Economic News Around the North, October 24th Edition

It is quite the blustery day here in Thunder Bay today so what better way to hunker down and enjoy the day than taking a look at the major economic news items over the last little while.

Ontario's GDP boosted billions per year by Lakehead University Thunder Bay, Orillia campuses. CBC Thunder Bay, October 24th, 2017.

Well, it turns out that according to a study authored by faculty at Lakehead's business school that Lakehead University's economic impact on Ontario is 1.4 billion dollars.  To my way of thinking, the faculty are the core of the university - indeed all the expenditures a university makes are to allow faculty to generate research, teaching outcomes and human capital value added for graduates so given that there are about 300 full-time faculty at Lakehead, I would estimate my personal economic impact on Ontario's economy at 4.7 million dollars (1.4 billion dollars divided by 300).  Based on my current salary, I am obviously grossly undervalued.  That is a pretty good return to any investment.  Come to think of it, hiring more full time university faculty is obviously a cheap and effective way to boost Ontario GDP.  Let the hiring boom begin.

Business ties with India explored. Chronicle Journal, October 24, 2017.

Well, a few weeks ago it was a delegation from China.  This week a delegation from India is passing through Thunder Bay.  Given the precarious state of our NAFTA negotiations, I would imagine it is a good idea to try and build as many ties as possible with the Asia Pacific region.

Northern business owners in 'defensive mode' about proposed tax changes. CBC Sudbury, October 24th, 2017.

This is the northern Ontario take on the tax changes being shepherded by Bill Morneau.  However, as we know there are going to be revisions.  Moreover, there may be other goodies coming down the pipeline in the wake of today's fiscal and economic update in Ottawa.

And in other Sudbury economic and business news....

2 former chairs quit Sudbury Chamber of Commerce over casino, arena position. CBC Sudbury, October 19th, 2017.

No comment there.  Sounds like a pretty strong difference of opinions.

While Thunder Bay is focusing on India and China for its economic enhancement efforts, it would appear that Timmins Economic Development Corporation has targeted Bolivia.

Exchange will see Bolivian delegates visit Timmins. TimminsPress.com. October 4th, 2017.

If you are interested in the Elliot Lake model of economic development, there is this...

Sault's becoming a popular retirement destination, credit analyst says. SOOTODAY.com, October 6th, 2017.

On the other hand, what if Amazon builds its new headquarters in the Sault?  The Sault is sending in a proposal. Check here.  Quite frankly, I have not come across other northern Ontario cities doing the same.

As well, there is television production activity underway in the Sault.

Producer returns with big projects for Northern Ontario. SaultOnline. October 15th, 2017.

And all the way in North Bay, there is this item referring to a recent Fraser Institute Report by Ross McKitrick and Elmira Aliakbari:

Ontario's green energy policies killed jobs.Nugget.ca, October 19th, 2017.

Even North Bay is apparently getting into the film business...

Film industry applauds local cinematography program. BAYTODAY.com, October 14th,017.

Have a great week!

The State of the North

The State of the North conference hosted by the Northern Policy Institute was held in Timmins from September 27-28 with much of the discussion focusing on reversing the north's economic decline.   Charles Cirtwill, President of the Northern Policy Institute sent out the slides of his presentation with an invitation to share and today's post reproduces a few of those slides.  Figures 1-2 present some GDP estimates by sector for the Northwest and the Northeast of Ontario while Figures 3-5 present non-residential building permits for assorted northern Ontario districts.

Economic News Around the North: October 3rd Edition

Here are some of the items of economic interest with respect to northern Ontario that have caught my interest over the last little while.  There truly is never a dull moment when it comes to the economy of northern Ontario.

White River Benefits from new Harte Gold mine. CBCNews Thunder Bay, October 3rd, 2017.

While being a small resource based community means dire times when the main industry shuts down, the converse is that when a new industry starts up, there can be a boom.  White River is getting good economic news.

Porter Airlines sets up a Thunder Bay crew base. TBNewswatch. September 19th,  2017.

This is definitely good news and raises the prospect that Porter may be looking at expanding its service west and south.  I would expect to see more flights through Thunder Bay to Winnipeg and perhaps through Chicago Midway to connect with the current Chicago-Toronto run.

Liquid natural gas coming to communities on Lake Superior's north shore. CBCNews Thunder Bay, September 25th, 2017.

And here are two interesting and related items:

Delegates discuss keys to reversing decline. TimminsPress.com, September 28th, 2017.

The State of the North - A New Vision is Emerging. TBNewswatch, September 28th, 2017.

I suppose you can start to smell the prospects of elections coming soon.  A provincial election is expected by spring while municipalities will be going to the polls next October.  Needless to say, the shopping lists are being put together in the form of strategies and plans designed to reverse the northern Ontario economic decline and to get candidates elected.  Such regional studies and strategies have a long history in the north - think back to the 1970s (Design for Development) or the 1980s (Royal Commission on the Northern Environment) or the 2000s (Regional Adjustment Strategy, The Northern Growth Plan, the Rosehart Report).   Given the lack of success to date in reversing northern decline, one must admire everyone's faith in grand economic studies and development strategies but then I suppose there is no serious expectation they will reverse anything.  Their purpose is simply to put together the wish list for new government spending initiatives designed to continue northern Ontario's palliative economic care.  This is not really a new vision at all but rather business as usual.

