Northern Economist 2.0

Wednesday 27 December 2017

Thunder Bay Building Permits: A Reality Check

A recent TBnewswatch story reported  the estimated value of building permits in Thunder Bay in 2017 was up substantially from the year before  at 146 million dollars.  Based on the numbers presented in the story, the increase in 2017 can be calculated at approximately 55 percent.  This is of course an upbeat year end story. Given the coming year will see both a provincial and municipal election, one can expect these types of numbers to be presented by local politicians as evidence that Thunder Bay's economy is doing well. However, it is important to adjust these kinds of number for inflation - that is present them in real dollars - as well as look at more than two years of data.

This is done in Figure 1.  Using annual total value of building permit numbers from Statistics Canada for 1998 to 2016 and adding the 2017 estimate from the City of Thunder Bay's Chief Building Official and then deflating using the CPI, the real value (in 2016 dollars) of total building permits is presented.  The good news is that 2017 is indeed up from 2016 but there has been an overall downward trend from peaks in real value reached in 2012 and 2013. Over a longer term view, a fitted linear trend suggests that there has been a slight increase in the real value of permits since the late 1990s but the 2017 performance is really not much higher than a decade ago or even two decades ago.


One can view the above chart as good news in the sense that construction activity over time in Thunder Bay over the long haul has been reasonably stable and perhaps even characterized by some very modest growth.  It should be noted that this activity is composed mainly of residential followed by institutional and government construction projects.  Indeed, the peaks in Figure 1 are much less impressive once you remove the government and institutional permit values. 

The composition of these permits is provided in Figures 2 and 3.  Figure 2 presents an area graph based on annual numbers while Figure 3 simply aggregates all the permits since 1998.  Nearly thirty percent  building permits since 1998 are of institutional and public sector origin.  Industrial permits are below 10 percent.  Commercial permits have been surprisingly large as a proportion of the total which is actually a cause for some optimism given that they reflect private sector perceptions of economic opportunities in Thunder Bay.






Thursday 14 December 2017

Thunder Bay Employment Flat for Forty Years


My recent Fraser Institute Blog post on employment growth in Canada at the provincial and CMA level since 2007 appears to have attracted a fair amount of interest if only based on the hits via my Linkedin page.  The article was posted on the Fraser Blog on December 4th and by December 14th, it had garnered 1,515 views.  The interest has been quite pronounced from Linkedin profiles in Ontario and of course particularly from the Thunder Bay area. As a follow-up, I decided to look at employment levels in Thunder Bay and Greater Sudbury from a longer-term perspective using data from Statistics Canada.

Now Statistics Canada has annual province level unemployment rates and employment data available on its site from 1976.  Its annual CMA level data only appears to go back to 1987.  So, in order to generate CMA employment levels and unemployment rates for Thunder Bay and Greater Sudbury prior to 1987, what I did (acting on the suggestion of my Lakehead colleague Rob Petrunia) was run regressions of CMA level employment and unemployment rates for both cities on the Ontario data along with a time trend variable.  The assumption is that employment levels and unemployment rates in the two cities should reflect what is going on in the province as a whole. The regression results were then used to estimate fitted values for Thunder Bay for the period 1976 to 1987 and for Sudbury from 1976 to 1990 (Sudbury data starts in 1990). 

The results are intriguing.  Figure 1 plots the unemployment rates in the two cities from 1976 to 2016 and there seems to be some good news here.  While unemployment rates in both cities fluctuate a great deal over time, they have generally trended downwards since the late 1970s.  The average unemployment rate in Thunder Bay between 1976 and 1985 was 9.7 percent while in Sudbury it was 11 percent.  Over the period 2010 to 2016, Thunder Bay’s unemployment rate was 6.1 percent while over the same period in Sudbury it was 7.5 percent. 

 
However, the good news seems to end when employment levels are examined in Figure 2 – at least for Thunder Bay.  Sudbury has seen its employment grow over time while Thunder Bay has essentially remained flat. In 1976, estimated total employment (full and part time) in Thunder Bay was 61,224 and in Sudbury it was 60,475.  By 2016, Thunder Bay’s employment was 60,100 while in Sudbury it was 81,700.  In other words, over 40 years Thunder Bay has essentially remained flat in terms of its employment level – indeed there has been a slight decline of 2 percent since 1976.  As for Sudbury, its employment level has grown by 36 percent since its estimated 1976 value.

