The creative arts are a fundamental component of life and the human experience. Northern Ontario and Thunder Bay in particular are blessed with vibrant and engaged arts communities whose creative work and activity deepens the regional quality of life. In Thunder Bay, a vital component of the creative arts is the Visual Arts Department and associated programs at Lakehead University where the faculty and students have been contributing to the regional arts scene for decades. Many generations of artists have acquired and honed their skills in the facilities and programs of Lakehead's Visual Arts Department.
This week, I received an in depth immersion in visual arts and the creative process as a result of my role as a reviewer for the Quality Assurance review of the visual arts program at Lakehead University. I joined Sally Hickson from the University of Guelph and Laura Peturson from Nipissing University and spent two days visiting with staff and students at the Visual Arts Department at Lakehead. It was certainly an illuminating experience learning about the different streams of the program and it was an eye opener learning about the capital intensity of the program given the facilities and equipment required to mount a quality program in the arts. It was quite instructive learning about ceramics, printmaking, painting, drawing and sculpture.
The students and faculty of the Visual Arts program regularly exhibit at the Thunder Bay Art Gallery as well as with other private galleries and their work is an impressive contribution to the region's cultural assets. Much of their work is also showcased on campus and the recent opening of the Alumni Commons at Lakehead provides an attractive venue for their work. All the best to the students, faculty and staff of the Visual Arts Department at Lakehead University.
Northern Economist 2.0
Friday 23 March 2018
Sunday 18 March 2018
Making Thunder Bay's Next Municipal Election Count
We are about six
months away from Thunder Bay’s next municipal election and the race for the
mayor’s chair and council spots represents an opportunity to examine directions
and priorities. The last election was
obsessed with the event centre and the issue was a distraction from important
issues such as the sale of municipal public assets, economic development, the
city’s economy, the sustainability of municipal finances as well as the ongoing
saga of infrastructure renewal and in particular the James Street Bridge which
has now been closed to vehicular traffic since 2013.
Sadly, with the
exception of the events centre, which has ridden off into the sunset for the
time being, all of these other issues are still ongoing. And of course, added to all of these issues
are those with respect to relations with First Nations as well as court cases
involving the city’s politicians and administration. Needless to say, Thunder
Bay has garnered an inordinate amount of negative attention on the national
stage in areas under the purview of municipal government and such attention is
certainly not a magnet for business investment.
When it comes to
economic development and the city’s economy, it remains that both population
and employment
levels in the city have been flat for the last four years. The low unemployment rate in the city results
from a labour force that has shrunk faster than employment and of itself is not
a positive harbinger for the future. Waiting
for the Ring
of Fire to kick start the economy appears to be a process akin to Waiting for Godot
and all the talk of smelter locations in the world will be of no avail given low
current chromite prices. As for the
current trappings of prosperity in the city, they are largely the result of a
large public sector and associated public spending which after the June
provincial election could very well come to a crashing halt.
Of course, even without
long term private sector wealth creation, the illusion of prosperity created by
public sector spending has helped fuel municipal
government spending and tax increases which over the last few years have
averaged above the city’s inflation and GDP growth rates. Moreover, there has been a continued shift of
the tax burden onto the residential ratepayer and they now account for about 70
percent of tax revenues. Added to this
are the continued steep increases in user fees and charges which given the talk
about “rainfall
taxes” show no sign of abating anytime soon.
Indeed, the thirst for
residential tax revenues also results in city council giving the go ahead to
new urban residential developments outside core areas that while adding to the
tax base in the short term also add to urban sprawl and require municipal servicing
whose maintenance will add to city expense in years to come. The sustainability of this type of short term
development formula should be a topic for debate and discussion but again it is
an issue the politicians are happy to ignore when it comes to an election year.
So, what is to be
done? Well, for starters Thunder Bay residents need to pay closer attention to
the fiscal, economic and social issues affecting the city and ask candidates more
pointed questions about what solutions might help address the situation. Perhaps one should ask why anyone might want to buy
a new house in Thunder Bay if the property tax bill for a new bungalow is going
to be in the range of $5000 to $7000 onto which will be added another $1000 a
year in water and sewer charges.
Given the length of
tenure that many current members of council have had, a legitimate question is
whether or not Thunder Bay might not be better off with a substantial transfusion
of new blood on City Council with new ideas and new energy to look at new ways
of doing things. After all, current
members of City Council have generally been the most comfortable with solutions
that involve raising taxes and spending more money. While the claim is often made that millions
in efficiencies and savings have been implemented, the fact is the tax levy continues
to grow which means total spending is going up and not down.
Making Thunder Bay’s
next municipal election count requires making an effort to create real change
in the way municipal issues are dealt with and that requires some new blood. It
truly is time for change.
Sunday 11 March 2018
Toursim and Travel in Ontario: A Target for Northern Ontario Tourism
My last post was on
border crossings into northwestern Ontario at Pigeon River and Rainy
River. This type of data has always
interested me because my academic career began approximately when the Canadian cross-border
shopping frenzy of the late 1980s and early 1990s took place. In 1980,
Canadians made 22.1 million same day auto trips to the United States and this
rose to 25.2 million in 1985 and hit 53.2 million in 1990. As the graph below shows, the peak was in 1991 at close to 59 million
trips before a decline set in and today the numbers are not even half that peak
at 21.5 million for 2017. These trips by Canadians to the United States were a
tourism flow into the US and a function of exchange rates, income, and
relative prices of goods.
