In Thunder Bay, A Plague of Plumbing Problems is Not a Municipal Priority

 

It would appear that Thunder Bay City Council is still maintaining its cone of silence regarding the plague of plumbing problems that have afflicted numerous homeowners, not to mention businesses and other institutions in the city.  Residents are growing increasingly frustrated by the silence in light of evidence that hundreds if not thousands of households across the city have been hit by leaks in their indoor copper plumbing and in many cases leaks in their city connection line to the water main.  The expense for some homeowners is running in the tens of thousands of dollars including the hundreds of dollars in fees that the City is charging to shut off and turn back on water at the shutoff valves in order to effect repairs.

 

Thunder Bay has had a long history of water system and supply issues and this is the latest installment in what is going to be a very expensive saga.  Given that these issues have emerged in the wake of the addition of sodium hydroxide to the water supply to combat lead pipes affecting about 8,700 residents in older neighborhoods, the reluctance of the City to comment is understandable.  Correlation is not necessarily causation, but the timing of the leaks in the wake of the sodium hydroxide addition is more than suspicious. On the other hand, there needs to be some public effort made to deal with the problems and the business as usual approach of the City and the accompanying silence of the mayor and councillors is not what our government should be doing.  We do not elect our politicians to ignore us.

 

The Mayor and Council are our elected representatives and their silence in what are now twin pandemics – COVID and the plumbing plague – essentially is leaving many of us on our own to deal with these issues while they pursue business as usual.  Indeed, this week the Mayor apparently lobbied the provincial government on community needs that included: Bombardier, operating funding to offset 2021 COVID-19 costs and lost revenues, infrastructure funding, and funding for additional hires for long-term care and to cover increased costs associated with COVID-19.  Nowhere was there public acknowledgement during this “important opportunity to advocate for our community” of the woes of so many local homeowners and residents.  The public needs to know that their municipal government is looking out for them and it becomes apparent that they do not have our back – unless it is to use it to carry the load of increased taxes to fund their priorities.

 

It would help immensely to know if there is anything we can do as homeowners to preemptively deal with the leaky pipe problem.  Are some neighborhoods affected more than others?  Is it a function of the age of your homes?  What signs should we be on the lookout for to catch the problem early? Are houses near corners more susceptible as some observations suggest?  Is proximity to pumping stations a factor in terms of water pressure or the amount of sodium hydroxide that was released? Instead, we are left with cobbling together evidence from rumor and social media of which the most important contribution to date is a Facebook page under the title of the Thunder Bay Leaky Pipe Club that now has nearly 700 members.

 

In the absence of publicly available evidence from the City in terms of incidence and distribution, we are left to our own devices.  For example, based on the above Facebook Page discussions it would appear that the leaks are occurring all over the city, even in newer subdivisions such as Parkdale.  However, there are particular concentrations in Northwood, River Terrace/Fairbanks, John Street and Valleywood areas. Indeed, a drive down James Street in Northwood a few weeks ago suggested that there was either a lot of landscaping being done or there has been a veritable plague of leaky pipes.  In the River Terrace neighborhood off John Street – a subdivision of about 200 homes – based on the dug-up lawns and the neighborhood stories – there have been 40 homes affected. 

 

That is a 20 percent rate.  There are about 50,000 private households in Thunder Bay which suggests that this problem may eventually affect 10,000 property owners. True, extrapolating from one subdivision of 200 to the entire city is not good science but given the absence of any official information it is the only analysis we can do.  In the absence of numbers from the City as to how much of a problem this is, we are left to wonder who is going to be next and how much it is going to cost.  Not only are most of us working from home during the COVID-19 pandemic, but now we also have to worry that we will be flooded out and hit with a ten-thousand-dollar bill.  As if there were not enough mental health issues in Thunder Bay.

 

So, here it is.  In Thunder Bay right now, based on the homicide rate, you have about a 7 in 100,000 chance of being murdered – in percent terms that is just over one-half of one percent.  if you get COVID-19, you have about a 1 percent chance of dying from it given the numbers to date – 109 cases and 1 death.  However, if you own a home in Thunder Bay, you have a 20 percent change of leaky pipes occurring and a plumbing bill that can range anywhere from a few hundred to many thousands of dollars.  Why is this not a priority?  How the Mayor and Council can still look at themselves in the mirror in the morning is beyond me. 

