Is Thunder Bay Housing History About to Repeat Itself?

 

In the early 20^th century, the Lakehead cities of Port Arthur and Fort William were amidst an economic boom fueled by the expansion of the Canadian wheat economy in the west and the Lakehead’s role as a port and transport centre.  As the boom progressed, population surged and the years from 1900 to 1914 saw massive growth with the population growing from just over 6,000 people to 30,000 – a 400 percent increase.  With this boom, the need for housing was paramount and the same era saw a massive construction surge with numerous houses built. 

Indeed, it seemed like the growth would never end and plans were afoot to bring huge swaths of land into readiness for what was certainly to become the Chicago of the North.  The pre-1920 period saw residential subdivisions planned and sometimes started for the Kam River Islands, Parkdale (which incidentally was zoned for 25-foot lots as far back as 1907), The Alma Adair Addition and the areas currently between Lakehead University and Confederation College now off Central Avenue and to be known as Inter-Ocean Park.

The Great Boom came to an end not only at the Lakehead but across Canada and for decades Thunder Bay was marked by huge swaths of land that eventually reverted to the municipality for non-payment of taxes and evolved into informal green spaces throughout the city. Along with large swathes of greenery in the centre of the city, many neighbourhoods have also had patches of green space on empty lots that were never developed.  While these lands sometimes evolved into official parks or parkettes, for the most part they were simply green space – owned by the city.  Visually, they made for a vision of forest within the city and in practical terms, while they served no obvious productivity need, they did harbour wildlife and absorb rainwater.  One only needs to see what happens to the inter-city area after a major deluge given that most of the green space there has been paved over.  If anything, the urban green space contributed to that intangible Thunder Bay often advocates as one if its attractions – quality of life.

Fast forwarding to the present, after decades of economic and population stagnation, it once again appears that Thunder Bay’s hour has struck and a boom – albeit a modest one - is underway.  With infusions of public infrastructure money, growing demand for transport services and mining activity in the region, employment and population have finally begun rising again with some of that growth boosted by recent immigration of permanent and temporary residents.  According to Statistics Canada numbers, between 2015 and 2024, the CMA population rose from 124,719 to 133,063 while the City of Thunder Bay proper rise from 110,298 to 117,100 – increases of 6.7 and 6.2 percent respectively. 

There is a demand for housing and with the assistance of federal and provincial housing money, Thunder Bay has embarked on a plan to boost the number of housing units via a combination of infill in existing neighbourhoods as well as move on disposing of its surplus green space.  The infill in existing neighbourhoods with higher density apartment units and more basement units have naturally disturbed the former pace and character of some neighbourhoods as additional residents and their vehicles have cluttered the streets.  Simply accusing existing residents of NIMBYISM does not address their concerns given that the City of Thunder Bay seems to do little to enforce either parking or noise bylaws.

However, the latest chapter in this saga is the declaration of surplus and sale of four major pieces of municipally owned land to build density housing: 300 Tokio Street, 144 Fanshaw Street, 791 Arundel Street, and the land between 211-223 Tupper Street and 224 Camelot Street.  The City of Thunder Bay wants 400 units on Tokio Street, 200 on Fanshaw Street, 600 on Arundel Street, and 185 on Tupper/Camelot streets for a total of about 1,385 units. A key issue here is that of these pieces of land, only one is in a downtown area and can be considered as part of a deliberate plan to boost density in the downtown cores which have been the focus of substantial redevelopment dollars to revitalize them but still lack higher population and traffic.  The others are all on green space adjacent to existing residential areas which in the case of the Arundel lands are also already marked by some high density apartments. 

So, there has been push-back from residents and the Tuesday January 13^th City Council meeting is expected to see a final decision on whether the city will dispose of this land.  Of course, city councillors and administrators have already generated a narrative to convince themselves and city residents – a large portion who concur – that Thunder Bay needs more housing and that this is the right thing to do.  The city maintains that with rising population, Thunder Bay is facing a shortage of 1,000 units of housing and they need to build large quantities of housing quickly to increase supply and make housing more affordable.  Thunder Bay is also pursuing an active growth agenda and plan, and this construction activity is seen as growing the tax base which is a priority of the new growth plan.  To assuage push-back, the claim has been made that the proposals are all conceptual and subject to change hinting but not stating that they will be down-scaled. And, at least one councillor has argued that << “If you build some of these types of units, you will allow people to still stay in your neighbourhood and you will open up a house that has three bedrooms that could potentially occupy [more] people,”  … “Change is hard to kind of wrap your head around ‘til you see it,” he continued. “Sometimes change is good, and then sometimes … the proposal might not be that change, it might be something different.”>>

In deciding on this matter, Thunder Bay City council needs to consider the following points made with reference to some of the arguments that have been advanced:

1.        Thunder Bay needs more housing and that this is the right thing to do.  The city maintains that with rising population Thunder Bay is facing a shortage of 1,000 units of housing and they need to build large quantities of housing quickly to increase supply and make housing more affordable.

