How Thunder Bay Wastes Both Taxpayer Money and Urban Core Development Opportunities

 

The City of Thunder Bay is engaged in budget season and striving to keep its total tax levy increase to 2.6 percent.  As part of its new two-part budgeting approach, the capital budget two-year plan is now underway with initiatives including $34 million in road improvements in 2026 with another $26 million in 2027 as well as initiatives in waste diversion and transit. The proposed capital budget for 2026 amounts to $160 million while 2027 is going to be lower at $148 million. January will see the operating budget and with the 2025 total levy at $241.7 million, a 2.6 percent increase could bring the levy up to $248 million.

The proposed 2026 tax levy increase is indeed modest by recent historical standards as the accompanying figure shows as  the 2025 increase was 5.2 percent and 2025 was 4.5.  However, the proposed 2.6 increase is also below the average increase over the 2015 to 2025 period which comes in at 3.4 percent.  Of course, increases need to be balanced against what the needs are and keeping rates low for their own sake is not necessarily the ultimate policy objective.  Rather, the aim should be to provide the best public services desired at the lowest costs possible which implies efficient and not wasteful spending, which brings me to the main event.

 

 

Whether the City of Thunder Bay will come in with a tax levy increase of 2.6 percent or not remains to be seen.  However, what is more important is what often seems to be a lack of strategic direction with how Thunder Bay seems to allocate its spending and projects by doing them in a manner that often works at cross purposes.  A case in point is the recent moves to build density housing in the City of Thunder Bay to address the housing shortage and provide affordable housing. 

The City of Thunder Bay is preparing to sell municipally owned land to developers to build density housing.  The pieces of land are:  300 Tokio Street, 144 Fanshaw Street, 791 Arundel Street, and the land between 211-223 Tupper Street and 224 Camelot Street.  Despite the oft stated claim to want to provide affordable housing, the City has apparently rejected a developer’s affordable housing bid for the land that included transitional housing because it was not dense enough. The City of Thunder Bay wishes for: 400 units on Tokio Street, 144 on Fanshaw Street, 600 on Arundel Street, and 185 on Tupper/Camelot streets for a total of 1,385 units.

Now, Thunder Bay municipal politicians are very good at using the right words and as one councillor was quoted:

<<"There is no question that we are in a housing crisis, not only in the city of Thunder Bay, across the province and across the nation," Foulds said. "We're also in a climate crisis."

"In order to deal with those two huge issues, we do need to have a focus on intensification and increasing the density of our cities, building on existing infrastructure. With that said, we do need to make sure that the infrastructure can handle it. We also must make sure that the developments are appropriate and safe.">>

The problem here is that Thunder Bay’s idea of increasing density in a climate crisis apparently includes cutting down swaths of green space to build density development in areas often removed from where density either already exists or should be promoted.  Moreover, the constant dispersion of new development results in the new residents of these “density developments” having to rely mainly on automobile transport rather than public transit which is not convenient or timely given the dispersed nature of the city.

As noted in an earlier post:

<<Of these four proposed locations, three are essentially going to be plonked on available space – often green space – in the midst or immediately adjacent to existing residential areas.  Only one – the Camelot Street location is going to be placed near a downtown core area.  And that is the point.  To date, the large builds on Junot and Fulton have been built in or adjacent to existing lower density residential areas and often at the expense of nearby green space.  Except for Camelot – which is a good location if one is planning to build up core area density – these are all scattered willy-nilly in places where the only option is to drive somewhere to get anything done.>>

As noted in the same post, the logical place to target density developments in Thunder Bay should be the two former downtown cores areas of Port Arthur and Fort William and the corridor connecting them that runs along and immediately adjacent to Water/Fort William Road/Simpson Streets and Algoma/Memorial/May Streets.

So, how does this come back to my point about wasteful spending? Thunder Bay is constantly trying to revitalize its core areas – the former cores of Port Arthur and Fort William - with initiatives that cost millions of taxpayer dollars.  For example, the recently completed north core/Port Arthur streetscape project clocked in at about $13 million.  Currently underway is the south core/Fort William Victoria Avenue revitalization project which is going to kick in at $18.4 million.  Then there is the Simpson Street redevelopment cost from the end of Victoria Avenue to the Ogden/Dease Street area which is approaching the $8-$9-million-dollar cost. 

