Municipal Election Analysis 2018: Thunder Bay Mayoral Race

The results are in and former provincial Liberal Cabinet Minister Bill Mauro will be the next Mayor of Thunder Bay.  Congratulations to Mayor Mauro as well as all the hard-working candidates who chose to run for office.  Thanks also to outgoing council members who have seen years of public service.  Public service is never easy and putting your name forth as a candidate and serving as an elected official is an important act of participation in our democracy.

The new Mayor-Designate took 34 percent of the 41,108 votes cast for mayor edging out soon to be former City Councillor Frank Pullia who took 32 percent of the vote.  The choice of mayor was in many respects part of a general desire for change at the municipal level given that both of the higher profile council incumbent candidates for mayor went down to defeat.  Indeed, the new council represents a significant but not overwhelming amount of change with a number of new faces as well as new but familiar faces – as in the example of the new mayor.

Yet, the aspect of this race I found the most interesting was the collapse of the protest vote which saw Shane Judge garner only 5,155 votes (13 percent of the total) compared to his 2014 total of 9,531 which was a 26 percent share of the total.  Even more interesting was the collapse of support for Iain Angus who as a Councillor at Large in 2014 won with 15,861 votes and who as a candidate for mayor in 2018 was only able to manage about a third of that at 5,816. 

One wonders if this signals a general rightward shift in the Thunder Bay electorate given at least my perception of the generally left of center positions of Iain Angus.  Indeed, this may reflect a weakening of the labour vote in general given that Angus was endorsed by the Thunder Bay District Labour Council for Mayor and none of the five at large candidates endorsed by the Labour council won either.   Only three of the Labour Council ward endorsements won (Foulds, Ch’ng and Oliver). Or it may reflect a shift in voter priorities towards lower property taxes given that taxation was continually brought up as an issue during this campaign.The new mayor and several of the winning candidates have emphasized that taxation rates were an issue.

Figure 1 presents the ranked votes by mayoral candidates and most starkly illustrates how despite there being four high profile candidates, it was essentially a two-person race.  Indeed, one wonders what results would have been like if the provincial liberals had won the spring election and Bill Mauro had not entered the municipal race.  It is possible that in the absence of Bill Mauro’s entry, Frank Pullia might very well be the mayor today.  
 

Much is being made of the success of the new online/telephone voting system so a breakdown by type of ballot is interesting.  While voter participation is up above 50 percent this election and voter totals are up I would not venture to say that more convenient online voting options have resulted in a dramatic surge in participation.  Those who want to vote will vote no matter what the system is and the chief advantage of the new system is that it is more convenient for many people. While 41,108 ballots were cast for mayor this election, last time it was 37,123.  The result was an additional 3985 ballots cast – an increase of 13.4 percent.  This is actually a respectable increase but whether it was due to an appetite for change or the convenience of online voting will take a few more elections to see if the increase is sustained.

Of the 41,108 ballots cast for mayor, 15,249 - 37 percent- were paper ballots while 25,775 – 63 percent – were online/telephone ballots.  The preference does appear to be for the convenience of online/phone voting.  Figure 2 shows the distributions of the paper mayoral ballots. 
 

Figure 3 shows the distribution of the online/telephone ballots and Figure 4 the total distribution.  The results for the paper and the online/telephone ballots generally parallel each other but a closer examination shows that among the paper ballots, Frank Pullia had 33 percent of the vote and Bill Mauro 32 percent while in the online/telephone results it was 35 percent for Bill Mauro and 31 percent for Frank Pullia.  Overall, Bill Mauro became Mayor with 34 percent of the total vote and Frank Pullia was second with about 32 percent.

 

 

This is quite an interesting result because it raises the question as to whether the outcome might have been different if only paper ballots (which incidentally are also tabulated electronically) had been used.  It does appear that Frank Pullia had an edge with more traditional medium voters while Bill Mauro’s edge was with online voters.  This is also interesting given that the Pullia campaign was very social media intensive meaning it was fully engaged with the new technology.

This is also an interesting result because given the overall turnout – about 51 percent – and the number of candidates splitting the votes resulting in the winner only holding 34 percent of the total vote.  It means the mayor in the end was elected by about 17 percent of eligible voters.  This is not Bill Mauro’s fault by any stretch of the imagination.  People who are unhappy with small pools of voters rather than a majority deciding their leaders should make sure they get out and vote. On the other hand, perhaps recognition of this low effective support is why the incoming mayor seems relatively low key and unambitious given that his goal is to focus on one or two soft infrastructure projects - like an indoor tennis facility - rather than roads and bridges. I suspect many voters will be surprised to find out a tennis facility is going to be one of the new mayor's priorities.

In any event, these results should provide food for thought for many analyses to come. Next time, I will take a look at the At-Large results.

