NORTHERN ECONOMIST 2.0

Wednesday, 12 July 2017

Thunder Bay's Crisis: Time to Move Forward

Thunder Bay often feels neglected by decision makers in Toronto as well as the national media. Indeed, it has sometimes been expressed that for Thunder Bay, bad publicity is better than no publicity at all as it draws attention to its needs. I disagree and am more disposed to the adage that no news is good news. Thunder Bay has been making the national media all too often over the last few months and the attention is not favorable. One really has to wonder why community leaders in Thunder Bay have not been expressing more concern about the issues spanning indigenous relations, institutional problems and social issues given the waves of negative attention.

One only has to take a look at the Toronto Star to see the spotlight that has been focused on Thunder Bay. Indeed, many issues appear to be getting more attention in Toronto and the national press than in Thunder Bay itself. The ultimate economic spillover on our community in terms of its potential as a good place to invest and do business is in serious danger. This is not good for the community and if you think I am exaggerating the potential negative long-term impact that this could have on the city's image and ultimately its economy, take a look at the list of stories that have appeared in the Toronto Star since early May. If you were an investor planning to open a business in Thunder Bay, a tourist thinking of visiting or a student planning to attend the university or college, how would you react to the following list of stories that mention Thunder Bay - just from the Toronto Star?

Economic Forecasts and the Impact on Northern Ontario's Economy: Overview and Assessment

Northern Ontario’s economy, with its traditional reliance on transportation and resource sector activities in the end relies on the international economy as a source of demand for its products. With that in mind, it is helpful to see what the latest forecasts are for the world economy and the potential impact on northern Ontario. FocusEconomics – headquartered in Barcelona – is a major international economic research and forecasting company that provides data and analysis on international economic indicators and produces economic forecasts and reports. It covers 127 countries, 12 global regions and 33 commodities. It recently released its July 2017 Consensus Forecast for major economies.

Airships to the Ring of Fire

One of the hurdles to the economic development of the chromite deposits in northern Ontario's Ring of Fire (along with commodity prices and complex negotiations with First Nations) is transportation access to the remote and geographically challenging region. While there has been talk of road and rail access, both of these options are quite expensive. Well, from the pages of the Winnipeg Fee Press comes an editorial that makes the case for an alternate approach -airships. An editorial in the July 3rd edition highlights the work of University of Manitoba professor Barry Prentice who has invested years of his time (and had to deal with some major challenges) in developing an airship prototype.

The Winnipeg Free Press editorial notes that the precedent for northern access using airships is being pursued in northern Quebec where a Quebec Company called Quest Rare Minerals is planning to use a fleet of seven Lockheed airships to transport supplies to its Strange Lake mine near Labrador as well as then carry out the ore. Needless to say, the applicability of the concept to transport in northern Ontario's Ring of Fire is obvious and I have made the case before. Even the House of Commons has apparently thought airships to access the north was an idea worth exploring. The case seems even more compelling now given the increasing fragility of winter ice roads in getting supplies into the north. The First Nations have also noted the possibility of airships as a potential approach as this piece by Chief Elizabeth Atlookan notes. Is this an idea whose time has finally come?

Tuesday, 27 June 2017

A Tale of Two Revenue Sources: The LCBO & OLG

With the aversion of a strike by Ontario’s LCBO workers, most of us will probably turn our thoughts to immersion in our favorite beverage as we move into the Canada Day long weekend. What the recent dispute should also spark is some introspection regarding the special importance of Ontario’s crown corporations – namely the Liquor Control Board of Ontario (LCBO) and the Ontario Lottery and Gaming Corporation (OLG) – as sources of Ontario government revenue.

Economic News Around the North: June 25th Edition

Well, I have returned from a rather lengthy set of travels. My trip home was via the scenic Highway 17 drive through Sudbury, the Sault and around the north shore of Superior to Thunder Bay. There is nothing quite like this drive in terms of the vastness of the land and the vistas of rocks, trees and highway. I had not done this drive in a number of years and perhaps because of the extra rain this year the landscape seemed a lot greener than I remembered it. The video link here shows a bridge crossing along the way (I was in the passenger seat doing the filming for those of you who might be concerned about my safety). Nevertheless, here are some of the economic news items that have caught my interest.

Well, there were a number of not so flattering stories dealing with Thunder Bay in the national media over the last few weeks but the economic news was somewhat more upbeat.

$23M from Ontario government for school upgrades. CBC Thunder Bay. June 19th, 2017.

Thunder Bay Sears Location to Remain Open. Tbnewswatch. June 22nd, 2017.

Thunder Centre shopping area to be sold to new owner. CBC Thunder Bay June 19th, 2017.

The Thunder Centre has got a new owner and despite Sears Canada's financial woes, the Thunder Bay store at Intercity Mall is to remain open - at least for now. Sudbury and The Sault were not as lucky. North Bay's store is also not closing.

As for the new school construction, it comes at the cost of some closures - rule of thumb in Thunder Bay based on this story is close three old schools to get one new one. While closing schools is one way of generating some new construction activity, in the end, there are only so many schools that can be closed. Eventually, to get new schools we will have to do it the old fashioned way - boost enrollment. Other northern Ontario cities also seem marked by the dynamic of out with the old and in with the new. In the Sault, the original St. Mary's College was demolished to make way for a new elementary school. One wonders when this dynamic will hit the school boards in Toronto. Curious to see when they will knock down stately old Jarvis Collegiate or UTS in order to build a shiny new building.

Also, in Thunder Bay tourism news, the decommissioned icebreaker Alexander Henry has left Kingston Ontario and is set to return to Thunder Bay to serve as a transportation museum on the waterfront.

In Sudbury, there seem to be a lot of projects coming to a head with respect to community infrastructure. A key debate is where to build the new sports arena - downtown or outwards.

Sudbury at a crossroads: build downtown or build outwards? TVO. June 23, 2017.

True north wants to convert downtown arena into arts centre. CBC Sudury. June 22, 2017.

Rainbow Centre makes pitch for Sudbury library, art gallery. CBC Sudbury. June 23rd, 2017.

New Casino in Sudbury depends on where city builds new arena. CBC Sudbury. June 14th, 2014.

In other potential infrastructure news from a natural resource perspective:

Noront looks for smelter landing spots in Sudbury, Timmins. Northern Ontario Business. June 20th, 2017.

New gold mine in Timmins by 2018: Gowest CEO. mining.com. June 4th, 2017.

In other news, North Bay's housing market is still doing well according to this source.

Meanwhile, for those of you that missed this, the June 1st provincial byelection in Sault Ste. Marie for the seat vacated by Liberal David Orazietti was won by a Conservative for the first time since 1981. A sign of things to come? Hard to say. The election is still officially a year away (though one might see a snap election called in the fall if the governing party feels confident) and alot can happen in a year. Stay tuned.

NORTHERN ECONOMIST 2.0