What is also
interesting when examining travel flows is province level numbers for the
number of tourism visits, their origin, as well as the spending amounts. The figure below plots total visits to
Ontario from1998 to 2015 based on data from Ontario’s Ministry of Culture,
Tourism and Sport which in turn is based on Statistics Canada travel survey data. Total tourism visits in Ontario in 1998 were
129,646,000 and in 2015 they were 141,902,000.
The average annual growth rate of total trips was 0.6 percent - which does not seem that high. The average
annual growth rate of trips in Ontario originating from Ontario was 1.7
percent, compared to 1.1 percent from the rest of Canada, 1.6 percent for
overseas trips and -5.3 percent for the United States. Ontario has been its own best growing tourism
market accounting for 71 percent of visits in 1998 and 85 percent in 2015. The
biggest decline has been in American visitors which over the period fell from
23 percent to 8 percent.
When total spending by
these visitors is examined in the chart below, it suggests that spending has
grown faster than the number of visitors particularly for overseas visitors to
Ontario. Indeed, spending by Ontarians
visiting within Ontario grew at an annual average of 3.7 percent, that by other
Canadians 3.7 percent, Americans -1.2 percent and overseas visitors by 6.9
percent. Indeed, overseas visitors have definitely
been punching above their weight when it comes to their spending on tourism
visits to Ontario indicating that this is definitely an area where Ontario
might wish to direct its marketing activities.
Spending by overseas visitors to Ontario surpassed that of Americans in
2013 and in 2015 was 50 percent higher.
How important is this
tourism visitor spending to Ontario’s economy-approximately 2 percent of
Ontario’s GDP – but is has not changed much over the period 1998 to 2015. It has not been growing as a share of GDP
given that during this period there has been a decline in American spending
that has counteracted the rise in spending by overseas and Canadian
travelers.
When it comes to marketing tourism in northern Ontario, the above data suggests two main targets for our energy: the rest of Ontario and the overseas market. For the time being, the American market appears to have sunk into decline.
When it comes to marketing tourism in northern Ontario, the above data suggests two main targets for our energy: the rest of Ontario and the overseas market. For the time being, the American market appears to have sunk into decline.
Thursday 8 March 2018
Cross Border Travel in Northwestern Ontario: An Update
From time to time, it is useful to review
cross-border travel statistics in northwestern Ontario at the two main border
crossings with the United States – Rainy River and Pigeon River. These travel statistics are a nice indicator of the local state of tourism as well as economic activity. Figure 1 presents monthly vehicles entering
Canada at Pigeon River from 1990 to 2017 while Figure 2 does the same for
Rainy River (Data Source: Statistics Canada). Canadian and American
vehicles are separated and a polynomial smooth is fitted to each series in an
effort to summarize trends over time.
At Rainy River, Canadian vehicles entering
have been in long-term decline while the US numbers have remained approximately
the same despite some ebbs and flows. Of
note is the bit of a dip the Canadian vehicles at Rainy River numbers have
taken since 2014 coupled with the uptick in the US numbers over the same period
– no doubt a reflection of the depreciation of the Canadian dollar in recent
years. The downturn in Canadian vehicles
coming back is even more pronounced at Pigeon River where there is a sharper
drop since 2014 while the US numbers have nevertheless registered a small
upswing. However, the overall period from 1990 to 2014 was one of general increase in Canadian vehicles coming back.
In 2014, total Canadian vehicles entering
Canada at Rainy River was 147,137 while at Pigeon River it was 230,179 compared
to 135,149 and 170,904 respectively in 2017.
From 2014 to 2017, total Canadian vehicles entering Canada at Rainy River
fell 8.1 percent while at Pigeon River the drop was 25.8 percent. Over the same
period, US vehicles entering at Rainy River went from 28,686 to 35,272 – an increase
of 23 percent – while at Pigeon River they went from 41,376 to 45,510 – an increase
of 10 percent.
Sunday 4 March 2018
When Will the Ring of Fire Heat Up?
On Friday afternoon, I did a brief presentation at the Impact of Development Conference/Workshop held at the historic Trinity United Church on Algoma Street in Thunder Bay. My talk (which you can access here under "Looking Back and Looking Forward") was titled "Resources and the Northern and Northwestern Ontario Economies: Past, Present and Future." Along with a quick survey of the economic history of northern Ontario and an overview of current economic indicators, I also opined on the current state of developments in the Ring of Fire.
For the benefit of those not fully acquainted with the Ring of Fire, it is of course the massive planned chromite mining and smelting development project in the mineral-rich James Bay Lowland region. The area covers about 5,000 square kilometers but development has been slow. Major players include Noront Resources, the Ontario government and nine first nations. There have been a number of challenges including the cost of capital and transportation infrastructure to access the chromite, energy costs, the lengthy environmental assessment process as well as the process of consultation and negotiation with the nine members of the Matawa Tribal council. You can get a very good detailed analysis of the issues in the Skogstad-Alahmar report here.
However, all of these challenges can be resolved once the real challenge is resolved: commodity prices. Much of the hype in the Ring of Fire springs from the spike in ferro-chrome prices in the 2008-09 period which was followed by a collapse from which there has yet to be a recovery. As the accompanying figure illustrates, there was a 60 percent drop in the price of ferro-chrome and the price has not gone anywhere since.