Thunder Bay does need more housing and particularly affordable housing and social or geared to income housing.  To date, most of the new builds have been units at market rent and they have increased supply but that new supply comes at monthly rents between $2,000 to $2,500 a month.  These are GTA level rents in a city that despite its recent surge in growth does not even begin to offer the opportunities of a much larger city but seems to be developing all its drawbacks including crime and generally more inconsiderate behaviour on both the roads and in neighbourhoods.  Indeed, Thunder Bay rents are pretty much at the Ontario average. As for rising population, that growth may be about to end.  With recent changes to federal immigration including the caps on international student enrolment, Thunder Bay’s population may once again be levelling off.  In some respects, this may be a small-scale replay of the early 20^th century where the boom petered out, and Thunder Bay was left with large quantities of zoned land with no demand.  In this case, it will be a lot of units that may not find renters.  On the bright side, a classic overbuilding boom may be just what we need to bring local rents down in the longer run. I am sure City Councillors are not too concerned if developers are left holding the bag as that would be someone else's problem.

 

2.        Thunder Bay is also pursuing an active growth agenda and plan, and this construction activity is seen as growing the tax base which is a priority of the new growth plan. 

Thunder Bay’s growth agenda is a municipal revenue enhancement plan masquerading as an economic growth plan.  The key targets are not employment growth targets or business formation targets or per capita GDP growth targets, but measures directly correlated with municipal revenue.  The key targets are to grow the property tax base of 3% annually and grow population by 1 percent annually. Building multi-residential units that generate more tax revenue on a per square foot basis than single family dwellings meet these goals rather nicely – if growth in employment and population continue.  As already noted, continued population growth is not assured. If one looks at Statistics Canada’s labour force characteristics for Thunder Bay, in 2025, the population aged 15 years old and over has stopped growing.  From spring of 2016 to the end of 2024, Thunder Bay’s plus 15 years old CMA population grew from 104,300 to 111,900 – an increase of 7.3 percent.  However, by December 2025, the 15 years plus population was 111,400 – a decline of 500.  A blip? Perhaps? But nevertheless, making decisions based on previous growth rates continuing is always risky.  On the other hand, the developers will be taking the risks and once they have acquired the land, they may simply sit on it for years if economic conditions shift.  At least that is what happened when the city sold off the Municipal Golf Course for housing way back in 2016.  We are still waiting there.

 

 

3.        To assuage push-back, the claim has been made that the proposals are all conceptual and subject to change hinting but not stating that they will be down-scaled.

This is classic bureaucratic issue management.  Make the affected public feel better by giving them the hope that the development will be smaller than the concept drawings illustrate.  That may or may not happen.  Once the land is sold to developers, they will be calling the shots on what is eventually built.  The projects may be scaled down, or they may be scaled up.  People in the Junot /John/Red River area still remember what happened with the Transitional Housing Project for youth that was supposed to be under 30 beds.  If you look at the footprint of the almost completed structure now, it looks like it is well over 50 if not more. In general, in Thunder Bay when there is a development plan, what you see is not always what you get.  Indeed, many of the drawings presented give me a vibe out of Fritz Lang's Metropolis with a 1960s Soviet era flair.

 

4.        “If you build some of these types of units, you will allow people to still stay in your neighbourhood and you will open up a house that has three bedrooms that could potentially occupy [more] people.”  