In total, this is almost $40 million dollars in capital spending and rather than being additionally leveraged into a denser set of core urban areas with the tens of millions of dollars in federal housing infrastructure money, it is going to be left to mainly its own devices to attract residents.  And beyond these four proposed projects, there is the proposed Central Avenue Development Lands project which while ostensibly in the “center” of the city will build over 40 acres of largely wooded area eliminating much of the green corridor that runs from Lakehead University through to the College and ultimately Chapples Park. 

Thunder Bay’s development motto is essentially “density if necessary but not necessarily urban density.”  Thunder Bay equates urban density as simply the act of putting multi-residential units on anywhere the city has surplus land rather than working with owners in existing brownfield areas to consolidate derelict and underused properties. Infill is not always the same as creating urban density.  Thunder Bay wastes taxpayer money by providing business owners in the former core areas with beautification baubles but then does not follow up with real strategic investment in those areas.  It is the type of short-term thinking that has led to the creation of a dispersed and costly to service city with an over-reliance on automobiles.  Enjoy the short-term construction benefits from all the new housing projects as the future costs to both the taxpayer in servicing costs and the environment will be substantial.

Thunder Bay Is Missing Its Chance for Strategic Urban Density

 

After decades of low growth, Thunder Bay has been experiencing a period of growth that affords it an opportunity to reshape its urban landscape.  Historically, Thunder Bay has allowed its urban footprint to expand in a low-density highly dispersed web that is more costly to service and provide efficient infrastructure such as water and sewer as well as public transit.  The recent spate of population growth as well as the availability of provincial and federal money for housing means that Thunder Bay could be making some major strides building density in its core urban areas.  This of course would complement the rather large dollar amounts that have recently been expended for urban redevelopment projects in the downtown cores such as the North Core Streetscape Project and the Victoria Avenue Revitalization.

Alas, in its haste to meet federal and provincial housing targets and obtain government money, Thunder Bay is on the verge of yet again squandering the opportunities that have presented themselves by engaging in short term decision making that will build scattered density developments that will sprout like toadstools after a summer’s rain. City officials have noted that they are only 32 percent of the way in meeting their housing targets and must build an additional 1200 units by February 2027 to meet the target of 1,755 housing units. The proposed locations for density development are at 300 Tokio Street, 144 Fanshaw Street, 791 Arundel Street, 211-223 Tupper Street and 224 Camelot Street. 

Of these four proposed locations, three are essentially going to be plonked on available space – often green space – in the midst or immediately adjacent to existing residential areas.  Only one – the Camelot Street location is going to be placed near a downtown core area.  And that is the point.  To date, the large builds on Junot and Fulton have been built in or adjacent to existing lower density residential areas and often at the expense of nearby green space.  Except for Camelot – which is a good location if one is planning to build up core area density – these are all scattered willy-nilly in places where the only option is to drive somewhere to get anything done.

Thunder Bay needs to use this opportunity for growth to be more strategic in how it does its housing if it wants to truly build density.  The density housing projects in this city should be designed to concentrate population near services and amenities, not encourage more time-consuming commuting in the long run, to meet short term funding targets. The density build locations in Thunder Bay should be the two former downtown cores areas of Port Arthur and Fort William and the corridor connecting them that runs along and immediately adjacent to Water/Fort William Road/Simpson Streets and Algoma/Memorial/May Streets.  It is up to the mayor and council to provide this type of directive to its administration because simply asking them to come up with sites for density build will generate the quickest solution rather than a methodical plan for infill.

 

What might such a density corridor look like?  A good example is rooted in the urban renewal studies of the past.  Plate 20 of the 1968 Proctor and Redfern Downtown Fort William Urban Renewal envisioned a Simpson Street with density rental housing as the accompanying figure illustrates. Many of those apartments or condos would likely have sweeping views of the lake and provide for a mix of both premium and affordable units with room for shops, stores and offices on the street level.  Indeed, the recent redevelopment of Simpson Street's road and sewer infrastructure should have presented an opportunity for the consolidation of derelict and underused properties to build the multi-unit buildings the city seems to so desperate o ram through existing residential neighbourhoods and green space.

