Reforming Thunder Bay City Council: The Journey Begins

 

It appears that Thunder Bay City Council has finally decided to get serious about looking at its size and composition with the move to appoint a six-member citizen committee that will lead a review process over the next year that might actually result in changes in time for the 2026 municipal election.  The committee will have a far-reaching mandate to explore the size of council, their status as full or part-time membership as well as the structure of the current at-large and ward hybrid model that has governed Thunder Bay municipal politics since the 1980s.  When Thunder Bay was created it 1970, it began with a mayor and 12 councillors elected evenly across four wards which was revised to seven wards in 1976 and then took its current form of seven ward and five at large councillors in 1985.

 

This is coming about nearly three years after a previous council began to explore the issue and which ultimately generated this post which concluded: “it would be better if more of an effort was made to commission an independent arm’s length panel to review the situation and present options to council.”  Well, a committee has finally been appointed by City Council and is made up of six members.  The committee is chaired by former councillor Rebecca Johnson and vice-chaired by another former councillor Cody Fraser as well as citizens Riley Burton, Wayne Bahlieda, Heather McLeod and Carlos Santander-Maturana. 

 

The committee will conduct a two-phase consultation with the public.  The first phase includes a survey to ascertain how the public engages and interacts with City Council and examining if they have a desire to see changes to the composition of council. Phase two will include discussion and consultation with the public on potential options that could result in changes to council composition and/or the ward boundaries.  The committee will then take all of this information and “provide a report to City council with recommended changes to the composition of council or the ward system next year”.

 

The wording on the City of Thunder Bay website seems to imply that there will be changes and the chair of the committee in a TBTNewswatch story seemed to say that she believed that this time there were going to be changes made.  Indeed, phase two already says it is about options for change even before phase one has ascertained a desire for change  This is somewhat disconcerting because it suggests that someone or somebody somewhere has already decided that changes will be made, and the only real question is what those changes might be.  When put alongside a less than transparent process for committee member selection that were apparently “carefully chosen” and a survey that requires registration, one begins to wonder if the result is already a foregone conclusion.  Of course, one should be charitable on an issue that has reared its head up numerous times over the years and has only finally resulted in a serious attempt to examine it.  Given the length of time it has taken to get to this point, I suppose one should simply be grateful a committee has been struck even if the process seems akin to foxes guarding the hen house.

 

It is fair to ask what possibly an economist could contribute to a debate on municipal governance?  However, barring the reality that economists are municipal citizens too, it remains that economists are fully capable of examining the costs and benefits of institutional arrangements and their evolution as well as public finance aspects.  It is not an incursion into new territory to be staked out but rather an extension of what many institutional economists and economic historians already do.   In the case of the size, structure, composition and representativeness of the current institutional arrangement, there needs to be a framework for the decision making as well as an examination of what issues need to be addressed with the change.

 

A change in the current arrangements of municipal council represents an institutional change or innovation and such changes should be made if the perceived net benefits of the new arrangement exceed the net benefits of the previous one plus the costs of transitioning to a new arrangement – both social and economic costs.  It requires in the end an analysis of the current system and its benefits and costs not just economically but in terms of effectiveness in democratic representation and decision making as well as community spirit and engagement. 

 

What is not functioning under the current arrangement?  What could be improved?  What are the advantages of the current system of seven ward and five at-large representatives plus a mayor and what are its drawbacks?  In other words, what exactly are we trying to fix or improve.  What is driving the need to make changes to city council?  For example, simply being unable to get a consensus on building a new turf facility is not a reason to change the decision-making mechanism. Similarly, rancorous meetings are also not a reason to reform city council if the debate results in things getting done or poor decisions avoided.

 

Much of the debate in the past has focused on issues like ward councillors being too focused on their wards and not seeing the “bigger picture” when it comes to city issues.  Other times, there have been concerns that at-large councillors by not being tied to a ward and its needs were somehow shirking their duties by picking and choosing what they wanted to focus on.  Indeed, Thunder Bay politics at the municipal level has occasionally seemed like council consisted of a mayor, five mayors in waiting and seven dwarf councillors left to do a lot of the heavy lifting on local issues.  On the other hand, one could also argue that having five at large councillors allowed for citizens to go beyond their immediate ward councillor when lobbying if they felt they had not had their issue addressed.

 

And the hybrid system itself with two types of councillors is rather unique – why is it that Thunder Bay cannot have either a system of all ward councillors or all at large councillors?  What was the original purpose of going to a hybrid model and have those reasons shifted?  Then, there is the issue of the total number of councillors given the population size as on a per capita basis Thunder Bay probably has more councillors than many other cities in Ontario.  Burlington, for example, with a population nearly double that of Thunder Bay, has six ward councillors plus a mayor.  Kingston, on the other hand, which is one and a half times Thunder Bay’s population, has a mayor representing “the city as a whole” and twelve district councillors.