 
A declining unemployment rate when total employment is growing can be seen as good news.  A declining unemployment rate when total employment is declining means that your labour force is actually shrinking faster than your employment level.  For Sudbury, a lower unemployment rate is good news given that it has been accompanied by rising employment.  For Thunder Bay, a declining unemployment rate is a misleading indicator and masks the moribund nature of its economy given that its employment level has been essentially the same for 40 years. 

Tuesday 28 November 2017

Is Income Inequality Responsible for Thunder Bay's Deteriorating Social Fabric?


Thunder Bay has seen a number of deteriorating social indicators over the last few years which include rising homicide rates, tragic deaths of indigenous people and increasing use of foodbanks.  In looking at the causes of what appear to be increased poverty and violence, one might consider that these trends are the result of rising income inequality.  Income inequality in both Canada and the United States has been rising over the last few decades and researchers have been drawing links between health status and economic inequality as well as the role of inequality in fostering environments conducive to crime and violence.

We had a talk last week at Lakehead University from Martin Daly whose book Killing the Competition makes the case that most homicides are the result of competition between males over goods that are distributed inequitably.  In other words, economic inequality drives the homicide rate and all things given one would expect more unequal societies to have higher crime and homicide rates.  Of course, this raises the question as to what income inequality has been like in Thunder Bay over the last few years and whether it too has trended up.

Needless to say, information on income inequality at a CMA level is not easy to obtain or construct.  However, there is tax filer data available from Statistics Canada obtained from Revenue Canada and it is possible to obtain annual data on median total tax filer incomes for the top 1 percent as well as the bottom 50 percent and construct a ratio. One can construct a simple dispersion or inequality measure by taking the ratio of the median income of the top 1 percent to the median income of the bottom 50 percent on the tax filer total income distribution.  If this ratio goes up over time, it implies increasing income inequality while if it goes down it implies decreasing inequality.

The figure below plots this measure of income inequality for the period 1982 to 2015 for Thunder Bay as well as Greater Sudbury and Ontario.  The results are intriguing.  In 1982, the median total income of the top 1 percent of tax filers in Thunder Bay was 11.9 times that of the median for the bottom 50 percent - $78,200 versus $6,600.  By 2015, the ratio was 12.34 - $236,900 versus $19,200. While income inequality in Thunder Bay has gone up somewhat over time, much of the increase was actually between 1982 and 2001 when the ratio rose from 11.9 to 14.2 and has actually moderated since.


Given that homicide rates in Thunder Bay trended downwards from the early 1980s to 2007 and surged since 2007, there does not seem to be much correlation here.  Moreover, Figure 1 also plots the same inequality measure for Greater Sudbury as well as Ontario as a whole.  Since the late 1990s, Greater Sudbury has actually been more unequal with respect to this inequality measure than Thunder Bay and yet its homicide rate is now lower.  As well, both Thunder Bay and Sudbury have a much more equal distribution of tax filer income than Ontario as a whole which saw its ratio rise from 15.3 in 1982 to peak at 24.9 in 2006 before declining to 22.2 in 2015.

So whatever is disturbing the social fabric of Thunder Bay, income inequality does not appear to be the obvious culprit. 

Thursday 23 November 2017

Homicide Rate Up Again in Thunder Bay

Statistics Canada released its 2016 homicide statistics yesterday and for Canada as a whole, the total number of homicides actually declined slightly with the national homicide rate falling by 1 percent to 1.68 per 100,000 of population.  Of course, when Canada's urban areas are examined, there is quite a bit of fluctuation around this national average.  For Canada's CMAs, the homicide rate in 2016 ranged from a high of 6.64 per 100,000 of population in Thunder Bay to a low of 0 in three cities: Trois Rivieres, Kingston and Greater Sudbury (See Figure 1)




If you look at the percentage increase in the homicide rate, the rankings change somewhat.  The largest percent increases in the homicide rate were in Ottawa, Gatineau and Thunder Bay.  Fifteen CMAs saw an increases in their homicide rate, two saw no change (Brantford actually had zero murders in 2015 and 2016) while the remaining 17 CMAs saw declines in their homicide rates. (See Figure 2).