 

 

The Empire Ascends: Pax Canadensis and the Threat to China

 

The public pronouncements of Chinese diplomats on Canada-China relations have become quite interesting of late.  In marking the 50^th anniversary of the establishment of formal relations between China and Canada (which incidentally was instrumental in getting China recognized by other countries and ultimately helped get China where it is today) Canada’s Prime Minister Trudeau remarked on the current strains on relations between the two countries – namely the Meng Wanzhou and Kovrig/Spavor affairs.  

 

This came on the heels of Bob Rae’s remarks at the United Nations in response to China’s claims that Canada was “bullying” Beijing by refusing to release Meng Wanzhou. Rae’s response was not the usual polite and timid mutterings of diplomatic nothings that the Chinese government has come to expect from Canada and its politicians and diplomats.  Rae essentially said: “When you say that a country of 35 million people that we are somehow bullying a nation of over one billion, one of the great superpowers of the world and they have chosen to treat these two Canadian citizens in this way, this is something that we shall never forget.”

 

Well, good for Bob Rae.  Since the Meng Wanzhou affair began, China’s ambassadors in Ottawa have used ominous threatening language and the Chinese government has used trade as a punishment by reducing its canola imports and halting pork and beef imports for a while.  However, apparently, we are the bullying nation.  One wonders what the point of such language is on the part of China’s government representatives in Ottawa and New York?  Is it an attempt at mockery or humour?  Does President Xi Xiping really believe that Canada is bullying China?

 

Or is there something more here?  I recall an old  story my father used to tell me about a man who went to his doctor because he had a phobia about chickens.  The man believed the chicken might eat him.  The doctor explained the absurdity of this in calm measured terms and convinced the man that he was indeed not a mere grain of corn that the chicken might eat but many times larger and indeed a threat to the chicken.  The man appeared to accept this, calmed down and prepared to leave but as he was leaving turned and said: “I am still worried. You are right, I am many times larger and not a grain of corn, but does the chicken know this?”

 

China’s behaviour on the world stage seems driven by extreme insecurity.  While it is now the second largest economy in the world and has become a major world player, it still smarts from past injustices and when backed against a wall reverts to old diplomatic language and behaviour.  It still sees itself as a developing economy with a past marked by western colonialism despite the progress it has made and does not understand why it is not always getting its way.  Canada not doing exactly what it says is somehow being seen as a loss of face and not a problem to be solved given Canada’s position between China and the United States.  That is the most charitable explanation of its behaviour. 

 

Aside from the uncharitable explanation that China really is a mean self-centered bully is the off the wall possibility that the Chinese government truly believes it is in a parallel universe where Canada is a huge imperial power.   Canada has foisted a Pax Canadensis on the world backed by the force of its arms.  In this mirror universe straight out of a Star Trek episode, the evil Canadian empire that arose on the ashes of the British and American regimes now encircles the globe with colonial possessions right up against China’s borders and is trying to keep China from asserting its rightful place in the world.  Its flag of crossed swords is the ultimate symbol of bullying diplomacy and its arrival on your shores heralds the onslaught of red coated Mounties directing your traffic and polite bilingual bureaucrats overseeing the construction of hockey arenas and Tim Horton’s franchises. A Pax Canadensis indeed.  The world should be so blessed.

 

Whether China is psychologically insecure or simply misguided does not matter.  Neither bode well for a peaceful and stable world future.

 

 

Homicides in Hamilton: Is Hamilton Becoming the Next Thunder Bay?

 

There have been a number of high-profile homicides in Hamilton and surrounding parts over the last few months with an estimated 12 homicides to date in Hamilton alone.  With nearly three months to go, 2020 is shaping up to see Hamilton’s largest homicide total since 2013 when there 15 homicides.  This inevitably sparks comparisons to other urban centres and Thunder Bay inevitably comes to mind because of its recent issues with homicides, but also because in many respects, the two communities share similarities.

 

Hamilton and Thunder Bay are both “lakeheads” with Hamilton at the head of Lake Ontario while Thunder Bay is at the head of navigation on Lake Superior.  They both have histories as gritty industrial towns, saw the shedding of middle-class industrial jobs and several decades of economic hardship, and have social and poverty issues with segments of their populations.  Both have had issues with inequality, racism, and the lack of housing for marginalized and homeless people.