 

Perhaps fewer councillors but all full-time rather than the current part-time might make for better decision making.  However, that would likely mean a higher stipend and part of the argument for reducing the size of council is a belief that somehow there are going to be cost savings.  If you are indeed looking at cost savings in municipal government, reducing the number and salaries of councillors is merely symbolic as the real savings lie elsewhere. On the other hand, one can argue that being a councillor is about community service and the money should not matter.

 

Would having all councillors as ward councillors make the council too parochial as each seeks only to look after neighborhood concerns?  Or will having all at-large councillors undermine the position of mayor as all councillors can claim to have a city-wide mandate from the electorate?  Indeed, if all the councillors are at large, why elect a separate mayor at all?  Make the mayor the at-large councillor with the most votes.  Or, if we move to an all-at-large approach, will only high-profile individuals and financially better off individuals being able to run for council given that ward races can favour ward residents with close neighborhood ties while city wide campaigns are more expensive to mount? 

 

And all of this of course is intertwined with the issue about whether we need to or should redesign our ward system given the current imbalances in population across wards as populations in the city have shifted.  Should we go to eight or ten numbered as opposed to named wards with approximately equivalent populations, as well as a mayor?  Should the councillors be all at-large or all ward based or some new type of hybrid?  What should the borders of the new wards be?  Will changing the number of wards and councillors as well as redesigning borders lead to better democratic accountability?  More citizen involvement? And on top of all of this – do we want a first past the post system electing our councillors?  Ranked or weighted ballots – especially for at-large candidates?

 

 

 

As mentioned before, all of this is really not new territory for an economist.  Institutions and their quality are fundamental to successfully functioning economies.  Has Thunder Bay been hurt economically by its current municipal institutions? Indeed, one could in a moment of introspection go further and ask if amalgamation was responsible for the economic slowdown after 1970 given a monopoly one-city government replaced what were a set of competitive municipalities.  There can be a lot at stake here as change for the sake of change without understanding the reasons for change as well as the long-term ramifications can leave us worse off.  Borrowing from the words of our outgoing City Manager, if you “don’t know what you don’t know”, then how can you know that what you are doing is the best decision possible?  The committee indeed has its work cut out for it and one hopes that they are independently minded enough to be able to know what questions to ask, when to ask them and more importantly, when to suggest to do something and when to do nothing.

Thoughts on Canada's Economic Future

I was invited to make a contribution on Canada's economy and its future by TheFutureEconomy.ca which is an online media outlet "that produces interviews, panels, and op-eds featuring leaders from industry, government, academia and more to define a strong vision for our future economy."  My piece on Canada's economic challenges in coming years was published January 8th and titled:"Childhood's End: Canada's 21st Century Challenges."It was a privilege to be asked to contribute to this site given the range of leaders from across Canada who have also contributed their thoughts.  There is also a nice promotional link with a bio and describing Lakehead University.  The piece starts below and you can link to the site for the remainder:

In the pandemic’s wake, Canada finds itself in a world changed yet again with forces afoot that threaten its standard of living as well as its security and way of life. After nearly 150 years of operating under the umbrellas of relatively benign global superpowers, Canada needs to prepare for a multipolar world with respect to trade and economic growth opportunities that are linked to its foreign policy and defence capabilities. In many respects, Canada’s long adolescence has come to a rude end, and it must now learn to make its way in the world in a more adult fashion. This awakening, however, comes at a time when its economic indicators suggest economic weakness. Canada came to be...

The Perils of Northwestern Ontario Roads

 

The holiday season has seen a spate of accidents on the highways of northwestern Ontario - seven between December 29^th and January 6^th according to stories reported on TBnewswatch.  This has resulted in a number of deaths and highway closures as well as an outage of service for TbayTel with numerous customers losing phone, internet and television service.  Indeed, since mid-December at least five people have been killed in highway collisions in the region across ten major accidents. Indeed, according to a CBC report, 34 people were killed on northwestern Ontario roads in 2022.  This has made road safety a major issue and it has been exacerbated by what appear to be an increasing number of collisions involving transport trucks. Collisions involving transport trucks on area highways appear to have grown from 13.4 percent of the total in 2016 to 21.3 percent in 2021.

 

Of course, whether or not it is more dangerous to drive in northwestern Ontario relative to the rest of the province invariably requires not absolute numbers, but relative comparisons based on rates of fatalities that are population adjusted.  For example, using data from  Ontario Road Safety Annual Reports,  in 2022, Ontario as a whole had  592 fatalities on its roads while northwestern Ontario had 34. However, while northwestern Ontario accounts for 1.5 percent of Ontario’s population, it accounted for over 6 percent of its persons killed in collisions in 2022 based on these numbers.