Thunder Bay is up again after a decline in the homicide rate in 2015.  If you need a refresher on long-term trends in Thunder Bay's homicide rate, here it is down below.  Thunder Bay's homicide rate trended downwards from 1981 to about 2008 and then began to trend up.  For a local media take on this story, see here.






 

Friday 17 November 2017

Why Are Northern Ontarians So Happy?


I recently came across a Statistics Canada Report from 2015 on life satisfaction across Census Metropolitan areas and economic regions that presented ranked scores based on the responses to the Canadian Community Health Survey and General Social Survey. The responses are over the period 2009 to 2013 and the key question was:

“Using a scale of 0 to 10, where 0 means “very dissatisfied” and 10 means “Very satisfied”, how do you feel about your life as a whole right now?”

There were nearly 340,000 respondents to the survey and the results for the CMAs had samples of at least 1,800 to 2,000 respondents.  Average life satisfaction from 2009 to 2013 across Canada’s 33 CMAs (as shown in Chart 1 below taken from the report) ranged from a low of about 7.8 in Vancouver, Toronto and Windsor to a high of 8.2 in St. John’s, Trois-Rivieres and Saguenay.  More interesting is that both Sudbury and Thunder Bay are in the top ten in terms of life satisfaction.  Moreover, the proportion of individuals reporting a 9 or 10 – the highest rankings – is highest in Sudbury and Thunder Bay and lowest in Toronto and Vancouver (As shown in Chart 2).  Even when the results are adjusted for individual-level socio-economic characteristics such as income, life satisfaction remains higher in smaller communities like Thunder Bay or Sudbury. 


 

I guess it bears repeating that economic success and achievement and life in the big city may not be all it is cracked up to be.  Given the surge in rents and housing prices in places like Toronto as of late, and the increased congestion and traffic, one would expect these life satisfaction rankings results would persist if a survey was done today.  Even with slower economic growth in northern Ontario, it remains that for many people there is an advantage to living in communities where there is a more intimate and human scale of life. 

At the same time, given the higher rate of aging populations in smaller communities and the u-shaped relationship between life satisfaction and age the report notes, it may simply be demographics - an older population seems to be a happier one.  While young people are striving and competing and making their way in the world, older people have pretty much come to accept where they are at and are comfortable in their own skins. Having a larger proportion of older people in a community may be the key to tranquility and happiness on a community level.

Nevertheless, northern Ontario can use all the good news it can get.  Residents of northern Ontario have apparently decided to embrace Albert Einstein’s observation that: “A calm and modest life brings more happiness than the pursuit of success.”

Sunday 8 October 2017

Porter Airlines Says it's Sorry But Is it Enough?


Well, we had quite the flight delay with Porter Airlines yesterday.  Our flight to Billy Bishop from Thunder Bay was supposed to depart at 11:10 am and when all was said and done it did not leave until nearly 6:00 pm meaning that from start to finish our trip to Hamilton in the end took twelve hours.  We have traveled to Europe in less.  Indeed, you can drive to Hamilton from Thunder Bay in about 14 hours straight if you put your mind to it.  Still, compared to others on the packed flight with small children or who were traveling on tighter schedules to attend weddings or were unable to go back to their house and spend some time for the extended wait – we were fortunate.  And Porter has demonstrated its concern and sympathy and very quickly emailed us with a 100-dollar voucher each (it came in at 4:52am this morning) to be used on future bookings with Porter.  Based on the length of the delay and the amount of the compensation, it seems that Porter already complies with the new proposed Ontario minimum wage at least when it comes to the value of passenger time.

In the end the delay was for a “mechanical issue” and as one of the flight attendants who took the elevator with us at the end of the flight remarked it is better to be safe than sorry.  I agree.  Still, this is not the first mechanical delay with Porter on a flight to or from Thunder Bay that I or other members of my family have encountered.  Indeed, over the last year there have now been about four such issues involving us with the most recent delay the longest.  In each case, the weather was excellent and the plane on the tarmac and then suddenly…the dreaded delay due to a mechanical issue.  However, if you are in Thunder Bay it is even more ominous because Porter Airlines must fly in the mechanic from Toronto on its next available flight.

Why Porter airlines and the other two airlines in Thunder Bay (Air Canada and Westjet) who also fly nothing but Q400s there could not get together to chip in and maintain one mechanic on a standby contract to service their planes is beyond me.  Perhaps the recent announcement from Porter that they are making Thunder Bay a crew base will also mean they are going to keep a mechanic and parts on hand.  I hope that is the case because I like flying Porter and the convenient access to downtown Toronto.

