Post Pandemic Business Recovery: Some Are Doing Better Than Others

The COVID-19 pandemic  had a devastating effect on Canada’s business sector and new data is emerging that helps illustrate the size of the drop in business activity as well as the subsequent recovery.  Figure 1 uses data from Statistics Canada (Table 33-10-0270-01 Experimental estimates for business openings and closures for Canada, provinces and territories, census metropolitan areas, seasonally adjusted) to generate an index of active businesses for four Ontario cities as well as the province of Ontario.  It sets January of 2016 equal to 100.  For example if in January of 2016 you had 1200 active business and in January of 2023 you had 1500, then January of 2016 would be equal to 100 and January of 2023 would be 125.  Everyone starts at 100 in order to generate comparisons that would not be easy to see if the absolute number of business are used.  For example as of January 2023 Thunder Bay had 2,832 active business while Toronto had 192,016 which would not yield terribly useful visuals if plotted together.  

 

 

 

The chart is for Ontario and four cities: Thunder Bay, Greater Sudbury, Toronto and Hamilton.  With the exception of Thunder Bay and Sudbury, there was growth in the number of active businesses from 2016 to 2020 and then a dramatic drop which affected everyone.  From January to May 2020 there was 14.6 percent drop in the number of active Ontario businesses.  Toronto saw a drop of 15.8 percent followed by Hamilton at 13.4 percent, then Thunder Bay at 11.5 percent and Sudbury at 10.3 percent.  A recovery then begins but Thunder Bay and Sudbury unlike Ontario as a whole or Hamilton or Toronto barely match their pre-pandemic number of active businesses by 2023.  Indeed, if one looks at the entire 2016 to 2023 period(See Figure 2), Thunder Bay sees a decline of 3.8 percent while Sudbury is down one one-tenth of one percent.  Relative to 2016, the number of active businesses is up 8.6 percent in Toronto, 9.3 percent in Hamilton and 7.9 percent in Ontario as a whole.  

 

 

 

Pandemic impact aside, Thunder Bay and Sudbury seem to be suffering from a longer term set of problems with business activity given that they were experiencing a decline prior to the pandemic.  Between January 2016 and December 2019, Thunder Bay saw 124 fewer active business while Sudbury saw 40 fewer business.  After the pandemic drop, both of these cities recovered but only to approximately where they were prior to the pandemic.  Over the longer term, business formation has been weak and represents a serious economic challenge.

Is Canada’s Labour Shortage Actually a Productivity Slump?

 

Despite what seems to be supply side issues of staff shortages, rising demand and inflation in the wake of the pandemic, at least one contrarian view is that Canada’s labour shortage is an illusion. University of Waterloo economist Mikal Skuterud in a recent Globe Oped noted that despite perceptions of a labour shortage, Canadian labour force participation was identical to what it was in October 2018 at 65.7 percent and the absolute size of the labour force at 20.8 million is the largest it has ever been.  The “shortage” may indeed also be a result of the demand for workers in the post pandemic surge growing faster than their numbers.  Indeed, if one looks at the health sector, the supply of physicians and nurses per capita is the largest it has ever been but the post pandemic surge in dealing with postponed surgeries and procedures has been overwhelming.

 

However, the problem may be worse than you might think.  Not only is the size of the labour force the largest is has ever been but so is total employment.  If you look at the number of people employed – producing labour units so to speak - it is three percent higher than it was in 2019.  Employment did plunge in 2020 as a result of the pandemic shutdowns but it has since rebounded dramatically – by over 9 percent since 2020.  As the accompanying figure illustrates, employment is indeed the highest it has ever been.  [Data Sources: Statistics Canada, Table 14100393 Labour force characteristics, annual and 

V62471340 Canada [11124]; Gross domestic product at market prices]

 

 

However, despite more people working than ever before, the output response has been shall we say a bit sluggish?  While employment grew by over 9 percent from 2020 to 2022 as pandemic recovery set in, real GDP (in $2012 constant dollars) grew by less than 9 percent.  As a result, output per employed person has actually declined since 2020.  From 2020 to 2022 real GDP per employed person actually fell by just over one third of one percent.

 

Something has happened over the course of the pandemic that seems to have affected the productivity of Canadian workers.  Perhaps the long shutdown resulted in a deterioration of human capital and skills?  Perhaps the retirement of so many experienced workers and their replacement by less experienced entry level workers has led to output disruptions as new workers learn by doing?  Or, after the trauma of the pandemic, everyone wants more work life balance and as a result we are simply not working as hard as we used to?  Is this simply the aggregate effects of “quiet quitting?”

 

Such slowdowns in output per employed person are not unique to the pandemic era and based on the chart have occurred before – for example during the Great Recession and also between 2014 and 2016.  History suggests that we do recover from these “productivity” slumps and based on past performance one would expect the same over the next couple of years.  The disruption of the pandemic will take a number of years to fully work its way through the economy and the social fabric of the country.  The bigger problem in terms of productivity is if this time things are going to be different, and the productivity slowdown becomes a permanent feature.  Given that Canada has had economic productivity issues for decades, this latest iteration of an old issue is disconcerting to say the least. 