This is an intriguing argument. I am not sure what type of housing market demand this statement is directed at.  I suppose there are some people in Thunder Bay that would like to downsize to an easier to maintain lifestyle once the kids are gone.  Indeed, the thought has often crossed my mind that it would be nice to sell the house and move into a condo or apartment.  The problem with condos in Thunder Bay is that Thunder Bay’s condo market is very limited in terms of what is available.  Most of it is really glorified apartments with few amenities and outside parking – not terribly attractive.  Moreover, based on average house and condo prices in Thunder Bay, unlike southern Ontario or the GTA where you sell your house, buy a three-bedroom condo in a building with a pool, gym and underground parking and have several hundred thousand dollars left over, the Thunder Bay reality is different.  You sell your house, buy a condo in a building with no pool or gym and outside parking and must sink another $100,000 or so on the purchase price. If that is not enough to change your mind, how about I base the rebuttal here on a simple personal anecdote.  I currently live in a four-bedroom house with yard and deck.  The expenses of maintaining my home (taxes, water, insurance, basic maintenance, etc.…) even with the occasional emergency repair such as an appliance going, do not amount to more than $15,000 annually. Why would I downsize to a two-bedroom apartment at $2,000 a month - $24,000 annually - plus a monthly fee for outside parking that would add another $1,000 annually? True, if I were in my late 70s or early 80s and finding home maintenance challenging, it might be more attractive but at that stage one is looking more at a retirement home or assisted living arrangements.

 

5.        “Change is hard to kind of wrap your head around ‘til you see it,” he continued. “Sometimes change is good, and then sometimes … the proposal might not be that change, it might be something different.”

 

Well, we should save the best for last.  To start, coming right out and saying a proposal is going to change and might be something different means in the end neither we nor City Council for that matter know what City council is deciding to do.  That is not terribly reassuring. Moreover, it is one thing for an administrator or bureaucrat to engage in the assuaging platitudes of issue management; it is another for a ward representative to do so in response to obviously upset people. I am really not sure what to make of this statement by the councillor in question aside from that he is an obvious fan of the Alex Rider series on Prime Video and has decided to channel Dr. Grief.  As aficionados of the series may recall from Season 1 of Alex Rider, Dr. Grief is an evil villain seeking to change the world by placing his clones in key positions around the world.  A key scene is when Dr. Grief in response to a classroom question by teen spy Alex about who gets to choose the one percent in a world starting over, intones: <<Change is never easy. Change hurts, but it can be for the better.>> Not sure if people who are concerned about the erosion of neighbourhood green space and residential quality of life really appreciate this type of lecture from their elected representative but maybe it will work.  People in Thunder Bay complain a lot, but then usually just go back to sleep and let things happen.

 

So, what more can one say.  Thunder Bay probably does need more housing, but a lot already has been or is under construction and it is not obvious that the demand will continue to grow at the same rate. In some respects, Thunder Bay may be about to embark on a small-scale repetition of the early 20^th century when there was a massive push to accommodate housing demand that eventually fell short. Density housing is an obvious solution to future housing needs, but more effort needs to be made to design well placed units with amenities rather than simply throwing up apartment blocks reminiscent of 1960s quick builds.  Most importantly, the City of Thunder Bay is taking the quick and easy way out with greenfield development rather than a more focused approach to building urban density in its core areas especially given the amount of money that is continually being spent to “improve” those areas but without the follow through of increasing the population in those areas. This has been said before and will be said again.

 

 

What Is Thunder Bay's Population?

 

During the last Thunder Bay City Council Meeting, the discussion over the city’s new Smart Growth Plan included a few remarks by the mayor that the city was growing and that according to conversations that he has had, it is probably around 150,000.  Of course, while it cannot be denied that Thunder Bay has seen its population grow over the last few years based on even anecdotal observation, the 150,000 number is vastly at odds with any estimate provided by Statistics Canada or even the City itself in its annual submissions of municipal data to the Ontario Government via the Financial Information Return (FIR). This type of mixed messaging and confusion on what Thunder Bay’s population is, including the usual casting of doubt on Statistics Canada, does not do anyone any favours.  This becomes even more problematic given that Thunder Bay is engaged in long-range financial planning that also presents population and household numbers. 

Thunder Bay will soon be dealing with a Long-Range Financial Plan for the 2026 to 2035 period, and the current draft presents population estimates (Plan starts at page 32 of December 9th Agenda for Finance and Administration Standing Committee) taking the city from 112,330 in 2020 to 117,003 in 2025.  Over the same period, the same draft has the number of households in Thunder Bay growing from 47,180 to 48,405.   In other words, the City of Thunder Bay says it has added 1,225 households since 2020 and 4,673 people.  However, it should be noted that average household size in Thunder Bay is approximately 2.2 people so the additional households should probably only be associated with only an additional 2,695 people.  Or perhaps it could be that our current population increase is also being accompanied by an increase in household size.  In addition, the household number in the draft plan is also out of whack with the household number and population in the finally submitted Thunder Bay FIR report to the provincial government for 2024 which says Thunder Bay has 50,995 households and a population of 108,843.