Pictures of a Presentation

I did my Lakehead University In Conversation presentation in the Fireside Room at the Brodie Library yesterday.  My talk was titled "Going from Chicago to Duluth of the North: Thunder Bay’s Economy in the Past, Present, and Future," and was quite well attended with about 30-35 members of the community present including old friends, new friends and even several candidates for municipal office.  Lakehead's In Conversation series is a very important venue for sharing university research and expertise with the broader community and an important form of engagement. A couple of pictures below including some shots of your Northern Economist in action.  Thanks to Peter Boyle for passing on some of the shots.



And of course, a photo with Peng You.





I will be posting the slides sometime later this week here on my LU Department web page.

Thunder Bay's Economic Evolution: A Brief History

From its origins as a fur trade company headquartered at Fort William, to the development of the grain and forest sectors, Thunder Bay’s economy has seen ebbs and flows over the course its history.  Key to its modern economic development was the federal government decision to route the Canadian Pacific Railway through the Lakehead and the arrival of the transcontinental railway in the 1880s.  Indeed, without this explicit government intervention it is unlikely Thunder Bay would have developed into a city as large as it is today.  Government action in assorted forms has been one of the pillars of Thunder Bay’s economy. 

Transportation is another pillar of Thunder Bay’s economy.  During the first decade of the twentieth century, there was a massive boom rooted in infrastructure building for the transport needs of the western Canadian grain economy that saw the twin Lakehead cities of Port Arthur and Fort William become the largest grain port in the world.  At its peak, over 30 grain terminals lined the waterfront.  Indeed, growth was so rapid that many believed the Lakehead would become the Chicago of the North.  Population quadrupled between 1901 and 1911 and the real per capita value of new construction was never higher than during this period.

Yet, as the twentieth century wore on, there was growing realization that as well as Thunder Bay was doing, it was not going to be the Chicago of the North.  The remainder of the twentieth century saw continued but slower growth and Thunder Bay’s ultimate evolution was more akin to Duluth Minnesota – the American Lakehead – rather than Chicago.  Thunder Bay’s economic growth slowed in the wake of World War I and the Great Depression and resumed during the resource boom of the 1950s and 1960s.  Indeed, natural resource extraction and processing whether forestry or mining have always been another pillar of Thunder Bay’s economy.

Port Arthur and Fort William amalgamated to form Thunder Bay in 1970 ending the urban competition that in retrospect appears correlated with better economic performance given the economic slowdown that ensured.  After 1970, labor saving technological change, aging capital stock, a shift in world grain markets and increasing international competition also eroded the competitiveness of Thunder Bay’s grain transport and forestry sectors culminating in the forest sector crisis, which saw substantial job losses in Thunder Bay and the surrounding region.  These job losses were aggravated by high energy costs with respect to electricity which were especially damaging to the energy intensive pulp and paper sector.  Total employment in Thunder Bay has never recovered from the peaks reached in the first years of the twenty first century.

In the wake of the forest sector crisis, recent years have seen a stabilization of the Thunder Bay economy and a shift in its composition towards employment in research, regional health and social services, and higher education.   This base continues to support a growing range of retail and service activities particularly in hospitality and accommodation oriented around a growing tourism scene that has drawn some international attention.  Nevertheless, economic growth has been slower compared to the rest of Canada and Ontario. While the unemployment rate in Thunder Bay is low, it is because the labor force has shrunk faster than employment as a result of an aging population and youth out-migration.  Population in Thunder Bay peaked in the 1990s and has declined slightly since.   While the First Nation’s population has been expanding, its future economic engagement hinges on the long-term success of initiatives to expand human capital via education and training.

 

As for the future, tomorrow is yesterday as Thunder Bay’s economic future will still rely on its traditional three pillars – government, transportation and natural resources.  These pillars will of course make use of new knowledge and technology and will require innovative entrepreneurial vision to recognize and implement new opportunities. Thunder Bay’s transportation infrastructure and its pivotal location on the east west transport corridor, the role of regional government services and the ongoing potential of the mining sector combined with information technology and the knowledge economy will be the economic forces propelling its future.

A version of this article was originally composed for Lake Superior News appearing there October 16^th in advance of the October 20^th Lakehead University In Conversation Talk at Brodie Library titled Going from Chicago to Duluth of the North: Thunder Bay’s Economy in the Past, Present, and Future.  

Trying to Understand Thunder Bay's 2018 Municipal Election Campaign

It is perhaps a sign of advancing age that I am finding it increasingly difficult to understand what Thunder Bay’s municipal election campaign is actually about.  I found the 2014 municipal election to simply be a wasted election as despite issues like municipal fiscal sustainability, the Kam River Bridge, and the sale of public assets, the entire election was simply fixated on the events centre.  This time around, the long-term fiscal sustainability of municipal finances is still an issue as is the Kam River Bridge to which can be added the city’s social fabric as well as Thunder Bay’s economic development and yet to date it appears to have become – and here I suppose I am dating myself again - a Seinfeld Election.  That is, despite what are acknowledged by many to be a host of issues, it appears to be an election about nothing in particular.

