Northern Economist 2.0

Saturday 25 February 2017

Economic News Around the North: February 25th edition

Here are some of the stories that have some economic significance for northern Ontario over the last week that managed to catch my interest It was for the most part a relatively quiet week. Enjoy.

Investments in First Nations Infrastructure and Economies. Net News Ledger. February 25th, 2017.

Community accepts $99M settlement deal. Chronicle Journal. February 25th, 2017.

This settlement provides resources for the long-term economic sustainability of Fort William First Nation.  Investing the funds in an endowment would generate a stream of income in perpetuity available for investment in economic, social and infrastructure projects.

Marshalls coming to Thunder Bay in 2018. Tbnewswatch. February 24th, 2017.

Time to reignite Ring of Fire.  Sudbury Star. February 25th, 2017.

This one is an op-ed from one of the many candidates currently running for leadership of the Federal Conservative Party. It might be interesting if not entertaining to hear what Kevin O'Leary thinks about the Ring of Fire as a viable business proposition.

Local economy needs immigration, forum hears.  Saultthisweek.com. February 21st, 2017.

DSSAB issue dividing region. Timminspress.com. February 24th, 2017.

Expect these types of cost-sharing issues to become more common around the north given declining urban populations and rising taxes.

Brace for impact of U.S. softwood lumber duties. Northern Ontario Business. February 22nd, 2017.

Again, it is difficult to know where this issue might go.  We may get some insight on Canada in the world of Donald Trump from Derek Burney at his talk this week in Thunder Bay.








Thursday 16 February 2017

Economic News Around the North: February 17th Edition


Here is listing of some news stories across northern Ontario over the last few days that I feel are of some economic significance for the region.  There was actually quite a bit going on.  Have a nice weekend.

Friday 10 February 2017

Economic News Around the North: February 10th Edition

Here is a listing of some of the major news stories around northern Ontario this week that in my view have some economic significance for the region.  Of course, much of the week's news was dominated by the release of the 2016 Census population counts.  Most of the stories in the regional media focused on local results (major centers actually saw declines) and there was little in the way of putting the results together for northern Ontario as a whole - though you can always see my post on the regional perspective. Enjoy and have a nice weekend.

Preparing Northern Ontario for the Future. Government of Ontario News. February 8th, 2017.

This was an item that does not seem to have been picked up by regional media but then despite the title of the release the actual report was a long-term report on Ontario's economy.  The long and short - population and economic growth are being concentrated in the GTA.

Population decline is a Northern Ontario thing, says mayor.  Timmins Today. February 9th, 2017.

Thunder Bay's population experiencing low growth. TBnewswatch. February 9th, 2017.

City Stalled; Stagnant growth, aging population present economic challenges. Chronicle-Journal. February 9th, 2017.

While the Thunder Bay CMA remained stable (up 25 people from 2011), the city itself saw the loss of 450 people. However, it should be noted that in this story, Thunder Bay's Mayor was optimistic about the Ring of Fire and admitted being surprised by the numbers given that there had been indications of heightened economic activity like more building permits.  Given that the Thunder Bay CMA remained stable (0% growth), surrounding municipalities like Neebing (3.5%), Oliver Paipoonge (3.3%) and Shuniah (2.2%) saw increases, and the City of Thunder Bay fell (-0.4%), one wonders if the Mayor is willing to draw any insights from the Tiebout Model of migration as to why people have essentially been leaving the city but population in surrounding areas has been growing?  I'd explain more but my time is limited.  Looking for analysis? Hey, where is that research chair on the northern Ontario economy?

Sudbury's economic outlook positive. Sudbury.com. February 9th, 2017.

Mayor optimistic, despite weak population growth. Sudbury Star. February 9th, 2017.

Census. Thousands leave northern Ontario cities over last 5 years. CBC News Sudbury. February 9th, 2017.

Greater Sudbury is growing, but more people moving to the outskirts. CBC News Sudbury. February 9th, 2017.

Well, despite Tiebout effects, Sudbury is still growing.

North Bay's population down 3.9%-census. North Bay Nugget. February 8th, 2017.

