Thunder Bay, The Conference Board and Smart Growth

 

The Major City Insights for Thunder Bay by the Conference Board of Canada was released October 15^th and the report essentially summarizes the economic situation in Thunder Bay as “Local economy treads water” with the key points being as follows:

· Thunder Bay faces a tepid economic outlook featuring mixed performances from the various sectors of its economy. Ongoing work on the city’s $1.2-billion jail remains an economic bright spot, but other important sectors face a range of difficulties.

 

· Plans for at least two local lithium plants remain in play, but faltering demand for electric vehicles (EVs), which use lithium in their batteries, and the recent removal of the federal EV mandate could scupper them. The big drop in lithium prices since 2022 is a bad sign for the industry.

 

· Modest recent improvements in lumber and pulp prices spell some optimism for the long-suffering local forest products industry, although this year’s big jump in U.S. softwood lumber tariffs to a total of 35.19 per cent is a setback.

· Thunder Bay’s real GDP has largely floundered against this uninspiring backdrop. We forecast no change in 2025 following a 0.2 per cent easing in 2024, then a 0.7 per cent rise in 2023. Fractional 0.7 per cent growth is our call for 2026, followed by annual advances just above 1 per cent in 2027–29.

 

· The window of migratory opportunity might have closed for Thunder Bay due to sharply lower federal immigration targets that are limiting the number newcomers from abroad. Rising return-to-office orders from firms and governments, meanwhile, will eventually limit other Ontarians’ ability to take advantage of very affordable local housing.

Out of 24 CMAs covered in the Conference board reports,Thunder Bay ranks 24^th in terms of real GDP growth forecast for the 2026 to 2029 period.  Total employment is expected to remain flat going forward and while population for the CMA is forecast at 134,000, it will remain at that level for the foreseeable future. On the other hand, low growth is not negative growth and business owners in Thunder Bay appear to be well adjusted to a low growth environment given that the most recent survey results out of Thunder Bay Ventures find them cautiously optimistic amid economic challenges.

Needless to say, it is not the most auspicious backdrop for the unveiling of the City’s Smart Growth strategy.  What the ultimate plan to address the City’s economic future will be is interesting to say the least and community input is being solicited on the draft as well as being subject to review by assorted City Standing Committees.  Despite what seems to be some robust construction activity underway in the city in terms of residential and hotel activity, it appears that this is not sufficient to offset what the Conference Board views as “tepid” economic performance.

Indeed, while the City seeks to address growth, a lot of the emphasis to date seems to be on assessment growth and growing the property tax base which are usually not the main targets of economic growth inducing policies.  It would be like next week's federal budget making the case that moving Canada's economy forward requires more people paying more income taxes. The aim should be growing the city’s level of economic activity to increase  both real total and real per capita GDP through private and public sector investment in productive job creating activities.  The City of Thunder Bay Smart Growth plan proposes two key measures to guide growth over the next decade:

• Grow the property tax base by 3% annually

• Grow the population by 1% annually

It would appear that in the end, this is not really an economic growth plan per se but a plan to try and grow Thunder Bay’s municipal tax base that is accompanied by a lot of social and quality of life and community goals masquerading as economic targets.  Indeed, the entire approach resembles a much earlier initiative by Thunder Bay Ventures circa 2005 called Thunder Bay Fast Forward concerned with growth in the midst of the forest sector crisis which also generated sets of indicators. Nevertheless, this latest effort at growth and measurement will probably go over well given the general level of economic literacy in the community. One suspects that perhaps such an approach also works well in a city where one-third of employment is broader public sector and public sector construction projects have been key drivers for the last few years. 

Of course, growing both the economy and the municipal tax base are not mutually exclusive goals but it is odd the performance indicators for successful growth do not include real GDP (which incidentally looks somewhat flat going forward) though employment and labour force indicators as well as building permits which are correlated with overall economic growth are included.  However, as the report states, the “key performance indicators such as tax base and population growth are priority metrics”.  In other words, as long as there are more people on public sector incomes paying more property taxes, this plan will be declared a success.

In light of the Conference Board Report, one suspects the response of our civic leadership to square the Smart Growth Plan with the Conference Board report will be to remark they are measuring different things and growth is more than about just measuring economic output – the perennial apples and oranges comparison. They may even claim the Conference Board report is missing the real sources of economic growth and performance just like Statistics Canada is missing the true size of our population with their numbers.  All we can do is wish our municipal leaders good luck on this one.

 

Urban Density, Rules, and Thunder Bay

 

The big rage in urban policy these days is the 15-minute city – that is, living in an urban area where everything is 15 minutes away.  One could argue that Thunder Bay has been a 15-minute city for decades – no part of town is more than 15 minutes away by car.  However, the modern incarnation of the 15-minute city is one where most things one needs in the process of daily life – medical services, schools, retail, services, etc…- are within a 15-minute walk from where you live.  This used to be a feature of early cities that persisted well into the 19^th century but with urban growth and the advent of the automobile and suburbanization, we have moved away from that.

