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!