Mayor confused by decline in North Bay's population. North Bay Nugget. February 8th, 2017.

I am not confused at all.  Despite the increase in construction and building permits, there is really only so much government building projects can do.  Sometimes, you need a surge in private sector investment too.

Census data shows Sault population declining. Sault Star. February 8th, 2017.

How on earth did Jocelyn Township's population grow one-third in five years? SOOToday. February 10th, 2017.

Sounds like more insights from the Tiebout Model in the Sault also.

Friday 3 February 2017

Economic News Around the North: February 3rd Edition

Here are some stories over the last week from across northern Ontario  that I feel have some significance for the region's economy.  Have a nice weekend.

What the Finns can offer Northern Ontario's biomass economy. Northern Ontario Business. Jan 27th, 2017.

Thunder Bay and Fort William First Nation partner on economic development. Northern Ontario Business. February 2nd, 2017.

City to push economic development at ROMA. North Bay Nugget. January 29th, 2017.

Ring of Fire mining development still years away from delivering on a decade of hype. CBC Thunder Bay, January 30th, 2017.

Province pulls plug on loan program. Sault Star. February 2nd, 2017.

Sudbury a magnet for newcomers. Sudbury Star. February 1st, 2017.

And for those of you who believe that politics and institutions are important to economic performance, two stories of interest this week.

First, while its not yet Easter, there is this resurrection (It must be a slow news week in Sudbury):

We're one Ontario, says Wynne. Dismisses separation effort. Sudbury.com. January 27, 2017.

And for those of you who believe that the context of leadership does matter and that government leadership should aspire to formal and decorous behavior in order to help foster a community environment attractive to business and economic activity, there are these:

Hobbs sues Zaitzeff over YouTube video. Tbnewswatch. February 2, 2017.

Hobbs serves notice against Zaitzeff. Chronicle Journal. February 1, 2017.

Friday 27 January 2017

Economic News Around the North: January 27th Edition

Here are some new items that I found to be of interest with respect to the economy of northern Ontario over the last week or so.  Some are not quite what they seem - North Bay (and Thunder Bay) do well by not making this list.  Have a nice weekend. Livio.


New Veterans Affairs office opens in Thunder Bay. CBC News, Jan. 26, 2017

5 Things to know about Thunder Bay's proposed city budget. CBC News, Jan 24, 2017.

Tax levy could rise by millions. Chronicle Journal, Jan 24, 2017.

Steel, hub important to Ontario, Wynne tells mayor. Sault Star, Jan 26, 2017.

Mineral exploration on the rebound. Northern Ontario Business. Jan 26, 2017

Putting a value on the North's assets. Northern Ontario business. Jan 24, 2017.

Proposed Sudbury arena would be a "showpiece of Northern Ontario" sudbury.com,  January 26, 2017.

North Bay fails to crack list of top 25 cities. North Bay Nugget. Jan 27, 2017.

Friday 20 January 2017

Economic News Around the North: January 20th, Edition


Here is a listing of some stories around northern Ontario over the last few days of economic significance for the region. Congratulations to Thunder Bay International Airport and Laurentian University for their milestones. Enjoy. 

Thunder Bay Airport Sets New Passenger Record, Tbnewswatch, January 16, 2017.


Sudbury businesses question if labour law changes are necessary. Northern Ontario Business, January 16, 2017.

Carbon bill hits city hall. Chronicle-Journal, January 16, 2017.

Good news for Sudbury on jobs front. Sudbury Star, January 13th, 2017. 






Friday 31 August 2012

Northern Policy Institute Finally Announced!


Today, the Northern Policy Institute was finally announced by the Ontario government simultaneously at Laurentian and Lakehead Universities with the news that the institute will be jointly housed at Lakehead and Laurentian with a 10 member board overseeing the operation and with the search currently underway for a CEO.  This is a process that has been a long time in the making starting from the original North Superior Planning Board Report in 2007 on a policy institute for Northwestern Ontario and then the morphing of the concept into a pan-northern institute through the 2008 Rosehart Report and then the 2011 Northern Ontario Growth Plan.  The idea of  a policy institute definitely caught the interest of the provincial government given that during this long interim it provided 5 million dollars to University of Toronto to fund the Mowat Centre in 2010 - a public policy institute to research issues from an Ontario perspective.

