passenger rail service to the North (which I take to mean the Ontario Northland and probably not full service across the north shore).
In terms of proposed implementation, the election platform of the victorious Conservatives said that a provincial conservative government under Doug Ford would:

1.     Build the roads to the Ring of Fire.

2.     Establish resource revenue sharing from mining, forestry and aggregates to help Northern and Indigenous communities share in the benefits of resource development by having the province take a portion of provincial revenues collected from aggregate licenses, stumpage fees and the mining tax and direct it to the local, host Northern and Indigenous communities. This was estimated at $20-$30 million in annual revenue.

3.     Ensure all hunting and fishing license fees are spent on wildlife conservation.

4.     Reverse the 148 percent increase to the aviation fuel tax for all Northern airports returning the aviation fuel tax to its original 2.7 cents per litre

5.     Bring back full passenger rail service to the North by first completing an environmental assessment of what equipment needs to be purchased and what upgrades need to be made to restore the service and then providing $45 million annually for operating costs.

Despite the flurry of activity with respect to announcements about promises made and kept, it remains that these five points and their associated implementation specifics have yet to be addressed.    How they will be implemented given the fiscal constraints the province faces will be an important issue.

In terms of fostering the northern Ontario economy, to these five points, I would add the freeing up of more Crown Land for cottage and camp development to provide the inputs to grow and develop a tourism service sector in the north that can be serviced out of its existing towns and cities. I would also urge extension of the highway twinning projects already currently underway to grow needed transport infrastructure in the north and hopefully improve upon the previous government’s anticipated completion date.

When these specifics will start to take firmer shape may be indicated in the November 15th Ontario Economic Outlook and Fiscal Statement.  Until then, we wait.  Hopefully, the Ford government will repudiate the adage that while provincial governments go and come, the problems of the northern Ontario economy abide. 
 
 

Sunday, 21 October 2018

Pictures of a Presentation

I did my Lakehead University In Conversation presentation in the Fireside Room at the Brodie Library yesterday.  My talk was titled "Going from Chicago to Duluth of the North: Thunder Bay’s Economy in the Past, Present, and Future," and was quite well attended with about 30-35 members of the community present including old friends, new friends and even several candidates for municipal office.  Lakehead's In Conversation series is a very important venue for sharing university research and expertise with the broader community and an important form of engagement. A couple of pictures below including some shots of your Northern Economist in action.  Thanks to Peter Boyle for passing on some of the shots.



And of course, a photo with Peng You.





I will be posting the slides sometime later this week here on my LU Department web page.

Wednesday, 17 October 2018

Thunder Bay's Economic Evolution: A Brief History


From its origins as a fur trade company headquartered at Fort William, to the development of the grain and forest sectors, Thunder Bay’s economy has seen ebbs and flows over the course its history.  Key to its modern economic development was the federal government decision to route the Canadian Pacific Railway through the Lakehead and the arrival of the transcontinental railway in the 1880s.  Indeed, without this explicit government intervention it is unlikely Thunder Bay would have developed into a city as large as it is today.  Government action in assorted forms has been one of the pillars of Thunder Bay’s economy. 

Transportation is another pillar of Thunder Bay’s economy.  During the first decade of the twentieth century, there was a massive boom rooted in infrastructure building for the transport needs of the western Canadian grain economy that saw the twin Lakehead cities of Port Arthur and Fort William become the largest grain port in the world.  At its peak, over 30 grain terminals lined the waterfront.  Indeed, growth was so rapid that many believed the Lakehead would become the Chicago of the North.  Population quadrupled between 1901 and 1911 and the real per capita value of new construction was never higher than during this period.

Yet, as the twentieth century wore on, there was growing realization that as well as Thunder Bay was doing, it was not going to be the Chicago of the North.  The remainder of the twentieth century saw continued but slower growth and Thunder Bay’s ultimate evolution was more akin to Duluth Minnesota – the American Lakehead – rather than Chicago.  Thunder Bay’s economic growth slowed in the wake of World War I and the Great Depression and resumed during the resource boom of the 1950s and 1960s.  Indeed, natural resource extraction and processing whether forestry or mining have always been another pillar of Thunder Bay’s economy.