This opportunity is going to be short-lived and if we simply build things in an erratic short term pattern, we will have to live with the costs for decades to come.  Our municipal politicians need to actually step up and lead for a change by providing direction rather than hide behind bureaucratic processes.  This window of opportunity will not last long.

Thunder Bay Reaches Employment Peak

Thunder Bay has hit an employment milestone.  Data from the Statistics Canada October 2025 Labour Force Survey shows that for the month of October, Thunder Bay hit an employment level of 68,200 jobs.  This was an increase of 700 jobs from September 2025 and 2,100 jobs from October of 2024.  Annualized October to October, employment in Thunder Bay was up 3.2 percent.  Moreover, October 2025 was the highest monthly employment total ever going back over nearly 40 years to 1987.  The accompanying figure plots the monthly ebbs and flows of employment since 1987 (along with a 5th order polynomial smooth to illustrate trend) and while there have been other notable peak periods such as June 2003 (67,400), April 2023 (67,100) and June 2018 (66,200) it remains that 68,200 is the largest yet.  

 

There has definitely been an upswing in employment since 2015, notwithstanding the pandemic drop. Thunder Bay has seen substantial economic activity over the last couple of years particularly as a result of numerous construction projects for housing along with highway work and some major institutional projects such as the one billion dollar new correctional facility, the art gallery and most recently the start of the multiplex turf facility. Of course, whether this can be sustained over the long term is an important question and Thunder Bay's peak employment figures have largely fluctuated between 65,000 and 70,000 jobs but have never been able to break out of this corridor.  Depending on what the impact of federal and provincial infrastructure money is down the road, as well as whether the region's mining projects for critical minerals indeed come to pass. 

Nevertheless, good news for the time being 

Thunder Bay, The Conference Board and Smart Growth

 

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

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

 

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

 

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

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

 

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

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

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

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

• Grow the property tax base by 3% annually

• Grow the population by 1% annually

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

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

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

 

Thunder Bay’s Employment Trends in the Wake of the Lost Decade

 

Thunder Bay even during the trade war has been doing quite well.  Population is up as is total employment in the wake of the pandemic.  While the national unemployment rate in August of 2025 was 7.1 percent and Ontario clocked in at 7.7 percent, Thunder Bay was below both at 5 percent.  Moreover, employment grew from 65,300 in July to 66,400 in August which incidentally is one of the highest the highest monthly total employment amounts in 20 years.  While Thunder Bay has seen ebbs and flows over time, there has been a distinct upward trend in total employment since about 2012 marking the end of what could be termed the early 21^st century lost decade as the forest sector crisis ravaged the local and regional economy.

Figure 1 plots monthly total employment obtained from assorted Statistics Canada series from 1987 to 2025.  It also fits a LOWESS non-parametric smoothing curve to highlight the trends in total employment.  The early years of the first decade of the 21^st century saw total employment in Thunder Bay rise as the recessionary 1990s were left behind and the all-time peak employment of 67,400 jobs reached in July of 2003.  Soon after began the shocks and declines of the forest sector crisis began to accumulate and employment trended downwards until 2012.   

 

 

Thunder Bay’s economy transformed in the aftermath of the forest sector crisis as it moved into knowledge economy jobs as well as saw the expansion of the regional mining sector.   Indeed, despite the ebbs and flows, the period since 2012 is the longest continuous upward trend in employment in this nearly 40-year period. However, despite this good news, total employment in August 2025 still falls short of previous peaks reached in July 2003(67,400), June 2018 (66,200) and April 2023 (67,100). Indeed, Thunder Bay’s best employment performances historically have always oscillated within a band of 65,000 to 68,000 jobs.  This band has never been exceeded and until it is one can argue that Thunder Bay remains strangely constrained in a situation of bounded economic ability.

The other interesting point in all this that I came across while cleaning out files was a 2005 Major Employer List out by the Thunder Bay Community Economic Development Corporation.  Sadly, they no longer seem to have such as list on their web site as I could not locate either the old ones or an updated version.  Nevertheless, the list is compelling documentation of the world that we have lost.  Thunder Bay is intriguing in the sense that over time one is faced with the dual reality that there has been both major economic change and no change whatsoever.