In the end, its all about commodity prices and until the market price goes up and makes the project profitable, not much else is going to happen.
For the benefit of those not fully acquainted with the Ring of Fire, it is of course the massive planned chromite mining and smelting development project in the mineral-rich James Bay Lowland region. The area covers about 5,000 square kilometers but development has been slow. Major players include Noront Resources, the Ontario government and nine first nations. There have been a number of challenges including the cost of capital and transportation infrastructure to access the chromite, energy costs, the lengthy environmental assessment process as well as the process of consultation and negotiation with the nine members of the Matawa Tribal council. You can get a very good detailed analysis of the issues in the Skogstad-Alahmar report here.
However, all of these challenges can be resolved once the real challenge is resolved: commodity prices. Much of the hype in the Ring of Fire springs from the spike in ferro-chrome prices in the 2008-09 period which was followed by a collapse from which there has yet to be a recovery. As the accompanying figure illustrates, there was a 60 percent drop in the price of ferro-chrome and the price has not gone anywhere since.
In the end, its all about commodity prices and until the market price goes up and makes the project profitable, not much else is going to happen.
Tuesday 27 February 2018
The Impact of Development
There is going to be a conference on economic development ithis week. The Impact of Development workshop will be held this Thursday and Friday at Trinity United Hall, 310 Park Street Thunder Bay and has been made possible through the support of the Resources, Economy, and Society Research Group (RESRG) at Lakehead University, ReSDA: Resources and Sustainable Development in the Arctic, Lakehead University Department of History, Canadian International Council – Thunder Bay Branch, and Lakehead University Faculty of Social Sciences and Humanities.
The focus of the conference is single industry communities and features presentations on northern Ontario, Atlantic Canada as well as the Arctic and even Latin America. Among the resource sectors covered are forestry and mining. Moreover, a glance at the program will illustrate that there will be a diverse set of perspectives available with respect to development. I will be doing an overview on the resource sector experience in northwestern Ontario with a foray into mining and the Ring of Fire on the Friday afternoon. See the program below.
Day 1
Day 2: Morning
Day 2: Afternoon
Everyone is welcome!
The focus of the conference is single industry communities and features presentations on northern Ontario, Atlantic Canada as well as the Arctic and even Latin America. Among the resource sectors covered are forestry and mining. Moreover, a glance at the program will illustrate that there will be a diverse set of perspectives available with respect to development. I will be doing an overview on the resource sector experience in northwestern Ontario with a foray into mining and the Ring of Fire on the Friday afternoon. See the program below.
Day 1
Day 2: Morning
Day 2: Afternoon
Everyone is welcome!
Thursday 15 February 2018
Recent Labour Force Numbers for Northern Ontario Are Not Pretty
Last week’s labour force numbers for Canada
from Statistics
Canada were seen as a bit of a shock given that employment
fell by 88,000 in January. Part-time employment declined (-137,000), while full-time employment was up (+49,000). At
the same time, the unemployment rate increased by 0.1 percentage
points to 5.9%. Ontario also
declined by about 51,000 jobs and much of the loss was due to part-time work. So how does northern Ontario compare when
recent labour force estimates are looked at?
The accompanying figure looks at
employment growth for northeast and northwest Ontario compared to Ontario and
Canada between December 2017 and January 2018.
Whereas Ontario and Canada saw employment drop by just over one half of
one percent, total employment in the northeast declined 2.4 percent while in
the northwest it fell by 1.8 percent. As
well, the losses were more driven by full-time employment as it dropped 2.5 percent
in the northeast and 2.3 percent in the northwest. All one can hope is that the January numbers
are a short-term aberration because northern Ontario saw its employment drop
more than either Ontario or Canada and the northeast seems to have been hit harder.
Population Growth Results: Thunder Bay and Sudbury at the Bottom
Statistics Canada has released its recent sub-provincial population estimates for 2016/17 and the results find that
population is still growing faster in the Prairies
well as parts of Ontario but the two major northern
Ontario CMAs are not in the pack.
According the Statistics Canada, the 10 CMAs with the highest population
growth in 2016/2017 were in either the Prairies or Ontario. In 2016/2017, the
population growth rate was 2.0% or higher in four CMAs: Saskatoon (+2.8%),
Regina (+2.4%), Guelph (+2.2%) and Ottawa–Gatineau (Ontario part) (+2.2 and were
followed by Toronto (+1.9%), Oshawa, Winnipeg, Edmonton and Calgary (+1.8%
each), and Kitchener–Cambridge–Waterloo (+1.7%). The figure below shows the picture pretty clearly.
At the bottom of the rankings are Sudbury,
Thunder Bay and Saguenay. Sudbury is
third from the bottom with a population increase of only 0.1 percent. The population decreased in the Saguenay
(-0.2%) and Thunder Bay (-0.1%) CMAs for the fourth consecutive year with
Saguenay’s population decrease partly attributable to out-migration of young
adults aged 18 to live elsewhere in Quebec. In Thunder Bay, the number of
deaths surpassed the number of births, and has done so since 2006/2007,
contributing to its population decline.
