NORTHERN ECONOMIST 2.0

Monday, 14 March 2022

Thunder Bay Water Rates Still Climbing

Municipal ratepayers and property owners are most often concerned about increases in their property taxes. However, along with property taxes, there are also assorted fees and user charges that municipalities levy separately from property taxes which enable them to in a sense deflect from the increase in municipal property tax burdens on homeowners given that combined numbers are rarely if ever provided. Chief among those user fees in most Ontario municipalities is of course water and sewer/wastewater rates. The 2021 BMA Municipal Report provides an opportunity to look at recent levels of water and sewer rates as well as their recent growth. The levels are for an average residential household and a comparison is provided for 2015 and 2021.

As Figure 1 illustrates, the highest water rates in 2015 for 28 major Ontario municipalities are for Sudbury, Windsor and Thunder Bay and they range from $1,278 for Thunder Bay to $1,403 in Sudbury. At the bottom, are Timmins, Mississauga and Brampton which range from $590 for Brampton to $680 for Timmins. In the case of Thunder Bay, if you are an average bungalow and already paying nearly $4,000 a year in residential property taxes, the water and sewer rate is an additional 30 percent on top of your property taxes.

Figure 2 plots the average annual growth rate of water and sewer/wastewater charges in these same cities over the six years from 2015 to 2021 and also ranks them from highest to lowest. Whereas Thunder Bay is nearly at the top in terms of the level of the fees, it is mid ranked in terms of the growth rate since 2015 at about 3.6 percent annually. But then, over the period 2005 to 2015, Thunder Bay ramped up its water charges at an average of 9.5 percent annually - thereby bringing it up to the top of the level of charges in Figure 1. The current fastest growing eater charges are in Sudbury, Mississauga and Brampton while growth is currently the lowest in Niagara Falls, North Bay and Timmins - the latter two which have apparently seen a reduction in water rates. Mississauga and Brampton are of course currently at the bottom of the ranking in terms of levels and their infrastrucure is likely undergoing a catch up process given the rapid growth in both these cities.

In Thunder Bay, one does not expect water rates to decline anytime soon given the numerous water related issues that have plagued the city over the last decade ranging from massive flooding of the new water treatment plant about a decade ago combined with widespread flooding across the city as well to the current leaky pipe debacle affecting thousands of homes. In the end, both of these fiascos have generated lawsuits on the part of affected parties which if successful will generate costs for years to come.

Wednesday, 9 March 2022

Thunder Bay Gas Prices: Higher Than You Think

The current spike in gasoline prices has brought prices at the pump to the highest they have ever been. In just over a week, the price per litre in Ontario has jumped nearly 25 cents and is hovering in the $1.80 a litre range in many places. In Thunder Bay, the price briefly touched the $2 a litre mark at several gas stations but has since settled to about $1.95 a litre. This spike is an exuberant uptick that is part of a long upward trend in prices which in recent years has been reinforced by new carbon taxes.

The accompanying figure plots the monthly price of regular unleaded gasoline at self-service filling stations for Thunder Bay, Toronto, and Ottawa over the period 1990 to 2022. The data up to January 2022 is from Statistics Canada while the last two months are calculated from a gasoline price website. All three series track together quite closely. Prices were flat in the just below 60 cent a litre range for most of the 1990s and then underwent a significant ascent to Spring of 2008 when they came down. Since then and until the start of the pandemic prices have gone up and down together in all three cities bouncing between 80 cents a litre and just over $1.40 but were most often at $1 or more a litre. The pandemic saw another drop in gas prices back to the 80-cent level and then recovered back to the $1.40 range. The current spike is quite evident for all three cities at the far right of the chart.

While the graph shows Thunder Bay’s gasoline prices nicely tracking the other two cities, the scale of the diagram masks the fact that the differential between Thunder Bay gasoline prices and that of the other two cities has grown over time. During the 1990s, the average price per litre in Thunder Bay was about 4 cents higher than Toronto and 3 cents higher than Ottawa. During the 2000s and the 2010s, the price in Thunder Bay average 5-6 cents more than Toronto and about 7 cents a litre more than Ottawa. For the pandemic period of 2020 to 2022, Thunder Bay’s price per litre has averaged 11 cents more than Toronto and 12 cents more than Ottawa.

Notwithstanding the demand and supply shocks of the international energy market, the price of gasoline in Thunder Bay has gradually grown faster than that of the other two major Ontario cities in the Statistics Canada gasoline price data set. Moreover, that differential has spiked since the start of the pandemic. Why? While no doubt local gasoline purveyors will argue that it has to do with rising costs and supply chain issues, the reality is that casual observation over the years reveals that over the last decade the number of gasoline retailers in Thunder Bay has shrunk considerably. While that has been a process underway in many cities, it is particularly noticeable in Thunder Bay now as the relative lack of competition has allowed prices to be higher than they otherwise need to be.