At the same time, I think Porter has had an awful lot of “mechanical issues” and having so many really is ultimately their fault. I think they have an aging stock of aircraft given that the planned beefing up with the C-Series fell through and they now need to renew their aircraft stock in a very competitive airline world.  It's tough I know.  Still, here is the thing.  You can’t keep telling people they have a delay due to mechanical issues.  It has happened often enough to me and my family now that inevitably I am starting to wonder if an airline with so many mechanical issues is the one I should keep selecting for my travel.  I am already booked on a few more flights with Porter for the next couple of months but after that maybe I should shop around more.  After all, better to be safe than sorry.

Wednesday 13 September 2017

Thunder Bay Housing Coming Down

A report by Moody's Analytics reported in today's Globe and Mail says that higher interest rates, newer mortgage-lending rules and declining affordability are together going to put a damper on the growth of Canadian housing prices.  Indeed, the price of single family homes in Canada is forecast to only grow at 1.3 percent annually over the next five years but there will be considerable variation across the country.  Larger urban centers with growing populations particularly in southern Ontario will do better while many other cities will see declines.

As the accompanying graph constructed from data provided in the Globe article shows (July forecast), Toronto and Hamilton are still expected to lead the pack at growth rates of 7.7 and 5.8 percent respectively but after that the growth rates drop off and indeed move into negative territory. 

Thunder Bay is expected to see annualized declines of 5.4 percent.  Reasons for this are falling median incomes, slow population growth rates and slow rates of household formation - along of course with the fact that interest rates are on the way up. Other housing price reports on the Moody site also show that Greater Sudbury is forecast to have price declines.  The May 2017 report for example (the April forecast) noted Sudbury prices over the next five years would decline by 1.2 percent annually.  The same report also had Thunder Bay declining by 1.2 percent annually with a substantial revision now in the new report. What has changed over the last few months? Interest rates.


I think interest rates are really the big factor here given that Thunder Bay's housing prices managed to double over the last 10-15 years despite the weak economy and flat population growth.  Not quite the growth of the GTA but still quite remarkable given the local demographics and economic performance. 

Wednesday 12 July 2017

Thunder Bay's Crisis: Time to Move Forward

Thunder Bay often feels neglected by decision makers in Toronto as well as the national media.  Indeed, it has sometimes been expressed that for Thunder Bay, bad publicity is better than no publicity at all as it draws attention to its needs. I disagree and am more disposed to the adage that no news is good news.  Thunder Bay has been making the national media all too often over the last few months and the attention is not favorable.  One really has to wonder why community leaders in Thunder Bay have not been expressing more concern about the issues spanning indigenous relations, institutional problems and social issues given the waves of negative attention.

One only has to take a look at the Toronto Star to see the spotlight that has been focused on Thunder Bay.  Indeed, many issues appear to be getting more attention in Toronto and the national press than in Thunder Bay itself.  The ultimate economic spillover on our community in terms of its potential as a good place to invest and do business is in serious danger.   This is not good for the community and if you think I am exaggerating the potential negative long-term impact that this could have on the city's image and ultimately its economy, take a look at the list of stories that have appeared in the Toronto Star since early May.  If you were an investor planning to open a business in Thunder Bay, a tourist thinking of visiting or a student planning to attend the university or college, how would you react to the following list of stories that mention Thunder Bay - just from the Toronto Star?

Thursday 15 June 2017

Thunder Bay Taxis Stories: The High Cost of Cabs


Well, trying to take a taxi in Thunder Bay can be a bit of a challenge.  Several winters ago, a couple of hours before our flight out we called for a cab and it just did not seem to be arriving.  In the end, we had to drive and park our own vehicle at the airport which had not been our original intention. When we discussed the matter with the company, they mentioned it was mid-afternoon and a lot of their cabs were on “school runs” so it would be best to call the night before to book a cab to ensure a ride.  It turns out a lot of the business for cab companies in Thunder Bay is from the broader public sector – schools, social agencies etc…which limits their incentive to provide more and more  immediate availability for private sector clients. 