Port Arthur and Fort William amalgamated to form Thunder Bay in 1970 ending the urban competition that in retrospect appears correlated with better economic performance given the economic slowdown that ensured.  After 1970, labor saving technological change, aging capital stock, a shift in world grain markets and increasing international competition also eroded the competitiveness of Thunder Bay’s grain transport and forestry sectors culminating in the forest sector crisis, which saw substantial job losses in Thunder Bay and the surrounding region.  These job losses were aggravated by high energy costs with respect to electricity which were especially damaging to the energy intensive pulp and paper sector.  Total employment in Thunder Bay has never recovered from the peaks reached in the first years of the twenty first century.

In the wake of the forest sector crisis, recent years have seen a stabilization of the Thunder Bay economy and a shift in its composition towards employment in research, regional health and social services, and higher education.   This base continues to support a growing range of retail and service activities particularly in hospitality and accommodation oriented around a growing tourism scene that has drawn some international attention.  Nevertheless, economic growth has been slower compared to the rest of Canada and Ontario. While the unemployment rate in Thunder Bay is low, it is because the labor force has shrunk faster than employment as a result of an aging population and youth out-migration.  Population in Thunder Bay peaked in the 1990s and has declined slightly since.   While the First Nation’s population has been expanding, its future economic engagement hinges on the long-term success of initiatives to expand human capital via education and training.

 

As for the future, tomorrow is yesterday as Thunder Bay’s economic future will still rely on its traditional three pillars – government, transportation and natural resources.  These pillars will of course make use of new knowledge and technology and will require innovative entrepreneurial vision to recognize and implement new opportunities. Thunder Bay’s transportation infrastructure and its pivotal location on the east west transport corridor, the role of regional government services and the ongoing potential of the mining sector combined with information technology and the knowledge economy will be the economic forces propelling its future.

A version of this article was originally composed for Lake Superior News appearing there October 16th in advance of the October 20th Lakehead University In Conversation Talk at Brodie Library titled Going from Chicago to Duluth of the North: Thunder Bay’s Economy in the Past, Present, and Future.  

Monday, 20 August 2018

Prelude to Municipal Election: Thunder Bay Economic Overview


As the election campaign for Thunder Bay Mayor and City Council begin to heat up, there will be attention focused on how Thunder Bay’s economy has been doing over the last four years.  The Conference Board and Statistics Canada both provide data for  quick snapshots about how Thunder Bay has done since 2014.  First, real GDP numbers for Thunder Bay (in 2007 dollars) from the Conference Board show that the city’s economy since 2014 has grown at annual rates ranging from a low 0.7 percent in 2015 to a high of 1.4 percent in 2017 with a forecast growth of 1 percent in 2018.  While the local economy is growing, its growth rate is well below that for Ontario and Canada which in 2017 alone saw real GDP growth at 3.2 and 3.1 percent respectively according to the Conference Board. Indeed, out of 29 CMAs in 2017, Thunder Bay ranked second last in real GDP growth – just ahead of St. John’s which saw growth of -1.7 percent.

It turns out that in the wake of the 2014 municipal election, growth faltered in Thunder Bay and that is also borne out by the employment numbers.  According to Statistics Canada, Average monthly employment in 2014 was 61,608 and fell to 59,650 in 2015 and then began to rebound (see Figure) and to date in 2018 averages 61,967.  So, this suggests that the last four years have seen just over 300 jobs added to the Thunder Bay economy which works out to about 75 jobs a year.  (By the way, don't be fooled by what looks like dramatic employment growth since 2015 - after all, the scale on the Figure ranges from 58,000 to 62,500) However, this masks the ebb and flow across sectors.  Manufacturing, public administration, finance, insurance and real estate employment have all declined while there have been increases in accommodation and food services, transportation and warehousing and retail.  Other sectors have been stable.

 
The shrinkage of employment in the finance, insurance and real estate sector is a function of declining house sales and weak housing starts.   As the Conference Board noted in its Winter 2018 Outlook: “Thunder Bay’s uneven economy and slumping population have impaired residential construction. While housing starts clocked in at just under 300 units last year, this was due to an upswing in construction of multi-family homes, particularly apartments, which are relatively infrequent here. Tellingly, CMHC data show that area builders have had no unsold apartments since August 2016. Such projects are risky in an economic environment like Thunder Bay’s, so builders wait for pent-up demand to accumulate, then pre-sell their units.”