Figure 2 plots the major employers in 2005 ranked from highest to lowest.  Highlighted in red are all the employers that to the best of my knowledge are no longer with us.  In 2005 the list has 55 employers with then largest being the City of Thunder Bay (3,080 employees) and the smallest being DST consulting Engineers and Loch Lomond Ski Resort (both at 100 employees each). Interestingly, the top ten employers on this list are all still with us showing the amazing continuity that is often Thunder Bay despite all the change that has occurred.

 

This list of major employees added up accounts for 29,320 employees with average total monthly employment in Thunder Bay in 2005 at 64,000.  Notable by their absence is any of the grain elevator companies but these had been hollowed out in the 1980s and 1990s and to my knowledge there could not have been more than 300-400 workers left in that sector.  Then there is TBayTel which easily has several hundred employees also, but it is possible that they are under the municipal total. Nevertheless, if you add these jobs too, then this list was essentially the city’s economic high ground with nearly 50 percent of employment.

Since 2005, Thunder Bay’s economy lost several major employers.  Gone are Buchanan Group Northern Wood (550 employees), Cascades Fine Papers Group Thunder Bay Inc. (550 employees), Abitibi Consolidated (down to 400 by 2005 after other closures), Buchanan Group Great West Timber (290 employees), Buchanan Northern Hardwoods (200 employees), Zellers (368 employees), Sears Canada (300 employees) and OPG Generating Station (150 employees)for a total of 2,518 jobs. The last three employers mentioned went later than the forest sector companies with Zellers departing 2013 (it was a national departure), Sears Canada (2018, another national departure) and OPG Generating more recently.

Between 2005 and 2010, average annual monthly total employment went from 64,000 to 59,800 as associated multiplier effects worked in reverse affecting retailers, suppliers and other services.  Thunder Bay itself lost about 5,000 jobs during this period – many high paying resource sector jobs - an upheaval that essentially ended a way of middle-class life for many families.  The fact that Thunder Bay is currently back to 66,400 jobs is a remarkable achievement given that it means that nearly 7,000 jobs have been created since the forest sector crisis low point.  In other words, the 5,000 lost jobs have been made up – in quantity of not always quality – with growth of an additional 2,000 jobs.  This is good news. 

Crucial to the remainder of this decade will be continued growth in Thunder Bay’s economy that boosts employment well above its historic 65,000 to 68,000 glass ceiling.

Charting CMA Population Growth in Canada

 

The news that the Greater Sudbury CMA is poised to reach 200,000 people much sooner rather than later highlights how Canada’s recent population surge has begun to permeate even regions and cities that for years have seen rather lack luster population and economic growth. In the case of Sudbury, the city’s Mayor has made it his goal to grow the city-region’s population to 200,000 by 2050 and given that it is 2025 and population seems to be over 190,000, it is apparent the Mayor may still be in office by the time the goal is reached and thus able to personally celebrat the achievement. 

Meanwhile, Thunder Bay has embarked on a “Smart Growth” Plan that among other things also seeks to attract new residents and population though it has not set a goal for population. Such goals and forecasts are dangerous given that the urban renewal schemes of the 1960s forecast that Thunder Bay (The Lakehead) was going to hit 186,000 people by the 1980s. Yet, even in Thunder Bay, the news is that population growth has been higher than anticipated in recent years with international migration boosting the population of the CMA to over 130,000.

All the optimism for growth in Northern Ontario’s two major urban areas is a cause for celebration given what have been decades of low expectations and performance.  At the same time, one needs to place the recent performance of northern Ontario’s premiere cities into comparative context.  When one looks at the growth of population of Greater Sudbury, and Thunder Bay relative to other Canadian CMAs, the results suggest that even when growth picks up, the lag abides.

 

 

Population data for Canada’s CMAs from Statistics Canada is used to plot several charts to provide some context for the last statement.  Figure 1 plots Canada’s population by ranked CMA in 2001 but by the current number of CMAs which have increased since that year (for example, Red Deer, Drummondville, Nanaimo, Kamloops and Chilliwack were not CMAs in 2001 but have since grown to over 100,000 people). Not surprisingly, Toronto, Montreal and Vancouver were the top three CMAs at 4.9, 3.6 and 2.1 million people respectively. Of the forty CMAs shown in Figure 1, Greater Sudbury ranked 21^st out of 40 with 164,210 people while Thunder Bay ranked 31^st.  Below Thunder Bay were Moncton, Peterborough, Bellville, Kamloops, Lethbridge, Nanaimo, Drummondville, Chilliwack and Red Deer. 