This range of estimates – none of which incidentally approach 150,000 - begs the question as to what then the population of Thunder Bay is?  Part of the issue is that there is a distinction between the population of Thunder Bay as contained within the city limits – the City of Thunder Bay – and the population of the immediate surrounding area as defined by Statistics Canada as the Census Metropolitan Area (CMA).  The accompanying map shows that the city itself is contained with a much larger CMA which in turn is within an even larger District which according to Statistics Canada in 2024 had a population estimated at 157,293.   Perhaps this the source of so much confusion among our elected officials in that they conflate the population of the district (which essentially stretches from Fort Frances to Wawa) with the population of the city itself which is anywhere from 108,843 to 117,003 or perhaps even the CMA at 133,063.  That Thunder Bay is a service centre for a regional population of 157,293 that accesses its government, health, retail and education services is a reasonable statement but saying that our city itself is swarming with 150,000 people is not.

 

 

The accompanying figure plots three population series: the CMA and City populations from Statistics Canada and the City population according to the annual FIR reports - which I again must note, are filed by the City of Thunder with the provincial government.  For the CMA, the StatsCan numbers show a decline from 2001 to 2011 from 126,696 to 124,926 followed by a flat population that starts to increase after 2016 and in 2024 is estimated at 133,063.  For the city itself, the Statistics Canada numbers show a pattern like the CMA but the numbers are larger than the numbers the city itself seems to be using in its annual FIR reports.  The City of Thunder Bay’s population according to this series declines from, 113,298 in 2001 to 110,861 in 2016 and then starts to grow and in 2024 was estimated at 117,100.  According to the StatsCan estimates, between 2016 and 2024, the Thunder Bay CMA grew 6.6 percent and the city itself 5.6 percent.  However, the FIR numbers say the Thunder Bay had a population of 115,419 in 2001 which shrank to 107,909 in 2016 and has since grown an anemic 0.9 percent to 108,843.

 

 

If the city is making the case that its population numbers are underestimates that affect the grants it receives from the federal and provincial governments, a key part of the problem is that the city itself seems to be submitting numbers in reports that are much lower than the StatsCan estimates.  On the other hand, the provincial government probably has a good handle on how many people live in the city of Thunder Bay versus the surrounding area based on Driver’s License and OHIP usuage data and does believe the population of the city itself is closer to 108,000 with a large percentage of the CMA population outside the city. Indeed, based on the FIR estimate, 20 percent of the CMA population lives outside the city limits and is probably a factor in all the traffic being generated as they come in and out of town accessing city services.

Of course, rather than blame someone else, the solution here in part is that the city of Thunder Bay needs to get its act together in terms of getting a handle on its own numbers.  For a city with 3,207 employees (2,165 full time, 995 part time and 47 seasonal), Thunder Bay seems unwilling or unable to hire a couple of graduate school level trained economists and statisticians who could provide a more disciplined and consistent approach to compiling and analyzing its economic and population data to make its case with both higher tiers of government and its own municipal ratepayers.  Instead, we are left with plans, pronouncements and submissions that have conflicting data and population estimates that seem to emerge out of thin air.

Making Major Decisions at Thunder Bay City Council-Part II

 

As noted in the previous post, the last few weeks at Thunder Bay City Council have been busy with three major decisions of particular note: not approving changes to council composition, approving the Kam River Heritage Park site as the location for a temporary village of tiny homes to address homelessness and finally, not shutting down the County Park location and adding Intercity Mall as the location for a new more centralized library.  These were particularly thorny issues to deal with on several fronts and my take is that the correct decision was made in two out of the three cases.  In the last post, I provided my thoughts on the two decisions I think City council got right: sticking with the status quo on council composition and not putting a large new central library in the Intercity Mall.  However, on the third decision – going ahead with the Kam River site for the tiny homes project- I beg to differ.  However, there may yet be a silver lining to the decision made if it is truly a transitional decision and time it buys used to bring about long term social and geared to income housing.

After several other tries at establishing a tiny homes village first on Miles Street (which is separate from another project by Alpha Court), then in Intercity, and then on Cumberland Street, the nod has now been given to the Kam River Heritage site – for now.  This has been somewhat of a merry go round in terms of location selection. There is still another meeting for final ratification, however, and this location decision has been made and reversed before. However, my feeling is given the cycling across locations, City Council will stick with this final choice if only to avoid further eroding their credibility. 