And in terms of some of the more entertaining economic development strategies being touted:

City signs friendship agreement with Nanning, China. TbNewswatch, Septembner 22nd, 2017.

City makes friends with Nanning, China. The Chronicle Journal, September 23rd, 2017.

Apparently one of the visions discussed was shiploads of vegetables and beef and other agricultural produce from Thunder Bay's port to Nanning.  According to one Thunder Bay City Councillor: "There is that kind of potential for our agricultural sector."  I assume this meant western Canada's agricultural sector (but then why ship to China through Thunder Bay rather than Vancouver or Prince Rupert) given that Thunder Bay's agricultural sector would be hard pressed to feed 100,000 people locally never mind 7.5 million in Nanning.

Still, its nice to be friends with other cities even if the expectations are a little off kilter.

In other news:

Could more autonomy hurt the North? One expert says yes. Northern Ontario Business. October 2nd, 2017.

Cambrian student population reaches highest total in 10 years. Northern Ontario Business. October 2nd, 2017.

Give First Nations priority access to marijuana industry. Nugget.ca. October 2nd, 2017.

Developing a Smart City important for the economy. Saultstar.com. September 29th, 2017.

And in terms of negative economic impact when a major broader public sector employer shuts down....

Laurentian University strike enters second week, administration says new offer on table. CBCNews Sudbury. October 2nd, 2017.

The Not So Giving North?

Well, here is some interesting data on median donations by Ontario CMA in 2015 available from Statistics Canada (Table 111-0001).  It is of course useful as an index of local generosity to charitable causes.  Please note it is not a complete index as it only takes into account the value of donations and charitable activity also can involve a great deal of donated volunteer time - which this measure does not capture.  Nevertheless, Figure 1 is somewhat disappointing when one looks at the performance of northern Ontario.

The median donation ranges from a high of $470 for Wellington Centre to a low of $140 dollars for Petawawa.  With the exception of Elliot Lake which is in the middle of the distribution, northern Ontario cities are all clustered in the bottom third.  Elliot Lake comes in at $340 followed by Kenora at $290, North Bay at $270 and Thunder Bay at $260.  Timmins and the Sault are at the bottom of the northern median donation list at $160 and $210 respectively.  It is a somewhat disappointing performance given our self-perception as being very community minded.

Of course, a possible explanation could be that the value of donations is a reflection of lower incomes in the North.  However, as my last post demonstrated, income growth has been pretty robust in northern Ontario.  Moreover, as Figure 2 shows, the median income of donors across Ontario CMAs shows that the northern Ontario CMAs are more dispersed across the income range.  Donor incomes in northern Ontario CMAs are not clustered at the bottom.  Elliot Lake, is at the bottom of the donor income plot and yet is the most generous northern Ontario CMA whereas Sudbury which has the highest median donor income is near the bottom when it comes to median donation values.

Needless to say, I am not too despondent over this.  While all I can offer is anecdotal evidence, I think that donors in northern communities probably are much more giving of their time than money when it comes to charitable activity.  Thunder Bay for example has numerous community events - most recently the 2017 18U World Cup - that are only possible via the selfless activity of numerous volunteers.  Then there are the activities of food banks and other facilities that also rely heavily on donated time.  So, in the end, when it comes to charity, I think money is not everything.  Still, it would be nice to see those numbers go up.  If Elliot Lake can do it, why not everyone else.

Household Incomes in Ontario: Northern Exceptionalism

Statistics Canada has released the figures for median household income in Canada from the 2016 census providing comparisons for the period 2005 to 2015.  The median total income of Canadian households rose from $63,457 in 2005 to reach $70,336 in 2015 - an increase of 10.8 percent.  This growth was led by the resource intensive provinces and Ontario appears to have done particularly poorly- it had the lowest growth rate at 3.8 percent.  Even Quebec did better at 8.9 percent - the second lowest growth rate.  Almost every metropolitan area in Ontario saw growth below the Canadian average - with an interesting set of exceptions.

What is interesting in these numbers given Ontario's poor performance is the performance of the major northern Ontario cities, what I like to term the N-5: Thunder Bay, Timmins, Greater Sudbury, Sault Ste. Marie and North Bay.  Incomes in three of these five  cities all grew above the Canadian average - a much better batting average than the rest of the province.  Moreover, all five of these cities grew above the Ontario average.

Figure 1



Of course, median household incomes in these northern Ontario cities are still below the Ontario median (See Figure 1) but over the course of a decade they appear to have closed the gap substantially despite the forest sector crisis and other assorted slings and arrows.  Indeed, as Figure 2 shows that median household incomes in Timmins, Sudbury and North Bay all grew above the Canadian and Ontario average.  Thunder Bay and the Sault did not top the national performance but they still topped the provincial performance.

Figure 2



If you are wondering about income growth in some other Ontario cities, for the record: Toronto (4%), Hamilton (5.3%), Ottawa (4.4%), London (-2.1%), Windsor (-6.4%).  The urban north of the province appears to have done surprisingly well in the median household income sweepstakes and this probably represents another factor in why house prices to date have been as robust as they have been in places like Thunder Bay and Sudbury. 