Ontario's Pandemic in Three Charts: A Bumbling Mediocrity

Ontario appears to be once again in pandemic crisis as the Omicron variant causes cases to soar.  On December 1st, 2020 daily reported cases were 780 and by the 15th they had soared to 2,421 and on December 31st the reported number of cases was 18,445.  The first chart presents the daily number of cases since the start of the pandemic with a LOWESS smooth and indeed the figure is quite astounding showing a near vertical soaring of daily case numbers to heights heretofore unseen as has been occurring in other parts of the world.  Indeed, there are now so many cases that Ontario has restricted access to testing meaning that we have now lost track of the pandemic.  The result is a new set of restrictions and lock down measures for January designed to slow down and blunt the wave given the surge and the confused and chaotic rolling out of vaccine boosters.

Figure 1

At the same time, the evidence has been mounting that Omicron is not as severe as the previous variants and the disease is generally milder.  Yet, the concern is that while the disease is generally milder, there are so many cases that hospitals still risk being overwhelmed.  While hospitalizations have been rising over the last few weeks it remains that relative to the total number of active cases, hospitalizations remain at levels well below those of previous waves as shown in the next figure taken directly off of the government web site. Indeed, as the next figure shows, there are now so many cases relative to hospitalizations that the chart shows a hospitalization line that looks practically flat at the horizontal axis.

Figure 2

This obscures the reality that it is still possible that this current wave of the pandemic will see hospital and in particular ICU capacity overwhelmed.  So we proceed to the third and final chart which presents since May 2020 the total number of adult ICU beds available at Ontario hospitals (lightest green), the total number of occupied ICU beds (intermediate shade of green) and the number of adults in ICU due to COVID-19 (the darkest green).  This is perhaps the most curious piece of the puzzle.  While ICU hospitalizations due to COVID-19 have been rising in Ontario, they are nowhere yet near the peak reached in May of 2021.

Figure 3

 

Yet, the concern is about overwhelming the hospital system which has been the concern all along.  Indeed, despite a pandemic that has lasted nearly two years now we still seem to be having the exact same issues with each new wave - worries about capacity whether it is hospital beds or health professionals.  Indeed, it is this capacity issue that has been a key driver behind some of the longest lock downs in the developed world.  It remains that Ontario, like Canada, has some of the lowest per capita hospital bed numbers in the developed world as this chart put together by yours truly for the 2022 Maclean's chart fest illustrates.  

And, what chart three also shows is that after the ramping up of ICU bed capacity in the wake of the first wave - ICU capacity was reduced rather dramatically in Ontario after the summer of 2020.  It was ramped up a bit in spring of 2021 but then came down again where it has remained since August of 2021.  And this is during a pandemic that has been occurring in successive waves and continually generated concerns about capacity of the health system.

If there is one thing that this pandemic has revealed about Canada's heath care system and the pandemic response is that we have spent a lot of money - indeed health spending to GDP soared to over 13 percent in 2021 - and yet we seem to always be chronically short of resources. Indeed in the case of ICU bed capacity in Ontario - we have been winding things down only to panic once again when the pandemic reignites.  It is fortunate that the Omicron variant appears to be relatively mild and likely the last stage before becoming an endemic virus as it infects virtually everyone.  

Will we have learned anything from it when it comes to our health care system?  Likely not.  Once it subsides it will be back to business as usual - a high spending system that is apparently resource starved at the same time, operates with just-in-time capacity and with little resilience to meet unforeseen demands. After all, recall that even before the pandemic, the Christmas holidays were always a source of concern about hospitals capacity as flu season hit and health professionals took holidays thereby reducing services.  The pandemic has simply aggravated a long standing trend.  

Given the general lack of outrage by Canadians or Ontarians about this state of affairs, it is obvious that they are quite happy with a bumbling mediocrity that spends more and gets less every time.  I guess that as long as business and individuals get deficit fueled federal and provincial government support payments, they are not too concerned about value for money in their health care system - until they suddenly have to use it.  If that is not the sign of a declining civilization, I don't know what is.

Ontario’s Pandemic: The Beginning of the End or the End of the Beginning?

 

The last few weeks have seen a major improvement in Ontario’s daily COVID-19 case account.  The fourth wave seems to have peaked at just under 1,000 daily cases several weeks ago and for the last seven days has averaged under 500 daily cases (See Figure).  This is at the bottom of the scenarios that were envisaged just a short while ago as the fourth wave picked up steam and this may indeed be the beginning of the end of the pandemic in Ontario. At the same time, we may simply be embarking on a new post-pandemic era characterized by intermittent ebbs and flows of infection and a long-term change in how things are done.  In the end, it has been a remarkable learning process.