Monday, 28 February 2022

In Person or Not in Person: That is Not Quite the University Question

The pandemic saw the rapid unrolling and implementation of mass online learning at the university level with a varied suite of tools including Zoom. Of course, the growth of online learning had been underway for some time but it was the pandemic that provided the opportunity for mass diffusion of both the techniques and the technology. My personal recollection at my own university in the years leading up to the pandemic was a general pressure to put all materials online as well as offer more online options for students in order to accommodate their “needs” and “busy schedules” so as to encourage or maintain enrollment by offering flexible learning options.

Oddly enough, the year of the pandemic, I had decided to try out two courses with web based course options – the modern equivalent of what I suppose used to be called a correspondence course – and lo and behold as fate would have it, I had to do everything online. I offered self-directed learning options with Zoom weekly tutorial interaction. In the end, I liked it more than I had imagined. Moreover, I found out that more students were able to take the more esoteric offerings I taught such as Canadian Economic History and History of Economic Thought. Indeed, the registrations in those courses doubled and tripled given that in previous years course conflicts limited the number of students that could take those courses. And, the flexibility of schedules did not hurt me either allowing for a lot more opportunities for attending online seminars around the world as well as more research activity.

Now it is true, that I still like in person teaching. The in person class I taught this fall was quite enjoyable and the attendance unlike other years of in person teaching was high and constant because the students who took the in person course I taught wanted to be there in person. Those that did not took the online courses. Which brings me to my point, the insistence of many universities – including my own – that next fall will be one hundred percent in person. Indeed, they are even insisting that a certain proportion of these in person courses be scheduled as night classes. I guess the current surge in inflation is not the only throwback to the 1970s. Given the push to online of the pre pandemic decade, such an insistence seems odd not the least because the students themselves are divided on the issue.

While some students want more in person teaching, many others want continued online to accommodate schedules that include part time work. The impact in enrollment from mandating one hundred percent in person classes is uncertain to say the least. Indeed, I can already hear my administration lamenting next year that my own courses are undersubscribed after the drop from the pandemic levels which will occur by their insistence on a return to a more inflexible scheduling system that generates more student course conflicts that prevent students from taking my courses.

I can understand why universities are maintaining they want more in person because in the end for universities it really is all about the money and ancillary revenues from parking fees, residences and campus restaurants and pubs are down dramatically. Yet, annoying a large chunk of the student body by insisting on one hundred percent in person attendance to fill up residences and cafeterias will probably erode enrollment also affecting revenues. This may be why universities while proposing one hundred percent in person classes really intend for a hybrid option in which you lecture to students in person while recording the lecture for those unable to attend.

However, hybrid class delivery requires substantial investment in classroom lecture capture technology to do properly. Moreover, in implementation what a hybrid class will likely result in is voluntary classroom attendance with everything else online – including evaluation. After all one cannot realistically have some students writing online tests and other in person at the same time and still have a level evaluation playing field. In the end it will all revert to the lowest common denominator. I personally am not looking forward to having a class of one hundred students in which by mid-term the attendance zeros out so that I have to talk to an empty room while recording. If I have to do that I may as well do everything via Zoom.

So, what is the solution? Good question. For what it is worth - and I have learned what I have to say seems to be worth little in a world where everyone’s mind is made up in advance - I think there will need to be a mix of in-person and online options for students. The in person class will be in person – no recording of lectures and no online evaluation. The online classes will be a blend of approaches and will include web based courses, Zoom type lecture courses and hybrid courses. Yes, in the end, a hybrid course is really only an online course with voluntary classroom attendance offered as a compromise that allows university administrations to pretend they have their cake and can eat it too. I think universities should aim to make sure students take about half their courses in person and the other half can be some form of online option.

Why is having a large chunk in person important? In the end, students need to experience a traditional lecture environment because a lecture, just like a performance of Macbeth, is quite different whether it is done as a live production or whether it is a film. Moreover, students need to interact socially with other students as well as their instructors as part of the learning experience. If students do not get to know their instructors and their instructors know them, how will they be able to get proper letters of reference and recommendation when the time comes?

As for the mix of what courses are online and what are in person, that is best left to individual departments and their faculty members to decide. Universities should set the broad parameters of what the blend should be but allow departments and faculty members the flexibility to determine the precise blend based on their experience of what works and what does not work. In the age of personal experience, technology and flexible tailoring of options to suit one’s needs and expectations, micro managing is something that belongs to the age of dinosaurs.

