NORTHERN ECONOMIST 2.0

Saturday, 11 August 2018

Building Permits Decline

Statistics Canada's most recent report on building permits shows that in June 2018, Canadian municipalities issued $8.1 billion worth of building permits, down 2.3% from the previous month.
The decline was the result of lower construction intentions for residential buildings, following a strong May. Multi-family dwellings accounted for the majority of the decline while the non-residential sector did see increases. The value of industrial permits rose 5.3% to $603 million, a third consecutive monthly increase. The industrial permit gain in June was largely the result of a few high-value permits issued for agricultural and manufacturing buildings in Ontario.

When the results are examined on an annualized basis - that is June 2017 to June 2018, the total value of permits in Canada was down 5.6 percent with residential permits down 1.5 percent and non-residential down 12.4 percent. The biggest drop on the non-residential side was for institutional permits which fell 31.1 percent. When Canada's CMAs are ranked for the June 2017 to June 2018 period (see Figure below), the range is from a high of 202 percent for Moncton to a low of -72 percent for Regina.

With respect to northern Ontario, Thunder Bay saw a decline of 13.9 percent and Greater Sudbury a drop of 43,6 percent in the total value of permits. Even the GTA and central Ontario area saw a decline with Toronto down 16.5 percent and Kitchener-Cambridge-Waterloo down 46 percent.

Interestingly, despite the weakening in intentions for new construction, the unemployment rate continues to fare well. Statistics Canada also reported this week that the July unemployment rate in Canada was down to 5.8 percent with annualized employment growth. With respect to northern Ontario, Sudbury's unemployment rate (3-month seasonally adjusted moving average) fell from 6.8 percent in June to 6.6 percent in July even though its total employment fell from 80,500 to 80,400 jobs. Meanwhile Thunder Bay's unemployment rate fell from 5.1 percent in June to 5 percent in July while its employment level rose from 64,900 to 65,000.

Wednesday, 8 August 2018

Thunder Bay's Municipal Election Issues: A Brief List

With all of the candidates signed up and off and running, it is now time for the candidates running for municipal office in Thunder Bay to present their platforms and debate the issues they feel will define and shape municipal government here over the next four years. While no one can predict the future, there are a number of issues that face municipal government in Thunder Bay and will affect its ability to deliver public services. The role of municipal government is technically not to provide services to the public but to provide services to the owners of property. However, when said and done what the City of Thunder Bay ultimately does is provide public services to everyone.

First and foremost, municipal services need to be paid for and so a key issue is the long-term fiscal sustainability of municipal services in Thunder Bay. This of course then becomes tied to property tax rates, provincial grants and user fees – the three main sources of revenue. The City’s finances in terms of its credit rating are good though as I have noted before it is easy to be prudent when the ultimate budgetary insurance is simply raising taxes. However, given that there has been a gradual shift to the residential property tax base, the candidates will need to address how much more can the residential taxpayer bear in terms of increased tax rates especially when the tax rate increases have been accompanied by rising user fees for water. What can be done to make city services more cost-effective?

Second, there is the city’s social fabric within which we can include crime rates – particularly homicides – as well as the homeless population, racism, poverty and the growing use of food banks. The social fabric of Thunder Bay is a crucial issue given its effect on both the quantity and quality of life for its residents. It is also an important issue from the prospect of attracting new investment in the city given the poor press Thunder Bay garners in major media outlets in the Toronto area. While there is reason for hope, at the same time continued hope requires action. How can we deal with our pressing social issues?

Third, is the issue of future municipal governance. Thunder Bay currently has a council of twelve plus a mayor with five of the councillors At-Large and the remaining councillors ward-based. We do need to have a conversation as to whether this is still the best institutional framework for municipal decision making. The At-Large/Ward hybrid harkens back to Amalgamation in 1970 as a compromise to deal with the need to make city wide decisions in the face of strong regional loyalties to the old municipalities and neighborhoods. However, it is not 1970 anymore and some thought should be given not only to having a smaller council - as a signal that there is a commitment to efficient government - but also one that is either all Ward based or all At-Large. As noted in an earlier posting, my preference would be for an all Ward based system.

Fourth, is the general issue of what I would broadly term city development but encompassing not only the city’s economy – about which City Council actually not do much about directly – but also its urban development, infrastructure development (I would include a new bridge over the Kam here) and demographics. Aside from providing an environment conducive to business via tax and regulatory policy and ensuring cost-effective and appropriate services and infrastructure, City Council cannot really turbo start the local economy. That is a function of national and international economic conditions and the demand for what we do here. Ultimately, what can we sell to the rest of the world from Thunder Bay? Tourism is one area where we can still do more as a city. However, we are also hampered economically by having a spread-out city that is costly to service with new housing developments springing up willy-nilly in outlying areas. However, we have made some progress in core-specialization with many government services in the former south downtown and a thriving cultural/arts/restaurant scene on the north side adjacent to the waterfront. We also face an aging population that is quite pronounced given that so many of our youth have left. While the First Nation’s population is young and growing, much work needs to be done to ensure they are equipped with the human capital necessary to maximize their economic potential and many of those tools are under the purview of the federal and provincial government. There are no easy or quick answers here but one hopes candidates have pragramtic and workable ideas.