Sunday 4 June 2017

Comparing Homicide Rates: Why Thunder Bay Has a Problem


From a peak reached in the early 1990s, police reported crimes rates in Canada have been on a downward trend.  This is also the case for homicide rates, which have been on a downward trend nationally since the early 1980s.  There is of course variation from year to year in homicide rates so some type of regression smoothing procedure is helpful in establishing what the longer-term trends over time are.  What quickly emerges from an examination of long-term trends is that Thunder Bay followed national trends in homicide rates until the early 21st century but that since then there has been a substantial divergence.  It is not a “northern Ontario” thing because the Greater Sudbury CMA tracks provincial and national homicide rates quite closely.

Figure 1 presents LOWESS Smoothed homicide rates for Canada and major regions from 1981 to 2015.  LOWESS is a particularly useful smoothing tool because it helps deal with “outliers” – that is extreme observations that can often distort averages taken over time. The data source is from Statistics Canada (Table 2530004 - Homicide survey, number and rates (per 100,000 population) of homicide victims, by census metropolitan area (CMA), annually).  Canada as a whole has seen a steady decline in homicide rates going from smoothed values of 2.74 per 100,000 in 1981 to 1.51 by 2015 – a drop of 45 percent.  This decline is a feature of the West, Ontario, Quebec and Atlantic Canada though Atlantic Canada sees a sight upturn after 2006.  In terms of regional rankings, homicide rates are now the highest in the West, followed by Atlantic Canada, then Ontario and finally Quebec.
 

Friday 26 May 2017

Economic News Around the North: May 26th Edition

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Everyone, please try to have a nice weekend. 

Tuesday 11 April 2017

How Many Jobs Have Been Created in Thunder Bay?

One of Thunder Bay's Members of Parliament and currently Minister of Employment, Workforce Development and Labour - Patty Hajdu - asserted in a letter to the Chronicle-Journal this morning that "In the last eight months alone, the Canadian economy has created more than a quarter-million full-time jobs. In fact, 1,600 jobs new jobs have been created here in Thunder Bay since we were elected."  Needless to say, this piqued my curiosity and so I went off to Statistics Canada to see what Thunder Bay's total employment numbers have looked like since October of 2015 - the year the Trudeau Liberals  took office.

The results are provided in Figure 1, and are monthly seasonally un-adjusted total employment (three month moving average) for the Thunder Bay CMA.  The numbers show rising monthly employment from October 2015 to August 2016 and a decline since.  In October of 2015, total employment in Thunder Bay was 59,100 jobs and the total employed reached a peak of 61,300 by August of 2016.  This represents an increase of 2,200 jobs.  However, between August of 2016 and March of 2017, employment then declines from 61,300 to 59,300 - a drop of 2,000 jobs.  So, based on these numbers, from October of 2015 to March of 2017 Thunder Bay goes from 59,100 to 59,300 jobs for an increase of 200 jobs.



Of course, while these numbers are three month moving averages, they are not adjusted for seasonality. If we go from October 2015 to October 2016, employment grows from 59,100 to 60,800 for an increase of 1,700 jobs.  If we go from March 2016 to March 2017, we see total employment grow from 59,500 to 59,300 jobs - a decline of 200 jobs.  Based on Figure 1, Thunder Bay may have indeed seen the creation of 1,600 new jobs since the election of the Trudeau Liberal government but it also appears to have lost nearly as many jobs making for little in the addition of net new employment.
 

Friday 17 March 2017

Fire Services in the North: The Case of Sudbury



Sudbury is in a bit of a tizzy over proposed changes to its fire and paramedic services.  The proposed plan will see nine of the current 24 fire halls closed and a move to reduce the number of volunteer firefighters and hire more full time firefighters. The staff report estimates that the full-time compliment would go from 108 to 166 within the next decade, while the volunteer ranks would be almost cut in half from the current staffing level of 350.

Sudbury is a very large and dispersed municipality with the central core area served by full time firefighters and outlying areas served by volunteers who are paid part-time employees. Under the new plan, Sudbury's municipal government maintains that firefighters would be able to reach 90 percent of Greater Sudbury within nine minutes, as opposed to the current 69 percent.  Part of what is planned is an equalization of services to standardize and improve coverage and response times.  However, part of the plan also involves composite stations staffed by both full-time and volunteer firefighters, as well as increases in taxes in the areas currently served by volunteer firefighters.

