NORTHERN ECONOMIST 2.0

Wednesday 23 May 2012

Northern Economist on Canadian Trade, Manufacturing & Health Transfers!

You might want to check out some of these recent contributions to public policy. I did a piece on federal health transfers that appeared in iPolitics in late April arguing that the Canada Health Transfer should be broken up into two separate components - a per capita amount and a needs based amount that takes factors like demographic differences into account. I've been busy blogging on Worthwhile Canadian Initiative and there has been a spirited debate on the decline of manufacturing, natural resource exports and Dutch disease going on there that was recently picked up on by Maclean's magazine. Finally, the Winnipeg Free Press just ran a piece on the prospects and impact of the free trade agreement Canada is currently negotiating with the European Union. You can continue to follow my posts on Worthwhile Canadian Initiative in one centralized location at uFollow.

Wednesday 29 February 2012

Time for a Break

Well it has been a busy time for Northern Economist and getting busier all the time. March always marks the onset of my busiest time of the year and this year along with finishing up supervising two honour's theses, teaching my courses, and being Department Chair, I am also involved in an undergraduate program evaluation for the Department of Economics at Lakehead and helping to draft our new Department academic plan. I'm also on the university Promotion, Tenure and Renewal committee again in the spring. In addition, I'm also committed to conference papers to present my research in April, May, June, July and September so as much as I enjoy blogging about northern Ontario's economy, I'm out of time.

As my colleague Steve Gordon at Worthwhile Canadian Initiative has remarked, blogging is a lot like giving out free pizza. However, the pizza is free only for those who choose to consume the product - I still have to do the baking. We blog to contribute to debate and policy formation, to try and help make a difference, but in the end there is only so much time to go around. This break may last a while as I'm also heading into a sabbatical and for academics, sabbaticals are generally breaks from your usual routine and investment of your time in professional development. I will be spending mine on wealth research and analysis of health expenditure and health system sustainability along with some deepening on my econometric skills. Sorry, but baking lots of free pizza is not the way I was planning to spend my sabbatical.

For those of you who like my stuff on northern Ontario, you can continue to access the past posts I've done both here and at at my original Northern Economist 1.0 site where there is a wealth of material dealing with the region's economy from a descriptive and analytical perspective. Enjoy. You can also check in at this site from time to time just in case an important topic grabs my attention. As well, I will continue to post occasionally on more general economic topics as part of the team on Worthwhile Canadian Initiative, Canada's premier economics blog. You can access all of my posts on Worthwhile Canadian Initiative in a convenient listing at Ufollow.

All the best and cheers! Livio.

Friday 24 February 2012

Thunder Bay's Fiscal Follies

The Thunder Bay City Council budget situation grows more and more curious. A media report yesterday contained what can only be termed contradictory information. On the one hand, the story in the Chronicle-Journal stated that: “The proposed budget includes a 2.67 per-cent property tax increase on top of a 1.5 percent hike for the enhanced infrastructure renewal program.” This means that the combined property tax increase for this budget year is actually 4.2 percent. Yet, a little later in the story, Councilor Linda Rydholm is quoted as saying she was willing to support the budget because: “At ward meetings and other places, it seems like people are expecting the 2.67 per cent increase, particularly knowing that 1.5 percent is for infrastructure, roads and buildings.” In other words, the tax increase is 2.67 percent but the 1.5 percent is included.

It would appear that we are still sorting out the size of the actual increase in Thunder Bay’s 2012 municipal taxes. Moreover, it would appear that even city councilors are confused as to whether the total increase is 2.67 percent or 4.2 percent. Add to this the fact that seven million dollars was inadvertently left out of this year’s municipal budget and now will be funded out of the reserve fund, one has to wonder what exactly is going on? Is there some confusion on the part of the media in understanding council's message? Are city councilors unable to grasp the details and complexity of the budget process? Are city administrators and councilors engaged in a strategy of sowing confusion to obscure the true size of the increase? Or is this simply some giant comedy of errors at taxpayer expense?

If the total municipal tax increase is indeed 4.2 percent, it means that total payments to the city by municipal ratepayers will rise nearly 5 percent this year once the rise in water rates of 6.7 percent is included. In 2011, the water bill for the average household was 714 dollars while the average property tax bill was 2,501 dollars. Using these figures to compute a weighted average results in an increase of 4.8 percent in total payments by ratepayers to the city in 2012 (4.8=0.22*6.7+0.78*4.2). Breaking up a 4.8 percent increase into three separate numbers may fool some of the taxpayers some of the time but it cannot fool all of them. If City Council wants to remain at all credible, it will need to come clean and address this confusion and very quickly. This credibility is all the more important given the cost overruns for operating the new waterfront park and the desire to build a new multiplex that will also require a large public operating subsidy.