This has been a charged and emotional issue given the need to address the homeless problem and the presence of tent encampments under third world conditions.   There are also the many concerns as what the impacts of such a village will be on adjacent residences and businesses.  And to be fair, this is not just Thunder Bay’s problem, but the provincial and federal government’s problem given there are homeless encampments across the province and the country.

In the end, several reasons were advanced as to why the Kam River site should be selected including proximity to essential services, the fact the area already houses an encampment, and that it is in keeping with the City’s strategic plan.  After numerous delays, there is also a sense of urgency to put the project in place to not jeopardize provincial funding though making decisions to just get the money is never sound public policy.

However, a key concern raised has been safety of the residents given the proximity to water and rail tracks with the prospect of drownings up front and center.   The City Manager commented that “You can drown in six inches of water like you can drown in 12 feet of water. The depth is not really the consequential issue. It's clearly delineating it, making people understand the risks, and putting in some prevention measures."  This somewhat less than sensitive response in the wake of recent history along our waterways also omits the reality that a drowning is a drowning whether in six inches or 12 feet of water and if it is a municipally run village on city land there will inevitably be additional liability issues.  Safety is a big issue with this site.

As well, even with these tiny homes, encampments will still not be eliminated as the tiny home village is part of a city homelessness plan that includes three approved encampment sites. Also not addressed as a concern is the reality that this plan  - unlike the other sites considered - puts the tiny village essentially out of sight and out of mind by locating it where it will not be easily seen.  This will be a problem given that the project is supposed to run for only five years as “permanent” solutions are brought into play.  However, if the problem disappears from public view, it will be difficult down the road to generate the attention and the resources for permanent solutions.  The risk of hiding the problem is that long term solutions will go onto the back burner.

Then there is the cost.  According to the media reports, Thunder Bay will spend $5.5 million to construct an 80-unit "tiny home" village, with the province contributing $2.8 million of that, and has targeted operating costs for the first year at $1.5 million. So, over the five-year span of the project, the total cost for 80 units based on these numbers will be close to 13 million dollars.  Given the history of public sector capital projects at the public sector level in Thunder Bay, one can certainly expect cost overruns in the building and operation of these tiny homes.  Hamilton (always my favourite example) has also erected a “temporary” village to house its growing homeless population with the cost for 40 units (80 beds) originally forecast at $2.8 million but that has ballooned to $7.9 million or about $100,000 per bed.  Operating costs annually are apparently going to be $40,000 per bed. 

Is this a problem?  Well, in the case of Thunder Bay, think about it this way. Spending $13 million for 80 tiny units over five years works out to $162,500 per unit – or $32,500 annually. Thunder Bay is currently undergoing an apartment building spree financed by federal and provincial housing money which is increasing the supply of rental units but not necessarily increasing the stock of affordable housing because two-bedroom units in these new build apartments are going for as much as $2500 per month. At $2,500 per month, the annual rent is $30,000 per year.  Essentially, for the same amount of money, the City of Thunder Bay could simply house up to 160 homeless people in new existing two bedroom apartments for the next five years in very nice lodgings.  If older buildings at somewhat lower rents were put into the mix, then you could house even more homeless people.

Of course, this modest proposal of a solution is not going to happen. One suspects that current rental accommodation landlords in Thunder Bay are not terribly interested in helping solve the city’s homeless population problem in a manner that might affect the value of their investments or the building environment of their current mix of tenants.  This does however lead to what I think the longer-term solution could be. 

Given the private sector does not appear to be either capable or willing to provide new build affordable housing and given the amount of money that is being spent simply for tiny homes, there can be a public sector role in longer term housing solutions.  There needs to be more social housing – administered by the district of Thunder Bay Social Services Administration Board (DSSAB) and funded by the City of Thunder Bay, the Provincial and the Federal governments with local groups (such as Alpha Court as well as Indigenous organizations) in partnership.  The partnership approach is key and has been noted by others.  Small apartment style buildings providing social housing and geared to income units need to be built in multiple locations throughout the city with city owned and other public land in the downtown cores and city being possible locations.