Aside from campaign signs dotting the landscape at strategic street corners, I have met only one candidate on my doorstep and only two have left literature.  I have yet to become aware of any scheduled public debates.  This is during the course of a campaign with a record number of candidates – 11 for the position of Mayor alone with another 26 vying for the At-Large councilor positions – which no doubt complicates the traditional debate framework.  Indeed, how can we have a meaningful discussion in which 11 candidates for Mayor can outline how they see the state of the city and offer analysis and solution?  Incumbents for the At-Large positions must be silently laughing all the way to the proverbial bank given the difficulty of numerous candidates swimming like so many salmon upstream to stake out a position and gain visibility.   

With traditional election campaigns difficult to conduct, this appears to have become Thunder Bay’s truly first complete social media election campaign which complements the debut of internet voting nicely  Many of the candidates – but not all - appear to have developed extensive web presences and have Facebook profiles full of photos and videos showing smiling candidates in assorted municipal action poses.  There are catchy slogans and mission statements that describe themselves as accountable community activists, serious leadership, concerned with the social fabric, and even showing transformative leadership.  

There are candidates claiming to be working for you, others putting Thunder Bay first or working together for a Thunder Bay that works, some posing with old family friends and seniors, and many updated profile photos showing youthful smiling vigour.  If they have received endorsements, they are highlighted along with any favorable media coverage. Indeed, if one were to judge Thunder Bay by the Facebook profiles of its municipal candidates one could only conclude that our community is definitely one big happy place full of wonderful smiling people whose major source of gainful employment is posing for pictures. 

There are even some alliances being formed between candidates as they campaign together.  There is one slate of five councilor At- Large candidates that aims to put people and the planet first under a time for change slogan.  Then there is another alliance between one incumbent and one new entry in the At-Large race that is marketing itself as political twins working for you.  I suppose this is a political variant of a two for the price of one marketing ploy.  Or perhaps, vote for one, get one free.

In the end, all of this seems to me to be mainly style over substance.  Needless to say, election campaigns have always been dominated by style over substance with serious policy discussion seen as a dangerous luxury – especially for incumbents.  In the end, polite conversation at least in the social circles I move in appear to have narrowed down the issues in this election to three: a need for major change in representation given that many on council are long in the tooth, taxation rates and cost-effective municipal services, and social issues with an emphasis on crime and public safety.  If this is not be another wasted election, we need candidates to address how they would reduce crime and improve the social fabric and how they would pay for it given what has been a steadily rising municipal tax burden that has shifted largely to the residential ratepayer. We cannot afford to waste another election.

Thunder Bay's Tax Levy Debate

It would appear that the municipal election campaign is starting to heat up with the outgoing Mayor taking issue with the Thunder Bay Chamber of Commerce's recent election policy document which among things argues that the City of Thunder Bay's tax levies have increased by an annual average of 3.36 percent over the last decade.  Their graph is for the period 2012 to 2022 which includes projections for the 2018 to 2022 period which is not exactly the last decade. The Mayor maintains that the average tax levy change over the past eight years is only 2.4 percent - after new growth in the tax base was factored in.

This is all really quite entertaining because what matters is the increase in the total tax levy - that is what is being drawn from the tax base and used to fund spending.  The tax levy is essentially an expenditure estimate for taxpayer assisted spending and in the end what matters is the total amount of the revenue taken in and its growth and not whether some of it comes from the existing base and some of it is coming from new assessment growth.  The latter argument is really only being advanced to deflect attention from the overall increases.


So, what are the numbers?  Well, here is my two cents worth.  The accompanying figure plots the annual tax levy increase for the period 2008 to 2018 based on total tax revenue numbers from the Financial Information Returns from the Ministry of Municipal Affairs and Housing (with the exception of the last couple of years which come from City of Thunder Bay budget documents).  If you take the average, it comes out to comes out to 3.3 percent which is pretty close to the Chamber estimate.  If you take the average for only the 2011 to 2018 period, you get an average of 3.4 percent.  The last four years average out to 3.7 percent which is a rate well in excess of the rates of inflation and income growth in this city but the number is skewed by the 5.7 increase in 2015 - the year right after the last election. In the end, the tax levy in Thunder Bay has increased at an average of over 3 percent annually for the last decade and based on the chamber numbers is projected to continue doing so.

Thunder Bay Municipal Election Issues: Crime

The October 22^nd municipal election in Thunder Bay should start heating up as we move into the final four weeks of the campaign.  There are indeed quite a few campaign signs sprouting up and in a sign that the race has intensified there is even some campaign sign vandalism.  On the one hand, having a large number of candidates should make for an interesting race but on the other hand with so many candidates, any real debate is going to be unwieldy to manage and I expect the final outcomes will largely favour incumbents with name recognition.  This means that despite what seems to be an enormous appetite for change, there will be very little come the day after October 22nd.  Still, one would be remiss on not trying to highlight some of the issues.

In my August 8^th post, I did a brief summary of what the main issue categories  in the coming election should be and today I want to focus on one specific issue in particular – crime in Thunder Bay.  There is a lot of social media discussion as well as media reporting on crime in Thunder Bay and also a lot of informal chatting among people and concerns have been expressed about what seems to be substantial drug driven gang activity.  There are also statistics that measure crime and Statistics Canada has reported recently that Thunder Bay in 2017 leads Canadian cities in their murder rate for a second year in a row.