 

 

We appear to owe this new diminished phase of the pandemic partly to continued public restrictions with respect to the wearing of masks in public places and the high rates of vaccination.   The prolonged restrictions and phased in reopening over the summer has also been wise given the experience of Alberta and Saskatchewan with the Delta variant.  The high rates of vaccination in the province have been having their desired effects and the onset of the vaccine passport system has encouraged more hold backs to go and get vaccinated.  Yet, there are bumps.  The fact that the new QR code vaccine passport many can download for the first time today requires iOS 15 - for many of us a new iPhone - means a lot of us are not going to be conveniently loading it into our Apple Wallets.

 

And while the provincial government is apparently planning to announce a further relaxation next week in pandemic restrictions dealing with capacities in assorted public venues at the same time, it is announcing new restrictions reflecting slower progress in other areas.  The easing of pandemic measures will include ending capacity limits in all locations where proof-of-vaccination requirements are in place, such as restaurants, bars and gyms, a senior official in Ford's government said on Wednesday.  To its credit, it is going to retain the requirement for masking in public spaces.  Moreover, future outbreaks will apparently be met with more local response as opposed to province wide one size fits all provincial lock downs though my guess is that is more aspirational given the heavy handed tendency towards centralization of policy at Queen’s Park.

 

At the same time, it has been recently announced that long-term care homes will be instituting testing for staff and visitors whether doubly vaccinated or not at the same time that it is mandating vaccines for all long-term care home staff by November 15^th.  While this continued testing has been out forth as “random” testing to provide early detection of breakthrough cases, some evidence to date suggests that Ontario LTC homes will be interpreting it as weekly testing suggesting that things will not be going back to normal for some time. Calling it "random" may be government political word massage to make visitors to LTC homes think it is not going to be formalized but it remains that the Oxford Dictionary defines random as: "done, chosen, etc. without somebody deciding in advance what is going to happen, or without any regular pattern" and not something done on a weekly basis.

 

The fact that testing is going to be used on doubly vaccinated individuals (who granted can still transmit the virus) while some hospitals have announced that visitors (to be clear not patients) will require double vaccination to get in to see their loved ones suggests that the real elephant in the room is still the high proportion of not vaccinated people in Ontario – for which a lot of other vaccinated people will continue to pay the price.  It remains that as of today only 73 percent of all people in Ontario are fully vaccinated.  And in long-term care homes, as of the latest figures for end of August, more than half of homes had less than 90 percent of their staff doubly vaccinated.

 

So, practice and implementation continue to lag science and evidence though the other revealing result of this pandemic has been how much public health, epidemiology and infectious disease science is a lot more like economic science than they would care to admit.  When it comes to scientific expertise, the pandemic has revealed that we are all economists now. Economists have been the butt of jokes for years about how their economic forecasts always seemed off the mark and yet during the pandemic, epidemiologists, bio-statisticians, and other assorted medical experts, have joined the ranks of economists and weather forecasters – not just in the range of forecasts provided but by the constantly shifting advice.   One does not have to think that far back to recall debates and discussion over whether to close border or wait, aerosol transmission or not aerosol, masks are effective or not effective, take AstraZeneca, don’t take AstraZeneca, etc.

 

In the end, this will hopefully be a humbling experience for science that will improve it.  Economic science, like the other sciences is evidence based and empirical with theoretical frameworks driving the analysis.  Facts are indeed facts but interpretation of the facts via theory and explanation is open to debate, consensus only evolves over time, and most importantly:  decision and policy making based on the evidence and the conclusions drawn from the evidence in the end is not done by the scientists but by politicians and civil servants who have agendas and constraints of their own not least of which is public reception and compliance.  The decisions in the end have been much more coloured by the art of the possible than many would have liked. We are indeed at an end but the drama continues.

The Finances of the University-Lakehead Edition

 

Many will have caught Alex Usher’s post on HESA dealing with university finances in Canada during the pandemic year which paints a surprisingly different picture of university finances than what one might expect.  Of the 34 universities with data available for the 2020-21 fiscal year, 30 of them posted surpluses and some of them were quite staggering.  For example, a 726 million-dollar surplus at University of Toronto (a $441 million surplus the year previous) or Queen’s with $144 million surplus (year previous was $35.7 million).  This seems quite at odds with the sky is falling scenarios that propagated the early part of the pandemic as universities argued that they were going to lose money. So how did this happen?

 

According to Usher: “Well, apart from the University of Saskatchewan (where the turnaround was mostly due to a quite amazing uptick in the investment portfolio), the formula was pretty simple.  Overall, university revenues rose slightly – about 2.6% in nominal terms – while expenditures stayed unchanged.   Essentially, the savings from keeping campuses closed offset the usual 2-3% growth in salary costs.”  Indeed, as he concludes: “universities did not in fact lose money during the pandemic.  They cut their budgets in anticipation of a fall in revenue and then the fall never came.  They will be in good shape to deal with the next year or two when, I suspect, we will see a bit more labour militancy that we’ve seen for awhile.”

