The July 2019 Labour Force Survey was released by Statistics Canada yesterday and showed total national employment in July was down slightly (by -0.1%) while the unemployment rate moved upwards to 5.7 percent. What was also interesting was the year over year change in employment as it showed the last twelve months have seen substantial employment growth even if recent growth has slowed a bit. Seasonally unadjusted employment growth results showed an increase between July 2018 and July 2019 of 2.2% for Canada and 2.3 percent for Ontario. However, as the accompanying figure shows, when the rates are examined by economic region and ranked there is quite a difference in performance across the province.
The highest growth was for Kingston-Pembroke at 8.9% followed by the Ottawa at 4.2%. It would appear that eastern Ontario as a whole is doing quite well. The Kingston area is apparently seeing substantial residential and non-residential construction activity - including hospital and bridge construction - as well as an increase in food manufacturing. Next was Toronto at 3.4% and then nearby Kitcher-Waterloo-Barrie also at 3.4%. Lagging behind but still positive are Stratford-Bruce at 0.8% and Hamilton-Niagara at 0.6%. Thus, eastern and central Ontario edging into the Niagara peninsula have seen employment growth. The remainder - mainly Southwestern and Northern Ontario have not done well - seeing employment declines. The largest decline was London at -4.5% followed by Northeast Ontario at -2.6% , Muskoka-Kawarthas at -1.8%, the Northwest at -1.7% and then Windsor-Sarnia at -0.2%.
With respect to Northern Ontario, employment in the Northeast declined from 257,400 to 250,800 between July 2018 and 2019 while the unemployment rate rose from 6% to 6.8%. In the Northwest, employment fell from 107,800 to 106,000 while the unemployment rate rose from 4.9% to 5.6%. If there is an economic slowdown or recession in the offing, it would appear that it may already be underway in parts of Ontario.
Northern Economist 2.0
Saturday, 10 August 2019
Wednesday, 7 August 2019
Crime and the Economy: Are Low Interest Rates a Factor?
The most recent
set of crime statistics for Canada revealed that police-reported crime in
Canada, as measured by both the crime rate and the Crime Severity Index (CSI),
increased for the fourth consecutive year in 2018, rising 2%. The accompanying figure below further
reinforces the fact that after years of decline – a decline that stretches back
to the 1990s – crime rates are rising.
Of course, all of this begs the question as to why crime rates are
rising again after years of decline.
Explaining the drop in crime rates has been
a
source of some debate. The fall in
crime rates since the 1990s in Canada as well as the United States has been
attributed to a number of factors including new policing strategies, changes in
the market for illegal drugs, an aging population, a stronger economy, tougher
gun control laws and increases in police numbers. As for the impact of the
economy on crime, well that is also a source of debate.
On the one hand, the intuitive feeling is
that a weak economy should cause people to turn to crime. Yet, many studies of the relationship between
the economy and crime have found statistically small relationships between
unemployment and property crime and often no relationship between violent crime
and unemployment. It has also been argued
that economic downturns may actually reduce criminal opportunities as when unemployment
is high more people are at home "protecting" their property and
when out and about they carry less cash and possessions.
If the latter is the case, one could make
the argument that the strengthening economy of the last couple of years has
been a key factor in fueling the recent surge in crime. Unemployment rates in Canada are at historic
lows and to add fuel to the fire – so are interest rates. Low interest rates mean that even if more
employment today is part-time or uncertain, people are still able to consume more and
go out more simply by borrowing more. Indeed,
Statistics Canada also noted recently
that the seasonally adjusted household credit market debt to disposable income
ratio increased to 178.5 percent in the 4th quarter of 2018.
More debt to fuel spending on homes and
basic consumption frees up resources to spend on more illicit things like
illegal drugs and much of the recent crime increase is drug related.
With unemployment low and cheap money
sloshing around both fueling spending and consumption, the opportunities for
crime may have mounted. It is certainly a point worth considering.