Economic News Around the North: September 8th Edition

Summer is over, autumn is back and winter is coming.  It is the start of a new academic school year and life takes on a brisker pace here in Thunder Bay both on and off campus.  Traffic is noticeably up everywhere in town and the drivers are in a hurry.  So, without any more delay, here are the recent stories I feel have some economic significance for northern Ontario.

Vale to shut Clarabelle Mill Crushing plant. CBCNews Sudbury. September 7th, 2017.

As noted in another story in the Sudbury Star, Vale is not closing the mill itself, but only the crushing plant.  This is expected to affect 13 jobs but no plans for workforce reduction have been announced yet.  It should be noted that it has apparently been a good month for commodity prices.

Also in Sudbury...

Sudbury city councillor wants a closer look at de-amalgamation. CBCNews Sudbury, September 6th, 2017.

Sudbury city councillor Michael Vagnini wants to put forth a motion to re-examine the amalgamation of 8 areas that took place in 2001 to create Greater Sudbury.  Laurentian University economist David Robinson says amalgamation hasn't worked.  Vagnini notes that municipal employment in the former cities together has grown 30 percent since 2001 which suggests rising costs (and taxes) underpin his concerns.  Of course, breaking everything asunder after it has been put together will involve substantial transition and transaction costs and the key question should be what are the benefits and what are the costs.  If Sudbury explores this option, is Thunder Bay next?  One can make the case that having twin cities at the Lakehead led to economic competition that may have generated some growth and development benefits.  It could be more than a coincidence that amalgamation in 1970 which resulted in monopoly municipal government also coincided with the start of decades of slower economic growth.

Of course, Thunder Bay has enough issues on its plate without embarking on revisiting its own amalgamation.  If anything, it apparently could use some good news and this week has seen a spate of good news stories especially from its local CBC outlet.  There have been stories on the start of school, the excitement of the XXVIII WBSC U-18 Baseball World Cup 2017 which is being held in Thunder Bay and the community spirit it has brought to the fore as well as a story on making clowns feel better given that nasty Stephen King character.  However, the most interesting story has been a set of stories on why Thunder Bay is important to Canada and in particular, this one:

What makes Thunder Bay important? Economically, it's our location. CBCNews Thunder Bay, September 5th, 2017.

Its an upbeat boosterish piece not out of place with the pre-World War I brochures that used to extol Port Arthur and Fort William as the future hubs of the Dominion.   In many respects, little changes in Thunder Bay when it comes to its approaches to marketing economic development.  This morning also had an interview featuring young professionals noting all the potential that Thunder Bay has when it comes to opportunity and that the economy seems to be doing well because restaurants are opening. Don't get me wrong.  I think Thunder Bay is a great place to live and work but I think these types of self-obsessed feel good efforts directed at ourselves reflect a fundamental insecurity and an insular preoccupation with ourselves.  We really should be aiming any marketing campaign outside of the city, not at ourselves and I'm a bit surprised by the relentless onslaught of feel good stories by the local outlet of the national broadcaster.  Perhaps there has been a recent local management change or perhaps the PMO has sent the national broadcaster a directive that there must only be "sunny ways" stories in rural remote regions.

In other upbeat news with a more direct quantifiable economic impact:

Rainy River gold mine prepares to process ore. tbnewswatch. September 7th, 2017. 

Brookfield prepared to exit stake in North American Palladium as metal soars. The Globe and Mail. September 8th, 2017.

North American Palladium posts $8M profit in turnaround quarter. The Northern Miner. September 7th, 2017.

Indeed, the upbeat news from mining and the promised Ring of Fire Road has led to at least one First Nation being "anxious" for a gateway role in the Ring of Fire as this Chronicle Journal story notes.

In related mining news, it would appear the good news from the Ring of Fire has also caught the attention of other interests.  Indeed, it is infectious.

Should Ontario Northland be the railroader for the Ring of Fire? BAYTODAY.ca, September 7th, 2017.

City continues ferrochrome plant pitch. saultstar.com. August 29th, 2017. 

And in Timmins, more mining progress.

Sage Gold bulks up for mill sample. Northern Ontario Business. September 1st, 2017.

So, it looks like everything really is sunny in northern Ontario this week though even when it comes to the mining sector there are some critiques.  I guess we all need to make a conscious effort to spend more time out in the sunshine especially before the winter sets in.

And one last bit of good news, just out from Statistics Canada.  Canada's unemployment rate declined slightly to 6.2 percent.  Thunder Bay's rate for August is 6.5 percent (down from 6.7) and Sudbury's is 5.2 percent (down from 5.4)

 Have a great weekend.

Northern Ontario Wildlife & Vistas

It is Labour Day and the official end of summer break and the start of a new academic year.  Traditionally, this weekend also marks the end of summer fashions such as white shoes though strict adherence to such practices have rarely characterized the social circles I move in.  Summer in Thunder Bay can be quite pleasant though this year was a little cooler than usual. Nevertheless, the scenery this year was greener than usual due to the rain and the cool temperatures.  The trees in my yard filled out very nicely and their canopies provided a home for quite a few birds including this visitor under my pear tree...a Red Tailed Hawk I believe.