The police response to this news by the Acting Police Chief acknowledged the high homicide rate but the media report also noted that “Despite having the highest murder rate per capita for Canadian metropolitan areas and the second highest in terms of severe crimes, the overall crime rate in the city of Thunder Bay is down.”  The response of the Acting Chief accentuated the positive with the comment that “"Those numbers are great to see," Hauth said. "I think it’s continued work internally and working with outside agencies. We’ve made great strides in terms of doing things in the community."”

So what do the numbers look like?  Well, there are specific traditional crime rates for assorted offenses and incidents with the overall crime rate in terms of incidents per 100,000 of population actually down in 2017.  There is also what is known as the crime severity index which uses a weighting method to account for both the number of crimes and their severity.  There sometimes is confusion in media reports between the crime rate and the crime severity index and the confusion mounts if one goes up while another goes down.  However, if one looks at longer term trends, both sets of number tell a similar story.  Crime overall has come down in Thunder Bay over the last 15 years, but certain types of crime have actually gone up.  In particular, violent crime and homicides in particular.

In the case of Thunder Bay, the overall crime rate in 2017 declined from 6,771 incidents per 100,000 in 2016 to 6,576 incidents per 100,000 – a drop of 2.9 percent.  Since 1998, the overall crime rate in Thunder Bay has declined from 10,911 incidents per 100,000 to the current 6,576.  However, the homicide rate has exhibited an opposite trend going from 2.6 homicides per 100,000 in 1998 to 6.04 per 100,000 in 2017.  When it comes to crime severity, the accompany figure sums it all up quite nicely. 

 

The overall crime severity rate (with everything relative to a base of 100) was quite stable from 1998 to about 2010 and then fell and has stabilized since 2012.  For 2017, the crime severity index is up from 87.48 to 88.25- an increase of about 1 percent.  The decline in the crime rate however is being driven by the fall in the rates of non-violent crime.  What is more alarming is the increase in violent crime which in 2017 is the highest it has been since 1998. 

We can argue that crime rates are down overall, but the concern of the public is that violent incidents – homicides, assaults, etc… seem to be on the way up.  Drug possession or a vehicle theft is a problem, but the public is more perturbed by gang and drug related violence and homicides. The issue facing municipal candidates is what solutions can be offered to deal with the rising rates of violent crime in Thunder Bay?  And to help frame the discussion in a simple manner amenable to most municipal candidates, should solutions involve more resources to police or more effective use of existing resources and what should those solutions be?

Northern Ontario Economic Forecasts: Conference Board Forecasts Slower Growth for Thunder Bay and Sudbury

The Conference Board of Canada recently put out its Summer 2018 Metropolitan Outlooks for Thunder Bay and Greater Sudbury.  Greater Sudbury’s real GDP growth is expected to be 1.2 percent in 2018 and 1.1 percent in 2019 while its employment growth will be  -0.4 per cent in 2018 and rise 1.1 percent in 2019.  Meanwhile, Sudbury’s unemployment rate will rise from 6.7 per cent in 2017 to 7.0 per cent for 2018, before falling to 6.6 per cent next year.  Thunder Bay’s real GDP is expected to grow 1.2 percent in 2018 and 1 percent in 2019 with employment expected to rise 2.2 percent in 2018 but fall -0.7 percent in 2019.  The unemployment rate is expected to be lower than Sudbury’s at 5.1 percent in 2018 compared to 5.6 percent in 2017 but is expected to be 5.4 percent in 2019.

As the accompanying figures show, Thunder Bay and Sudbury have been growing more slowly and are expected to grow more slowly than Canada or Ontario.  Sudbury’s economy has been described as “unsettled” with a steady string of employment losses over the last few years.  Its primary hope is the current rebound in nickel prices given the employment losses have been hitting its mining sector.  


 



 
Thunder Bay saw a very good employment growth performance in 2017 that basically helped recover from the 3 percent drop in 2015 – its economy currently can be characterized as “moderate expansion.”  What seems to be driving things at the moment in Thunder Bay s a stronger construction sector with numerous small non-residential projects as residential demand is weak.  Indeed, the housing forecast for 2018 is 155 units – the lowest number of starts in 15 years.  As well, there has been some upturn in manufacturing and transportation.  

So, moving forward.  It appears that both Canada and Ontario are expected to see slower rates of economic growth moving towards 2020 with Thunder Bay and Sudbury even lower.  In terms of employment growth, Sudbury’s recent string of low employment growth is expected to end in 2019 if nickel prices continue their rebound while Thunder Bay in 2019 is expected to see negative employment growth again before resuming growth.  Thunder Bay’s economy has been performing marginally better than Sudbury’s recently as it is somewhat more diversified as in 2017 it had a higher economic structure diversity score of 0.78 compared to Sudbury’s 0.71.