It is useful to see where Greater Sudbury stands in its fire service costs relative to other cities in Ontario.  Figure 1 uses data from the BMA Management Consulting 2016 Municipal Study to plot the net per capita fire service costs (including amortization of any capital assets) for cities in Ontario with more than 100,000 of population as well as the Northern Ontario Five (N5) – Thunder Bay, Timmins, Sault Ste Marie, North Bay, and Greater Sudbury.  The results show quite a difference in per capita costs ranging from a high of $273 in Thunder Bay to a low of $102 in Milton.  Sudbury’s costs are quite modest coming in at $149 – the lowest among the N5 – and placing 22nd among the 27 cities in Figure 1. 
Of course, one can understand the concerns of ratepayers in Greater Sudbury that the proposed changes will raise costs and therefore raise taxes. The costs of fire fighting according to the BMA Municipal Study 2016 Report can vary as a result of a number of factors, which include:

1. The nature and extent of fire risks: The type of building construction, i.e. apartment dwellings vs. single-family homes versus institutions such as hospitals
2. Geography: Topography, urban/rural mix, road congestion and fire station locations and travel distances from those stations
3. Fire prevention and education efforts: Enforcement of the fire code, and the presence of working smoke alarms
4. Collective agreements: Differences in what stage of multi‐year agreements municipalities are at and also differences in agreements about how many staff are required on a fire vehicle
5. Staffing model: Full‐time firefighters or composite (full‐time and part‐time)

Costs in the end are an interactive function of the geographic area that must be served as well as the population base in that area that is available to cover the costs as well as its compactness - in other words, population density is a factor.  The importance of population density as a determinant of fire service costs is highlighted in Figure 2, which plots the net costs per capita of Figure 1 against population density (population per square kilometer) and reveals an inverse relationship when a linear regression is fitted to the data.  It of course does not control for any other variables and there is a fair amount of dispersion (the R-squared is also very low) around the fitted relationship but if Sudbury’s population density is plugged into the relationship, all other thing given, the per capita cost of its fire services rise to 181 dollars per capita.  Thus for Sudbury to be at 149 dollars per capita it must mean there are other factors affecting its costs or it is doing something to keep its costs well below – nearly 20 percent below - what is predicted by its population density alone.
It is the volunteer staffing model which has probably been a factor in keeping Sudbury’s fire fighting costs per capita relatively low given the large land area that must be served and the accompanying low population density.  Moving away from this model will probably bring Sudbury’s per capita costs more in line with other major Ontario municipalities.  No wonder ratepayers are upset.  At the same time, making the changes needs to weigh the improvements in service and response time that are expected to emerge against the expected additional costs.  It is an important cost-benefit analysis and should make for an interesting City council meeting in Sudbury on March 21st.

Friday 10 March 2017

The Wall


Thunder Bay is a relatively young city by historical standards and springing into life on the resource frontier and yearning for acceptance into the big leagues, it has always had a conflicted relationship with its architectural past.  Thunder Bay seems to equate growth and development with being new and something new is always assumed to be better except of course when it comes to its politicians as the longevity of its political representation often illustrates.  A great deal of Thunder Bay’s architectural heritage has been lost over the decades and invariably the arguments for tearing it down involve bringing in something new and supposedly cheaper. 

The latest case involves the controversy over “The Wall”.  Whereas Donald Trump’s “Wall” and the “The Wall” from Game of Thrones are both designed to keep people out, in Thunder Bay’s case, the wall along High Street was designed to keep things in place – it is a retaining wall.  Looking at it, one might think it is a remnant built in medieval times and anchored a fortress of the Knights Templar but it was built in the 1940s along a section of High Street –once one of Port Arthur’s most exclusive neighborhoods.  

 

Now, the wall is in need of repair and the majority of Thunder Bay city council has opted to replace it with a pre-cast concrete wall at a proposed cost of $2.4 million.  My guess is that members of City council probably think this is a reasonable compromise.  After all, it will still resemble an old wall and it will be new! Apparently, the members of the local Brick and Allied Craft Union who might be deemed to have some expertise with respect to bricks, stones and walls have suggested that the wall can be repaired and more cheaply than the $2.4 million earmarked for the replacement.