Red Tailed Hawk from my dining room window

And from the basement window

We were alerted to the hawk's presence by some shrill shrieks outside and it appears the hawk had managed to find something to eat.  The hawk's presence may be a factor in why the yard has been so quiet today when it comes to bird song in general.

On another day while walking along the nearby trail, came across one of nature's armoured tanks.  I was surprised to see this out in the middle of the day and plodding along on its way to the nearby river.

Also managed to get out to Nipigon this summer for a day trip that involved a visit to the waterfront, a short hike along the trail to Red Rock and then a very nice lunch at the Edgeview Restaurant.  A shot of the Nipigon River from the trail and another that also manages to include the new bridge - which incidentally is still a ways from being finished.

 

Not a bridge too far, a bridge that does not yet go far enough

The scenery in Nipigon was very pleasant and the visit also include a stop at the recently unveiled Paddle to the Sea Park.  Those of you who are of a certain age will likely remember the children's book and NFB film.

And one final picture from my summer sojourns around Thunder Bay and the North.  A shot of me and one of my minions!  Every self respecting economist must have an abundance of minions to support their policy prescriptions and points of view. 

Another Look at Northern Ontario Economic Activity...And the Pictures are Not Pretty

When looking at trends in the northern Ontario economy, we often look at evidence on population growth, unemployment rates, personal incomes or employment creation.  Well, here is another indicator courtesy of Statistics Canada Table 11-001 - Summary of charitable donors, annual.  Now this data is on charitable contributions and provides information on the value of donations (more on that in a later post) but it also provides data on the number of taxfilers by jurisdiction.

Why is the number of taxfilers an interesting number?  If your economy is growing and there is substantial economic activity, more people are either working or setting up businesses and income is being generated and by extension the number of income tax taxfilers should be going up. So what do the numbers look like?

Figure 1 presents the number of income tax taxfilers for Thunder Bay and Sudbury from 1997 to 2015 and for Sault Ste. Marie, North Bay and Timmins for the period 2008 to 2015 (which is what is available),  Needless to say, things look a little flat in these northern Ontario cities especially compared to Ontario as a whole in Figure 2 which has seen steady growth in the number of taxfilers despite having a fairly moribund economy until just a couple of years ago.




Figure 3 provides the percent change for these northern Ontario cities and Ontario as a whole for the period of commonly available numbers spanning the years 2008 to 2015.  The number of taxfilers has shrunk in four out of the five cities - only Thunder Bay has managed a slight increase.  North Bay shrank by -0.3 percent and Sudbury by -0.5 percent which is rather modest compared to Timmins and the Sault.  The number of taxfilers in Timmins shrank by 3.1 percent and the Sault by 2.6 percent.   Thunder Bay, on the other hand registered a very miniscule increase of one tenth of one percent. Ontario as a whole saw an increase of 9.2 percent in the number of taxfilers between 2008 and 2015.



So - more evidence of the blatantly obvious I suppose.  Growth in northern Ontario's economy has essentially come to a halt.   Given the coming provincial election, it will be entertaining to say the least to watch how the three party leaders handle the issue.

Economic News Around the North: August 15th Edition

We are in mid-August and the summer is drawing to a close.  The economic news has been pretty slow in northern Ontario.  Here are the stories of economic significance to northern Ontario over the last week or so.  They are mainly focused on the Conference Board Reports which were issued in late July and early August and that show the northern Ontario economy is not growing as fast as either Ontario or Canada.

Thunder Bay economy advances "sluggishly".  Tbnewswatch, August 9th, 2017.

Incidentally, Netnewsledger in Thunder Bay ran this story August 3rd (and was reported in my last northern Ontario economic news post.) I suppose narrative is everything.  According to the Conference Board Report in the above story, real GDP in Thunder Bay will rise 0.2 per cent in 2017 and 0.9 percent in 2018 following a 0.2 per cent increase in 2016.  Compare this to the Canadian economy which is expected to grow 2.3 per cent in 2017 and just under 2 percent in 2018.  Ontario is forecast to surge at 2.3 percent in 2017 but then scales back to 1.8 per cent in 2018.  Real GDP growth in Thunder Bay is forecast at below 1 per cent until 2021,  Yet, apparently life in Thunder Bay goes on with personal income per capita expected to grow at greater than 3 per cent from 2018 to 2021.  While the overall economy is not growing, having 30 percent of your employment in the broader public sector is lending a certain punch to average personal incomes.

Meanwhile in Sudbury, the Conference Board projects real GDP will grow at 1.2 percent in 2017 and 1.0 percent in 2018 but real GDP growth over the period 2018 to 2021 is also not expected to top 1 percent.  Yet, the narrative in Sudbury is a little different.

Sudbury to grow in 2017: Conference Board. Thesudburystar.com. August 4th, 2017.

In other Sudbury economic news:

Vale looking at layoffs in Sudbury. Thesudburystar.com. August 12th, 2017.

In terms of the size of Vale's economic footprint in Sudbury: "Vale operates five mines in Sudbury, as well as a mill, a smelter, a refinery and employs nearly 4,000 workers. It mines nickel, copper, cobalt, platinum group metals, gold and silver."