 

So of course, the interesting question is how did Lakehead University do?  Well, Lakehead has also done surprisingly well according to its 2020-2021 financial statement that was recently released. From 2020 to 2021, revenues did fall slightly from $200.2 million to $198.3 million – a drop of just under one percent.  However, total expenses fell even faster going from $198.7 million in 2020 to $187.6 million in 2021 – a drop of 5.5 percent.  As a result, there was an operating surplus of $10.691 million in 2021 which was up from a surplus of $$1.542 million in 2020.  And this was before the unrealized gains from an interest rate swap are factored in which brings the total surplus to $14.456 million.  It turns out Lakehead, like Saskatchewan, did very well on its investment portfolio seeing an increase in investment income from $3.4 million the year before to $20.055 million – a staggering 488 percent.  One wonders why their management of their own investment portfolio does not translate into better management of the university pension plan – one of the worst university pensions in the country in terms of the benefits provided to retirees but I digress.

 

On the revenue side, aside from investment returns it turns out everything else was down.  Government general grant revenue was down 3 percent while student fees were down 1.5 percent.  There was a slight fall in enrollment which accounts for this as total enrollment (full-time and part-time students) went from 8505 to 8365 – a decline of 1.6 percent.  However, the good news is that 2021-22 is expected to see a rebound with total enrollment currently estimated at about 8668 – an increase of about 3.6 percent.  So, one can expect both tuition and grant revenue to rebound this year. 

 

As for expenses, well salaries and benefits were down -0.3 percent, supplies for operations were -25 percent, the costs of operating assorted sales and services were -61 percent, building and equipment maintenance costs were -19 percent and travel was down a remarkable 93 percent – from $4.1 million the year before to $302 thousand during the pandemic year.  This may prove to be one of the more important cost savings as the constant shuttling of administrators and staff from Thunder Bay to Orillia and Toronto obviously can be replaced by Zoom technology.  As for salaries and benefits, the university took full advantage of the provincial restraint salary guidelines thereby keeping compensation cost growth low and that will continue this year given the contract that was negotiated.  And, it turns out that having all the faculty and staff work from home saved several million dollars in operations and maintenance as costs like utilities were shifted onto employee home budgets.

 

 

So, in the end the sky did not fall and when the last year is placed in long-term context, Lakehead’s finances are indeed looking quite robust.  Figure 1 plots revenues, expenditures, and deficits since 2000 and they show growing revenues and expenditures and deficits in only 5 of the last 21 years. The last five years have seen a string of operating surpluses of which 2020-21 is the largest. Indeed, Lakehead has seen an accumulated surplus since 2020 of $83 million dollars.  Where has that money gone? Likely into the university’s long-term investment portfolio which according to the financial statement sits at about $144 million dollars and of course this year earned a whopping $20 million dollar return.  It certainly has not gone into paying down the debt which as Figure 2 shows went up $8.038 million in 2020-21 from th year previous to reach $106.6 billion.  This was to finance the athletic facility expansion. 

 

 

 

When it comes to long-term major revenue performance as depicted in Figure 3, government grants in total dollars have been flat at about $65 million annually since 2010 and as a share of total revenue have declined from a peak of 43 percent in 2009 to reach 32 percent at present.  As for student fees (tuition), it has grown dramatically since 2010 –nearly doubling from about $43 million in 2010 to reach $84 million at present.  Figure 4 shows that enrollment growth is only partially responsible for this because despite the long-term upward trend, total enrollment is about where it was a decade ago and has been recovering after a decline.  What has changed is the composition of the students as there has been a larger share of international; students who also pay much higher tuition.

 

 

 

 

 

So, there you have it.  Lakehead’s finances during the pandemic were quite good and come on top of a long-term stable and improving financial situation marked by rising revenues, enrollment growth and an expanding university investment portfolio.  This echoes the comments made by the university during the situation at Laurentian that Lakehead is "very financially sound".  That is good to know. If Alex Usher is right, Lakehead like the rest of the university sector will see increasing calls from its faculty and staff for a return on their investment of time and personal resources into the operations and success of the university.

Another Pandemic Effect: Falling Crime Rates

 

As analysis of the pandemic and its effects continues, here is another result: falling crime rates.  The police reported crime statistics for 2020 were released today and they show that in 2020 crime in Canada fell substantially after being on an upward trend since 2014.  As the accompanying Figure 1 shows, as measured by the crime severity index, crime rates fell from 2000 to 2014 and then began to increase to 2019.  

 

 

 

However, 2020 as a result of people being more at home saw a fall in crime.  For example, there were significantly lower rates of breaking and entering, robbery, shoplifting and theft which is not surprising given that people were largely at home safeguarding their property and retail access was severely limited by assorted pandemic restrictions.