 

However, there are also major differences.  Hamilton is a larger urban centre clocking in at over 500,000 people whereas Thunder Bay hovers at about 120,000.  Hamilton’s population has been growing over the last two decades while Thunder Bay’s has not. Hamilton’s economy has also been undergoing a substantial period of economic rejuvenation that has been creating jobs and investment.  Building permits have been up three years in a row and Amazon recently announced a new distribution centre on the Mountain creating 1500 new jobs.  Hamilton’s downtown is booming with construction projects.

 

Prior to the pandemic, the Conference Board for 2020 projected strength in non‐residential construction, in professional services, and in the finance, insurance, and real estate industry and expected real GDP growth of 1.7 per cent in Hamilton in 2020. The projection for Thunder Bay by comparison was for growth by 0.7 per cent in 2020, with only modest growth in the manufacturing and construction sectors.

 

But coming back to the main event, is Hamilton going to supplant Thunder Bay as the murder capital of Canada? Figure 1 plots the total annual number of homicides in Hamilton and Thunder Bay over the period 1981 to 2020 as obtained from Statistics Canada (1981 to 2018) and from media reports to date for 2019 and 2020.  Being a much larger city in terms of population, Hamilton can be expected to have more homicides, but the gap has narrowed over time.  In 2012 and 2014, Thunder Bay actually managed more homicides than Hamilton.  Moreover, when a linear trend is fitted to the data, Hamilton has shown a distinct downward trend over time while Thunder Bay has shown the opposite.

 

 

 

The difference in the scale of the problems facing the two cities is even more apparent when homicides per 100,000 of population are examined in Figure 2.  From 1981 to about 2007, the two cities track each other with a downward trend though Thunder Bay often exceeds Hamilton once homicides are adjusted for population size.  However, there is a strong divergence after 2007 with Thunder Bay’s homicide rate soaring while Hamilton’s essentially flatten out based on the trend line (which is a polynomial fit this time to take into account the U-shaped nature of Thunder Bay’s data). Indeed, the estimated homicide rates for 2020 to date per 100,000 population are 2.1 for Hamilton and 6.8 for Thunder Bay.   

 

 

 

It would appear that Hamilton is nowhere near wresting away Thunder Bay’s crown as the murder capital of Thunder Bay this year. Of course, one wonders if policing resource difference is factor, but that will be another post. Stay tuned and stay safe.

Is Ontario Really Flattening the Curve?

 Well, Ontario's Premier has apparently stated that Ontario is flattening the curve but one wonders where this interpretation of the data is coming from.  As the accompanying figure illustrates, the trend smoothing line is on a definite upward trajectory even if the cases over the last few days have hovered in the 500 to 600 range.  It remains that we are in the midst of a second wave of infections given that hospitalizations have also been trending up since mid September.  So, this does seem to be a pretty upbeat assessment that appears to be at odds with the evidence to date.

Most of the more recent cases appear to be affecting those under age 40 and this explains why deaths and hospitalizations have not soared as previously but again it remains that infection rates are especially high in low income neighborhoods.  As well, quite a number of long-term care homes in Ontario are also seeing infections but then that is not a big surprise given the odd protocol that keeps residents safe by requiring family members to gown and mask up after a negative Covid test to enter the home but then allows family members to take residents out for the day and literally go gallivanting around town if they wish without a Covid test.  One wonders who in Ontario's health ministry dreamed that one up.  But then, consistency has never been a hallmark of Covid regulations issued by the government.

 

 

To be fair, the rising infection rate is ultimately not really the government's fault but the public's.  Infections are up and so the government response is to appear to be taking action so they tighten the rules and restrictions.  However, the only people that seem to follow the new rules were those following them already while those who were disregarding them continue to do so.  We live in a society that is not really used to rules and restrictions of any kind.  We are relying on common sense and a sense of responsibility to reduce the infection rate but the fact is many people feel that the rules apply to someone else - which is ultimately behavior that can be traced back to our political leaders who say we should do one thing but then privately make exceptions for themselves. And then of course, there are the people who think they are following the rules even when they are not and have convinced themselves that they are and say one thing while doing another.  It would appear that we are all politicians at heart.

