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

 

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

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

 

 

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

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

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

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

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

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

As noted in an earlier post:

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

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

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

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

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

Building 21st Century Thunder Bay

 

Monday evening promises to be another long haul at Thunder Bay City Council given the conjunction of issues that will be arriving.  In many respects, the issues of revamping the library system and redeveloping Victoria Avenue will help define the city for the remainder of the 21^st century.  A common theme to all these issues is downtown development, always a complicated issue in a city which now has three downtowns as well as several smaller neighborhood cores.  And to further spice things up, Thunder Bay has been left off the list of Ontario cities with strong mayor powers.  However, this is not a slight given that Thunder Bay has company in southern Ontario with  other big city places like Newmarket and Chatham-Kent which have been left off because they also have not yet submitted a housing pledge to the provincial government.  The strong mayor powers are generally designed to help fast track housing development.

 

However, the issues of downtown development and housing can be linked and the current issues facing Thunder Bay City Council with respect to a new library master plan, the demolition of Victoriaville and housing development could be linked facilitating a case for the allocation of strong mayor powers to Thunder Bay – assuming that is a direction we want to go.  Given the often insular and informal backroom nature of decision making in Thunder Bay, it is not surprising that informal polling suggests that the majority of people in Thunder Bay are not overwhelming keen on having the mayor’s office gain additional powers.

 

The issues in summary are as follows.  First, a $17.5-million preferred design for the demolition of the Victoriaville Mall, reconstruction of Victoria Avenue, and addition of new public spaces will be considered by City Council as part of yet another plan to revitalize the city’s south core.  The demise of the core has been ascribed to the decision to close up the traditional main thoroughfare – Victoria Avenue – with the building of the mall in the early 1980s.  This was done as part of another plan to revitalize the core in a manner akin to downtown north (Port Arthur) which had a new mall built there known as Keskus.  Keskus is now gone and the north core the home of a casino, new restaurants, a waterfront park and hotel, cruise ship dock and condo development, and is now considered the entertainment district.  The hope is now that opening up the south core to traffic will also spur revitalization.  The estimated cost is $17.5 million but realistically we can probably multiply that by two by the time everything is done given the history of public sector projects in Thunder Bay.

 

Second is the new master plan set of proposals for the future of the Thunder Bay library system.  The current system has four branches with two on the north side and two on the south side reflecting the traditional distribution of neighborhoods and population.  However, over time the two downtowns – where the two largest branches are - have seen fewer residents and the gist of the library system renewal plans are a new central location in the intercity area.  Three scenarios have been proposed: Plan 1) Retention of M.J.L. Black and County Park, retention of the two downtown locations (albeit downsized) and a new central branch located in the former Lowe’s store at Intercity Shopping Center. Naturally, this is modified status quo plus one making it politically the most palatable as well as the most expensive at $9.1 million. (However, see earlier caveat about public sector projects costs in Thunder Bay).

 

Plan 2) A central branch again at the former Lowe’s store with retention of County Park, Waverly, and M.J.L. Black with the closure of Brodie.  Cost of this option, $8.3 million.  What is interesting here is the juxtaposition of revitalizing the south core by opening up Victoria Avenue while removing a key amenity such as a major public library.  Given that many homeless people have been using both the enclosed Victoriaville center as well as the Brodie library as supports, their joint removal would create a new set of issues for Thunder Bay.   In addition, the Brodie Branch does have some historic significance as both a landmark and a Carnegie Library and naturally there would need to be a plan to deal with that aspect. On the other hand, there would still be four branches and politically this might sell depending on how many friends the Brodie location has.

 

Plan 3) A central branch located at the former Lowe's at Intercity Mall. There would be two neighborhood locations at Waverley and MJL Black. Brodie and County Park locations would close. Cost would be $7.7 million.  In strict cost terms, this makes the most sense but the issues with respect to Brodie raised under plan 2 holds and to that would be added neighborhood interests for the County Park branch.  In the end, this option would generate the most opposition though going to a more stream-lined system of only three branches might be seen by some as an advantage. 

 

What is common in all three of these plans is of course a new central location that is not a new build but a repurposing of existing mall space. This has pluses and minuses.  The biggest minus is that no one really lives in the intercity area and in a car dependent city like Thunder Bay, despite the official ceremonial attachment to environmental causes and bike lanes, it means yet another reason to drive to the area.  This is an area which incidentally still has freight trains merrily winding their way thru at the most inopportune times.  The biggest plus is also that it makes use of existing mall space and transforming underused mall space into other uses is a good thing. 