Sunday 11 February 2018
Economics News Around the North: February 11th Edition
Well, traveling in winter is never much fun and this weekend I was in
Montreal for the Fraser Institute Student Seminar Series and my way back has
been affected by snow and freezing rain and assorted other things. Still, there is always time to blog so here
are the economic news stories that have caught my attention over the last
little while with respect to northern Ontario economic affairs.
“Drop
CN bridge appeal, Fort William First Nation chief tells Thunder Bay city
council.” CBC News Thunder Bay, Feb. 8th, 2018.
Well, this makes a lot of sense.
I recall speaking on a Thunder Bay Chamber of Commerce panel last spring
where I made a similar remark that it was time to plan for a new span across
the Kam River. I suppose Thunder Bay City
council is gambling that they can get something for nothing by getting CN to
maintain the bridge but it would be forward looking to plan and line up the
funding for a new modern bridge. Best
case scenario – they could end up with two bridges. How’s that for infrastructure!
“Porter
Airlines new crew base ‘good news’ for Thunder Bay Ontario” CBC News
Thunder Bay, Feb. 2nd, 2018.
This is a good news story not least of which is that 40 jobs from the
crew base are coming to Thunder Bay but because it bodes well for the
development of Porter’s air network.
With a crew base in Thunder Bay, Porter can use Thunder Bay as a mini
hub perhaps for an expansion west to Winnipeg or a link through Chicago as part
of it existing network. Porter is
innovative and service oriented and a great alternative to Pearson. They are
also adding a 7th daily flight out of Thunder Bay to Toronto. This weekend reminded me why I rarely fly out of Pearson.
In other transportation news, it would appear air travel is big in
northern Ontario. North Bay is also getting some aviation jobs. I guess 40 is a
magic number for airlines as it is expected that 40 jobs will be created here
also.
“Voyageur
Airways receives $2.7 million to expand,” North Bay Nugget.ca, Fe. 9, 2018.
In other news…
“Business
confidence Drops in northeast: survey” Sudbury Star, Feb. 10th,
2018.
Apparently, less than a fifth of businesses in northeastern Ontario are
confident in Ontario’s economic future according to this Chamber of Commerce
annual report. This was reinforced by regional data, as the Business Confidence
Survey reveals that nearly half of northeastern Ontario businesses expect their
organization’s revenue to stay the same over the next 12 months.
It could be that the Canadian economy is finally slowing down given the
recent numbers from Statistics Canada.
“Canada’s
volatile jobs survey posts biggest monthly drop since 2009” CTV News, Feb 9th,
2018.
While Canada lost 88,000 jobs and Ontario and part time workers were
heavily affected, it is only one month’s data – January – and you would need
several months more before you could argue a trend was underway. However, Thunder Bay and Sudbury saw their
unemployment rates remain pretty much the same with Sudbury remaining at 6.8
percent and Thunder Bay dropping slightly from 6.1 to 5.8 percent. However, as I have noted previously, the
unemployment rate in northern Ontario is not the best indicator of job growth
given the shrinking labour force.
Indeed, even the
Sudbury Star noted that while Sudbury’s unemployment rate stayed at 6.8
percent, it nevertheless shed 800 jobs.
In Ring of Fire news, the saga continues.
“Plan
to develop Eagle's Nest site a step 'in positive direction' for Indigenous
communities” CBC News Sudbury, Feb. 7th, 2018.
Timmins is trying to boost tourism as is the Sault.
“Will
thousands flock to Timmins to watch Bryan Adams?” Feb. 8th,
2018. TVO.
As so economic life goes on in northern Ontario. Have a great week!
Monday 5 February 2018
What a 2.4 Percent Municipal Tax Levy Increase Really Means
Thunder Bay City Council
has voted to pass the 2018 municipal budget and will formally ratify it at a
vote this evening. The Mayor and Council
have of course been patting themselves on the back about how it is a “responsible
budget” and how it keeps the tax levy increase in spending within the average
of the last two terms of council. The tax
levy increase is now coming in a 2.4 percent now – just above the rate of
inflation - which is down from the 3.03 percent increase that was originally on
the way after several weeks of deliberation and debate. This was managed by essentially taking out
about $1 million from the city reserve fund to lower the levy against the
advice of City administration it turns out who also noted that the reserves –
used to cover unexpected costs or deficits throughout the year - have been
declining since 2012
What this all really
means is that this is an election year.
The average municipal tax revenue increase over the period 2011 to 2018
has averaged 3.3 percent and ranged from a high of 5.7 percent in 2015 to a low
of 2.2 percent in each of 2014 and 2016.
The increase of 2.2 percent in 2014 was also during an election year and
was followed by a 5.7 percent increase in 2015.
Keeping the increase low this year can be interpreted as a deliberate political strategy to not raise
the ire of ratepayers in the lead up to the October election and one can expect
a hefty increase to make up lost ground when the 2019 budget comes in.
In the end, a tax levy
increasing at just above the rate of inflation is not much of an accomplishment
given that it was done by dipping into the reserve fund. While much was said during council debate
about the hard decisions that have been made the fact remains that spending is
going to go up by the amount originally agreed upon – just over 3 percent – but
it is going to be subsidized by borrowing from the reserve fund.
But then, cost control
is hard work and in the end some of the efforts at cost control have
backfired. One need only look back at
the attempt by Thunder Bay to reduce garbage collection costs in 2017 which
were supposed to eliminate a truck and labour costs via attrition while at the
same time reducing bag pick-up to two bags from three with additional bags
requiring a tag. And what was the end
result? After a period of chaos, the truck
was reinstated but the three-bag limit was not and things have remained very quiet since.
