The Decline of Saving

Most of us are aware that Canadian households have reached record levels of indebtedness over the last few years.  Household debt in Canada is now over $2 trillion and household debt to disposable income ratios in Canada are now at 170 percent.  Less discussed is what has happened to savings.  While low interest rates have been a factor in Canadians being able to carry substantially larger debt burdens, they have also been a factor in reducing the interest income from saving and as a result have led to a drop in the number of savers.

The Bank of Canada rate dropped from 6 percent in 2000 to 0.75 percent in 2015.  Over the same period, the total number of savers in Canada as reported by Statistics Canada from data compiled from Income Tax returns (Table 1110036 - Canadian savers, by savers characteristics, annually) dropped from 4,808,930 to 3,356,840 – a decline of 30 percent.  Over the same period, the median annual interest income of Canadians fell from $400 to $230, a drop of 43 percent.

The Northern Ontario Growth Plan: A Summary Evaluation

The Ontario government released the Growth Plan for Northern Ontario on March 4, 2011 in response to years of slow growth and economic stagnation in northern Ontario. In an effort to improve the economy of northern Ontario, 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.

After five years, it was worth examining key economic indicators to see what if any improvements have occurred with respect to the economy of northern Ontario.  After a series of posts examining employment, new investment spending, consumer and business bankruptcies and employment composition, what conclusions can be drawn?

Economic News Around the North: May 14th Edition

Well it has been a few weeks since I did an economic news round-up.  To start off, Happy Mother's Day to all the moms in northern Ontario and beyond! Here is a very brief sampling of some of the northern Ontario related bigger picture economic stories that caught my attention over the last little while.

There have been a few interesting items over the last few weeks.  To start off, both Lakehead and Laurentian universities will be looking for new Presidents as Dominc Giroux and Brian Stevenson nearly simultaneously announced that they will be moving on.  Both institutions are key components of the regional knowledge economy as well as significant economic engines in their own right and the choices made with respect to the next presidents will be critical to the region.

Lakehead University President Brian Stevenson to step down. CBC News. Thunder Bay, April 28th, 2017.

Dominic Giroux to leave Laurentian University for CEO's job at Health Sciences North. CBC News, Sudbury, April 26, 2017.

The actual role of a university president has become more difficult over the years given the increasing complexity of universities and the social and economic environments in which they operate.  However, the key roles remain threefold: vision, fundraising and community relations.  The day to day management of the university is generally delegated to sub-ordinates - or  should be especially  at larger places.  In the end, a successful university president must be judged on their leadership role in terms of providing a general vision of the university's role and articulately communicating it, raising funds - a difficult task in the limited economic environment of northern Ontario - and diplomatic service among  the many communities that the university serves ranging from alumni to business to government.  Good luck to the respective search committees!

Why Northern Ontario Should Worry About an Aging Population

The release by Statistics Canada of  a second series of data from the 2016 Census on age and sex, and type of dwelling shows just how much Canada's population age distribution has changed.  In 1851, 45 percent of Canada population was aged 14 years or less while only 2.5% was 65 years and older. In 2016, only 16.6 percent of the population was aged 14 years or less while 16.9 percent was aged grater than 65 years.  As noted in the release, for the first time Canada's population of seniors outnumbered its children (5.9 million seniors versus 5.8 million aged 14 years or less).  It is truly a new age.

When the results are examined by CMA, it turns out that large urban centers are younger than the national average.  Canada  had 16.9 percent of their population aged 65 years and over and 16.6 percent aged 14 years or less.  In terms of seniors, the largest proportions were in Trois-Rivieres (22.3%), Peterborough (22.2%) and St. Catharines-Niagara (21.8%) while the lowest where in the west: Saskatoon (12.8%), Edmonton (12.3 percent) and Calgary (11%).  As for those aged 14 years and below, the largest proportions were again in the west: Lethbridge (19.1%), Saskatoon (18.9%) and Calgary (18.8%).  The smallest were in Trois-Rivieres (14.3%), Kelowna (14.2%) and Victoria (13.1%).

The two northern Ontario centers of Thunder Bay and Sudbury were generally on the older side with Sudbury coming out slightly younger.  Thunder Bay ranked 8th out of 35 CMAs in the proportion of seniors (19.8%) and 32nd out of 35 in the proportion aged 14 years or less (14.6%).  Sudbury was 12th in the proportion of seniors (18.3%) and 25th in the proportion of children (15.5%). Needless to say, an aging population has implications for future economic growth and these figures suggest that northern Ontario - as represented by Thunder Bay and Sudbury - faces a future of continued slower growth.

Evaluating Northern Ontario's Growth Plan-Part V: Economic Diversification

This is the fifth 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.  My third post looked at new investment spending as measured by building permits and my fourth post looked at consumer and business bankruptcies as an indicator of economic health. In this fifth post, I will be looking at changes in the composition of employment between 2011 and 2016 as an indicator of diversification.

Measuring diversification can be a complicated issue.  Is a diversified economy one more reliant on services rather than primary industries - in which case we are already there as the bulk of employment in northern Ontario is service oriented.  Is a diversified economy one in which we are less reliant on resource extraction or on any one sector?  Given the growing reliance on public sector employment in northern Ontario one might argue we have become less diversified in recent years.  In short, any measure of economic diversity is bound to be imperfect.