 

Police-reported crime in Canada, as measured by the Crime Severity Index (CSI), decreased 8% in the first year of the pandemic—falling from 79.8 in 2019 to 73.4 in 2020. The CSI was 11% lower than a decade earlier in 2010.  One exception was an increase in police reported hate crimes which saw a 37 percent increase in 2020.  Homicide rates also increased as well as police-reported opioid offenses.

 

 

 

More interesting is a ranking of the change in CSI by Canadian CMA as shown in Figure 2.  The largest declines in crime severity were in Regina, Calgary, Ottawa, Barrie and Toronto and ranged from -20 percent to – 15 percent.  However, some cities nevertheless saw increases in crime severity even during the pandemic with the largest increases in Kingston (4%), Greater Sudbury (7%) and Peterborough (14%).  

 

 The two northern Ontario CMAs had quite different profiles this time with Thunder Bay mirroring the national trend coming in with a decline of 8 percent whereas Sudbury saw an increase. Nonetheless, crime severity is still higher in Thunder Bay relative to Sudbury though the gap closed considerably in 2020.   Sudbury saw increases in identity fraud, homicide and breaking and entering.  Thunder Bay saw decreases in breaking and entering, shoplifting and theft though homicides were up.

 

However, the crime severity index is different from police reported crime rates.  One is a weighted index with 2006 set at 100 while the other is the number of actual police reported crimes per 100,000 population. Here both Sudbury and Thunder Bay saw a decline in the number of police reported crimes per 100,000 population with Thunder Bay reporting a 16 percent drop and Greater Sudbury a 6 percent drop.  The crime rate (as opposed to crime severity index) in 2020 was down in all the Canadian CMAs except one - Peterborough - which saw a 5 percent increase. 

Of course, you are probably keenly interested in which CMA was number one for homicides in 2020 as measured by the homicide rate.   Thunder Bay had 8 homicides in 2020 for a rate per 100,000 of 6.35 - putting it once again in the top spot for CMA homicide rates in Canada.

Moving Beyond the Pandemic in Ontario

 

With each passing day, the new COVID-19 case count has been diminishing in Ontario.  Today’s tally was 114 and there were zero deaths.  Indeed, the number of daily deaths has been in the single digits since July 1^st.  For Thunder Bay District, the last while has  seen a zero daily case count more often than not  There are only two active cases in the District and the hospital has no COVID cases.  And vaccination rates continue to grow with 69 percent of all people in Ontario having received at least one dose and 47 percent being fully vaccinated with two doses.  For the time being, the pandemic is practically over, and the province is slowly reopening its economy with the third stage set to begin this Friday.

 

 

 

Moving forward, the challenge is many-fold.  First, the damage done to the economy is significant.  Ontario had the most protracted lock down in Canada and indeed in much of the developed world.  There are many businesses that after such a protracted lock down will not reopen.  The implications for business formation and investment is serious.  Moreover, the reopening is proceeding at such a slow pace that it may indeed be too late for many businesses.  Employment is rebounding but we are still not where we were before the pandemic.  In 2019, total employment in Ontario stood at 7.377 million employed persons.  In 2020 it fell to an annualized 7.022 million. As of June 2021, the most recent numbers suggest that at 7.273 million, we are still not there yet.

 

And, try getting anything done.  Employment and labour force participation have both shrunk.  The labour shortage which has been underway due to the aging of the population has been made worse with the shutdown and withdrawal of labour not to mention the reduced immigration of the last year.  Indeed, if Thunder Bay is any indicator, trying to get anything done in terms of household repairs and services is very difficult. Everyone is booked and prices have gone up.  Thunder Bay was always a difficult place to get things done without a bevy of personal connections often acquired in high school and the problems seem to have become worse in the wake of the pandemic. 

 

Yet the recovery continues, but much depends on what happens next with the pandemic.  The summer is a golden time and for the post-pandemic recovery to continue beyond September vaccination rates must continue to rise.  With new variants percolating around the world and travel resuming, getting total double vaccination rates above 80 percent is crucial.  September and the return to more indoor activity will be an important test as to whether or not we really have got things under control.

 

While it is important to relax restrictions as normalcy returns there is one restriction that should be maintained for the remainder of the summer and into the fall and it should be a very simple one – if you are in an indoor public space, you must wear a mask.  It is true other provinces are already moving away from this but in my opinion this is premature.  I think you can probably open everything up for indoor activity – gyms, theaters, dining etc… with fairly generous capacity constraints but the one thing that should be maintained is a face mask particularly this fall. Even in a restaurant, except at your table with your designated dining partner or party, there needs to be a face mask on the way in and as soon as you leave your table with servers always masked.  It’s a simple rule and one with the greatest benefits in preventing a resurgence until the vaccination rates are much higher.  

 

Whether we are up to this final task or plan to throw this modest caution to the winds remains to be seen.