Labels:
canada,
crime,
economy,
interest rates
Wednesday, 24 July 2019
Winston Churchill on Boris Johnson and Brexit
Boris Johnson is now the
United Kingdom’s Prime Minister and he has promised to lead the UK out of the European
Union by October 31st. He
insists that he can get the European Union to renegotiate the deal even though
the Europeans are adamant that the deal negotiated with Teresa May is a take it
or leave it proposition. And if they do
not renegotiate, then Johnson is also quite strident that Britain will leave no
matter what. As a result, all of this will likely lead to a quite disruptive and erratic
next few months as Britain and the EU try to sort out the remainder of Brexit.
Based on these positions,
it would appear that the outcome by October 31st is assured –
Britain will leave the EU without a deal and sail off on its separate way.
On the other hand, politics is a strange process with a lot of dramatic posturing and one could very well
see a new deal emerge. Or, in what could
be a really bizarre turn of events, Britain could very well stay in the
EU. Just as only Nixon could go to
China, only Boris could actually keep Britain in the EU.
Much of the discussion
of the entire Brexit issue has focused on how chaotic and disruptive it has
been and how damaging it is to Britain’s long-term economic and political
interests. However, there may be some
reason behind this madness if one is to take the writings of Winston Churchill
on foreign policy and extrapolate them to the present. In his first volume of his epic history of
the Second World War, Churchill writes the following:
“For four hundred years the foreign policy of England has been to oppose
the strongest, most aggressive, most dominating Power on the Continent, and
particularly to prevent the Low countries falling into the hands of such a
Power…we always took the harder course, joined with the less strong Powers,
made a combination among them, and thus defeated and frustrated the Continental
military tyrant…Thus we preserved the liberties of Europe, protected the growth
of its vivacious and varied society, emerged after four terrible struggles with
an ever-growing fame and widening Empire…Here is the wonderful unconscious tradition
of British Foreign Policy…Observe that the policy of England takes no account
of which nation it is that seeks the overlordship of Europe…it is concerned
solely with whoever is the strongest or the potentially dominating tyrant.”
Well, there you have
it. Britain’s elites and particularly those
in the Conservative Party appear to be - borrowing from the words of Keynes -
the unwitting slaves of some now defunct foreign policy prescription that
guided the rise to empire. Boris Johnson
and the Brexiteers do not view the dominant European power as Germany, France
or Spain but the grand project of European union and its bureaucracy in
Brussels is now the continental tyrant. By leaving the EU, they see
themselves as safeguarding the freedom of Britain and sowing disruption that
might lead to the eventual breakup of the EU.
Of course, one might
ask why they joined? Well, as the European
Project was coming together after 1950, it gradually became apparent that it
was not falling apart and would continue.
So, being on the inside would have been the best way to keep an eye on
things and steer things according to Britain’s interests. Indeed, being on the inside and “unconsciously”
provocative or disruptive could be seen as a potential policy direction given
hundreds of years of British foreign policy geared towards keeping Europe apart. Indeed, French President Charles De Gaulle’s
opposition to British membership can be viewed as a realization of this.
Why leave now? Well,
the “unconscious” hope was that given the strains the EU was undergoing in the
wake of the 2008-09 financial crisis and the migrant crisis, leaving now might
be the final push leading to its break-up.
However, the miscalculation here was that it is no longer 1789 or 1913
or 1939. It is the early 21st
century and Britain’s actions have interestingly enough galvanized the
Europeans at least for the time being into working harder to stay
together. Boris and the Brexiteers and
their “unconscious” policy formulation may backfire big-time.
Labels:
Boris Johnson,
Brexit,
EU,
UK,
Winston Churchill
Tuesday, 23 July 2019
Crime Statistics Update 2018: Thunder Bay Crime Rate Down 6 Percent
The Police-reported
crime statistics for 2018 from Statistics Canada are out.
The police reported crime statistics provide both the crime rates
and the crime severity index as well as more specific data on things like the
homicide rate. According to the report,
police-reported crime in Canada, as measured by both the crime rate and the
Crime Severity Index (CSI), increased for the fourth consecutive year in 2018, growing
by 2%. Despite the increase, the CSI was 17% lower in 2018 than a decade
earlier. Indeed, over the period 1998 to 2014, the crime severity index in Canada
fell rather dramatically – dropping by about 44 percent - but has now started
to rise.