Prelude to Municipal Election: Thunder Bay Economic Overview

As the election campaign for Thunder Bay Mayor and City Council begin to heat up, there will be attention focused on how Thunder Bay’s economy has been doing over the last four years.  The Conference Board and Statistics Canada both provide data for  quick snapshots about how Thunder Bay has done since 2014.  First, real GDP numbers for Thunder Bay (in 2007 dollars) from the Conference Board show that the city’s economy since 2014 has grown at annual rates ranging from a low 0.7 percent in 2015 to a high of 1.4 percent in 2017 with a forecast growth of 1 percent in 2018.  While the local economy is growing, its growth rate is well below that for Ontario and Canada which in 2017 alone saw real GDP growth at 3.2 and 3.1 percent respectively according to the Conference Board. Indeed, out of 29 CMAs in 2017, Thunder Bay ranked second last in real GDP growth – just ahead of St. John’s which saw growth of -1.7 percent.

It turns out that in the wake of the 2014 municipal election, growth faltered in Thunder Bay and that is also borne out by the employment numbers.  According to Statistics Canada, Average monthly employment in 2014 was 61,608 and fell to 59,650 in 2015 and then began to rebound (see Figure) and to date in 2018 averages 61,967.  So, this suggests that the last four years have seen just over 300 jobs added to the Thunder Bay economy which works out to about 75 jobs a year.  (By the way, don't be fooled by what looks like dramatic employment growth since 2015 - after all, the scale on the Figure ranges from 58,000 to 62,500) However, this masks the ebb and flow across sectors.  Manufacturing, public administration, finance, insurance and real estate employment have all declined while there have been increases in accommodation and food services, transportation and warehousing and retail.  Other sectors have been stable.

 

The shrinkage of employment in the finance, insurance and real estate sector is a function of declining house sales and weak housing starts.   As the Conference Board noted in its Winter 2018 Outlook: “Thunder Bay’s uneven economy and slumping population have impaired residential construction. While housing starts clocked in at just under 300 units last year, this was due to an upswing in construction of multi-family homes, particularly apartments, which are relatively infrequent here. Tellingly, CMHC data show that area builders have had no unsold apartments since August 2016. Such projects are risky in an economic environment like Thunder Bay’s, so builders wait for pent-up demand to accumulate, then pre-sell their units.”

What is also interesting is the comparison of employment between Thunder Bay and Ontario as a whole.  In 2016, according to the Conference Board, 16 percent of employment in Thunder Bay was industrial versus 20 percent for Ontario.  As for office employment, it was 20 percent in Thunder Bay and 28 percent for Ontario.  At 5 and 15 percent respectively, the shares in Transport and Warehousing and Wholesale and Retail Trade are the same as for Ontario as a whole.  However, when it comes to non-commercial services (i.e., health, education and public administration), Thunder Bay’s employment share is 27 percent compared to 19 percent for Ontario. When it comes to other services (arts, entertainment, recreation, accommodation and food) Thunder Bay is at 16 percent compared to 13 percent for Ontario.

So, the long and short of Thunder Bay’s economic performance over the last four years is that while not a disaster, it has been uneven.  Real output growth has been weak and total employment has essentially remained stable and within that there is a shift to services particularly of the non-commercial variety meaning more emphasis on public as opposed to private sector employment growth. The lack of population growth combined with an aging population has led to a weakening of the housing sector. That is the current reality.

  

Thunder Bay's Municipal Election Issues: A Brief List

With all of the candidates signed up and off and running, it is now time for the candidates running for municipal office in Thunder Bay to present their platforms and debate the issues they feel will define and shape municipal government here over the next four years.  While no one can predict the future, there are a number of issues that face municipal government in Thunder Bay and will affect its ability to deliver public services.  The role of municipal government is technically not to provide services to the public but to provide services to the owners of property.  However, when said and done what the City of Thunder Bay ultimately does is provide public services to everyone.

 

First and foremost, municipal services need to be paid for and so a  key issue is the long-term fiscal sustainability of municipal services in Thunder Bay.  This of course then becomes tied to property tax rates, provincial grants and user fees – the three main sources of revenue.  The City’s finances in terms of its credit rating are good though as I have noted before it is easy to be prudent when the ultimate budgetary insurance is simply raising taxes.   However, given that there has been a gradual shift to the residential property tax base, the candidates will need to address how much more can the residential taxpayer bear in terms of increased tax rates especially when the tax rate increases have been accompanied by rising user fees for water. What can be done to make city services more cost-effective?

Second, there is the city’s social fabric within which we can include crime rates – particularly homicides – as well as the homeless population, racism, poverty and the growing use of food banks.  The social fabric of Thunder Bay is a crucial issue given its effect on both the quantity and quality of life for its residents.  It is also an important issue from the prospect of attracting new investment in the city given the poor press Thunder Bay garners in major media outlets in the Toronto area.  While there is reason for hope, at the same time continued hope requires action.  How can we deal with our pressing social issues?