 

A Pandemic of Poorly Prepped Puppies

 

One of the many interesting features of the COVID-19 pandemic has been the increase in people seeking the solace of pets of all types.  Adoptions and sales of dogs for example have soared in Canada and indeed in other countries.  The buying frenzy is reminiscent of other frenzies at different points in the pandemic ranging from toilet paper to outdoor space heaters to bicycles and exercise equipment.  In the United States, pet industry sales grew by nearly 7  percent in 2020 and associated food, treats and supplies grew 10 percent.  However, buying a living thing is not quite the same as an inanimate object and any subsequent buyer’s remorse a more serious issue.  Indeed, around the world, animal shelters are apparently starting to see an upsurge in older puppies with “behavioural issues.”

 

An increase in the supply of canines across a wide spectrum of owners who might not normally have acquired one means that there are a lot of first time dog buyers who think the natural and proper relationship between a person and a dog is somewhere between that of a Disney cartoon and your best friend from high school.  Indeed, the tendency to treat dogs and pets as members of the family has grown and just as many parents are indulgent with their children, so too are many dog owners.  The result is a pandemic of poorly trained and undisciplined dogs who essentially own their owners rather than vice versa.  Indeed, there are so many dogs that one is surprised that government have not decided to tax their ownership as a way of paying down post pandemic debt.

 

The pandemic has aggravated what is a canine behavioural problem sometime in the making.  It has come to a head during the pandemic and nowhere more so than during the last few weeks whether sitting on my deck or going for a walk.  The standard young couple today is no longer two people and a couple of kids but two people and at least one or more dogs and sometimes a cat or two for good measure.  And when they walk their family members, the dogs are not always well behaved on their leash.  Indeed, we have now come across several who are not on their leash or even if on a leash dart right out at you and begin to paw you supposedly because they want to be your friend.  Of course, if I behaved in a similar way towards the pedestrians I came across on my local walking trail, I imagine I would soon be a featured on the local newscast in a most unflattering manner and soon after would have to spend some time in forcible confinement.

 

The fact is that many dogs are not being properly trained and they are becoming a hazard to other pet owners as well as people who do not own pets.  Today, an off-leash dog barked and chased after us in a nearby park while its owner was off ruminating thoughtfully in the distance.  Later in the day, while driving, we saw another off-leash dog scamper across the street pursued by an arm flailing owner entreating it to please come back.  Yesterday, a person with two rather large German shepherds paused to check their phone as we walked by and barely prevented one of the dogs from successfully lunging as I walked by.  And the coup de grace, several weeks ago a rather large and ill-tempered dog actually got off its leash and attacked another two small dogs out for a walk with their owner. 

 

It is probably only a matter of time before more serious incidents start to emerge in greater numbers as playful puppies turn into more hellish hounds.  Needless to say, while your friendly neighbourhood spider man might say, with great power comes great responsibility I would add that great responsibility also comes with dog ownership.  

 

 

Ontario: Is it Requiem for the Pandemic ?

 

Well the news in Ontario has improved dramatically on the pandemic front.  Daily case numbers today were 370 – down from over 2,000 a month ago.  Daily deaths have also been falling.  If one takes a look at the daily case counts since the start of the pandemic in late January of 2020, it looks like that the third wave is definitely on the way out.  Ontario (See Figure 1) had three waves each worse than the other.  The first wave now looks relatively minor compared to the second one which peaked in early January of 2021 and the third wave which peaked in mid-April of 2021.  

 

 

 

While the steep decline can be attributed to the lengthy lockdown and the rising vaccination rates (as of today 76% of Ontarians aged 18 plus have received a first shot and almost 20% have had two shots) there is also the effect of seasonality. Much like last summer, warmer weather and more people being outdoors has helped slow transmission.  Note that the second wave peaked in early winter and the drop was not as pronounced as what we are experiencing currently because we are mainly indoors in the December to March period of the year. As for the lengthy protracted lockdowns, it will be interesting to see what the retrospective analysis will be like on their actual effectiveness.

 

Of course, data will be a challenge and as we all know in Canada data on the pandemic from the outset  has been less than optimal. Governments at both the federal and provincial level are hoping to declare victory and move on hoping that we all forget the chaos of coordination of data, response and most recently vaccine distribution.  Trying to snag a vaccine appointment in a decentralized and chaotic system has made the process a veritable rodeo.  It will be tempting to shrug one’s shoulders and move on, but the most important lesson of the pandemic is to learn from the pandemic. If we simply do what we did in the wake of SARS two decades ago - study, plan and ignore -  what is the point? 

 

As for Thunder Bay District, Figure 2 illustrates that after the initial onset of the pandemic in spring of 2020 which produced a very small first wave, we had a long period of relative inactivity until mid-November of 2020 when our second wave began, and it never really ended until recently.  We had a long second wave that peaked in early March of 2021 and then began to decline and bottomed out in mid-April.  We have not gone to zero cases but have instead since mid-April been averaging 5 to 6 cases daily.  Our active case count is down and in recent days most of the cases have been outside the City of Thunder Bay, but the infection is still there percolating quietly.  