Timmins and the Sault also made their way into the Conference Board's Mid-Sized Cities Outlook and the report forecast real GDP in the Sault to grow 0.6 percent in 2017 and for Timmins to grow 1.4 percent in 2017.  Of the four cities covered in these Conference Board Reports it would appear that Timmins is doing the best with the manufacturing sector as well as the primary and utilities sectors driving growth.  Thunder Bay is forecast to grow the least. 

Timmins ready for economic growth says Conference Board of Canada. timminspress.com, July 27, 2017.

Sault growth behind that of Ontario, Canada. saultstar.com. July 28th, 2017.

So what about North Bay?  Well, no Conference Board Report for them.  They are neither a "big" northern CMA like Thunder Bay or Sudbury or a "Mid Size" city like Sault Ste. Marie and Timmins.  I'm sure that North Bay at least self-identifies as a Mid-Sized city and I wish to state that I consider North Bay one of the northern urban league of  five - the N5 as I sometimes like to refer to them.  

Still, here is an item of interest regarding the employment impact in northern Ontario - particularly North Bay -of an Electricity Trading Agreement entered into last fall with Quebec by the Ontario government.

Fedeli request leads to FAO probe on Ontario-Quebec Power deal. BayToday.ca. August 11th, 2017.

And another page in the inexorable march of retail change in the north:

Self-checkout threat to local jobs very real, labour warns. Nugget.ca, August 5th, 2017.


Enjoy the rest of the summer.

North's CMAs Sluggish When it Comes to Building Permits

The June 2017 building permit numbers from Statistics Canada are out today and they show that the total value of building permits rose in six provinces in June, led by Quebec and Manitoba. Meanwhile, permits were up in 14 of 36 census metropolitan areas (CMAs), led by Toronto, Montréal and Winnipeg with Hamilton reporting the largest decline in June (-60.0%).

The year to year results (June 2016 to June 2017) are shown in the accompanying figure for Canada's CMAs.  All CMAs grew 24.3 percent. They range from a high of 172 percent for Halifax to a low of -81 percent for Moncton.  As for Thunder Bay and Sudbury, they both show a negative performance with -2.7 percent for Thunder Bay and -4 percent for Greater Sudbury.




This building permit report comes in the wake of Conference Board Reports showing that these two cities have sluggish economies. However, with respect to building permits in Ontario they are not doing as badly as Hamilton, Windsor, Peterborough or St. Catharines.  Another intriguing result is the Ottawa area where Ottawa/Gatineau shows annual growth of 13.7 percent but the Gatineau part is at -12.7 percent and the Ottawa part grew at 18.9 percent.

Living With Mom and Dad in Ontario: North & South 2016 Census Results

Statistics Canada released its 2016 Families, Households andMarital Status Results for the 2016 Census on August 2^nd and the results show that proportionally fewer households are composed of a 'mom, dad and kids' family and more people are either living alone, or as part of a couple without children, or as part of a multi-generational family. However, the other interesting result was that the proportion of adults aged 20 to 34 living with parents was 34.7 percent and has been increasing since 2001 when it was 30.6 percent.  It is both a northern and southern Ontario phenomenon.

Economic News Around the North: August 3rd, 2017 Edition

Well, we are about to start a long weekend so why not stock up on some reading material related to the northern Ontario economy.  To start off, a couple of big picture items with important implications both economically and politically.

Why Canada would be directly in the way of a North Korean nuclear war. National Post. August 3rd, 2017.

It turns out the world is round after all and the shortest route to the United States from North Korea is a curve and the curve takes North Korean missiles right over Canada on their way to destinations like New York or Denver.  Looking at the map on this story carefully and one can see that the way to Chicago comes pretty close to Thunder Bay.  One wonders if the North Koreans are aware that Thunder Bay (actually the twin Lakehead cities of Fort William and Port Arthur) once styled itself as the up and coming  "Chicago of the North".  Hopefully, the North Koreans have updated their intelligence and will not get Thunder Bay confused with Chicago - not that it will really matter much if we head off into global thermonuclear war.  Where is President Trump's "Wall" when we really need it? I guess, we should all just move to Australia and hang out "On the Beach" with Nevil Shute.

Here in the north, we might want to use our enhanced political clout to get the Ontario government to take on North Korea. However, another story in the National Post is not too taken with the potential for two more northern Ontario riding.

Josh Dehaas: Ontario Liberals plans for two new ridings could violate the Charter and cost PCs the election, National Post, August 3rd, 2017.

In other news:

Thunder Bay Economy Sluggish-Conference Board of Canada. NetNewsLedger, August 3rd, 2017.

Personally, I think sluggish as a description of Thunder Bay's recent economic performance is a bit of an understatement.  However, there does appear to be a fair amount of recent hotel, condo and apartment construction so obviously all things considered a lot of people want to live in Thunder Bay either permanently or temporarily despite the economy and the bad national publicity.  The Economics Department at Lakehead just hired a new colleague so there is another addition to the local population (4 if you include family).  Welcome back to Lakehead Karl & family!

New $15 million plant opens in Timmins. Sudbury Star, July 20, 2017.