 

 

Fast forward to 2024 and Figure 2. In 2024, Toronto, Montreal and Vancouver were still the three largest CMAs at 7.1, 4.6 and 3.1 million people respectively.  Greater Sudbury, even with nearly 192,000 people, had fallen to 25^th place while Thunder Bay with 133,000 had fallen to 34^th place out of 40.  Figure 3 plots the percent growth in population from 2001 to 2024 for these 40 CMAs and here the evidence shows that population growth was the highest in Calgary, Edmonton, Kelowna, Red Deer and Chilliwack with growth ranging from a high of 82 percent for Calgary to a low of 59 percent for Chilliwack. In terms of growth rates, Greater Sudbury grew 17 percent putting it in 37^th place in terms of population growth while Thunder Bay at 5 percent growth came 39^th out of 40^th.  While second last place in the population growth sweepstakes is better than last – the honour which went to Saguenay – it was not a sterling performance.  

 

 

On the plus side all CMAs saw growth from 2001 to 2024 but in the end it is both growth per se as well as relative growth that matters if you are seeking to promote a growth agenda.  Of course, the key question is why Thunder Bay (and even Sudbury) have continued to do so poorly when it comes to the relative population growth sweepstakes.  Bear in mind that population growth per se is only one indicator of economic performance and the presence of economic opportunity.  Rising per capita incomes and by extension individual economic welfare require the economy to grow faster than population.  Thunder Bay and Greater Sudbury have done somewhat better in terms of per capita income growth.  For example, out of 64 major Ontario communities ranked by CMHC, Thunder Bay and Sudbury rank 41^st and  21^st  respectively in terms of average household income before taxes placing them closer to the middle of the distribution.

Still, despite the celebration of recent population and urban growth, it remains that Greater Sudbury and Thunder Bay are at the bottom in terms of their population growth when it comes to wider comparisons with the rest of Canada. And even worse, Sudbury’s population growth rate since 2001 has been three times that of Thunder Bay at 17 versus 5 percent. Thunder Bay appears to have been particularly afflicted by low overall growth both in terms of its economy and its population and the question is why?  Is it a function of remoteness?  Likely not as many of these CMAs have as many locational disadvantages as Thunder Bay which likes to boast it is in the middle of the country at the confluence of major transport links. Is it the absence of resources or skilled labour?  Again, likely not given its location in the mineral and forest rich shield and the presence of both a community college and university in the community.  

This leads to another factor – institutions, or the arrangements that people have for dealing with one another.  What is it about Thunder Bay in terms of the environment of the community both in terms of local culture and governance that may be militating against growth?  I would argue that it is the absence of competitive behaviour and the prevalence of monopoly that has most stifled the city’s economic growth and development.  In this regard, Thunder Bay is a microcosm of what ails Canada as a whole – a country that has long tolerated monopolies and oligopolies in its economic fabric as manifested in its banking, telecommunication, transport and retail sectors.

In Thunder Bay, this type of non-competitive behaviour that often seeks to block entry of new firms through lengthy approval processes has been compounded by a monopoly municipal government in the wake of amalgamation that has also effectivelt stifled local initiative and innovation (it is no coincidence economic growth in the city dramatically slowed after the merger of the ultra competititve cities of Port Arthur and Fort William in 1970) and a growing reliance on the public sector as the main driver of activity.  If one looks at Thunder Bay, one third of the population essentially works for the public sector and one third is retired or not working and deriving the bulk of its income from some sort of public sector pension.  The remaining third is your private sector and even they are essentially tailoring their businesses to attracting the spending of either the public sector directly via public sector construction projects and contracts or those who derive their incomes from public sector pensions.   With the taxpayer footing the bill in one form or another, there is little incentive for competitive behaviour even in the local private sector and their captive market often results in cost overruns especially on public sector projects.

Needless to say, it is amazing that Thunder Bay's population has grown as much as it has.