 

Nonetheless, Thunder Bay is also trying to move into the new age and part of that process involved its new Zoning By-law that passed in April of 2022.  While not ostensibly part of an official plan to build the 15-minute city, it is designed to encourage urban density.  Among other things, the plan levels “residential zoning across the city, opening the door for homeowners to subdivide any detached house, build new homes on smaller lots, and even allow for residential housing in backyards”.  In part this is expected to expand the rental housing market by allowing for more basement apartments – many of which already exist – to come out into the housing stock fully and legally and expand affordable housing.  Even the Chamber of Commerce has got into the act by supporting this policy as a return to mixed use neighborhoods and the creation of “walkable neighborhoods” where you can walk down the street and get groceries or a cup of coffee.

 

Of course, the problem is that in Thunder Bay, as is often the case, the left municipal hand does not always move in accord with what the right municipal hand is doing.  There is a degree of policy inconsistency.  On the one hand, April 2022 saw a new zoning bylaw designed to encourage urban density through a process of infill while September of 2022 sees the same municipal entity initiating planning to expand the Parkdale suburban subdivision that also requires a substantial extension to the city’s sewer infrastructure.   On the one hand we want more density in existing residential neighborhoods, but we also want new suburban residential developments.

 

However, such inconsistency is minor given it is traditional not only in Thunder Bay but across municipalities in Ontario.  It is rare to find a municipality – especially in today’s era of “housing shortages” that would not jump at the prospect of new development and associated tax revenues and development charges.  The more serious issue for Thunder Bay is that despite being a city with a CMA population of 130,000, it really feels like a much smaller and spread-out place because of its historic development as two cities.  What is actually required is more density buildings in the four to eight storey range just off of existing commercial and retail areas – including the old downtown cores.  Simply allowing for more basement apartments in existing suburban neighborhoods does nothing for “walkable communities” as they all need cars to get anywhere anyway.  If anything, this makes a car-centric city worse. Pretending that more basement apartments in areas remote from shops and services will create walkability is simply aspirational urban planning.

 

What is starting to happen especially in some of the older “modern suburbs” built circa 1960 and going forward is basement apartments being allowed without consideration for the spillover effects of more residents and especially more vehicles.  The new zoning bylaw allows 1.5 vehicles per home but some of these rental homes now have 3 and 4 vehicles most of which end up being parked on the street.  The amount of traffic on some residential streets is noticeably higher – and one should note faster.  And if the new units happen to be close to the university or college, there are invariably a lot of overnight guests adding to the urban street scene.

 

Even all this could be worked around if the City of Thunder Bay actually followed up its plans with some type of concerted implementation.  Case in point. Snow removal. The city has calendar parking in residential neighborhoods to facilitate snow clearing.  That is on even calendar days you park on the even address side of the streets and on odd calendar days you park on the odd side.  This allows for easier and efficient snow clearing as one side of the street is always clear after a storm. 

 

The problem is there are now too many cars on some streets for the parking available at the homes, so they invariably need to be parked on the road and in the winter rotated from side to side.  That has become too bothersome for the average Thunder Bay resident who prefers to park willy-nilly wherever they feel like  and so there are always cars on both sides no matter what day it is.  And if snow is in the forecast, no one cares because facilitating snow removal is a community benefit and the constant turnover of new rental residents with weaker ties to the neighborhood means they do not care as much.  Moreover, the city rarely, if ever, tries to go down streets and ticket violators as part of a program of regular enforcement – no doubt because they are “short-staffed”.  On days when it does snow, the snow plough operator has difficulty getting through the street resulting in an uneven job.  And to make it worse, more often than not even the city plough operator does not follow the rules ploughing the even side on an even day when parking there is allowed and vice versa.

 

Thunder Bay has in many respects again become the wild west. Rules? They appear to have become voluntary unless someone decides they are not.  Try following the speed limit in a school zone with two large F-150s behind you and see what its like.  If you want rules, you follow them if you like, it is your choice, seems to be the mantra.  Yet, with increased density and more people living in closer proximity, following the rules should be more and not less important.  Thunder Bay has always been a place full of independently minded people doing whatever they want when they want and that appears to extend to the city government itself which makes plans and rules and does not enforce them or even try to implement them properly.  To be fair, some of this behaviour is continued fallout from the pandemic and a reaction to the rules and restrictions that were imposed.  There is a process of social and behavioural adjustment under way in cities across Canada, and it is not over yet.  Still, it remains that the long-term outcome here is not going to be some type of urbanite planning fantasy of happy renters and homeowners co-existing in walkable suburban communities strolling hand in hand to save the environment while the city wins urban planning awards.  Rather, it is going to result in a deterioration of urban quality and community life for many residents of Thunder Bay as a result of aspirational planning with no follow through.