 

It would be more helpful if along with putting amenities in intercity, there was more of a plan to put density housing there too. In the end revitalization of core areas helps to have people living in and around them because downtowns traditionally have a lot of amenities within walking distance.  In the case of the former core areas of Port Arthur and Fort William, many of those amenities have over the years migrated to the inter-city area.  The inter-city area has become the de-facto main downtown of Thunder Bay and yet there has been no follow through to also put in more apartment or condo buildings.  Intercity mall is a case in point, with its retail and a new library, a residential development at its north end would create much needed housing and help create the urban density that Thunder Bay claims is one of its goals.  Indeed, density housing projects – six to eight story apartment and condo buildings – in both former downtown cores as well the intercity area – would be a way of Thunder Bay helping meet provincial government housing targets.  This could indeed be the type of plan that would allow the provincial government to grant the city strong mayor powers, but it requires a vision and to date there is no vision.

 

While Thunder Bay has not been growing robustly in terms of population, it appears that there is a demand for housing given the recent move to increase density in existing residential neighborhoods via basement apartments and mother-in-law suites, while paradoxically also expanding standard suburban residential developments.  One suspects if well-designed quality and affordable apartment and condo housing was more available in any of Thunder Bay’s three “downtowns” one suspects there would be a definite demand for it.  Again, building it requires a vision as well as the will and the ability to implement the vision.   It also requires a more favorable municipal tax rate for multi-unit residential.  To date, all this has been lacking and we are left with incremental changes that do not always work together to build integrated and thoughtful end results. 

 

 

 

 

 

Gasoline Prices Are Going Up Again

Gasoline prices are on the rise in North America as a result of rising demand combined with more restrictive supply.  An aspect of tightening supply comes as a result of more "cooperative behavior" between major suppliers Russia and Saudi Arabia which was recently highlighted in a report on NPR.  Vancouver made the news with the highest prices on the continent hitting $1.62 a liter on Monday.  Along with refinery issues in Washington State which supplies a portion of Vancouver's gasoline, part of the high price in Vancouver also is a function of taxes in that Vancouver has very high taxes on motor fuel and a new carbon tax came into effect this month.  

While prices in Canada generally have headed up over time, there is a substantial range between the highest and lowest prices.  The accompanying figure plots the monthly maximum and minimum price of unleaded gasoline at self service stations for 18 major centers as compiled by Statistics Canada over the period January 1990 to March 2018. The cities are:St. John's, Winnipeg, Regina,Saskatoon, Edmonton, Calgary, Vancouver, Victoria, Whitehorse, Yellowknife, Charlottetown, Halifax, Saint John, Quebec, Montreal, Ottawa-Gatineau, Toronto and Thunder Bay.  Needless to say, the trend for gasoline prices over time is upwards (Figure 1).

What is also of interest is what appears to be a growing gap between the trend lines over time.  For example, if you go back to January of 1990, the price per liter of unleaded gas ranged from a low of 47.9 cents in Calgary to a high of 58.9 cents in Yellowknife -  a gap of 11.1 cents.  In March of 2018, the price ranged from a high of 151.4 cents in Vancouver to a low of 106.9 cents in  - a gap of 44.5 cents.  Indeed, if one plots the gap between the highest and lowest prices, one finds that it has grown over time as shown below (Figure 2).  This of course suggests that over time there has been increased dispersion of gasoline prices across cities and regions in Canada.  

However, one needs to standardize for the mean and if one takes the standard deviation of these gasoline prices by month and divides by the average, one gets a measure of dispersion known as the coefficient of variation and it tells a slightly different story (Figure 3).  The period from 1990 to about 2009 was one of a declining coefficient of variation - that is prices across these cities were actually becoming less dispersed.  However, since 2008, the coefficient of variation has been rising suggesting greater dispersion.  The overall linear trend from 1990 to 2018 however shows a declining coefficient of variation.

So, the long-term trend for gasoline prices in Canada is that they are on the way up.  The range in prices between highest and lowest in cents per liter is also growing with the gap across major cities as much as 45 cents per liter.  However, in terms of dispersion as measured by a coefficient of variation, the overall long-term trend since 1990 is for a declining coefficient of variation - that is less dispersion.  However, there are two periods - declining dispersion from 1990 to 2008 and then a rebound towards more dispersion of prices since 2008 to the present.



As a final bonus. here is a plot of Thunder Bay's monthly unleaded gasoline prices since 1990 compared to the 18 city median over the same period (Figure 4). Thunder Bay's prices are pretty close to the  median but since 2008 have been more often than not above the median.  In March of 2017, the average price in Thunder Bay was 110.7 cents per liter compared to the 18 city median of 104.8 cents.  In March of 2018, the monthly price in Thunder Bay was 123.6 cents per liter compared to a median of 121.8 cents.  Anyway, above the median or not, it looks like prices are going up.  Thunder Bay has seen a year over year increase of nearly 12 percent.  The increase for the 18 cities in this analysis over the same period in the median price was 16 percent and for the average monthly price it was 13 percent. So to date, we have been lagging a bit when it comes to price increases.