Housing the Homeless: Thunder Bay Edition

 

Thunder Bay’s ongoing decision-making process regarding the location of a tiny homes village to house the homeless took yet another turn this week with the final site selected – again – but not the 114 Miles Street East site.  It is now  the Hillyard site off Central Avenue in the intercity area adjacent to the off leash dog park.  Council has spoken but this has become a process of musical sites.  The site selection process has moved across 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, then the Kam River Heritage site, then back to Miles Street and now the Hillyard site.  

In a 7-6 decision, this is the “final” choice “and will not need to come back to council. Unless staff discover barriers in the process of developing the site, which Collin said could include significant unanticipated objections from the public, the shelter village will be built at that location.” Needless to say, this is probably not over yet as one suspects that a treed area that contains a walking trail and off leash dog park using by local dwellers off Beverly Street and that is remote from the services the homeless are supposed to be able to access will be costly to develop. The area does not appear to have immediately accessible water, electricity or transit.  This will take time and given the other tiny homes project in the south core is being delayed, encampments will be around for quite some time. 

A couple of things come to mind about this process.  First, it is obvious that while everyone maintains that they wants to solve homelessness in Thunder Bay, no one wants a highly visible tiny homes shelter complex next to them.  When tucking it away on the Kam River Park did not work out, hiding it in the industrial/commercial urban wasteland that is intercity seems acceptable to many – for now. Whether or not it can actually work is a challenge for future decision making. We obviously do not want a future without challenges for our local councillors.

Second, when opposing these types of projects, it helps to have a strong neighborhood association or BIA (Business Improvement Area) to advocate for you.  While the traditional urban core areas such as Fort William, Port Arthur or Westfort, have BIAs, the intercity industrial/commercial nexus does not.  After all, they have never needed organized lobbying given that they were the central and natural economic hub in the wake of amalgamation.  I expect they will be organizing very soon. The business owners in the area were likely not consulted and one suspects that the assorted business interests in the area are not going to be amused by the additional security measures they will need to take to secure their grounds from assorted urban foragers in an area already prone to break-ins and trespassing.

In the end, even if these tiny homes are built – given their location away from services - one suspects take-up will be limited and encampments in their current locations will persist and even grow given the state of the expensive rental housing market in Thunder Bay.  There is actually not a shortage of housing in Thunder Bay given the numerous projects that have been springing up but a shortage of affordable housing.  Rents from one-bedroom apartments in these new builds which have no doubt received numerous incentive payments from government to build are in the $2000 a month range.

The ultimate solution here is not tiny homes but a program of social housing accompanied with more direct take up measures.  After all, once social housing is built and people have a place to go, it will be difficult to remain at large camping in public areas.  As outlined in a previous blog post: “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.” 

You are looking at 3-4 storey buildings with small apartment style units and the ground floor housing social support services and security. Such housing spread out across assorted urban core areas close to services will also blend in better with surroundings. Tiny homes are not a solution that appears palatable to people in Thunder Bay.  Social housing is the way to go even if probably more expensive.  In the absence of social housing, the only other approach would be for the city to use the funds it was planning for tiny homes to simply rent apartments for the homeless in existing buildings. Good luck with that.

 

Thunder Bay Is Not Growing Where It Should

 

Thunder Bay has embarked on a plan to build and diversify the municipal tax base and attract more residents.  This plan for growth is seen as an imperative given that Thunder Bay’s economy while not shrinking in absolute terms is nonetheless growing less slowly than Ontario and Canada.  For example, over the 2010 to 2024 period, Thunder Bay’s average annual real GDP growth was 1.8 percent compared to Canada’s 2 percent or Ontario’s 2.1 percent.  Employment has also shown this differential given that between 2006 and 2024; Thunder Bay added 9 percent more jobs to its economy while Ontario and Canada both added about 27 percent more jobs. 

So, the focus is on growth and a large part of that growth is on growing our population.  Population growth is of course correlated with economic growth as more people usually means more economic activity and therefore a larger economy which in turn should spillover into growth of taxable assessment.  This is a key concern for the City of Thunder Bay given that it is the anemic growth in taxable assessment that have helped shift an ever-larger tax burden onto the residential tax base given the decline in the industrial tax base of forest product mills and grain elevators over the last tree decades. 