Tuesday, 15 February 2022

COVID19 Update for Ontario and Thunder Bay District

Reported COVID19 cases in Ontario are falling as are hospitalizations . The current wave of COVID19 appears to be in decline in the province as a whole with today seeing 1,593 cases reported. As Figure 1 illustrates, the fifth wave has been the largest in terms of cases report with the first and forth waves receding into practical insignificance relatively. Relative to the number of cases, the mortality rate from COVID has dropped during this fifth Omicron wave. At the same time, the absolute number of deaths are the largest yet as Figure 2 illustrates, and while recent days have seen a drop in numbers, the LOWESS smooth suggests that a drop is not yet underway. Ontario is moving into a relaxation of COVID protocols starting March 1st which makes sense given the drop in cases as well as the effective mortality rate. From January 2020 to August 31st 2021 there were 9511 deaths and a total of 566,719 cases for an effective death rate from COVID19 of 1.7 percent. From September 1st, 2021 to the present there were 509,679 recorded cases and 2,599 deaths for a mortality rate of 0.5 percent. Thus, the mortality rate if you get COVID-19 based on these statistics has fallen by two-thirds.

In the Thunder Bay District, things seem a little different in terms of cases. As Figure 3 shows, there is no decline yet in the current wave. Numbers are still trending up and why this is occurring is something that the local public health unit has not shed too much light on. Some of it is definitely spread in institutional settings but the disturbing aspect is that while hospitalizations are going down in the rest of the province, they are staying pretty much level in the Thunder Bay District. On the bright side, this current wave has not generated an absolute number of deaths (Figure 4) greater than the earlier waves as is the case for Ontario as a whole. On the other hand, there is a slow and gentle upward trend in deaths at the moment.

Needless to say, Thunder Bay is lagging at present in its COVID19 performance and the reasons for it are unclear at least to those of us in the general public at large. While Ontario as a whole seems ready for the relaxation of protocols effective March 1st, Thunder Bay is not. On the other hand, it could be that Thunder Bay as a whole has become much more relaxed with respect to its attitudes towards COVID19 already thereby generating the different trend. Perhaps, Thunder Bay is already providing a picture of what an endemic phase to COVID19 might look like.

Wednesday, 9 February 2022

Northern Ontario’s Population Growing But Performance Is Mixed

The 2021 Census detailed population results have been released and they show that Canada has been undergoing robust population growth that exceeds that of the other G7 countries. According to Statistics Canada: “Approximately 1.8 million more people were calling Canada home in 2021 compared with five years earlier, with four in five of these having immigrated to Canada since 2016. Although the onset of the pandemic slowed population growth from a record high in 2019 (up 583,000 or +1.6%) to its lowest growth rate in a century in 2020 (up 160,000 or +0.4%), Canada's pace of population growth remains the highest in the G7.” Indeed, since 2016, Canada’s population has grown 5.2 percent while Ontario’s has grown by 5.8 percent.

The results for northern Ontario are intriguing given that the long-term propensity in the north has been towards a relatively flat population. After the decline of the 1990s, population in the region stabilized but since 2016 the overall population has also grown albeit at a much lower rate than the rest of the province and the country. Moreover, the growth performance is uneven with some parts of the north seeing increases and others declines. Figure 1 shows the population by northern district as well as regional agglomeration. The north grew 1.2 percent since 2016 – well below the Ontario and Canadian population growth rates.

The northwest saw relatively restrained growth at just over one-fifth of one percent. Within the northwest, Rainy River saw a decline of 3.4 percent while Thunder Bay district and Kenora district saw increases of six-tenths and seven-tenths of a percent respectively. Most of the growth in the north’s population is coming from the northeast which grew 1.6 percent. Even there, there are some differences ranging from lows of -2.6 and -2.2 percent in Timiskaming and Cochrane while Parry Sound saw a 9.5 percent increase, Manitoulin 5.1 percent growth and Sudbury District (including Greater Sudbury) an increase of 2.9 percent. While the north grew by 1.2 percent from 2016 to 2021, the Indigenous population on reserves grew 1.5 percent though even here there were interesting divergences are the approximately 115 Indigenous Reserve divisions. For example, Bearskin Lake grew 26 percent while Pic River shrank by 16 percent.

Like the rest of the country, the greatest population growth was in urban centers though even there the results are quite mixed (Figure 2). Of the five major cities in northern Ontario, three saw population increases in their CMA populations – Thunder Bay (1.4 percent), Greater Sudbury (2.8 percent) and North Bay (1.9 percent). On the other hand, Timmins and Sault Ste. Marie saw declines of 1.5 and 1.8 percent respectively. When some of the smaller towns are examined, often there are declines. White River for example, shrank by nearly 14 percent losing 88 people while Nipigon shrank 10 percent losing about 170 people. Even Kenora managed a slight decline though Elliot Lake grew at the national and provincial rates coming in at 5.9 percent.

These of course are just numbers, but the real question is why the differential growth across the region. Obviously larger centers do better because they offer a better set of amenities and economic opportunities but even being a larger urban center is not a panacea given Timmins and the Sault. Given low rates of natural increase, some northern centers have done a better job at attracting new migrants and overall, the northeast has done better than the northwest given its proximity to southern Ontario. Higher housing costs have seen Toronto’s population growth fall below that of adjacent cities like Hamilton, Barrie, and Kitchener-Waterloo. Some of the exodus has obviously spilled over into the near north regions of Parry sound and Nipissing as well as Sudbury.