The attitude of City Council is probably best summarized by Mayor Hobbs, who stated in a letter to the editor that: “Historic Hadrian’s Wall is just a pile of crumbled stones now.  What is modern today and not satisfactory to some will one day be historic.  Roll with it folks.”  Needless to say, the remark succinctly reflects the attitude that has been responsible for the razing of large sections of our history.  And to be fair, it is an attitude that exists in  other parts of urban Canada.  Downtown Toronto has seen large swaths of its past similarly demolished because despite its size and self perceived sense of grandeur and sophistication, Toronto is really just a large version of Thunder Bay.

We are a young city and simply disposing of everything after 50 or 100 years means that in the end our city will always look like it has just been put together.  Perhaps this is what the vast majority of people in Thunder Bay prefer because they do not feel that their past is as glamorous as that of Athens, Rome, Paris or London.  Always having something new and shiny may give you something to boast about in the short run but it is short sighted and reflects a people who are fundamentally insecure about who and what they are.  True, we cannot keep everything but we should at least make more of an effort to give the past a fighting chance.

Wednesday 1 March 2017

Thunder Bay Airport Flying Higher


Thunder Bay Airport (YQT) has seen another year of growth hitting an all-time high for passenger numbers in 2016 by exceeding 800,000 passengers for the first time – 807,041 passengers to be exact.  Some of the recent growth has come from the depreciation in the Canadian dollar relative to the US dollar, which has attracted Americans away from airports in Duluth and Minneapolis.  This is certainly a welcome development given that market size in northwestern Ontario is relatively stable given population trends. This is also a regional success story and according to the Thunder Bay International Airport Authority’s (TBIAA) own estimates generates an estimated $645 million dollars in GDP annually and creates 5000 jobs. 

And of course, one does not need an economic impact study to see the importance of better air connections to Toronto with three airlines now competing for your business and offering on weekdays a total of 16 flights daily (Air Canada-6; Porter – 6; Westjet – 4).  When one adds seasonal flights to tropical destinations as well as assorted regional airlines like Wasaya and Bearskin, It is indeed a golden age for air travel out of Thunder Bay.

Figure 1 plots the total number of passengers out of Thunder Bay airport and they show an increase from 503,428 in 1997 to 807,041 in 2016 – an increase of 60 percent.  The average annual growth rate of passenger volume over this period has been 2.6 percent but there have been some fluctuations as Figure 2 illustrates.   


 
The years 2002, 2005 and 2008 saw large dips in the growth rate as a result of the forest sector crisis and the onset of the Great Recession.  There was a substantial rebound starting in 2009 but 2014 and 2015 also witnessed a flattening out of growth.  As a result, the increase of 4.5 percent in 2016 is certainly quite welcome and hopefully represents the start of a new growth curve similar to what occurred after 2009.  If this new phase of growth is being based on American travelers out of Minnesota taking advantage of a stronger US dollar then the exchange rate as well as border crossing issues will be crucial variables.
 

Historical Workshop This Weekend

The Lakehead Social History Institute is sponsoring a community workshop on quantitative history this weekend on Saturday March 4, 2017 at the Mary J. L. Black Library.    There will be five brief presentations on research using a variety of sources from 12:30 to 2:30 and then a hands on workshop from 2:30 to 4:30.  Admission is free.

I will be doing a presentation titled "Who Had What? A Quantitative Analysis of Wealth and Inequality in the Thunder Bay District Using Probate Data, 1885 to 1930."  I will be discussing my wealth research using probate records and apply the data I have compiled for the Thunder Bay District to examine trends in wealth during the foundation, settlement and boom periods of the Lakehead as well as the distribution of wealth and property.



See you there!

Tuesday 24 January 2017

Do Municipalities Really Need New Revenue Tools?


Municipalities in Ontario have been agitating for new revenues particularly given the sluggish growth in provincial government grants.  Well, apparently at least one municipal councilor in Thunder Bay also believes that cities need more revenue tools.  This is in spite of the evidence that Ontario municipalities have seen their revenues grow quite robustly over time.  According to the Financial InformationReturns maintained by the Ontario Ministry of Municipal Affairs, between 2000 and 2015, total municipal revenues in Ontario more than doubled growing from $22.7 billion to $47.8 billion.  While the growth rate has slowed somewhat since the 2009 recession, it remains that since 2000 these revenues have grown at an annual average rate of 5.2 percent.  This is much faster than either Ontario’s population or GDP growth.