It is heavy industry tied to the mining sector.   A  Timmins-based speciality plant called The Bucket Shop for the creation and manufacture of custom heavy equipment buckets for front-end loaders, scoop trams, excavators and even dozer blades for mining and construction industries.  If you are in Timmins, put a visit to it on your bucket list.

Which way Sault Ste Marie? Northern Ontario Business. August 2nd, 2017.

Tom Dodds resigns from EDC.  Sault Star, August 1st, 2017.

Well, things are economically uncertain in the Sault so it is time for a new strategic approach to economic development. According to the story: " Under the new organizational flowchart, the EDC will handle business retention, attraction and expansion; export opportunities, infrastructure development, and tourism. The Innovation Centre will oversee technology and innovation development, provide support for tech companies and start-ups, run the Community Geomatics Centre, and handle special projects like the lottery and gaming initiatives, energy projects, and agricultural opportunities. The municipality, itself, has set up a Community Development Fund and will steer the development of a strategic plan, handle community promotion, arts and culture development and work on the labour front to attract newcomers and bring home ex-pats."

As an economist, restructuring your economic development approach is more of a political gesture designed to convey concern for the economy as economic fundamentals for the Sault like much of the north remain the same.  Still, I am not running for office and if I were I guess I would accept the need to look proactive.

If you are marketing your local economy, this is not good:

Sudbury lands 8th on list of bed-bug ridden cities. CBC Sudbury, August 1st, 2017.

Sault Ste. Marie came in 23rd out of 25.  For once, Thunder Bay did not make this type of list.

Sudbury is getting a new events center (not in the downtown) and an economist even suggests how it will be paid for - by taxpayers.

Robinson: how we'll pay for the events centre.  Sudbury Star. July 24th, 2017.

And as for the goings on in North Bay:

The hard numbers behind North Bay's population decline. BayToday.ca, August 2nd, 2017.

Well, that is all for this edition of  Economic News Around the North.  By the way, here is a great Pan Northern Link for news in general. Have a great long weekend!

Economic News Around the North: July 17th Edition

Well, a number of interesting items have come to my attention with respect to stories with an economic impact on northern Ontario.  However, it is summer and peak travel season so I think I will keep things short and a bit more eclectic than usual, but with a tourism focus.

To start off, it would appear that tourism efforts in White River, Ontario may be all for naught given the reaction of the Chinese government to Winnie the Pooh.  According to a BBC story, Winnie the Pooh is being blocked in China because images of Pooh are being used to represent China's President Xi Jinping in social commentary and criticism. 




Winnie-the-Pooh may be the world's most beloved bear but apparently the love stops in Beijing where government censors cannot "bear" the images.  White River has of course gone to great lengths to market its link to the character and everyone who has driven the highway has invariably stopped at the roadside statue of the Pooh.

 

No doubt, White River and its citizens will now join the list of subversive elements being monitored by the Chinese government and the Pooh Hometown Festival held the third week of August will acquire new cachet and international significance.  Mark August 18th down in your travel calendar.

In other northern news stories with some relation to tourism and the economics of tourism and travel:

Thunder Bay's Hotel Boom shows no sign of slowing. Northern Ontario Business. July 12th, 2017.

Sudbury Casino would drain economy: report. Nugget.ca. June 27th, 2017.

Thunder Bay Tops Best Places to Live in Northern Ontario. Tbnewswatch. July 6th, 2017.

Well, given Thunder Bay's recent spate of bad news, the above ranking by MoneySense qualifies as good news though the story does qualify the ranking by noting that nevertheless, Thunder Bay barely makes the top 100 ranking only 97th overall (out of 400).

Summer is also the season of festivals and events and the economic impact of these festivals is important.

Few weeks before festival financial picture is clear: Mayor. Timmins Press.ca. July 5th, 2017.

Temiskaming Shores first-ever craft beer festival already sold out. CBC News Sudbury. July 11th, 2017.

Sturgeon Falls festival serves up Rock 'n Ribs. Nugget.ca. July 16th, 2017.

And if you are in Thunder Bay and at Hillcrest Park on Thursday evenings, there is always the MacGillivray Pipe Band which is celebrating its 100th anniversary this year.



And speaking of MacGillivray, what would William MacGillivray (b. 1764, d. 1825; Chief Director of the Northwest Company) who managed a commercial fur trade empire that extended A Mare usque ad Mare and after whom Fort William, the inland headquarters of the Northwest Company was named, think of this?

Have a great week!

Economic Forecasts and the Impact on Northern Ontario's Economy: Overview and Assessment

Northern Ontario’s economy, with its traditional reliance on transportation and resource sector activities in the end relies on the international economy as a source of demand for its products.  With that in mind, it is helpful to see what the latest forecasts are for the world economy and the potential impact on northern Ontario.  FocusEconomics – headquartered in Barcelona – is a major international economic research and forecasting company that provides data and analysis on international economic indicators and produces economic forecasts and reports. It covers 127 countries, 12 global regions and 33 commodities.  It recently released its July 2017 Consensus Forecast for major economies.

