NORTHERN ECONOMIST 2.0

Friday 21 April 2017

Evaluating Northern Ontario’s Growth Plan-Part IV (Business and Consumer Insolvency)

This is the fourth in a series of posts in which I am presenting evidence evaluating the Growth Plan for Northern Ontario, which was released on March 4, 2011. The 25-year plan was to guide provincial decision-making and investment in northern Ontario with the aim of strengthening the regional economy. The goal was strengthening the economy of the North by:

Diversifying the region's traditional resource-based industries
Stimulating new investment and entrepreneurship
Nurturing new and emerging sectors with high growth potential.

While the provincial government did commit itself to the development of performance measures for ministry specific initiatives that supported the implementation of the plan, I will be using a broader set of indicators of overall economic performance that are supported by the availability of readily accessible public data. My first post was an overview while my second post looked at employment and my third post looked at new investment spending as measured by building permits. In this post, I will be looking at consumer and business bankruptcies or insolvencies as an indicator of economic health. All other things, during times of economic distress, one would expect to see more consumer and business bankruptcies while during better economic times, the numbers should be expected to decline.

Mortality in the North

Ontario’s Health Quality Council has just released a new report on Health Equity in northern Ontario that shows that Ontario’s northern regions lag behind provincial averages in quality of health and health care. The geographic focus of the report is on the area that “extends north of Lake Huron to Hudson Bay and James Bay, and from the Quebec border in the east to the Manitoba border in the west, which represent nearly 80% of Ontario’s landmass.” If you do not want to read the report, there is a pretty good overview in the Globe and Mail.

While northern Ontario has seen health gains over time, it remains that the gap in health indicators between the north and the south is growing and it may be worse than the report suggests because the report’s data is drawn from Statistics Canada’s Community Health Survey, which does not cover Indigenous people living on reserves. As it stands, the relative gap in mortality rates has grown to 30 percent in 2012 from a 12-17 percent range in 1992. In 2012, the age standardized mortality rate per 1,000 people was 5.7 in the northwest, 5.7 in the northeast and 4.4 in Ontario.

People in the North West LHIN region have a life expectancy of 78.6 years, compared to 81.5 years in Ontario. People in the North East LHIN region also have a markedly lower life expectancy than Ontario overall, of 79.0 years, or 2.5 years shorter than the Ontario average. The North West LHIN region has nearly double Ontario’s number of potential years of life lost due to avoidable deaths, at 6,023 years lost per 100,000 people over a two-year period, compared to 3,243 years per 100,000 people in Ontario. The North East LHIN region also has considerably higher potential years of life lost due to avoidable deaths than Ontario, at 4,763 years per 100,000 people. People in northern Ontario are more likely to die prematurely due to suicide, circulatory and respiratory disease.

The reasons for these differences are complex. The north is a sparsely populated region and the vast differences make it difficult to deliver the same level of care one might get in Toronto to smaller isolated communities. There are also lifestyle factors such as higher smoking, drinking and obesity rates in the north. For example, the self-reported smoking rate was 26.0% in the North East LHIN region and 22.9% in the North West LHIN region, compared to 17.3% in Ontario.

However, access is also still an an issue. According to the report: “People in the north are less likely than Ontarians as a whole to report having a family doctor, nurse practitioner or other regular health care provider – 89.2% of people in the North East LHIN region and 83.8% in the North West LHIN region, compared to 93.8% of people in Ontario.” The Globe and Mail story quotes NDP health critic Frances Gélinas as saying that part of the blame for health-quality gaps between the north and south lies with the Liberal government’s move to concentrate health services and surgeries in “centres of excellence” in big cities in the south.

To that, let me add the following anecdotal observation. Its not just centralization in the south that may be affecting access to health care in northern Ontario but also concentration of health services and facilities within the north’s few major urban centers themselves. Take the case of Thunder Bay since the new centralized hospital and new medical school were put into place over a decade ago, there has been a steady migration of health services and facilities to the area around the new hospital on the north side of the city. Indeed, even the Fort William Clinic is now technically in what used to be the old City of Port Arthur. Twenty years ago, hospitals, diagnostic facilities and clinics appeared to be much more dispersed across the city’s two north-south population clusters.

I would like to see a study of if there has been any impact on access to medical services and access particularly for those on the south side of the city to physician visits and diagnostic tests. Especially, how have seniors with limited mobility and lower income people on the south side continued to access physician appointments and tests. Do they have a higher rate of cancellation? Would the south side benefit from having an Urgent Care Access Center like the types that have been springing up in southern Ontario cities? Perhaps there has been no change but I would like to see some evidence based results because my gut feeling is that it is much harder to access care even in the north’s larger urban centers and the result is fewer people going to see doctors and getting tests. Moreover, those most likely to not make it to the doctor may be among more vulnerable populations. However, gut feelings are not enough to make policy. We need evidence.