A Primer on Recent Municipal Finance for Thunder Bay City Council

 

Well, it is going to be another fully packed agenda at the meeting of Thunder Bay City Council on Monday October 5^th.  There is the usual plethora of reports and decisions to go through most notable of which are yet another vote on the proposed Thunder Bay sign and a report on Thunder Bay’s Centennial Botanical Conservatory recommending substantial re-investment in the facility.  Of course, this is contrary to what was recommended in the program and service review which recommended closing it.  

 

For those of us of a certain vintage, we are able to remember that the Botanical conservatory project was a Canadian centennial year project in 1967.  It has provided an oasis of greenery during harsh winters here but over the years was allowed to deteriorate to the point where it seemed the facility was on the chopping block. Thunder Bay in general likes shiny new things and once acquired, tends to neglect them.

 

However, it appears it will be saved after all and the estimated costs for updating facilities at the Conservatory prepared by Gord Wickham, Vice President of Colliers International Projects Leaders sums to about $951,000 and not the estimated $2.8 million to $3.2 million originally stated.   Of course, given that the new turf facility will sum to over $50 million by the time it is done, just under a million dollars is  a modest amount to invest for a city with a tax levy pushing $200 million annually and growing by about $6 million a year.   

 

The art of good municipal public finance is making decisions that represent good use of taxpayer dollars and reinvesting in the Conservatory would be a good 50^th anniversary project for the City given it also rebuilds something that was built in commemoration of the 100^th anniversary of Confederation.  Two birds with one stone so to speak in a city with a lot of targets and not enough stones.  More to the point, it is something that would not exist without public sector investment – unlike a turf facility for which there are qualified private investors who would have built on their own but now do not wish to compete with the city.

 

Of course, not on the agenda is the recent Fraser Institute report on municipal spending and finances in Canada authored by yours truly but also worth a read by the councilors as it represents a nice primer on the forces driving municipal spending.  Local Leviathans: The Rise of Municipal Government Spending in Canada, 1990-2018 argues that Canada’s municipalities have increased their spending and employment over the last two decades while maintaining that they are fiscally challenged. Between 1991 and 2018, total real local government revenues in Canada grew from $107 billion to $186 billion—an increase of 74% while real per-capita total revenues have grown from $3,831 in 1991 to $5,024 in 2018—an increase of 31%. Total real property-tax revenue in 2018 dollars grew from $42.2 billion in 1991 to reach $71.7 billion by 2018—an increase of 70%. Meanwhile, revenue from government grants grew from $48.7 billion to $80 billion for an increase of 64%, while all other revenues grew 107%—from $16.6 billion to $34.4 billion. Thus, own-source revenues of one type or another saw the most robust growth.

 

The increase in operating spending is driven by several factors. Growing revenues from property taxes, intergovernmental grants, and the sales of goods and services are positively related to rising per-capita municipal expenditures. Essentially, one can argue that municipal spending rises to fill the revenues available. Moreover, on the cost side, increases in the number of municipal employees coupled with their pay rates is also a positive driver of rising municipal spending.

 

This suggests that municipalities in Canada for the most part have increased  their  spending  because  of  a  more  than  adequate ability to generate revenues to fuel that spending. The municipal wage rate and the number of municipal employees both are positive and significant determinants of per-capita municipal spending. As well, the size of the real per-capita municipal operating surplus is positively and significantly related to real per-capita property-tax revenues and real per-capita grant revenues.  Indeed, over the long term, municipalities have played an interesting game. They are required by provincial legislation not to run operating deficits and they have not only managed to balance their budgets but generate operating surpluses most years and potentially add to their reserves. Over the period from 2008 to 2018, the operating surplus for municipalities in Canada ranged from a low of 6.1% of revenues in 2014 to a high of 11.9% in 2017.

 

Given the significance of both municipal wage rates and employment numbers as positive drivers of spending and negative drivers of the operating surplus, it stands to reason that municipalities need to make more of an effort to address their spending. Only after such an effort, can it be reasonable for municipalities to request additional support from upper tiers of government or increased taxes from their own ratepayers. Municipal ratepayers and provincial and federal governments alike need to be cautious that the current COVID-19 crisis is not used by municipalities as simply an opportunity to finance a long-term enrichment of their spending.

 

Food for thought but I suppose many councilors are not that hungry.