 

The trend is even more stark if one plots these road deaths per 100,000 population constructed from data available since 2015 from the Safety Reports combined with population data for Ontario and the northwest.  It should be noted that the 2021 and 2022 reports are still preliminary and therefore do not include the official regional numbers.  While there are numbers for Ontario as a whole for those two years, the rate per 100,000 was also estimated using population figures for those years.  Thus, 2021 and 2022 for northwestern Ontario and Ontario are “estimates” based on Ontario population, the reported total by CBC for 2022 and a calculation for 2021 done based on the average from 2015 to 2022 of northwestern Ontario to Ontario fatalities.

 

 

 

The results show that when done per 100,000 population there are substantially more deaths on northwestern Ontario roadways than Ontario as a whole.  From 2015 to 2022, average fatalities per 100,000 population were 8.7 for the northwest while for Ontario as a whole they were 4.0.  In other words, the roadways of the northwest are twice as deadly compared to the Ontario average.  And, while Ontario appears stable over this time period, one could argue that the northwest is seeing an overall upward trend.  Is this a problem? I would think so.  The roads of the northwest – in particular its highways - are not just regional roads but national conduits for travel and commerce.  This is a provincial problem with local and national implications given the number of lives being lost.  Drivers beware.

Reflections on the New Year

 

Happy New Year to all!  One must admit that 2023 has been a bit of a ride regionally, nationally, and internationally.  Regionally, Thunder By and northern Ontario have had a reasonably good year economically though many of the trends affecting the country and the world – the higher cost of living, homelessness and a general angst and anxiety about the future – are also part of life here.  Sometimes, even the nature of “high tech”  21^st century crime sometimes makes one wonder if the world has truly been turned upside. 

 

The country’s economy has slowed but there is no recession yet.  If anything, the Bank of Canada is not given enough credit for engineering what to this point has been a soft landing of higher interest rates, slower growth and falling inflation.  As much as people complain about the cost of housing in Canada and the seeming inability to get things done, it also seems to be a feature of other countries such as the USA, the UK and Australia.  Indeed, it is interesting how similar debates around housing issues are occurring in countries around the world.  And of course, there is the international front where a definite challenge is underway from the CRINKs (China, Russia, Iran and North Korea) in three specific theatres  – Middle East, Ukraine and Taiwan – and in the Cyber world to the EU-Anglosphere-Asia/Pacific Western Alliance. 

 

Still, much of the global turmoil seems far removed from Thunder Bay which is still in many respects still somewhat both removed and integrated with life in the rest of province and country.  Air travel is still the quickest and most convenient way to get from here to anywhere but the pre-pandemic age of numerous, cheap, and conveniently scheduled flights connecting Thunder Bay to Toronto and ultimately the world has departed for now.  As much as Thunder Bay is plugged into the modern world, we still seem to wait a long time for things other places seem to get much sooner. After all, we have been waiting for an Ikea and a Costco since at least the mid 1990s.  As my running joke goes, Thunder Bay is probably a great place to wait for the apocalypse.  When the world ends, it will happen at least ten years later in Thunder Bay. 

 

Of course, as much as there seems to be constant change and turmoil, after 33 years of teaching and research and nearly twice that number of years being alive, one achieves a certain serenity from the patterns of constant change.  In many respects, one has seen it all. I reflect that during my career, my teaching has gone from hand-written lecture notes and chalkboards to electronic screens and PowerPoints while my research output was once typed on a manual typewriter after organizing index card cards from research trips to the library where sources were hunted down from a card catalogue. Today, I can surf any number of libraries and digital sources for both data and output on my laptop or iPad from the comfort of my own home. Writing - including blogging - is much faster than it ever was.

 

With all the new technology and social changes, one can sometimes start to feel like a dinosaur but the trick to avoid that fate is of course to maintain a curiosity and enthusiasm for the world around you, to see things in a different light, and to try new things.  After all, despite the gloom, 2024 should be the quintessential Canadian year.  A year of beer as we celebrate the year of 20-2-4s.  What could be more Canadian than that?  To a 2024 of hope and wonder and if things go off the rails, there is always a beer.

 

 

Thunder Bay's Economy: The Year Forward and Back

 

As 2023 winds down and 2024 arrives, a retrospective combined with a look ahead on the economy is a timely exercise.  The economic indicators to date for 2023 suggest that Thunder Bay has had a very good year.  Average monthly employment in 2023 to date is up about 3 percent over 2022 – representing nearly 2,000 new jobs.  However, while average monthly employment appears to have recovered from the pandemic, it has yet to permanently surpass the 2018 level.  However, on the plus side, the accompanying figure suggests that Thunder Bay’s employment does appear to be on a modest longer-term upward growth trend after years of being seemingly flat.  As well, the seasonally adjusted unemployment rate remains around 5 percent and the average for 2023 is lower than 2022 which suggests that the local labor market does not have a lot of slack in it.  