Again, as outlined in a much earlier blog post, a good model here is Finland which has through the building of social housing complexes that provide places to live and a fixed address for those requiring access to government services dramatically rescued its homeless population. As I have noted, “People who are homeless need to be housed and housed without questions being asked.  Creating a complex or dispersed network of complexes of transitional emergency housing with very small personal units combined with social support such as a community kitchen, social workers and even a nurse practitioner and mental health workers and basic security on site would be one way of dealing with the homelessness crisis.”   And once lives are stabilized in these homes, the next step is placing them in geared to income units.  As far as I am concerned, tiny homes on a riverbank are at best an expensive band-aid solution.  If you are going to be spending tens of millions of dollars, you need to be leveraging that money into permanent solutions, not stop gaps.  True, the social housing approach is seen as more expensive, but it is more likely to solve the problem rather than dilute or obscure it.  Moreover, the tiny homes approach is not exactly cheap either.

Still, these are all complicated questions, and one certainly does not envy the people who must wrestle with them. I suppose getting two out of three decisions right is not a bad score but as my old high school motto would say - Agimus Meliora – let us strive for better things. And doing better in the case of homeless encampments given that the Kam River site is likely a done deal, is to gain redemption by using the next five years to fully implement long term solutions and not hide problems along a riverbank.

 

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 Four Ages of Ontario Government Health Spending

Understanding the pressures and challenges facing Ontario’s health care system and in particular - provincial government health spending – requires an overview of the numbers.  The Canadian Institute for Health Information (CIHI) via its National Health Expenditure Database provides a wealth of information on health spending in Canada.  The 2019 edition of the National Health Expenditure release allows us to piece together a broad picture of where health spending in Ontario has been over the last few decades. 

Figure 1 on total health spending in Ontario provides a view of total and provincial government health spending over the period 1975 to 2019 (with 2018 and 2019 being estimates).  They show steadily rising spending.  Total health spending on health in Ontario was $4.4 billion in 1975 and has grown to an estimated $100.5 billion.  Meanwhile, over the same period provincial government health spending has grown from $3.1 billion to $63.4 billion.  The massive growth in health spending over time is part of the conventional wisdom that health spending is unsustainable.

However, these numbers are nominal totals and do not take into consideration population, inflation or economic growth which are all necessary to provide context for these numbers.  Between 1975 and 2019, provincial government health spending in Ontario grew 20-fold while GDP grew 13-fold, population grew 1.7-fold and prices 5-fold.  

The City of Thunder Bay Has Spoken, The Case is Closed

Thunder Bay City Council and its municipal administrative apparatus seems to have embarked on its Roman imperial phase with respect to community relations with its taxpayer base.  In response to those who provided input ( my input here ) on the 105 Junot Avenue South Rezoning application and following the October 21^st decision to uphold the rezoning in a 7-5 vote, the Office of the City Clerk provided a Notice of Passing decree that begins as follows:

“The Thunder Bay City Council passed By-law 94/2019 on the 21^st day of October 2019, under Section 34 of the Planning Act, R.S.O. 1990 as amended.

Public comment has been received and considered and had no effect on Council’s Decision as the application is consistent with all relevant planning legislation and represents good planning.”

I suppose all that was missing at the end of this statement was a simple “All Hail the Glory of the Emperor” to convey the full message of conquest and victory.  The implied message seems to be that any resistance to the edicts of City Council is futile and has no effect.   Whatever is decided is consistent, represents good planning, and the final collective decision is ultimately infallible. 

The entire public drama and division over 105 Junot was amplified by The City of Thunder Bay because they encouraged the Ontario Aboriginal Housing Corporation to expand the scale of the transitional project from 20 to 58 beds to “maximize” the use of the site which one suspects probably really means greater property tax revenues for the City - assuming that the OAHC pays property taxes.  A smaller scale facility more in keeping with other such projects around the province would have been more suitable given the many concerns raised by residents in the area and generated less discord. 

Unfortunately, the Aboriginal Housing Corporation was caught in the middle of this unfortunate situation and making it into an emotional issue that attracted the attention of the Globe and Mail did not serve anyone’s long-term interests.  What the City of Thunder Bay should have done in response to the input received was return to the original proposal of 20-beds but that would have required actually listening and accepting at least some of the arguments made by those who presented their concerns.  Really, how can a facility approved on a much larger 58-bed scale in a neighborhood with the social and crime issues that were raised be “good planning?" 