Third, is the issue of future municipal governance.  Thunder Bay currently has a council of twelve plus a mayor with five of the councillors At-Large and the remaining councillors ward-based.  We do need to have a conversation as to whether this is still the best institutional framework for municipal decision making.  The At-Large/Ward hybrid harkens back to Amalgamation in 1970 as a compromise to deal with the need to make city wide decisions in the face of strong regional loyalties to the old municipalities and neighborhoods.  However, it is not 1970 anymore and some thought should be given not only to having a smaller council - as a signal that there is a commitment to efficient government - but also one that is either all Ward based or all At-Large.  As noted in an earlier posting, my preference would be for an all Ward based system.

Fourth, is the general issue of what I would broadly term city development but encompassing not only the city’s economy – about which City Council actually not do much about directly – but also its urban development, infrastructure development (I would include a new bridge over the Kam here)  and demographics.  Aside from providing an environment conducive to business via tax and regulatory policy and ensuring cost-effective and appropriate services and infrastructure, City Council cannot really turbo start the local economy.  That is a function of national and international economic conditions and the demand for what we do here.  Ultimately, what can we sell to the rest of the world from Thunder Bay? Tourism is one area where we can still do more as a city.  However, we are also hampered economically by having a spread-out city that is costly to service with new housing developments springing up willy-nilly in outlying areas.  However, we have made some progress in core-specialization with many government services in the former south downtown and a thriving cultural/arts/restaurant scene on the north side adjacent to the waterfront.  We also face an aging population that is quite pronounced given that so many of our youth have left.  While the First Nation’s population is young and growing, much work needs to be done to ensure they are equipped with the human capital necessary to maximize their economic potential and many of those tools are under the purview of the federal and provincial government.  There are no easy or quick answers here but one hopes candidates have pragramtic and workable ideas.

Finally, I am somewhat cautious about bringing up the next point but feel that I should despite the fact it is the kind of thing that some candidates may latch onto and neglect the more important and difficult issues already covered.  We can all recall the last municipal election when the debate was consumed by the Events Centre with all other major issues relegated to the sidelines.  Still, I would be remiss if I did not mention that 2020 will be the 50^th Anniversary of the creation of Thunder Bay and we should give some thought to what type of events or projects we will use to commemorate Thunder Bay’s amalgamation in a manner that is positive and celebrates our potential.  Again, I have had thoughts on this in the past but there may be other ideas out there.

So, without further ado. Let the campaign debates begin!

Explaining Thunder Bay's Municipal Election Candidate Growth

With over 101 individuals seeking municipal office for October's municipal and school board elections this October, the question that now comes to mind is why are there so many candidates seeking office?  More importantly, why has this number been growing over time?  After all, in 2000 only 76 candidates sought office.  While there have been some ebbs and flows in numbers since then - there was another surge in candidates in 2003 - it remains that particularly since 2006, the numbers seeking the Mayor's job as well as an At-Large Council position have grown steadily.  Yet the overall population of the City is flat.

Analyzing the Candidate Numbers: Thunder Bay Municipal Election 2018

The nominations are closed and what a difference an additional week makes.  When you add up all the candidates, as of 5pm today there are now a total of 101 individuals running for office in Thunder Bay’s fall municipal and school board elections – up from 78 in 2014 – and a total of 61 running for City Council – more than the 51 of 2014.  So, it would appear that despite changes to the municipal nomination process for the 2018 election – a shorter time period for filing to run as well as the requirement of 25 signatures of support – there are more than enough people who want to fill municipal office.

However, a closer examination of the numbers suggest that the interest is greater for the Mayor and the At-Large Councillors.  Compared to the 2014 election, the number of candidates for Mayor is up from 6 to 11 – a 83 percent increase while the number seeking at At-Large position grew from 19 to 26 – an increase of 37 percent.  However, those seeking a Ward Councillor position fell from 26 to 24 – an 8 percent drop.  On the bright side, numbers for both the Lakehead and Separate Boards were also up from 2014.

Homicies Data Update: Thunder Bay Still Ranked First

Statistics Canada has just released the latest crime data report with the 2017 edition of Police Reported Crime Statistics. Overall, crime is up a bit in Canada.  While there has been some improvement in Thunder Bay's ranking when it comes to crime severity in general, what is of particular interest of course especially to us in Thunder Bay is the homicide rate.  According to Statistics Canada:

"After little change in 2016, the national homicide rate increased 7% in 2017, moving from 1.69 homicides per 100,000 population to 1.80. Police reported 660 homicides, 48 more than in 2016. The 2017 homicide rate was higher than the average for the previous decade (1.67 per 100,000 population for 2007 to 2016).

The increase in the national number of homicides was largely a result of the greater number of homicides in British Columbia (+30) and Quebec (+26).

With a total of seven homicides in 2017, Thunder Bay recorded the highest homicide rate among the CMAs for the second year in a row (5.80 homicides per 100,000 population). Abbotsford–Mission (with 9 homicides) and Edmonton (with 49 homicides) had the next highest homicide rates (4.72 and 3.49 per 100,000 population, respectively). Saguenay was the only CMA to report no homicides in 2017.