So, one has to conclude that costs have remained the same while less
garbage is being collected and revenue is probably up for the City from the bag
tags. It was certainly a win for the City of Thunder Bay but not for rate
payers who altogether have to pay more but are getting less.
We can expect more of the same next year after the dust clears from the election. The current cast of councilors will largely be returned to office and the cycle will start anew. We will be paying more and getting less, and the debut will be a hefty tax levy increase to replenish the reserve fund as well as boost spending to make up for the previous year’s slowdown. There will be the usual grumbling and complaints, but they will be dismissed because after all Thunder Bay voters are the ones doing this to themselves by falling for the same thing election after election. Why would city politicians take them seriously when they complain?
Additional Note: February 6th - Well, the budget did pass last evening. Please note that the 2.4 percent levy increase coming in is "net" or after factoring in "new growth". The gross levy increase is actually 3.13 percent. Originally, the net increase was going to be close to 3 percent and the gross increase nearly 3.6 percent. So, total spending is still going up 3 percent and the net is 2.4 because of the use of projected surplus funds from 2017 budget away from the reserve fund and towards the tax bill. However, apparently there was an effort to move even more of the projected 2017 budget surplus away from the reserve but it did not succeed. Of course the 3.13 percent does not mean that everyone's tax bill will be going up 3.13 percent or 2.4 percent if you are an "existing" ratepayer. That is the total increase in tax financed expenditure. Much of the burden of the increase will go to residential ratepayers. See my post last month here for a more detailed discussion.
Thursday 1 February 2018
Ontario's Fiscal Paradox
My latest on Ontario's public finances...
Ontario has wrapped up its 2018 pre-budget public consultations as it prepares to deliver its next provincial budget. Ontario Finance Minister Charles Sousa confirmed in the fall fiscal statement that Ontario’s 2018 budget will be balanced, as will budgets over the next two years. However, the average Ontarian may be confused by the fact that despite a future of projected balanced budgets, the provincial net debt will continue to increase.
Indeed, recent years have seen the provincial debt grow by amounts exceeding that year’s deficit. For example, in fiscal year 2014-15, Ontario’s budgetary deficit was $10.315 billion but the net debt rose by $17.386 billion. In 2015-16, the deficit was $3.515 billion but $10.796 billion was added to the net debt. In 2016-17, the deficit was $0.991 billion but $6.276 billion was added to the net debt.
So how can this happen? See here for the rest of the post on the Fraser Blog...
Ontario has wrapped up its 2018 pre-budget public consultations as it prepares to deliver its next provincial budget. Ontario Finance Minister Charles Sousa confirmed in the fall fiscal statement that Ontario’s 2018 budget will be balanced, as will budgets over the next two years. However, the average Ontarian may be confused by the fact that despite a future of projected balanced budgets, the provincial net debt will continue to increase.
Indeed, recent years have seen the provincial debt grow by amounts exceeding that year’s deficit. For example, in fiscal year 2014-15, Ontario’s budgetary deficit was $10.315 billion but the net debt rose by $17.386 billion. In 2015-16, the deficit was $3.515 billion but $10.796 billion was added to the net debt. In 2016-17, the deficit was $0.991 billion but $6.276 billion was added to the net debt.
So how can this happen? See here for the rest of the post on the Fraser Blog...
Wednesday 31 January 2018
2018 Blog Rankings Out!
Focus Economics has put out their list of Top Economics and Finance Blogs for 2018 and I am pleased to report that Worthwhile Canadian Initiative is once again on the list. As our entry reads:
"The Worthwhile Canadian Initiative is a "mainly Canadian economics blog." The blog is currently maintained by four economics professors, namely Stephen Gordon, Frances Woolley, Nick Rowe and the Northern Economist, Livio Di Matteo. Topics covered on the blog generally encompass macroeconomics, but also include politics, immigration, inequality, finance and education."
Great news and congratulations to my fellow bloggers at WCI!
Thursday 25 January 2018
Economics News Around the North: January 25th Edition
Here are the economic news stories that have caught my interest over the last little while in northern Ontario. The start of the new year has been a bit slow when it comes to economic news in the region but then there is so much else going one politically, economically and otherwise in Ontario, Canada and the world especially as we move into a critical phase with the NAFTA negotiations and the start of election campaigning in Ontario in the run up to the June election.
Here goes....
Architect envisions creative solutions to re imagine existing buildings. TBNewwatch, January 24th.
Well, this looks like a creative way to try and create some type of downtown event centre/conference facility in Thunder Bay. Of course, you can add Victoriaville as well as the empty Sears store at intercity to the list of underutilized space in Thunder Bay. Personally, it would be nice to see the Sears store retooled in a circular two level galleria space of small stores around a public space that could be used to house the farmers market. The only problem would be to find tenants for the small retail spaces given that rents at the ISC are apparently pretty steep.
Record year for airport. The Chronicle Journal, January 25th
The airport's economic role in the city of Thunder Bay and region continues to grow. Passenger volumes in 2017 were 844,627 which represents an increase of 4.6 percent from 2016. Since 1997, this represents an increase of over 60 percent.
