NORTHERN ECONOMIST 2.0

Wednesday 25 July 2012

Planning for the Boom

The talk of booms and rumours of booms continues in Northwestern Ontario and with good reason given the ramping up of mining activity. Along with several mines currently in production, there are a number of planned projects. Cliffs Chromite Project in the Ring of Fire is about to undergo an environmental assessment. Thunder Bay is currently the host to some 26 exploration companies with projects expected to produce gold over the next 3-5 years at Greenstone (Hard Rock), Atikokan (Hammond Reef), Pickle Lake (PC Gold Inc.) as well as several other places. As well, Stillwater is planning to develop a copper project near Marathon.

All this activity is generating exploration and supply work but the mining boom is not here yet. Nonetheless, area governments are beginning “to plan” for the development that is underway and yet to come. Atikokan apparently has commissioned a community readiness study that among other things argues that six major projects in the area will lead to substantial construction activity, home building and potentially a doubling of the population. Thunder Bay is apparently also undertaking a Mining Readiness Strategy that will attempt to capitalize on the mining development.

A boom with population growth would be a welcome development in Northwestern Ontario. This would be a much different region if Thunder Bay had 150,000 people and Nipigon and Atikokan were communities of 20,000 people each. Yet, it remains to be seen if all of this mining development will come to pass and yield the expected employment and income benefits given the volatility of world commodity prices. Most of the economic benefits will flow from the prospecting, exploration and setting up the mines as operating mines today are much more capital intensive.

With respect to all the planning being undertaken, the emphasize seems to be entirely short term – that is, how to meet the needs of the anticipated increase in population and demand for housing as well as capitalizing on the mining employment. A longer view needs to be taken. Three other things these communities need to plan for. First, making sure that new construction and development creates urban density in communities rather than a short-term build it where you like frontier mentality. Second, that some of the resource rents generated from these projects are invested in sovereign wealth funds for both the First Nations and the rest of the region’s residents to serve as a long-term source of income from a non-renewable resource. Third, there be some thinking devoted to what happens when the mines close. Is this too much to ask?

Thursday 19 July 2012

Northern Economist Goes to Suid Afrika!

Well, I had the opportunity to attend the 2012 World Economic History Conference held in the Western Cape town of Stellenbosch in South Africa. Stellenbosch is just outside of Capetown and is one of the oldest towns in South Africa dating back to 1679 and today is a university town of about 130,000 people situated in the heart of South African wine country. My session at the WEHC was a reunion between researchers on 19^th and early 20^th wealth in the British Empire that was organized by David Green (King’s College, London) and included along with myself, Alastair Owens (Queen Mary University, London), Jim McAloon (Victoria University of Wellington), Martin Shanahan (University of South Australia) and Roy Hora (Universidad de San Andre).

My stay in Stellenbosch was at the Eendracht Hotel on tree-lined Dorp Street. The Eendracht was originally a home that has been converted into an elegant hotel establishment with superb accommodation and service. Indeed, my entire stay in South Africa was marked by excellent, friendly and attentive service. It’s a long air trip there from Canada (Toronto to Capetown via a three hour layover Amsterdam was 23 hours) but well worth the experience you are going to have.

South Africa and the Western Cape region is an incredibly beautiful and diverse land featuring vineyards, mountains and beaches. From an economic perspective, it was remarkable how many economic activities were clustered in the small region that I had the opportunity to visit. Orchards and farming, vineyards, fishing, mining, forestry, manufacturing, resource and food processing, education, health, tourism were all part of the economic base of activities making it a remarkably self-sufficient region and yet with a surprising range of exports not least of which is wine – try the unique South African blend of Pinotage. The cultural wealth was also amazing in terms of the vast amounts of local art on display especially in some of the wineries.

South Africa is a land of diversity and extremes ranging from climate and terrain to its society, which is marked by great wealth as well as great inequality. In terms of comparisons with my own home here in Northern Ontario, some of the social issues such as employment, educational opportunity and housing were reminiscent of challenges we have with First Nations though rooted in a different historical context. The demographic balance between the descendants of European settlement and the indigenous populations are also quite different as the share of population originating from European settlement is much smaller than in Canada.

As well, there were other interesting comparisons such as the fact that while we have forest fires, the Western Cape region also has fires during their summer (I was visiting in winter which is cool and wet and more like autumn for someone from Canada). As well, we tend to have to bear proof our garbage containers and camp sites in provincial parks while in South Africa the concern is with baboons who are also on the prowl for things to eat.

South Africa was an impressive place. It was a great trip. I can’t wait to go again.

Wednesday 4 July 2012

Globe2Go From Thunder Bay

Well, I was rather disappointed to receive a letter from the Globe and Mail last week

informing me that the Globe and Mail would no longer deliver a paper copy in Thunder Bay starting September 1^st. The letter stated rising costs and service delivery issues as the reason and offered as a substitute a cheaper subscription to the electronic Globe and Mail known as Globe2Go. Oddly enough, our service has actually improved immensely over the last while and given all the airline competition and additional flights out of Thunder Bay (The Toronto edition of the Globe & Mail is flown into Thunder Bay every morning and delivered throughout the day) I do not see how costs have risen that much. Yet, who am I to quibble with one of our many overlords from Toronto who constantly develop new methods to affect our daily lives here in the North.

In some respects, I suppose this was probably inevitable. I used to have a subscription to the National Post and they too left the local market citing costs. They also dangled the prospect of a digital subscription at the time they left. This departure is particularly annoying because it also means I will no longer get my Sunday New York Times delivered. It came on the Monday but its heft was something I looked forward to.

Now, its not that I do not use computers or the internet (I'm blogging am I not?). However, I find reading a newspaper on the computer or an ipad or an ipod inevitably feels like …being at work. For some reason, I find reading the physical newspaper a more reflective ritual whereas once I’m on an electronic device I simply point and click on a few items, scan quickly and move on. I get greater personal value from the more expensive hard copy than I do from the cheaper digital version. If I’m only going to point and click on half a dozen stories, well the main ones are available for free on the web either from the Globe or dozens of other competitors.

Moreover, once you are into electronic subscriptions, the market opens up dramatically. Whereas I only have the choice of the Globe and Mail or my own local paper when it comes to hard copy newspapers, once I start to consider electronic subscriptions – well, the choice is limitless. In some ways, this is an opportunity to reappraise how I currently get my news. I suppose the Globe and Mail is gambling I am so addicted to their product that an electronic Globe is better than no Globe at all. I’m not so sure. Maybe it is time to subscribe to the New York Times electronically or perhaps the Guardian to get my international news and rely on my local newspaper subscription and free web access to Canadian dailies for my Canadian news. Maybe it is time to consider the choice between what the Globe offers electronically compared to the National Post. In any event, I’m going to take some time to decide what I’m going to do given that I now am being forced to choose.

By the way, when the National Post decided to stop delivering in Thunder Bay, I did not take out the digital subscription.