Friday 20 January 2017

Economic News Around the North: January 20th, Edition


Here is a listing of some stories around northern Ontario over the last few days of economic significance for the region. Congratulations to Thunder Bay International Airport and Laurentian University for their milestones. Enjoy. 

Thunder Bay Airport Sets New Passenger Record, Tbnewswatch, January 16, 2017.


Sudbury businesses question if labour law changes are necessary. Northern Ontario Business, January 16, 2017.

Carbon bill hits city hall. Chronicle-Journal, January 16, 2017.

Good news for Sudbury on jobs front. Sudbury Star, January 13th, 2017. 






Sunday 8 January 2017

Housing Prices in Sudbury and Thunder Bay: The Boom is Over



A key feature of housing markets in Canada over the last decade is the sustained price increases particularly in larger urban centers such as Vancouver and Toronto.  Despite a relatively flat economy and stagnant population growth, even northern Ontario has seen a price surge in its two largest urban housing markets: Greater Sudbury and Thunder Bay.  However, while Ontario’s housing price surge especially in the GTA shows little sign of abating, it appears that economic reality may have finally caught up with northern Ontario’s largest housing markets as prices appear set to level off.

Friday 24 August 2012

Civic Reflections on a Summer Day


Well, it is still summer and the living is easy which is a much nicer way to view life when you get up in the morning than House Stark’s motto Winter is Coming though inevitably winter will be here soon enough.  Summer walks are definitely a great way to reacquaint yourself with your neighborhood and over the last few days I’ve been up and down the Junot Street corridor off of which I live to observe the state of developments.

As many in the neighborhood know, the City of Thunder Bay is planning to reconstruct the Golf Links Road/Junot Avenue corridor between the Harbour Expressway and Walkover Street.  The road will be widened to four lanes and there are plans to improve sidewalks and bike paths as well as municipal servicing.  Indeed, some new sidewalks are going in as I write.  This is also all related to plans for additional density development as the area continues to grow as a central residential and commercial area.  An open house was held in April to solicit input on land use in the area with suggestions ranging from the proposed new events centre to industrial use to a mining innovation centre.

Of course, development proposals and actual development are already underway – sort of. Condominium construction appears to be stalled at the Thunder Bay Golf Club on Junot aside from a rather large pile of dirt.  Hotel construction on Junot is proceeding well with the Days Inn there completing yet another lengthening.  One wonders if the plan is to make it into the world’s longest hotel as a tourist attraction.




The controversial new EMS Station is now open and still causing controversy given the new 75,000 dollar sculpture that was recently unveiled.  Of course, that piece of art is quite the bargain compared to the waterfront beacons, which ran nearly one million dollars.  The EMS art piece is much smaller and does not have whispers emanate from its base.  Indeed, being so small is probably why all the trees and brush were cleared from the other side of the street prior to installation – to afford the houses there a better view of both the new EMS station as well as its new art work.



The desire to develop this part of the City has been present for some time given the past attempt to put in a new Tim Horton’s/Hotel complex in the same area that sparked enormous neighborhood opposition.  Wooded land in the city does not generate tax revenue as well as residential, commercial or industrial land.  As a result, the wooded area across from the EMS station was apparently sold off for residential building lots with at least one municipal councilor on the evening news saying how it was a prime residential area.  That was of course quite amusing given that the original location of the EMS was further up the street where the residents of the prime residential area there chased it off.  In some respects, this is actually a clever strategy as once the EMS station is built, only people who want to live across from it will actually build there – with the exception of the homeowners who used to have trees as a buffer.

Given the ideal location of this land, we can no doubt expect many of our local politicians and notables to erect their homes there.  Perhaps we can be innovative and erect a new public centre in the spirit of our 55 Plus Centre – the Politician Plus Centre where current and past local politicians can go hang out and engage in creative discussions and activities or perhaps rent cheap accommodation in a prime neighborhood as a reward for their years of service.

However, winter is coming and with winter will come a reengagement with issues and debate for City Council.  While it is fun to debate bike lanes and tanning salons in the summer, I suppose they will need to deal with questions like what actually caused the water treatment plant to fail during last spring’s flooding.  Perhaps, we will also find out what is going to happen with the plans for the events centre or if we will indeed see hotel and condominium construction begin on the waterfront this year.   If we do not get answers, I suppose we can all go to the waterfront and ask for guidance from the whispering beacons.