 

 

 

So, is this it? Is the pandemic over?  With rising vaccination rates, it is tempting to see this as the last wave.  However, there are caveats.  Full vaccinations need to continue to rise as herd immunity requires anywhere from 75 to 85 percent of the population getting two doses. However, even once fully vaccinated, it does not mean that new variants might not come along that can overcome vaccines.  And there will be no doubt a need for boosters at some point.  In addition, the steep decline is a function of the warmer weather and the real test will come this fall.  In the before time, the return to indoor activity in September was always marked by a resurgence of colds and flus and asthma with a peak usually hitting the third week of September.  If reasonable precautions such as continued masking are maintained, this should not be a problem. Still, it will be difficult to sort out colds from flus from COVID this fall. While things should be much more normal, it will probably not be as normal as we would like.

Thunder Bay City Council Swimming In Cash - Again.

 

Well, after a break of a few weeks, Thunder Bay City Council will be back in session this evening and the agenda is long.  Of course, much of the attention will be focused on Councillor Peng You’s move to put a question on the next municipal ballot regarding the size of council that specifically would ask: “"Are you in favour of a smaller city council, one made up of 8 councillors elected at-large and one mayor elected at-large?"  This is an old issue in Thunder Bay and usually resurfaces the year before an election and is a cheap and convenient way for a councillor to get attention as being fiscally responsible while not having much happen afterwards.  As we all know, the current arrangement consists of 12 councillors (seven ward and five at large) as well as the Mayor elected at large.

 

Reducing the size of council as an economy measure is largely symbolic as a $200 million plus tax supported budget is not going to be significantly affected by having four fewer councillors.  The quality of council is a more significant factor in driving the budget than the quantity of councils and council would be better off having fewer councillors and paying them more to attract better candidates able to actually analyze issues and make better decisions.  So, the question Councillor You wishes to place on the ballot is typical in that it is a simplistic question designed to address a much more complex issue.  A smaller city council makes sense as a symbolic political gesture and would be more useful if some of the meagre savings were reallocated to attract better candidates. 

 

However, there is also another issue here and that is the effectiveness of democratic representation.  Moving to a completely At-Large system potentially reduces accountability for neighborhood issues.  Councillors must be assigned to a Ward.  Otherwise, you have a council composed of a mayor and eight mini mayors each of whom will be more concerned with the big picture at the expense of the more mundane grass roots concerns of constituents.  It is a question of balance and a completely at-large-system runs the risk of affording councillors the opportunity to shirk even more when it comes to neighborhood issues they would rather avoid.  It is bad enough now having a mayor and five prima donnas with the ward councillors having to pick up the slack.  Good luck getting attention once they are all at large.  

 

However, that is only one of many issues this evening.  The other, tucked away near the end of the 248-page Committee of the Whole document, is the non-consolidated financial statement and reserve fund update.   It turns out that even with the ravages of the pandemic and the wringing of hands about budget problems and the need for resources, the City of Thunder Bay has turned out to have a net positive variance in 2020 of $4.1 million or in other words a surplus.  Moreover, in terms of total assets: “Cash and investments of $131.6 million have increased by $11.7 million from the prior year, primarily resulting from an increase in reserve funds of $21.8 million.”  It would appear that all that federal and provincial money was not all spent on the pandemic and substantial savings were generated.  Given that Thunder Bay was projecting a $3 million surplus for 2021 at the same time that 2020 seemed to only be on track for a $1 million surplus, it would appear that things have improved even more. 

 

Now of course, municipal governments of course are not allowed to run deficits on operating expenditures by the provincial government, so deficits are covered out of reserve funds while surpluses augment reserve funds.  Having reserves is important and fiscally responsible. At the same time, many municipalities – Thunder Bay included – are now in the practice of running habitual surpluses funded by tax increases that are often higher than they need to be. The 2020 and 2021 tax hikes are in the end larger than they needed to be.  The City of Thunder Bay consistently overshoots with the increase used to fund a savings program at ratepayer expense. For 2020, there was additional help from Ottawa and Queen’s Park and Thunder Bay is now swimming in cash.

 

 

 

 

COVID-19: An International Overview

 

COVID-19 case counts, mortality rates vary widely across developed world

 

Livio Di Matteo

Appeared in the Epoch Times, May 26, 2021

 

Perhaps the most noteworthy feature of the pandemic is that there was no uniform pattern of impact across advanced countries. The pandemic unfolded differently in each developed country, and governments that spent more did not as a rule more successfully contain the virus or better maintain their economies.

From the first reports of a pneumonia of unknown origin in Wuhan, China, in December 2019, the COVID-19 pandemic grew and spread around the world, with massive impacts on health, mortality rates, economies, and government budgets. Currently, the global tally is nearly 165 million cases and 3.5 million deaths. With the spread of new variants and differential rates of vaccination around the world, the effects of the pandemic will continue to reverberate worldwide.

 

However, we can already learn from this pandemic to help shape responses to future outbreaks.

