Falling Use, Rising Price: A Modern Lament

This morning's Thunder Bay paper featured a municipal councilor lamenting that the new provincial cap-and-trade policy will add at least $375,000 to the City of Thunder Bay's energy bill.  According to the councilor: “It’s very frustrating because we reduce consumption substantially and then bingo, it’s gone.”  As the story notes, the city’s finance department in November projected the legislation will lead to a $200,000 increase to natural gas, $150,000 for diesel fuel and $25,000 to gasoline based on estimates of 3.3 cents per cubic metre of natural gas, 4.7 cents per litre for diesel and 4.3 cents per litre for gasoline.

Recent Economic News Around Northern Ontario

Here is a listing of some stories out in the north over the last few days of economic significance for the economy of northern Ontario and its residents.  Enjoy.

Economic Growth Minimal - The Chronicle Journal, January 11, 2017

Business for the Arts - Netnewsledger, January 12, 2017

Should Timmins Have a University? - Sudbury.com, January 12, 2017

Legend Boat gets FedNor boost - Sudbury Star, January 11, 2017.

Economists to Share Trump Ideas with Morneau. North Bay Nipissing.com, January 12, 2017.

In Wynne's world Ontario is just fine. January 8, 2017.

Rubicon goes back to the drawing board. Northern Ontario Business, January 10, 2017.

Foresters seek common ground on endangered species management. Northern Ontario Business, January 9, 2017.

Building Permits Down

Statistics Canada has just released its building permit results for November of 2016 and the numbers are down overall largely as a result of a decline in construction intentions in Alberta.  According to Statistics Canada:

In the residential sector, the value of building permits fell 1.6% to $5.1 billion in November, following three consecutive monthly increases. Declines were posted in four provinces, led by Alberta. The largest gains were posted in British Columbia and Quebec.  The value of non-residential building permits rose 3.0% to $2.6 billion in November, the fourth increase in five months. Higher construction intentions were registered in five provinces, led by Quebec and Ontario. The largest decline was reported in Alberta.

The interesting results are for Census Metropolitan areas as the value of building permits was down in 16 of 34 census metropolitan areas for the month of November.  Both of the major northern Ontario CMAs - Greater Sudbury and Thunder Bay - registered decreases in November from October at 61.6 percent in Thunder Bay and 5.9 percent in Sudbury.

When November 2015 to November 2016 is examined, over the course of the year Moncton registered the largest increase at 227 percent while Brantford saw the largest decrease (See Figure).  Over this same period, Thunder Bay saw a 49 percent decrease while Greater Sudbury saw a 19 percent decrease.

 

City Council Attendance: Another Look at the Numbers

Tbnewswatch ran a story on Thunder Bay City Council meeting attendance halfway through the 2014 to 2018 term.  There were a total of 147 open and closed meetings over a two year period and the number of meetings missed ranged from a low of 0 for Councillor Hebert to a high of 28 for Councillor McKinnon according to the numbers presented in a Table. Of course, comparisons are often more striking when made using a graph.

Some Fiscal Issues of Note

Budget deficits have once again reared their head as a major policy issue at the federal level which is somewhat amusing given that not too long ago, the projection was for a new age of persistent surpluses at the federal level.  Not only did the incoming Liberal government immediately begin running large deficits expected to continue until the early 2020s, but the forecast has worsened to an even longer run of  deficits.  The most recent projection by the Federal Finance Department says we are looking at deficits at the federal level until about 2055.  For my take on this, see here.

As for budgets, deficits and fiscal sustainability at the provincial level - well, Ontario is still not out of the woods yet.  Health spending is a big factor.  The province's Financial Accountability Office has just released a report on trends and outlook in the Ontario health sector.  Ontario is restraining health sector expense growth in an effort to balance its budget by 2017-18 but according to the FAO's review of the program changes introduced: "if the Province is to meet its 2016 Ontario Budget health sector expense targets, the Province will need to implement additional program changes that result in health sector expense savings of $0.4 billion in 2016-17, $0.9 billion in 2017-18 and $1.5 billion in 2018-19." The FAO also notes that the continuation of 2% annual average growth in health spending - which is what the government is currently doing - may be difficult to sustain beyond 2018-19 if service quality and level are not to be compromised.