Friday 14 April 2017

Economic News Around the North: April 14th Edition

Well, we are heading into the Easter weekend. Spring is a time of rebirth and who knows, after two decades of slow growth, perhaps the north's economy will finally resurrect itself in the third. On the other hand, Good Friday this year coincides with the anniversary of the sinking of the Titanic. Here are some of the stories that I felt were of economic significance for northern Ontario over the last week or so.

Gas prices soar in city. TbNewswatch, April 13th, 2017.

Well the price of gas has shot up again, just in time for a long weekend but it is a phenomenon that hit the entire province. If you want some insight on Canadian gasoline prices in general, there is an old post I did on gas prices on Worthwhile Canadian Initiative that also attracted quite a few comments that provided some interesting points. The long and short, in my opinion, prices are higher because the companies can get away with charging more. Price differentials across regions have converged over time and this may signify greater market power on the part of gas companies.

Alexander Henry one step closer to returning home. CBCThunderBay. April 11th, 2017.

There seems to be some support for relocating the former icebreaker Alexander Henry from Kingston to Thunder Bay's waterfront. In principle, this will be an excellent addition to the waterfront as it can serve as the core exhibit for a transportation museum. This might mesh in nicely with the plans for a grain museum which is being worked on by Nancy Perozzo's group. As well, there are plans to relocate the Thunder Bay Art Gallery to the waterfront also. When one looks at the restaurant development in the Waterfront area combined with the location of Magnus Theatre and the long-term plans to place an Events Centre in the area, one can finally see a substantial entertainment district coming into shape. The one caveat - customers and money. I know, presenting caveats and pros and cons does not go over well with local movers and shakers who prefer expressions of cheerful mindless optimism when it comes to economic development in the north but Thunder Bay's tax base is under stress and the city's population base and market size are limited. Can Thunder Bay become a tourism destination with its central Canadian waterfront marked as "The Mid-Coast?" Who really knows?

Thunder Bay taxi bylaw causes concern for council, taxi companies. CBCThunderBay. April 11th, 2017.

Getting a taxi in Thunder Bay is a ordeal. If you ever needed a taxi in the middle of a weekday afternoon on short notice, forget it as they are all engaged in "school runs". This is another example of how dependent even the private sector in northern Ontario is on public sector spending. I won't even get into trying to get a taxi at the airport or late on a weekend after an evening out or the price. Supply constraints have been very profitable for Thunder Bay taxi companies and by taking five years to re-write the taxi bylaws, Thunder Bay City Council has been aiding and abetting a cozy oligopoly.

Other Thunder Bay economic news:

First salty arrives in port. TbNewswatch. April 8th, 2017.

Grain shipments make for busy March at Thunder Bay port. CBCThunderBay. April 5, 2017.

Well, this has all been rather Thunder Bay centric to this point. In other news:

Sudbury loses 400 jobs in March. SudburyStar.com. April 7th, 2017.

Yet, things are going to get better as the Canada Revenue Agency has announced it is adding 543 full-time jobs to the Sudbury tax centre.

Council sets criteria for location of new events centre. CBCNewsSudbury. April 12th, 2017.

Sudbury appears to be moving forward at a rapid clip with a site selection team in place. However, four of the five members of the selection team appear to be directly related to Sudbury's municipal government with a consultant from PWC as the fifth. It would have been useful from an optics point of view to have a more arm's length group of experts. Apparently the criteria for site selection includes cost, economic impact and parking. In the end, it is all about weighting the criteria and if parking carries the biggest weight, then one should expect the greenfield site outside of the downtown as the final destination.

Here are some interesting items from North Bay.

Casinos siphoned millions from Sudbury, Brantford and Thunder Bay in 2014-15. Nuggest.ca. April 12th, 2017.

And in another tourism infrastructure related story. ..

North Bay city council votes to keep Dionne house. CBCNewsSudbury. April 5th, 2017.

The only surprise here is that the City of North Bay was actually considering giving the historically significant house to a group that was going to move it to a "pioneer village" project 70 miles south of North Bay. Why stop there, maybe they should consider moving it to Thunder Bay's waterfront - a nice plot of land between the yet to be completed hotel and the new condos?

And in the relentless and ongoing efforts to attract new business activity via marketing techniques....

Invest Sault Ste. Marie website launched. SaultOnline. April 6th, 2017.

Sault needs to find gaming 'sweet spot'. SaultStar.com. April 9th, 2017.

And in Timmins, this story about the mining sector.

Gold is the new economic driver for Ontario mining. TimminsPress.com. April 12th, 2017.

There were a number of interesting comments made. I was particularly intrigued by the Red Tape Challenge - an Ontario government consultation program for mining asking for input on what could be done to make the mining industry work better with government. Dealing with red tape by engaging in yet more consultation seems like a typically Ontario way to address questions of efficiency and regulatory barriers. However, with respect to gold as a driver, according to the president of the Ontario Mining Association:

“What has changed in Ontario in the last 10 years is that gold is now a larger contributor than nickel and copper. That’s new and it is a combination of the price of the commodities and the number of new discoveries of gold and the new investments around gold,” said Hodgson.

Have a nice long weekend.

NORTHERN ECONOMIST 2.0