In not so positive transportation news, cab fares in Thunder Bay are going up by 15 percent. They were already quite high. And if that is not enough, it looks like the increase in Thunder Bay's tax levy is going to stay at around 3.6 percent as the budget remains pretty much unchanged. Living in Thunder Bay does sometimes seem like a sort of reverse Walmart marketing jingle - pay more, get less.
On the bright side:
Getting more out of wood. The Chronicle Journal, January 23rd.
More federal funding to support initiatives in the bio-economy.
Conference explores growing economy. Sudburystar.com. January 7th, 2018.
On Feb. 6-7, the Greater Sudbury Chamber of Commerce will host its inaugural PEP (Procurement, Employment and Partnerships) conference and trade show presented by SNC Lavalin in partnership with the Canadian council for Aboriginal Business.
And of interest if you are planning to pursue resource development activities in the region North of 50....
Northern communities face threat of climate change. TimminsPress.com, January 24th.
Meanwhile, in the Sault....
New Sault company aims to create jobs, produce gadgets for all ages at soon-to-open shop. SooToday.com, January 23rd.
Of course, Sault Ste. Marie is disappointed that they did not make the 20 city short list for Amazon's second corporate campus and joins other disappointed Canadian cities, but not Toronto which remains under consideration.
In North Bay, they are hoping home construction is going to jump start their economy. Not sure where the housing demand is expected to come from but it is important to be hopeful. Perhaps if Toronto gets the Amazon campus, given the cost of housing, Amazon workers will live in North Bay and commute to Toronto.
North Bay community is up to housing-construction challenge. North Bay Business Journal. Jan 2nd.
So that is what has caught my eye across this vast expanse at least economically. One other bright item of news involves this morning's decision in a Thunder Bay courtroom exonerating the Chief of Police. Great to hear. All the best.
Here goes....
Architect envisions creative solutions to re imagine existing buildings. TBNewwatch, January 24th.
Well, this looks like a creative way to try and create some type of downtown event centre/conference facility in Thunder Bay. Of course, you can add Victoriaville as well as the empty Sears store at intercity to the list of underutilized space in Thunder Bay. Personally, it would be nice to see the Sears store retooled in a circular two level galleria space of small stores around a public space that could be used to house the farmers market. The only problem would be to find tenants for the small retail spaces given that rents at the ISC are apparently pretty steep.
Record year for airport. The Chronicle Journal, January 25th
The airport's economic role in the city of Thunder Bay and region continues to grow. Passenger volumes in 2017 were 844,627 which represents an increase of 4.6 percent from 2016. Since 1997, this represents an increase of over 60 percent.
In not so positive transportation news, cab fares in Thunder Bay are going up by 15 percent. They were already quite high. And if that is not enough, it looks like the increase in Thunder Bay's tax levy is going to stay at around 3.6 percent as the budget remains pretty much unchanged. Living in Thunder Bay does sometimes seem like a sort of reverse Walmart marketing jingle - pay more, get less.
On the bright side:
Getting more out of wood. The Chronicle Journal, January 23rd.
More federal funding to support initiatives in the bio-economy.
Conference explores growing economy. Sudburystar.com. January 7th, 2018.
On Feb. 6-7, the Greater Sudbury Chamber of Commerce will host its inaugural PEP (Procurement, Employment and Partnerships) conference and trade show presented by SNC Lavalin in partnership with the Canadian council for Aboriginal Business.
And of interest if you are planning to pursue resource development activities in the region North of 50....
Northern communities face threat of climate change. TimminsPress.com, January 24th.
Meanwhile, in the Sault....
New Sault company aims to create jobs, produce gadgets for all ages at soon-to-open shop. SooToday.com, January 23rd.
Of course, Sault Ste. Marie is disappointed that they did not make the 20 city short list for Amazon's second corporate campus and joins other disappointed Canadian cities, but not Toronto which remains under consideration.
In North Bay, they are hoping home construction is going to jump start their economy. Not sure where the housing demand is expected to come from but it is important to be hopeful. Perhaps if Toronto gets the Amazon campus, given the cost of housing, Amazon workers will live in North Bay and commute to Toronto.
North Bay community is up to housing-construction challenge. North Bay Business Journal. Jan 2nd.
So that is what has caught my eye across this vast expanse at least economically. One other bright item of news involves this morning's decision in a Thunder Bay courtroom exonerating the Chief of Police. Great to hear. All the best.
Saturday 20 January 2018
Crime in Northern Ontario Down
My last
post on policing resources in the major northern Ontario cities noted that
all five cities saw an increase in policing resources. In 2000, the largest
number of police offers adjusted for population was in Thunder Bay at 171.6
(per 100,000 of population), followed by Sault Ste Marie at 156, Timmins at
153.1, North Bay at 147.6 and finally Greater Sudbury at 143.1. By 2016, Thunder Bay was still first at 199.5
officers per 100,000 of population. It
was followed by Timmins at 196.2, Sault Ste. Marie at 176.7, Greater Sudbury at
160.7 and then North Bay at 152.6. Growth
in per capita policing resources was greatest in Timmins at 28 percent,
followed by Thunder Bay which saw a 16 percent increase. Next highest growth was Sault Ste. Marie at
13 percent, followed by Greater Sudbury and North Bay at 12 and 3 percent
respectively.