Economic News Around the North: June 25th Edition

Well, I have returned from a rather lengthy set of travels.  My trip home was via the scenic Highway 17 drive through Sudbury, the Sault and around the north shore of Superior to Thunder Bay. There is nothing quite like this drive in terms of the vastness of the land and the vistas of rocks, trees and highway.  I had not done this drive in a number of years and perhaps because of the extra rain this year the landscape seemed a lot greener than I remembered it. The video link here shows a bridge crossing along the way (I was in the passenger seat doing the filming for those of you who might be concerned about my safety).  Nevertheless, here are some of the economic news items that have caught my interest.

Well, there were a number of not so flattering stories dealing with Thunder Bay in the national media over the last few weeks but the economic news was somewhat more upbeat.

$23M from Ontario government for school upgrades. CBC Thunder Bay. June 19th, 2017.

Thunder Bay Sears Location to Remain Open. Tbnewswatch. June 22nd, 2017.

Thunder Centre shopping area to be sold to new owner. CBC Thunder Bay June 19th, 2017. 

The Thunder Centre has got a new owner and despite Sears Canada's financial woes, the Thunder Bay store at Intercity Mall is to remain open - at least for now.  Sudbury and The Sault were not as lucky.  North Bay's store is also not closing.

As for the new school construction, it comes at the cost of some closures - rule of thumb in Thunder Bay based on this story is close three old schools to get one new one.  While closing schools is one way of generating some new construction activity, in the end, there are only so many schools that can be closed.  Eventually, to get new schools we will have to do it the old fashioned way - boost enrollment.  Other northern Ontario cities also seem marked by the dynamic of out with the old and in with the new.  In the Sault, the original St. Mary's College was demolished to make way for a new elementary school. One wonders when this dynamic will hit the school boards in Toronto. Curious to see when they will knock down stately old Jarvis Collegiate or UTS in order to build a shiny new building.

Also, in Thunder Bay tourism news, the decommissioned icebreaker Alexander Henry has left Kingston Ontario and is set to return to Thunder Bay to serve as a transportation museum on the waterfront. 

In Sudbury, there seem to be a lot of projects coming to a head with respect to community infrastructure.  A key debate is where to build the new sports arena - downtown or outwards.

Sudbury at a crossroads: build downtown or build outwards? TVO. June 23, 2017.

True north wants to convert downtown arena into arts centre. CBC Sudury. June 22, 2017.

Rainbow Centre makes pitch for Sudbury library, art gallery. CBC Sudbury. June 23rd, 2017.

New Casino in Sudbury depends on where city builds new arena. CBC Sudbury. June 14th, 2014.

In other potential infrastructure news from a natural resource perspective:

Noront looks for smelter landing spots in Sudbury, Timmins. Northern Ontario Business. June 20th, 2017.

New gold mine in Timmins by 2018: Gowest CEO. mining.com. June 4th, 2017.

In other news, North Bay's housing market is still doing well according to this source. 

Meanwhile, for those of you that missed this, the June 1st provincial byelection in Sault Ste. Marie for the seat vacated by Liberal David Orazietti was won by a Conservative for the first time since 1981.  A sign of things to come? Hard to say.  The election is still officially a year away (though one might see a snap election called in the fall if the governing party feels confident) and alot can happen in a year. Stay tuned.

Economic News Around the North: June 9th Edition

Here are the stories over the last little while that I feel are of economic importance to northern Ontario.  Summer is on the way and there is a definite slowdown in defining economic news as everyone starts heading out to camp for the summer. Tourism is going to be a sector of continuing importance to northern Ontario and camp development should be part of tourism development and infrastructure.  Making more camp/cottage lots available for development would certainly be one way of adding to tourism in northern Ontario.
 
Here is another piece of tourism infrastructure along the north shore of Lake Superior.

Lake Superior Water Trail connects explorers to northern Ontario. CBC News. Sudbury, June 9, 2017.

Of course, tourism development does not always have positive benefits for everyone as this historical example of northern Ontario tourism exploitation illustrates.

Speaking of infrastructure, there is a glitch in the US Soo locks rebuild.  See here.

It was mining day in Thunder Bay recently and there was another mining show in Timmins.  These events are good showcases for the sector.  The Timmins mining exposition was a 3 day event with 400 exhibitors.

Mining Day in Thunder Bay.  Northern Ontario Business. June 1, 2017.

Miners, investors flock to The Big Show. Northern Ontario Business, June 7, 2017.

In terms of developing the northern Ontario economy, another call for some type of tax incentive program from City Council in Sault Ste. Marie.  There was also a harkening back to the Peterson government of the late 1980s with a call more more government office relocation.  I suppose it would not be too tongue-in-cheek to suggest that the Ontario government simply sell all of its land in Toronto - at current sky high prices - use the proceeds to pay off its debt and then relocate the entire Ontario legislature and civil service somewhere in northern Ontario.  Of course the competition among the big 5 northern Ontario cities would be cutthroat so Wawa might have to be the compromise location.  Perhaps they could make the decision as part of a lottery or gaming experience run by OLG.

Of course, if all else fails there is the inevitable fallback to better marketing.  North Bay seems to be going in this direction with its municipal government handing a million dollars to its arms-length municipal economic development agency. 

In northern Ontario institutional news, there is a commission studying provincial ridings and representation in the far part of northern Ontario.  Some think the commission is thinking of splitting the Timmins-James Bay riding in two to provide better representation to indigenous communities. Will be interesting to see what the commission reports back.