Finally, I am somewhat cautious about bringing up the next point but feel that I should despite the fact it is the kind of thing that some candidates may latch onto and neglect the more important and difficult issues already covered. We can all recall the last municipal election when the debate was consumed by the Events Centre with all other major issues relegated to the sidelines. Still, I would be remiss if I did not mention that 2020 will be the 50^th Anniversary of the creation of Thunder Bay and we should give some thought to what type of events or projects we will use to commemorate Thunder Bay’s amalgamation in a manner that is positive and celebrates our potential. Again, I have had thoughts on this in the past but there may be other ideas out there.

So, without further ado. Let the campaign debates begin!

Wednesday, 1 August 2018

Explaining Thunder Bay's Municipal Election Candidate Growth

With over 101 individuals seeking municipal office for October's municipal and school board elections this October, the question that now comes to mind is why are there so many candidates seeking office? More importantly, why has this number been growing over time? After all, in 2000 only 76 candidates sought office. While there have been some ebbs and flows in numbers since then - there was another surge in candidates in 2003 - it remains that particularly since 2006, the numbers seeking the Mayor's job as well as an At-Large Council position have grown steadily. Yet the overall population of the City is flat.

Analyzing the Candidate Numbers: Thunder Bay Municipal Election 2018

The nominations are closed and what a difference an additional week makes. When you add up all the candidates, as of 5pm today there are now a total of 101 individuals running for office in Thunder Bay’s fall municipal and school board elections – up from 78 in 2014 – and a total of 61 running for City Council – more than the 51 of 2014. So, it would appear that despite changes to the municipal nomination process for the 2018 election – a shorter time period for filing to run as well as the requirement of 25 signatures of support – there are more than enough people who want to fill municipal office.

However, a closer examination of the numbers suggest that the interest is greater for the Mayor and the At-Large Councillors. Compared to the 2014 election, the number of candidates for Mayor is up from 6 to 11 – a 83 percent increase while the number seeking at At-Large position grew from 19 to 26 – an increase of 37 percent. However, those seeking a Ward Councillor position fell from 26 to 24 – an 8 percent drop. On the bright side, numbers for both the Lakehead and Separate Boards were also up from 2014.

Homicies Data Update: Thunder Bay Still Ranked First

Statistics Canada has just released the latest crime data report with the 2017 edition of Police Reported Crime Statistics. Overall, crime is up a bit in Canada. While there has been some improvement in Thunder Bay's ranking when it comes to crime severity in general, what is of particular interest of course especially to us in Thunder Bay is the homicide rate. According to Statistics Canada:

"After little change in 2016, the national homicide rate increased 7% in 2017, moving from 1.69 homicides per 100,000 population to 1.80. Police reported 660 homicides, 48 more than in 2016. The 2017 homicide rate was higher than the average for the previous decade (1.67 per 100,000 population for 2007 to 2016).

The increase in the national number of homicides was largely a result of the greater number of homicides in British Columbia (+30) and Quebec (+26).

With a total of seven homicides in 2017, Thunder Bay recorded the highest homicide rate among the CMAs for the second year in a row (5.80 homicides per 100,000 population). Abbotsford–Mission (with 9 homicides) and Edmonton (with 49 homicides) had the next highest homicide rates (4.72 and 3.49 per 100,000 population, respectively). Saguenay was the only CMA to report no homicides in 2017.

The attempted murder rate in Canada increased 4% from 2016 to 2017, to 2.25 per 100,000 population. A 25% increase in the province of Quebec was the main contributor to the overall national increase. This was due to the January 2017 shooting at the Islamic Cultural Centre of Québec. This incident resulted in six homicide victims and 40 victims of attempted murder."

I have done a number of posts on this topic over the years so its time to update some of the numbers. The two figures below plot the homicide rate (homicides per 100,000 of population) for Thunder Bay, Sudbury and Canada. The first figure is the raw annual homicide rate while the second figure plots a smoothed series which gives you a better picture of the longer term trends. Annual numbers tend to have a lot of variation and you really should not base analysis or policy on one or two years of data. However, based on the smoothed series (LOWESS Smooth using a 0.8 bandwidth) you can see the picture that emerges here over the longer term.

While the homicide rate in Thunder Bay for 2017 is down from the previous year at 5.8 versus 6.6 homicides per 100,000, the long term trend in one of increase. The annual un-smoothed data suggests the upward trend began circa 2008-09 while the smoothed series suggests that it has been a 21st century phenomenon with the rise starting approximately around 2000. Thunder Bay's homicide rate has diverged from the national trend which has been one of decline.

This is certainly one issue for the Fall 2018 municipal election.

NORTHERN ECONOMIST 2.0