The CSI increased in
two-thirds of Canada's largest census metropolitan areas in 2018, with the
largest increases in Windsor (+21%), Moncton (+15%) and St. Catharines–Niagara
(+15%). Breaking and entering was an important contributor to the increases in
Windsor and St. Catharines–Niagara, while fraud was an important contributor to
the increases in Moncton and Windsor. The largest decreases in the CSI were in
Belleville (-20%), Saguenay (-12%) and Peterborough (-10%).
The value of the CSI
was highest in Lethbridge at 137, followed by Regina at 126.6 and then Winnipeg
at 119.4. Thunder Bay ranked 8th
out of 35 on the level of crime as measured by the CSI index (See Figure 1)
while Greater Sudbury ranked 14th.
In terms of changes, Thunder Bay and Sudbury both registered an increase
in the CSI in 2018 at 9 and 5 percent respectively (See Figure 2) with Thunder
Bay reporting the 9th largest increase and Sudbury the 17th. Driving Thunder Bay’s increase in the CSI
were increases in breaking and entering; robbery; fraud; trafficking,
production and distribution of cannabis (pre-legalization); attempted murder;
and homicide. As for Sudbury, the
increase was driven by Increase in breaking and entering, and sexual assault;
and partially offset by decrease in child pornography.
So the long and short for Thunder Bay this year is that crime rates are down but the severity is high.
Labels:
2018,
crime statistics,
CSI,
sudbury,
thunder bay
Wednesday, 17 July 2019
So What's Up With Air Canada Service to Thunder Bay Now?
Air Canada’s
new three times a day with larger planes Rouge service from Toronto Pearson to
Thunder Bay seems to have become quite erratic over the last few weeks based on
some of the arrival times. The new
service began May 1st with a ceremonial greeting at the Thunder Bay airport using water cannon. However, the anecdotal evidence from conversations
with a few people suggests that there have some significant delays of up two
hours and sometimes more in recent weeks. This is likely
not due to adjustment to a new schedule as it has now been in place for several
months. One also suspects it is not an official part
of some type of preliminary celebration of Canada’s new air passenger protection laws.
In terms of
some specifics over the last week: Last Friday (July 12th), my in-laws were on
Air Canada 1512 which was supposed to arrive at 4:17pm and they arrived at almost
7pm. A flight earlier in the day also
had a substantial delay of several hours. On Sunday the 14th, AC8547 was supposed to arrive
at 11:02pm but did not show up until one and a half hours later. On Monday July
15th, the last flight of the day 8547 was only about a half hour
late. On Tuesday July 16th, AC 1510 due
at 10:17 am arrived at 11:40am while AC 1512 due at 4:17pm came in at 6:04pm. On Wednesday July 17th, AC 1512
was again late and at the time of this posting is supposed to be coming in at 6:42 pm.
Not sure
what is responsible for this service deterioration – it does seem like a pretty
bad on-time rate. In a discussion with one of my more well-traveled
sources, we hypothesized that part of the problem seems to be the fact that Rouge also
services international markets and some of these planes coming to Thunder Bay may be part of a chain with origins in the United States and the Caribbean. So, for example, the story is some of these
planes do runs for Rouge like say New Orleans-Toronto and then Toronto-Thunder Bay
or a Caribbean destination to Toronto and then Toronto-Thunder Bay. Small delays on the earlier international leg
then cascade into larger ones on the final leg into Thunder Bay. Another story
is that this may have something to do with the removal of capacity resulting
from the grounding of the Boeing 737 Max8.
Given that Rouge has larger planes – AC 1512 last Friday was a 270
seater – there may be last minute diversions onto other routes going on which complicate the schedule. Air Canada does claim in their messages to
delayed passengers that there have been “scheduling
issues.”
Of course,
who really knows what is going on here other than God and Air Canada. It would
be nice for Air Canada to acknowledge that they are having difficulties getting
to Thunder Bay on time with an explanation why and what they are doing to
address the situation. One expects that
passengers in Thunder Bay will have better luck getting an answer from God.
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