In the end, it is water off a duck’s back because many members of council believe they have been annointed as “progressive” thinkers who love their community.  The strength of their love means that they are doing good and therefore the ends always justify the means.  If that means tacitly implying that opponents to their good works are insensitive to poverty or diversity, then so be it.  They constantly solicit input from constituents but listen through a set of political noise cancelling headphones so that the discordant notes from any input not coinciding with their vision of fighting social and economic injustice is politely filtered out.

Those in Thunder Bay who uncritically champion all social injustice issues with unquestioned fervour and feel they have the ear of City Council and its municipal-corporate apparatus should be cautious.  In the end, any dispensed progressive works are to be accepted on The City’s terms because they know what is best for you.  Take the example of Dease Pool as a case in point.  Here, a long-standing community pool in what is considered a disadvantaged neighborhood was closed because it was old and needed substantial and expensive renovations.  There is continuing opposition to the closure but The City forges ahead.

The proposed new draft plan (available here) will essentially replace the pool area with a tennis court and a community garden.  Given that swimming pools accommodate a greater and more diverse number of users than a single tennis court, it seems like an oddly elitist rather than progressive use for the site.  However, consciences will be soothed with a multi-user community garden – which also atones for the environmental sin of an asphalt surface on the tennis court.  If all this redevelopment was designed to somehow deal with the rising costs of an old and aging pool, those of us with a more fiscally conservative bent could be understanding.  However, this will still cost a lot of money and in the end not fully serve the needs of the area.

As for the money that will be spent, it does not seem to matter because a “progressive” council that wants to do great things will simply raise the tax rates on its residents - who by the way are now responsible for the lion’s share of property tax revenue given the declining industrial and commercial base.  Be prepared this year for an initial budget proposal that stakes out a high increase in the tax levy.  This will be blamed on the provincial government who, being conservative rather than progressive, are the source of all fiscal evil.  After a cleansing public ritual of debate and input of appropriate length, The City will then retreat to an increase of between 3 and 4 percent thereby demonstrating that it is both fiscally responsible and generous in matters of expenditure. 

We should not complain too much.  We elected them.

 

Demanding Better from Canada's Federal Politicians

Well, it is nearly one week into the Federal Election campaign and the start was less than auspicious for the Liberals given that a campaign bus damaged the official plane on day one.  I was surprised that no pundit noted that it seemed like the left wing of the plane carrying Canada’s self-styled champions of progressive thought was damaged.  But then, media observers were probably too entranced by the plethora of slogans and ads which had already started to crescendo a few days before the call.   Yet, the slogans were for the most part predictable and really rather bland.  The general blandness of indeed the entire election, is coming during a time when Canada’s position in the world is under severe stress and change. How a country with an export to GDP ratio of 30 percent can continue to prosper in a world of tariffs and trade wars is a pressing question.  One was expecting more.

The campaign slogans are remarkably interchangeable.  The federal Liberals are asking us to “Choose Forward” which I am sure means other parties are a backwards choice rather than an exhortation to engage in time travel or perhaps go to an advance poll.  The federal Conservatives are telling us that “It’s time for you to get ahead” which again is a call to vote Conservative as a way of doing materially better rather than proceed to the front of a checkout line or perhaps take early action in setting your clocks back for the fall. 

Keeping to the theme of moving forward and ahead, both the Liberals and Conservatives are facing the Green Party with their “Not Left. Not right. Forward Together” which suggests rival parties are directionally challenged when it comes to deciding where to go.  And of course, there are the New Democrats who want us to know that they are “In it for You” which is a comment on the other parties being focused on themselves rather than a call to attract more candidates of which they are still woefully short.  And who can forget the People’s Party of Canada who are simply “Strong and Free” but based on their polling numbers are not strong and probably do not wish to apply the concept of free to immigration.

These are of course only slogans designed to highlight differences and send subliminal messages.  The Liberals are suggesting that choosing anybody other than them is a step backwards especially when it comes to their much-vaunted promotion of growing the middle class.  I suppose this  is a more charitable interpretation of their message than a more strident “We always know what is best for you” or “We are going to help the middle class whether you like how we do it or not.” 

Meanwhile the Conservatives, seem to be telling us if you want to be middle class, the best way to get ahead is to support them which is probably a more prudent line than “We want to help you help yourself get more”.  As for the New Democrats, well they are middle class boosters too but want to explicitly let you know they are in it for you if you vote for them with the policy prescription being there is no problem that cannot be fixed with more government spending - even if not necessary or counterproductive.  Here, the more accurate reality might be a reverse Walmart ad like “Spend more, Get Less”.