Well, that is it for now. Have a great weekend. 

Economic News Around the North: May 26th Edition

It has been a slow start to spring across northern Ontario but temperatures are finally starting to warm up.  Environment Canada says warmer weather is on its way.  Here are a few of the stories of economic significance for northern Ontario that caught my attention over the last week or so.

Regarding the Ring of Fire, here is an op-ed by Heather Hall and Ken Coates that essentially makes the point that ultimately, the Ring of Fire will not proceed "without substantial, clear and significant indigenous engagement." In the end as any good economic historian knows, institutional arrangements are important.

How to finally ignite Ontario's Ring of Fire. Chronicle-Journal, May 23rd, 2017.

Given this op-ed, selling yourself as a Ring of fire smelter location may be premature. I am also surprised that in this age of heightened sensibilities and sensitivities one is actually using the term 'smelter' and not something like "Value Added Mineral Processing and Community Economic Enhancement Facility".

Northern Ontario cities try to 'sell' themselves as best place to put Ring of Fire smelter. CBC News Sudbury. May 15th, 2017.

Nevertheless, there is no stopping the sense of optimism when it comes to the Ring of Fire especially in the run up to a provincial election.

Premier repeats Ring of Fire Optimism in Timmins. Sudbury Star, May 26th, 2017.

Sadly, given the presence of the Premier in northern Ontario, there was no reaction in northern Ontario to this item (by yours truly) which Dominic Giroux on Twitter noted as a "blunt assessment".  I think this provides support for a case for a government program to provide northern Ontario media organizations with research support as they are probably stretched for resources in pursuing stories.  This is not that far-fetched given the unfortunate downsizing that has occurred over the years in local media that I am aware of.

When it comes to economic development, human capital is also important and of course education is a key component of any human capital strategy.  Providing government services in northern Ontario is already a challenge given the low population density and geographic dispersion.  Doing so in rural northern Ontario even more so.

'Very frustrating, kind of heartbreaking': Seeking support for northern Ontario rural school,"CBC News, Sudbury, May 25th, 2017.

In terms of regional/local infrastructure, this item was of interest.

"North Shore gas project still in the works," Northern Ontario Business, May 19th, 2017.

And of course, there are under the surface the constant rumblings of the Northern Ontario Party...that are probably destined to remain rumblings.

Northern Ontario Party calls for separation.  May 12th, 2017.

Related to the motif of northern resentment and unhappiness, there was this interesting segment on TVO's agenda hosted by Steve Paikin.  In the interview with former Ontario cabinet minister David Orazietti, the interesting point was made that despite the constant claims of alienation and under representation of northern Ontario interests at Queen's Park, on a per capita basis the north has more provincial cabinet ministers than Toronto.  Of course, the related news item is the by-election in the Sault for David Orazietti's vacated seat.

And there is one final item and this again related to institutions and what can often be their indirect impact on business and the economy.  In Thunder Bay we have the situation where the police chief has been placed on administrative suspension as a result of being charged with breach of trust and obstructing justice "stemming from allegations that he disclosed confidential information concerning Thunder Bay mayor Keith Hobbs."  I must admit this one is quite puzzling to me and comes on the heels of other rather odd stories involving the Mayor.  Without really knowing what is going on here, one must nevertheless express disappointment at a situation involving relationships between the senior figures of Thunder Bay's municipal government that does not reflect very well in the national media on a community constantly trying to sell itself as a good place to do business.  Coming at a time when Thunder Bay is also under scrutiny for its relations with indigenous people, one hopes that this matter is speedily resolved and Thunder Bay's leadership quickly moves on to dealing with better things.

Everyone, please try to have a nice weekend. 

The Decline of Saving

Most of us are aware that Canadian households have reached record levels of indebtedness over the last few years.  Household debt in Canada is now over $2 trillion and household debt to disposable income ratios in Canada are now at 170 percent.  Less discussed is what has happened to savings.  While low interest rates have been a factor in Canadians being able to carry substantially larger debt burdens, they have also been a factor in reducing the interest income from saving and as a result have led to a drop in the number of savers.

The Bank of Canada rate dropped from 6 percent in 2000 to 0.75 percent in 2015.  Over the same period, the total number of savers in Canada as reported by Statistics Canada from data compiled from Income Tax returns (Table 1110036 - Canadian savers, by savers characteristics, annually) dropped from 4,808,930 to 3,356,840 – a decline of 30 percent.  Over the same period, the median annual interest income of Canadians fell from $400 to $230, a drop of 43 percent.

The Northern Ontario Growth Plan: A Summary Evaluation

The Ontario government released the Growth Plan for Northern Ontario on March 4, 2011 in response to years of slow growth and economic stagnation in northern Ontario. In an effort to improve the economy of northern Ontario, the 25-year plan was to guide provincial decision-making and investment in northern Ontario with the aim of strengthening the regional economy. The goal was strengthening 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.

After five years, it was worth examining key economic indicators to see what if any improvements have occurred with respect to the economy of northern Ontario.  After a series of posts examining employment, new investment spending, consumer and business bankruptcies and employment composition, what conclusions can be drawn?