Of course, simply growing population in Thunder Bay is not the panacea that one might think when it comes to increasing taxable assessment.  The reality is that population in the Thunder Bay area is increasing and has been for some time.  However, the population of the City of Thunder Bay has not been increasing relative to its surrounding areas.  If more people live around Thunder Bay but they are not owning homes and businesses within the confines of the City of Thunder Bay, then the impact on the city’s taxable assessment is going to be rather muted at best.  As the accompanying figure shows, there is a difference between population growth in the City of Thunder Bay and the Thunder Bay Census Metropolitan area.  Population statistics for the CMA are from Statistics Canada counts while the City of Thunder Bay’s population is taken from the Ontario Ministry of Municipal Affairs Financial Information Returns.

The results are plotted for the period 2001 to 2024 and are quite interesting. According to the official numbers compiled  by the Ontario government, the City’s Thunder Bay’s population in 2001 was surprisingly just over 115,000 while the CMA population was about 126,000.  During the first decade of the 21^st century – the period of the forest sector crisis – the CMA population declined by 1.2 percent while the city proper itself declined by 5 percent.  Since 2010, there has been growth in the CMA population going from 125,000 to 133,000 for an increase of 6 percent.  The city population itself has gone from 109,140 in 2010 to 108,843 in 2023 – a slight decline.  However, since 2016 – which is when population began to grow more robustly in the CMA, the city population has indeed grown by about 1 percent.

 

The point is that Thunder Bay is growing but not necessarily where the taxable assessment needs to be to broaden and diversify the municipal  tax base.  True, if the CMA population goes up, more businesses are likely to open in the city thereby expanding the business tax base, but a lot of growth is nevertheless occurring outside of the city boundaries.  What is more interesting according to these numbers is the following. Between 2001 and 2023, the Ontario Ministry of Municipal Affairs numbers put Thunder Bay’s population going from 115,000 to about 109,000 – a decrease of about 5 percent.  Municipal taxes per household have gone up from $1,947 dollars in 2001 to $4,070 in 2023 – an increase of over 100 percent - while water and sewer charges have gone from $379 in 2001 to $1,195 in 2023 – an increase of over 200 percent.  Meanwhile, total municipal employment over the same period went from 2,344 (FT, PT and Seasonal) to 3,122 – an increase of 33 percent.

Is it any surprise that population outside of the city boundaries has grown while the city proper has either declined or remained stagnant?  When choosing where to live in the Thunder Bay area, there has clearly been a substantial number of people voting with their feet.  The surrounding townships offer a lower municipal tax burden while providing access to whatever Thunder Bay proper has to offer.  If the City of Thunder Bay itself is to grow its population and economy, it will need to address the fundamentals that have fostered this shift outside the city.

Is Thunder Bay in Decline?

 

Last night’s Thunder Bay city council meeting was another eventful evening with discussions of tax ratios, highway trucking routes and the ultimate location for the city’s tiny homes endeavour given the demise of the Kam River location.  However, the most interesting aspect of last night’s debates was the exchange between a councillor and the city manager in which the question was asked if Thunder Bay was in decline? Thunder Bay has come a long way in terms of its internal debates as a few decades ago asking such a question would have been met with a bristly closing of ranks among the city’s political leaders with boosterish assertions that all was well in Thunder Bay despite short term challenges.  Times have apparently changed reflecting a maturation of economic discourse in the city though one does get the impression that in some regards it is too little too late given a more vigorous growth agenda should have been in place decades ago.

Nevertheless, the question was asked and answered by the city manager.  While the exact response cannot be replicated from memory, in essence it was that no, Thunder Bay was not in decline.  However, its economy and population were growing more slowly than provincial and national rates and that Thunder Bay needed to do more to boost growth and hence Thunder Bay had to undertake measures to boost economic growth.  This was tied to the discussion of lowering the tax ratios on commercial, large industrial, and multi-residential properties, effectively increasing the proportion of taxes paid by remaining property classes – namely single detached residences which incidentally have gone from footing half the bill to over 70 percent of the bill over the last few decades. Ostensibly this move would serve to attract businesses to Thunder Bay and boost growth and lower the tax burden on existing ratepayers.   Re-balancing the tax ratios is  a long standing issue in Thunder Bay and rooted in provincially driven policies.