The attempted murder rate in Canada increased 4% from 2016 to 2017, to 2.25 per 100,000 population. A 25% increase in the province of Quebec was the main contributor to the overall national increase. This was due to the January 2017 shooting at the Islamic Cultural Centre of Québec. This incident resulted in six homicide victims and 40 victims of attempted murder."

I have done a number of posts on this topic over the years so its time to update some of the numbers. The two figures below plot the homicide rate (homicides per 100,000 of population) for Thunder Bay, Sudbury and Canada.  The first figure is the raw annual homicide rate while the second figure plots a smoothed series which gives you a better picture of the longer term trends. Annual numbers tend to have a lot of variation and you really should not base analysis or policy on one or two years of data. However, based on the smoothed series (LOWESS Smooth using a 0.8 bandwidth) you can see the picture that emerges here over the longer term.








While the homicide rate in Thunder Bay for 2017 is down from the previous year at 5.8 versus 6.6 homicides per 100,000, the long term trend in one of increase.  The annual  un-smoothed data suggests the upward trend began circa 2008-09 while the smoothed series suggests that it has been a 21st century phenomenon with the rise starting approximately around 2000.  Thunder Bay's homicide rate has diverged from the national trend which has been one of decline.

This is certainly one issue for the Fall 2018 municipal election.

Thunder Bay City Council Races Growing

Well, what a difference a couple of weeks makes.  It would appear that the fall municipal election has finally caught the attention of the local community and the number of candidates is up considerably from my post two weeks ago.  In my July 7th post, I noted that with only a few weeks to go before the July 27th deadline, the number of candidates who had filed for election in Thunder Bay's city council race was down dramatically.  However, since then it would appear that a larger number of candidates have come forward.

In the 2014 election, the total number of candidates (including all the school boards) was 78 of whom 51 were running for spots on Thunder Bay City Council.  As of today, there are a total of 67 candidates registered of whom 40 are seeking a spot on City Council.  While the numbers are still down, the gap is not as great as several weeks ago.  The remaining week will likely see other candidates come forward.  For those of you who might think yours truly will be inspired to run I can assure you it is an honor I do not currently aspire to. (I thought the italics would be an amusing touch).   However, I am certainly glad others are taking the initiative first because the role is important and second because the perambulations of Thunder Bay City Council are often a source of inspiration for my blogging.

Large Municipal Operating Surpluses Do Not Always Mean You Are Good at Budgeting

The City of Thunder Bay’s final 2017 budget surplus is apparently now double what was originally projected. Whereas a $2.8 million year-end surplus had been forecast in January, it has now apparently grown to $5.6 million dollars.  Note that when the budget was approved last year, there would not have been a projected surplus as at the municipal level projected revenues need to match projected expenditures. 

Moreover, it should be noted that this is not an overall operating surplus but a “tax-supported” surplus meaning that there is a surplus on the tax supported side of municipal expenditures.  This is an important distinction because while it is a “tax reported” surplus, the variance is being reported as a percentage of the total net operating budget (2.3% of $240.1 million) and the total gross operating budget (1.6% of $358.7 million).  Given that municipal tax revenues in 2017 were $183.987 million, the variance can also be reported as a percent share of that which comes out to 3 .04 percent – a much larger number.  Indeed, I would argue that this is the correct variance number.

Renting in Northern Ontario-You Are Richer Than You Think

When it comes to housing markets, what gets the most attention is the affordability of single detached homes particularly in large urban centres like Toronto and Vancouver.  However, the high price of housing has boiled over into rental markets and it turns out that more Canadians are now renting than ever before.  Over half of the new households formed since 2011 are apparently renting and the greater demand is being reflected in higher rents.

So, what are rents like in the five major northern Ontario cities? Figures 1 and 2 plot the monthly rent for one and two-bedroom apartments in major northern Ontario cities from 1992 to 2017 using data from Statistics Canada.  In 1992, rent for a one-bedroom was the highest in North Bay at $510 monthly and lowest in Timmins at $451 while for a two-bedroom it was highest in Thunder Bay at $620 and lowest in Timmins at $565.  By 2017, monthly rent for a one-bedroom was highest in Sudbury at $848 followed by Thunder Bay at $779. For a two-bedroom in 2017 Sudbury was the highest at $1058 followed again by Thunder Bay at $957.

 

 

Over the period 1992 to 2017, the annual average growth rate in rents for a one-bedroom was 2.4 percent in Sudbury, 1.9 percent in Thunder Bay, 1.6 percent in North Bay, 1.8 percent in the Sault and 2.2 percent in Timmins.  Over the same period, for two-bedroom apartments, the average growth rate was 2.4 percent in Sudbury, 1.8 percent in Thunder Bay, 1.9 percent in North Bay, 1.9 percent in the Sault and 2.1 percent in Timmins. Indeed, these increases are pretty close to the inflation rate as measured by the CPI.