Of course,
the logical question that follows next is what was going on in crime rates over
the same period of time? It should be
noted that policing is much more complex in the early 21st century
dealing not only with traditional crimes but also with new crime areas such as
cyber and internet crime. As well,
social issues in general have been consuming more police resources as well as
new standards of accountability which entail more intensive use of policing
resources when dealing with incidents. Homicide investigation is especially resource intensive. Nonetheless,
a look at crime rates it is still a useful piece of information.
Traditional
measures of the crime rate such as criminal code incidents per 100,000 of
population or per police officer measure the volume of crime. One example is the homicide rate and past
evidence has found the homicide rate declining in northern Ontario in a
manner akin to other Canadian cities with the exception of a recent surge in
Thunder Bay. Another measure of crime is
the Crime Severity Index. The Crime
Severity Index combines both volume as well as takes into consideration the
seriousness of crimes by assigning each type of offense a seriousness weight and
generally serves as a complement to other measures.
The index has been set to 100 for Canada in 2006 and enables comparisons
of crime severity both at a point in time and over time.
Figure 1
plots the value of the Crime
Severity Index obtained from Statistics Canada for the five major northern
Ontario cities for the period 1998 to 2016.
The severity of crime differs across these five cities in any given year
but all cities have seen a decline over time.
The largest declines over time have been in Sudbury and North Bay at 36
and29 percent respectively. Next is
Thunder Bay with a 17 percent decline in crime severity between 1998 and 2016,
followed by Sault Ste. Marie at 16 percent and then Timmins at 15 percent. The good news is that while there are annual
ebbs and flows, crime rates over the long term are down in these major northern
Ontario cities.
Sunday 14 January 2018
Policing Resources and Costs in Northern Ontario: A Brief Municipal Comparison
Municipal
budget season is upon us and expenditures on protection – police and fire – are
some of the most important areas in which municipal tax dollars are spent. Municipal
police services have the responsibility of ensuring the security of residents,
businesses and visitors to their communities and the basic activities are crime
prevention, enforcement of laws, maintaining public order, assisting the
victims of crime as well as emergency services. Over the years, policing has become more
complex dealing with new types of criminal activity in the cyber age as well as
devoting more resources to social concerns.
One interesting
point of comparison for the five major northern Ontario cities is the number of
police officers per 100,000 of population and the trend in this number over
time. Figure 1 plots Statistics Canada
data on police officers per 100,000 for the period 2000 to 2016. In 2000, the largest number of police offers
adjusted for population was in Thunder Bay at 171.6, followed by Sault Ste
Marie at 156, Timmins at 153.1, North Bay at 147.6 and finally Greater Sudbury
at 143.1. By 2016, Thunder Bay was still
first at 199.5 officers per 100,000 of population. It was followed by Timmins at 196.2, Sault
Ste Marie at 176.7, Greater Sudbury at 160.7 and then North Bay at 152.6.
As Figure 2 illustrates, growth in per capita
policing numbers was greatest in Timmins at 28 percent, followed by Thunder Bay
which saw a 16 percent increases. Next
highest growth was Sault Ste Marie at 13 percent, followed by Greater Sudbury and North Bay at 12 and 3 percent respectively.
Another
point of comparison is spending. The BMA Municipal Reports provide some data on
the costs of providing policing services. The rankings for costs generally
parallel those for police numbers. When the net costs per 100,000 dollars of
assessment are compared (including amortization), in 2016 the highest cost was
in Timmins at $441 per $100,000 of tax assessment followed by Thunder Bay at
$434. Next was Sault Ste Marie at $402, then North Bay at $317 and finally
Greater Sudbury at $299. Naturally, this
ranking is influenced by the richness of the tax base and all other things
given cities with a weaker total tax base can expect costs of policing per
$100,000 of assessment to be higher. At
the same time, over the last decade, all five cities have seen a reduction in
the net costs pf policing per 100,000 dollars of assessment. This could be a function of growth in tax
bases as well as other efficiencies and economies.
Friday 5 January 2018
Thunder Bay Taxes Are Going Up Again!
It is municipal
budget season in Thunder Bay and the inevitable process of thrust, parry and
spin is well underway. First the thrust: the amount spent by the City of Thunder Bay obtained from
the tax levy is going up by 3.6
percent. Moreover, water and sewer
rates as well as tipping fees at the landfill will be going up by
three percent. In an effort to
forestall the inevitable complaints that these increases are too high, the
resulting parry and spin on the part of the City appears to be as follows.
The 3.6
percent increase in the tax levy will only be a 2.9 percent increase to
existing ratepayers after factoring in assessment growth.
According to the budget chair: “This is a budget that
stays the course in terms of not reducing services but maintaining investments
while living within our means.”
Moreover,
much of the increase is going to hire new full-time positions and vehicles for
the Superior North EMS. The paramedic service
has seen call volumes grow substantially in recent years as a result of the
aging population and the opioid crisis. As well, according to the budget chair,
in an ideal world “we would stay below the level of inflation,” but there has
been a reduction in provincial transfer payments.
The efforts
by the City to justify a 3.6 percent increase in the levy – that is in tax financed
city expenditure – are pretty standard.
Differentiating between existing ratepayers and “new growth”
conveniently sidesteps the fact that in the end it is all tax revenue coming
from city ratepayers. Arguing that we
are “investing” in services and living within our means needs to be considered
within the context of whether the services are cost-effective as well as the
fact the money is not from some kind of endowment but comes directly from city
ratepayers.