There is of course some confusion as to what exactly this would cost the average homeowner in Thunder Bay.  According to one report in the local media: “A home assessed at $100,000 would see a tax increase of $66.58. The median residential single-family detached home in the city, with an assessment value of $219,000, would see a $145.80 increase on its tax bill.” Another media report stated that “For a house assessed at $219,000, the median home value in Thunder Bay, that shift would mean an extra $7.83 on the tax bill, according to Kathleen Cannon, director of revenue.” Needless to say, taxes paid are going up though the amount of the increase is not being clearly communicated.  Most people would indeed be leery of a tax shift that promises lower taxes in the future given that the tax levy in Thunder Bay has been going up for decades even if the rate of increase has declined over time.

How much money are we talking about here in terms of additional tax shifting onto residential homeowners from commercial, industrial and multi-residential assessments? Well, according to the 2021 Census, there were 26,790 single-detached homes in Thunder Bay and 2,040 semi-detached homes.  If we go with the median estimate of $145.80 as the increase in the tax bill, then this would entail a shift of $4.2 million dollars out of a $240 million tax levy onto residential ratepayers.  On the other hand, if it is $7.83, then this would entail a shift of $225,739.  Given the amount of debate that this has been taking up, one suspects that it must be the former rather than the latter.  One would think that if you are going to reduce the total business/industrial tax bill, the $4.2 million dollar amount would be of more significant impact on job creation and growth than a few hundred thousand dollars.

However, the purpose of such a move to boost growth brings us back to the question of whether Thunder Bay is in decline, thereby justifying potential growth enhancing measures.  And, by decline one of course must assume that it applies to economic decline rather than social or moral decline. Definitions are of course important and decline can be defined as “a gradual and continuous loss of strength, numbers, quality, or value.” Thus, an economic decline should exhibit a reduction in key economic variables such as GDP growth, population or employment. 

Figure 1 takes real GDP data largely from Statistics Canada and supplemented where necessary by Conference Board numbers and provides the annual rate of real GDP growth for Thunder Bay, Canada and Ontario for the period 2010 to 2024.  There are years where Thunder Bay has exceeded national or provincial growth rates in real GDP ands years when it has fallen below.  Overall, since 2010, Thunder Bay has experienced faster real GDP growth than Canada 40 percent of the time and Ontario 50 percent of the time.  However, since 2019, Thunder Bay has never grown faster than either Canada or Ontario.  As a result, over the 2010 to 2024 period, Thunder Bay’s average annual real GDP growth was 1.8 percent compared to Canada’s 2 percent or Ontario’s 2.1 percent.  Thunder Bay’s economic output is growing but it is growing at a slower rate than Canada or Ontario.

 

 

Figure 2 presents the population increase from 2001 to 2024 based on Statistics Canada data again for Canada, Ontario and the Thunder Bay CMA.  Between 2001 and 2024, Thunder Bay’s CMA grew from 121,986 to 133,0676 for an addition of just over 11,000 people representing a percent increase of 9.1 percent.  While this is indeed growth, during the same period, Canada added nearly 10 million people for an increase of 33 percent while Ontario added nearly 5 million people for an increase of 42 percent.  Again, Thunder Bay’s population is growing but not as quickly as either the country or the province.

 

 

Finally, Figure 3 looks at employment but like population, given the differences in size, total employment is best analyzed not in terms of absolute numbers but as an index.  In 2006, Thunder Bay had 59,800 employed while Canada was at 16.4 million and Ontario at 6.5 million.  To look at growth comparatively, 2006 is set equal to 100 for each jurisdiction.   By 2024, Thunder Bay had added just over 5,000 more jobs putting the index from 100 to 108.7 – an almost nine percent increase in employment.  By way of comparison, employment in Canada rose 27 percent over the same period while Ontario rose slightly under 27 percent.  As the trend lines illustrate, employment rose in Thunder Bay – albeit with more fluctuations – but also at a lower rate.

 

 

So, is Thunder Bay in decline?  Strictly speaking, it is not. Thunder Bay is growing but it is growing more slowly than the rest of the province and the rest of the country in terms of output, population and employment.  It is growing in absolute terms but getting smaller in relative terms when it comes to population, employment and output. If Thunder Bay had grown at the same rate as the rest of the province over the last two decades in terms of population and employment, it would have a CMA population of over 170,000 people and employment at nearly 76,000 jobs.   It is not decline but relative decline.  It is not as big a problem as absolute decline but a problem nonetheless.

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.