Many people, including policymakers, view the pandemic as unprecedented or surprising, but only because the technological and economic progress of the 21st century—and resulting high living standards—has caused many to lose historical perspective. Plague and pestilence have been part of the human experience since the start of recorded history. Pandemics have happened before and will happen again. Nevertheless, many countries were caught unprepared for COVID-19.

 

Moreover, the pandemic did not strike everyone simultaneously, and even with additional time, some advanced countries seemed unable to heed warning signs and act quickly to implement proactive measures. Despite our instantaneous 21st-century communication and information dissemination, many countries seemingly had to experience their own pandemic before taking the matter seriously—even countries that experienced past viral outbreaks such as SARS.

 

As such, the pandemic’s effects were surprisingly severe in developed countries. For example, the International Monetary Fund’s advanced economies, which comprise only 18 percent of all countries, in 2020 accounted for 40 percent of the 30 countries with the highest COVID-19 deaths per million (although the older populations of advanced countries were a key factor in initial death tolls).

 

In the absence of vaccines or effective treatments, the world’s first year of the pandemic response unfolded more like a medieval plague or the Spanish flu. Control efforts consisted largely of face-masking, quarantines, lockdowns, and physical distancing. In the end, unlike the Black Death, it was not the deaths from COVID-19 per se that devastated economies, but rather the restrictions and stringent measures imposed by government to reduce spread. Lockdowns, quarantines, and travel restrictions disrupted global supply chains and had severe economic impacts on the international travel industry, labour-intensive services, food and accommodation, tourism, and the arts and entertainment sectors. Indeed, a one unit increase in the Oxford Stringency Index, which tracks government policy responses to the pandemic based on data from more than 180 countries, was associated with an approximate percentage point drop in real GDP growth of 0.1 percent.

 

Moreover, as noted in a new study published by the Fraser Institute, prolonged levels of stringent government restrictions did not significantly reduce COVID-19 case counts or deaths per million. On the plus side, high rates of testing helped control mortality rates, with each additional 100,000 tests per million associated with 21 fewer COVID-19 deaths per million. And again, countries with larger elderly populations experienced higher COVID-19 mortality rates.

 

Crucially, the number of hospital beds played a key role. Internationally, each additional hospital bed (per 1,000 people) was associated with 31.5 fewer COVID-19 deaths per million. Even among advanced countries, there are substantial variations in bed numbers. In 2020, hospital beds per 1,000 ranged from highs of 13.1 in Japan, 12.2 in South Korea and 8.0 in Germany to lows of 2.5 in Canada and Denmark, 2.4 in Singapore and 2.2 in Sweden.

 

In the end, though all countries experienced the pandemic, its intensity and severity varied as did the economic impact, and there wasn’t always a direct linear relationship between the intensity of the disease and the economic and fiscal impact. Indeed, countries with governments that spent more did not necessarily experience a better outcome in either maintaining their economies or containing the virus.

Clearly, how each country chose to play the cards they were dealt was an important determinant of the health and economic impacts reported during the pandemic’s first year.

Ontario Employment During a Pandemic Year

 Statistics Canada's April 2021 Labour Force survey results show the employment effects of the third wave lock-downs in Canada and Ontario.  Indeed, of the 207,000 jobs lost in Canada between March and April, about three quarters (153,000) were in Ontario with a sizeable portion of the losses amongst youth (73,000). and in Toronto (53,000).   However, the monthly numbers obscure the fact that for the most part, there has been an employment recovery underway in Ontario.  From a peak of 7,487,300 jobs in February of 2020, employment in Ontario fell 13 percent to bottom out at 6,497,300 in June of 2020 before starting to rise again and as of April 2021 stood at 7,256,500 jobs.  However, this employment level is still nearly 231,000 jobs below the February 2020 employment peak.

Based on the April numbers, year over year we are up 257,000 jobs or about 3.7 percent.  The accompanying figure plots major Ontario urban centers and Ontario as a whole in terms of the ranked percentage employment gains from April 2020 to April 2021.  It also includes the percentage change from February 2020 to April 2020.  Peterborough, Windsor and Brantford, have seen the largest percent employment gains over the course of the last twelve months.  Indeed, if one goes back to February 2020, Peterborough is up 5,000 jobs from the February employment peak - or nearly 9 percent.   Brantford is also up from its February peak as are Guelph and London.  

Everyone else is still below where they were in February of 2020.  The worst year over year performances are in Sudbury, Oshawa and Barrie, which range from a 0 percent increase to a six percent drop.  Indeed, Barrie is down over 15,000 jobs since February of 2020 for a total drop of 12 percent.  Barrie's recovery appears to have peaked in August of 2021 and has come down in employment terms since. 

And of course, there is the biggest job engine of them all - Toronto. Here the year over year April numbers are up 2.2 percent - for an increase of 70,600 jobs but Toronto is still down 180,000 jobs from its February 2020 peak.  So, nearly a year and a half into the pandemic, Ontario is still hurting with Toronto the largest source of missing jobs.