 

 

Along with employment opportunities being generated in large public sector construction projects in both the city and the region, there is also substantial activity in the local retail and tourism /hospitality sector with the opening of new retail and food service outlets as well as a very successful cruise ship season.  The port has also seen growing grain shipments as Thunder Bay resumes much if its traditional role in Canada's grain transport network.  On the housing front, while starts are not at historic highs, there nevertheless has been substantial activity particularly in the multi-residential unit sector.  Overall, Thunder Bay has seen healthy economic activity despite the recent rise in interest rates.  This is the result of continued activity in its traditional sectors of construction, forestry and port activity combined with activity on the mining front. As a result, population can be expected to grow albeit at rates still well below provincial and national growth rates.

Perhaps the biggest impact locally is the construction of Thunder Bay’s $1.2-billion provincial jail which until completion in 2025 will drive Thunder Bay’s labor market and economy even if the Canadian economy slows down in 2024. At the same time, the massive project has complicated the availability of local trades people with lengthy waiting lists for electricians, plumbers and carpentry services for smaller projects and home renovations assuming that you can even get trades people to agree to come.  However, completion of the jail project will likely see a ramping down of economic growth in the economy and in the absence of equally large new projects some alleviation of a relatively tight labor market particularly in building trades.

According to the Conference Board of Canada, housing starts in Thunder Bay are expected to grow but the numbers in their forecast seem unlikely to meet the 275 annual units required to meet provincial targets.  Nevertheless, Thunder Bay appears to be pressing forward with plans to apply for federal funding to build two thousand homes over the next three years - over 600 new units a year.  An average of 600 to 700 new homes a year is an amount that has not been seen in Thunder Bay since the baby boom years of the 1960s and 1970s.  Ultimately the success of such a grand scheme depends on local demand and this depends on what interest rates are like, what the state of the economy is and whether people have the incomes and purchasing power to pay for the housing.  Never mind if enough building trades people are available to actually do the work.

Going into 2024 and as noted in the most recent Conference Board Report, one can expect to see employment growth in construction, transport and warehousing, health care and social assistance, accommodation and food services and public administration.  Other sectors such as manufacturing, utilities, professional and scientific services, and educational services are expected to remain flat or even decline slightly.  Declines can particularly be expected in the areas of educational services given regional demographics and public funding levels, as well as the local FIRE sector (finance, insurance, real estate) given the rise in interest rates.  The post-secondary sector in Thunder Bay is also in uncertain territory given the dependence on volatile flows of international students and lack of clarity from the provincial government as to what directions in funding it may pursue in the wake of the Blue-Ribbon Panel Report. While the Blue-Ribbon Report called for increases in tuition and the provincial government grant to post-secondary institutions, the government’s response to date has been to continue to seek efficiencies which means the structural problems of university finances are unlikely to be resolved anytime soon.

Going forward there is also some economic uncertainty on several fronts.  It remains to be seen what the long-term outcome of the sale of Resolute Forest Products to Atlas Holdings will be on both local production and employment levels.  The future of the Alstom plant is also always precarious in the absence of a major transit project to generate longer-term employment.  As for the future of lithium refining in the region by companies such as Rock Tech Lithium, Toronto’s Avalon Advanced Materials and Green Technology Metals of Australia, there are positive expectations that these projects will finally trigger the long-awaited mining boom given the flurry of recent announcements and media stories. 

However, despite purchases of waterfront land, to date these are all plans, and the industry appears to be waiting for public money to assist their development.  It is unclear if any of these companies will be able to raise the necessary funds either publicly or privately to finance their activity in the face of international competition in the industry with other players with their infrastructure needs already in place.  As well, demand for fully electric vehicles – a key driver of the demand for lithium – has also been exhibiting weakness given the cost of the vehicles, their range, the availability of charging facilities and competition from alternatives such as hybrids as well as traditional gasoline powered vehicles.  As a result, the lithium refining industry in Thunder Bay and Canada while hopeful in its signs, may remain a work in progress for the foreseeable future.

Of course, in terms of what Thunder Bay can do to deal with all these changes and the economic uncertainty does not have a simple answer.  Thunder Bay, much like Canada as a whole, is a small economy unable to influence global economic and political trends beyond its borders.  Nevertheless, given the current buoyancy in the local economy, it is important to make hay while the sun shines.  Going forward, Thunder Bay must continue to make itself as attractive a jurisdiction for business investment as it can.  That means continuing to provide quality of life amenities, a range of useful and timely services for all demographic groups and a competitive local municipal service and tax environment.  Needless to say, at particularly at the municipal level, there will be a need to provide more while keeping the tax burden down – a tall order to fill at the best of times.