What is also interesting is the comparison of employment between Thunder Bay and Ontario as a whole.  In 2016, according to the Conference Board, 16 percent of employment in Thunder Bay was industrial versus 20 percent for Ontario.  As for office employment, it was 20 percent in Thunder Bay and 28 percent for Ontario.  At 5 and 15 percent respectively, the shares in Transport and Warehousing and Wholesale and Retail Trade are the same as for Ontario as a whole.  However, when it comes to non-commercial services (i.e., health, education and public administration), Thunder Bay’s employment share is 27 percent compared to 19 percent for Ontario. When it comes to other services (arts, entertainment, recreation, accommodation and food) Thunder Bay is at 16 percent compared to 13 percent for Ontario.

So, the long and short of Thunder Bay’s economic performance over the last four years is that while not a disaster, it has been uneven.  Real output growth has been weak and total employment has essentially remained stable and within that there is a shift to services particularly of the non-commercial variety meaning more emphasis on public as opposed to private sector employment growth. The lack of population growth combined with an aging population has led to a weakening of the housing sector. That is the current reality.

  

Thursday, 31 May 2018

Canadian Economy Slows in First Quarter 2018

Well, the Statistics Canada GDP numbers are out for the first quarter of 2018 and real GDP in the first quarter of 2018 grew at 0.3 percent which down from 0.4 percent the previous quarter.  Indeed a quick glance at a chart with the quarterly growth rates going back to 2013 suggests the period of more robust growth that took place in 2016 and somewhat into 2017 is winding up perhaps explaining the reluctance of the bank of Canada to raise interest rates yesterday. More to the point, expressed at an annualized rate, real GDP was up 1.3% in the first quarter. In comparison, real GDP in the United States grew 2.2%.

Real Gross Domestic Product Growth (Source: Statistics Canada)




combined line chart&8211;Chart1, from first quarter 2013 to first quarter 2018


The slower growth was driven by by a deceleration in household spending, lower exports of non-energy products and a decline in housing investment (-1.9%).   The impact of changing household spending is indeed a factor in the slowdown and may be tied to the recent increase in interest rates as well as other factors such as the rise in gasoline prices and rents.  According to Statistics Canada: "investment in housing fell 1.9% in the first quarter, the largest decline since the first quarter of 2009, due to a drop in ownership transfer costs (-13.5%). Lower resale activity coincided with new mortgage stress measures introduced nationwide in January...Household final consumption expenditure decelerated for a third consecutive quarter, slowing to 0.3% in the first quarter."

The sustainability of an economy led by consumer spending and housing may finally be coming into question.  How do things look going down the road? Well, FocusEconomics June 2018 Consensus Forecast still has Canada's real GDP growing at 2.2 percent annually this year with a decline to 1.9 percent in 2019 and 1.8 percent in 2020.  Given an annualized growth rate of 1.3 percent in the first quarter of 2018, we have a lot of ground to make up to reach 2.2 percent.The United States meanwhile is projected at 2.8, 2.4 and 2 percent for the same years.  Normally, when the United States does well so do as a result of our exports to them we but that traditional link has been under increasing stress given a more protectionist US economy. Today's news that the United States may be going ahead with tariffs on Canadian aluminum and steel will not help matters much.

Thursday, 5 April 2018

Yet Another Growth Plan for Northern Ontario


Most of us are familiar with the Northern Ontario Growth Plan which is a 25-year plan that was released on March 4, 2011 by the Ontario government that aimed to strengthen the economy of the North by:
  • Diversifying the region's traditional resource-based industries
  • Stimulating new investment and entrepreneurship
  • Nurturing new and emerging sectors with high growth potential. 

The Plan's policies were built upon six themes that each was to  contribute to the region’s long-term sustainability and prosperity: Economy, People, Communities, Aboriginal Peoples, Infrastructure and Environment.  I have discussed this plan in several posts on this blog.

Well, it turns out that the federal government also has a growth plan for northern Ontario though I must admit that it has flown under my radar.  I guess, when one works in an ivory tower, one sometimes loses sight of activity on the ground though how I never got wind of the extensive range of consultations escapes me. I am obviously moving in the wrong social circles.  As part of the follow up to the 2017 budget, FEDNOR began to put together a Prosperity and Growth Strategy for Northern Ontario (PGSNO) as a “roadmap to economic development and success” for the region.