In the end, these official slogans are all interchangeable and designed to sell a message that if stated more bluntly would probably not be seen as a good idea by the in-house advisors.  It would be a fun party game to see how many permutations and combinations can emerge by combining and rearranging these words.  How about, “Not left, Not right, but forward and backwards” or “Forward for a Strong and Free You” or “Time to choose forward to get ahead together while strong and free and realizing what’s in it for you.”   We are truly in a pickle this fall but unless we demand better from our politicians, we will not get anything better.  It can start with better slogans but a better policy debate would be even more useful. 

 

Setting Direction: The Next Four Years for Thunder Bay City Council

Thunder Bay’s new City Council has been sworn in and the first meeting tonight will send important signals on what the direction of the new council is as well as the ability of new council members to work together and effectively make decisions.  This is a process being repeated cross the province as new municipal councils from Toronto to Dryden to Windsor begin serving their terms. 

Many often feel the role of Council is to make decisions that do things – like boost the city’s economy or cut costs.  The reality is that much of this can only be done indirectly.  For example, the economic impact of City Council is via its role in setting tax rates and tax policy as well as providing strategic direction on what infrastructure and quality of life investments can attract business.   As for cutting costs, Council needs to follow a process that involves its civil servants –administration - which administers and delivers services.

True, City Council approves all decisions but it is only after strategic direction is provided and the alternatives have been produced and analyzed by the administration.  If City Council wants to reduce expenditure growth, it is not their role to decide what areas should be cut or restrained, it is their role to select the target expenditure level or the desire to reduce spending and then ask administration for their options on how to achieve it.  Having set the policy direction, City Council then decides on the options provided by administration to pursue in meeting the target.  In brief, the role of City Council is to select targets and then make decisions to meet those targets based on the instruments provided by their civil servants.

Of course, the automatic response to any such pontificating on the part of observers like myself is that I am not a member of Council and if I feel I know so much I should walk the walk and run for office. While I appreciate that elected office is an important calling and a tough job,  my response to that is on several levels. First, you should always be careful what you wish for. Second, such a retort on the part of any politician is really designed to stifle debate because given the number of people expressing opinions, how can we all run for office and all serve on Council or as an MP? Third, as engaged citizens and taxpayers we should contribute to debate and discussion and we all have skills that can serve the public in different way.   There is no one size fits all standard for public service and we cannot all be elected politicians.

 

So, that out of the way, the main challenges facing Thunder Bay over the next few years appear to have been categorized by the Mayor in his address last week: taxation, crime, the economy and infrastructure.  I would broaden the “crime” category to general “social fabric” given the interaction between crime, inequality and poverty but fair enough.  These are the categories most in need of attention in Thunder Bay.  Taxation of course is related to spending given that the municipal tax levy is directly linked to the amount of spending.  And, of course there are always issues that will rear their head as a result from decisions made elsewhere – such as the decision to legalize cannabis.

So the issues on tap for the first meeting tonight are whether to close Dease Pool or spend millions of dollars in repairs (apparently $2.8 million more), changes in parking regulations,  a recycling contract extension ($2.6 million more) and a report on the performance of the  new Python 5000 pothole repair machine.  Aside from the parking regulations, these issues all ultimately may involve spending more money for one reason or another.  Given that taxation rates are ultimately linked to spending, tonight will provide a pretty good indication of what we can expect from City Council with respect to tax rates in next year’s budget process and the direction for the next four years.

Recent Policy Posts: Employment, Currencies and Recessions

Along with Northern Economist, I also blog on the Fraser Institute website as well as Worthwhile Canadian Initiative and from time to time my thoughts also find their way to other sites.  For my most recent contribution to the Fraser Institute on employment growth across Canadian CMAs over the last decade, take a look here.  This post seems to have garnered a lot of interest on my LinkedIn page particularly from my Thunder Bay connections though there have been alot of Toronto visitors too.  Then there is my contribution on digital currencies and bitcoin which was published on the Focus Economics Blog.  I join a number of other economists and analysts in presenting our thoughts on what the future may hold for currencies and central banking as a result of developments such as Bitcoin.  Then there is my most recent post on Worthwhile Canadian Initiative dealing with the ways in which we can deal with the next recession given current monetary and fiscal policy.  Finally, my contribution to the 2018 compendium of economic charts put out by Maclean's - 91 charts in total this year - deals with the federal share of total government spending and can be found here. As always, enjoy!