As for the
paramedic service, it would be nice to see some kind of breakdown in statistics
as to exactly what the sources of the increased demand are in terms of case mix
and demographic breakdowns. In an
interview on CBC Thunder Bay radio this morning, the chief of the Superior
North Emergency Medical Services also noted that the city has a large transient
population that is a source of increasing demand. This raises the question as to whether city
ratepayers rather than the province should be on the hook to fund what is
increasing regional demand for emergency health services. However, as noted
above, the province is apparently not very interested in raising its grant
contribution.
The most
entertaining line was the one that ideally, we would see tax increases that stay
below the rate of inflation. The last
four years have seen increases in tax revenue all above the inflation rate suggesting
that this aspiration has yet to be achieved by the current city council. Nevertheless, given that it is an election
year one should have goals and dreams to campaign on.
Given that
it is an election year, it is also important to take a longer term look at municipal
finances – in particular I want to focus on Thunder Bay municipal own-source
revenue – that is tax and user fee revenues and then provide some comparisons
to basic economic indicators for the city. The data on total municipal tax
revenue, residential and non-residential tax revenue, and user fees spans the
period 1990 to 2016 and is from assorted past City of Thunder Bay Consolidated
Financial Statements as well as from the Financial Information Returns (FIR) maintained
for each municipality by the Ministry of Municipal Affairs and Housing. For 2017 and 2018, I use current City
of Thunder Bay budget summaries with the total for 2018 a forecast based on
the tax levy increase of 3.6 percent. From Statistics Canada, I have the
inflation rate - inflation is Ontario’s Consumer Price Index with 2002 as the
base year – as well as median total tax filer income and annual employment for
Thunder Bay. Population figures for Thunder Bay are from the Census of Canada.
One point with respect to City of Thunder Bay financial data
is that the summaries and budget information over the last few years do not seem
to provide the tax revenue breakdown between residential and non-residential
revenue. I suspect the reason for this has less to do with economy of
presentation and more to do with drawing attention away from the fact that the
residential share of tax revenue has risen dramatically. While FIR does provide
this information, unfortunately it only becomes available with a lag and 2016
is the last available complete set of FIR data. Overall, municipal finance data
is rather opaque and difficult to use not just in Thunder Bay but Canada as a
whole. Cities could do better when it
comes to being accountable to their ratepayers via concise, comprehensive and
easy to use statistics.
For the period 1990 to 2016 (but forecast to 2018 for
taxation revenue), Figure 1 plots taxation revenue and its two components –
residential and non-residential taxation (commercial and industrial). It then also plots user fee revenue (water
& sewer and other fees) and then the total of taxation revenue and user
fees. In 2016, tax revenues grew 2.2 percent with residential tax revenue
growing at 3.8 percent and non-residential tax revenue actually declining 1.1
percent. User fee revenue also declined
2.5 percent (despite rate increases the previous year). As a result, own source
revenues in 2016 grew a modest 0.6 percent compared to 5.3 percent the year
before. If one looks only at total municipal
tax revenue, it grew 5.7 percent in 2015, 2.2 percent in 2016 and based on
recent estimates (and not FIR data) grew at 3.3 percent in 2017 and will grow
3.6 percent in 2018.
Figures 2 and 3 provide composition information for
taxation revenue and total own source revenue for the period 1990 to 2016. When
one considers only tax revenue, from a 50/50 split in 1990 the distribution by
2016 had evolved into a 70/30 split. The
residential ratepayer in Thunder Bay now provides the City of Thunder Bay with
70 percent of municipal tax revenue. When the picture is broadened to total
own-source revenue, the residential ratepayer in 2016 provided about 46 percent
of own-source revenue, the non-residential ratepayer 21 percent and user fees –
which incidentally are paid by both residential and non-residential ratepayers
-about 34 percent.
Figure 4 plots the average annual growth rates for total
taxation revenue as well as residential and non-residential tax revenue and
user fees, alongside the growth rates for Thunder Bay’s population, employment
and median total tax filer income and Ontario’s inflation rate. The average annual growth rate for taxation
revenue has been 4.1 percent but residential tax revenue has grown at 5.6
percent while non-residential taxes have been growing at 2.3 percent. On average, both residential and
non-residential taxes revenues have grown faster than either population (-0.2%),
employment (-0.1%), inflation (1.9%) and median tax filer income (2.2%). User fee revenue has also grown faster than
all of these indicators at an average of 5 percent.
So, the 2018 municipal budget year is shaping up to be
somewhat modest in terms of increases at least by historical standards. Total tax revenue is anticipated to only go
up 3.6 percent (as opposed to 4.1 percent) while user fee increases of 3
percent look pretty good compared to average increases of 5 percent. But then, 2018 is an election year and I
suspect that we will be in for some pretty steep increases in 2019 once the
election dust clears. If one goes back
to the 2014 election, that budget year saw a 2.2 percent increase in municipal taxation
revenue but they made up for it in 2015 with a 5.7 percent increase.
It probably is a smart strategy to moderate tax increases in
an election year and then raise them steeply early on in the new mandate so that their memory fades by the time the next election rolls around. It
may perhaps be seen as calculating and opportunistic behavior on the part of
our municipal politicians but it seems to work. Thunder Bay residents keep
re-electing the same people over and over again.
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