FEDNOR undertook a series of engagement activities from June to November 2017 which included round tables, meetings and online tools aimed at reaching stakeholders across the region. According to FEDNOR, there was an online questionnaire with over 600 respondents, 33 round tables and 12 presentations with over 400 participants.  The result was a report with 12 common areas/themes of action (see the report for details):

1.    Infrastructure (broadband; transportation; and, energy)
2.    Diversification and self-sufficiency
3.     Northern image
4.     Rural and remote communities
5.    Timely and effective support
6.     Shortage of human resources
7.     Indigenous participation
8.     Building on regional strengths
9.     Business supports
10.   Indigenous enterprises
11.   Technology adoption
12.   Access to support for innovation

There was an item by MP Bob Nault in February 2018 discussing the report and its availability online but there seems to be little else until now.  Apparently, on Monday April 9th there will be an announcement by federal ministers Navdeep Bains and Patty Hajdu with respect to the PGSNO.  One imagines that there will be an announcement of federal development money to implement or address some aspect of the PGSNO.  Or perhaps there will be an announcement of further study and consultation.  Maybe both? Nevertheless, given that the federal report had twelve themes as opposed to six for the provincial growth plan, I would imagine that it will be twice the fun.

Sunday, 11 February 2018

Economics News Around the North: February 11th Edition


Well, traveling in winter is never much fun and this weekend I was in Montreal for the Fraser Institute Student Seminar Series and my way back has been affected by snow and freezing rain and assorted other things.  Still, there is always time to blog so here are the economic news stories that have caught my attention over the last little while with respect to northern Ontario economic affairs.


Well, this makes a lot of sense.  I recall speaking on a Thunder Bay Chamber of Commerce panel last spring where I made a similar remark that it was time to plan for a new span across the Kam River.  I suppose Thunder Bay City council is gambling that they can get something for nothing by getting CN to maintain the bridge but it would be forward looking to plan and line up the funding for a new modern bridge.  Best case scenario – they could end up with two bridges.  How’s that for infrastructure!


This is a good news story not least of which is that 40 jobs from the crew base are coming to Thunder Bay but because it bodes well for the development of Porter’s air network.  With a crew base in Thunder Bay, Porter can use Thunder Bay as a mini hub perhaps for an expansion west to Winnipeg or a link through Chicago as part of it existing network.  Porter is innovative and service oriented and a great alternative to Pearson. They are also adding a 7th daily flight out of Thunder Bay to Toronto. This weekend reminded me why I rarely fly out of Pearson.

In other transportation news, it would appear air travel is big in northern Ontario. North Bay is also getting some aviation jobs. I guess 40 is a magic number for airlines as it is expected that 40 jobs will be created here also.

Voyageur Airways receives $2.7 million to expand,” North Bay Nugget.ca, Fe. 9, 2018.

In other news…

Business confidence Drops in northeast: survey” Sudbury Star, Feb. 10th, 2018.

Apparently, less than a fifth of businesses in northeastern Ontario are confident in Ontario’s economic future according to this Chamber of Commerce annual report. This was reinforced by regional data, as the Business Confidence Survey reveals that nearly half of northeastern Ontario businesses expect their organization’s revenue to stay the same over the next 12 months.

It could be that the Canadian economy is finally slowing down given the recent numbers from Statistics Canada.


While Canada lost 88,000 jobs and Ontario and part time workers were heavily affected, it is only one month’s data – January – and you would need several months more before you could argue a trend was underway.  However, Thunder Bay and Sudbury saw their unemployment rates remain pretty much the same with Sudbury remaining at 6.8 percent and Thunder Bay dropping slightly from 6.1 to 5.8 percent.  However, as I have noted previously, the unemployment rate in northern Ontario is not the best indicator of job growth given the shrinking labour force.  Indeed, even the Sudbury Star noted that while Sudbury’s unemployment rate stayed at 6.8 percent, it nevertheless shed 800 jobs.

In Ring of Fire news, the saga continues.


Timmins is trying to boost tourism as is the Sault.



As so economic life goes on in northern Ontario. Have a great week!