The results are informative – rents have gone up in all northern Ontario cities - but the pace of increase picked up after 2004.  The average annual growth rate for one-bedroom apartments in these five cities was 2 percent from 1992 to 2004 and 3 percent from 2004 to 2017. For Greater Sudbury, rent growth was especially pronounced from 2004 to 2017 with an annual average growth rate of 3.5 percent for both one and two-bedrooms.   Thunder Bay in comparison saw average annual growth of 2.5 percent for one-bedrooms and 2.6 percent for two-bedrooms.   However, this period saw Sudbury with a mining boom whereas Thunder Bay experienced the forest sector crisis.

The higher growth rates in rent since 2004 coincide with the run-up in housing prices over the same period.  Even with rent controls, as new tenants come into a rental unit, there is the opportunity to raise the rent to reflect market conditions and the market is getting tighter. As all first year economics students can tell you, the long-term impact of rent control policies is to reduce the stock of units below what they would have been.  As a result, with rising demand, rents have climbed.

However, rents in Thunder Bay and Sudbury are still quite a bit lower than Toronto based on the numbers here.  In 2017, a one-bedroom in Toronto rents out at $1194 – 41 percent more than Sudbury and 53 percent more than Thunder Bay.  A two-bedroom in Toronto in 2017 rents out at $1403 – 33 percent more than Sudbury and 47 percent more than Thunder Bay.  According to the Winter 2018 Conference Board CMA reports, in 2017, household income per capita in Toronto $47,548 compared to $48,742 in Greater Sudbury and $47,287 in Thunder Bay.  Given that average incomes in Toronto are not really that much higher than either Thunder Bay or Sudbury it stands to reason that after paying your rent you will  have a lot more disposable income left over in Thunder Bay and Sudbury relative to Toronto. This really should be getting greater play in the economic marketing of these two cities.

Choosing Thunder Bay's Next Mayor

O for a Muse of fire, that would ascend

The brightest heaven of invention,

A kingdom for a stage, princes to act

And monarchs to behold the swelling scene!

Henry V

The municipal election process in Thunder Bay culminating this October is starting to pick up steam and there are now two candidates in the running for mayor: Iain Angus and Larry Hebert.  Both are long time stalwarts of Thunder Bay City Council and have contributed years of valued service to the community in assorted capacities.  Both also topped the polls last election for the position of Councillor at Large with Angus at 15,861 votes and Hebert at 14,664.  Given that the two top contenders for the Mayor’s Chair last election came in at 14,463 (Keith Hobbs) and 12,051 (Ken Boshcoff) votes, they are certainly credible contenders for the position of Mayor. 

Of course, when one looks at the current composition of City Council, there is indeed an embarrassment of riches when it comes to potential candidates for Mayor.  It is always time for a female Mayor in Thunder Bay and given Rebecca Johnson’s sterling career of community service, one would expect that she would also consider a run for Mayor. It would be credible given she garnered 14,620 votes last election in the At Large race.   Frank Pullia has carved out a strong role both as an advocate for community causes as well as a strong showing in the finance portfolio at City Hall.  At 14,112 votes last election, he is a key contender.

And of course, who can forget the ubiquitous Aldo Ruberto whose passion for quality of life issues in Thunder Bay plus 14,311 votes in the last At Large Race also puts him within reach of the Mayor’s Chair.  There are also some strong candidates in the ward Councillor category – the names that particularly come to mind are Joe Viridiramo and Andrew Foulds.  They are both high profile candidates committed to their city and with exposure across the community.

Of course, they cannot all be mayor but being the Mayor in Thunder Bay is important given the need for a sustainable economic future that embraces all the people of Thunder Bay and the leadership role that Thunder Bay plays in the region.  It is important to have as strong a slate of visionary candidates as possible to generate the ideas we need to move forward.  This election is an opportunity for defining debates and visions in the areas of economic development, First Nations relations and social and urban affairs and what better way than a strong Mayor’s race with many quality candidates. 

It should be noted that the race for Mayor need not be relegated to current City Council incumbents.  There are many individuals in Thunder Bay who also have strong community leadership credentials and it would be a shame if Ken Boshcoff or Shane Judge did not put their names forward again. Indeed, Shane Judge apparently will be running.  It is also a shame that Lisa Laco has stated she is not running.  And then there is the business community.   Having someone prominent from our local business community step up would also bring a vital perspective to the municipal election especially with respect to issues of business development and taxation. 

This is a crucial time for picking Thunder Bay’s next Mayor and council given the many challenges that have faced our community over the last four years and that will continue in the future.  We are also picking a Mayor who will be the public face of our community at an important milestone – the 50^th anniversary of Thunder Bay’s creation that will occur in 2020.  Having a strong mayor’s race full of vigorous visions would be the ultimate community contribution our community leaders could make.  Having a strong slate of candidates for Mayor would be a vote of confidence in the importance of municipal politics in Thunder Bay and the importance of civic leadership in shaping our future.  It is time for our accomplished community leaders to step up to the leadership challenge and run for mayor.