According to the press release:

The institute, an independent, not-for-profit organization, will monitor the implementation of the Growth Plan for Northern Ontario and make provincial policy recommendations for the region. It will work with northern municipalities, post-secondary institutions, research groups, Aboriginal organizations, francophone groups and industry to set priorities and directions for northern development.

This is very good news for Northern Ontario as it provides the recognition that there needs to be research and policy analysis on economic, social and business issues in the North.   The Presidents of both Lakehead and Laurentian are to be commended for their work leading up to today’s announcements as are many of the local community leaders and politicians who devoted time to what at many times seemed to be a byzantine task with no end in sight.

Having followed the Northern Ontario economy and regional economic development policy for over twenty years and researching and commenting on issues affecting the region, it is reassuring personally for me to know that in a sense it will be possible to pass on the torch and finally move on confident in the knowledge that there will finally be the commitment of resources for the study of Northern Ontario issues.  Despite popular perception (even at the university where I work), as an academic economist, research and public commentary on northern Ontario or the Thunder Bay economy was never my main area of academic interest.  My fields are public finance and economic history and “northern” work took much time away from those endeavors.  While I enjoyed interacting with the local media and was always treated very well and fairly by all, this activity also took a great deal of time in the sense that it often meant completely interrupting your train of thought.  Over the last while, I have been devoting more time to interests in health economics and economic history and less to the North and so the actual operationalization of the institute comes at a good time.

I was born and raised in Northern Ontario and as an academic I made the sustained effort to apply my skills and knowledge to local and regional public policy because I felt it was important to give something back to the community and there was so little analysis of northern Ontario issues.  Over the years, many have thanked me for this work via conversations and personal notes whether it was for columns in the Chronicle-Journal, interviews on TBT or CBC Radio and most recently for my blogging on Northern Economist.  Of course, in the process I also  irritated a great many people.  I do not apologize for that.  Politicians and society’s leaders need to realize that true university academics are passionate and committed researchers who speak their minds and not cheerleaders to be trotted out as a pretty backdrop at a moments notice for the pet issue of the day.  Those politicians who think academics should simply provide blanket endorsements for government actions and policies reveal just how little respect they have for knowledge and education and the people employed in those fields. 

As for the future of the Northern Policy Institute (NPI), I would be remiss as an academic in not offering a final frank and honest assessment.  It is a great idea and concept but the fact that its role will be to “monitor the implementation of the Growth Plan for Northern Ontario” in essence undermines both its independence and its effectiveness as an advocate for the region.  Of course, these are just the words of a press release and the reality will be in implementation but the board of the NPI needs ensure that the institute sets its own research and policy agenda in terms of collecting data on economic, social and business issues that reflect the region’s priorities.   If it is simply a mouthpiece to support the latest government policy initiative in the North, then what is the point?

That’s all folks!

For additional blog postings on public policy and economics, visit my material on Worthwhile Canadian Initiative.  You will be able to continue to access Northern Economist 2.0 postings on this blog as well as my previous material at the old Northern Economist site for the next while.

Friday 3 August 2012

Resolute Responds



Today’s Chronicle Journal had a one-page ad by Resolute Forest Products written in response to a Chronicle Journal editorial on July 18th entitled “Innovation But When”.   In the response, Resolute maintains that the editorial implies that there has been no capital investment or pro-active action taken by any Canadian or North American company relative to the forest products industry.  Resolute then proceeds to list the major capital projects it has recently announced: a 54 million dollar investment for improvements to a wood waste boiler and steam turbine installation at the Resolute Thunder Bay mill, an 8 million dollar upgrade of its sawmill complex, a 30 million dollar investment in the idled Ignace mill and another 20 million dollars at the newsprint mill in Iroquois Falls.

Resolute is justifiably miffed at being lumped in with a large chunk of the forest industry that did not invest sufficiently in its mills and met the perfect economic forestry storm of the early 21st century with aging infrastructure and equipment. Resolute is indeed an example of a proactive and engaged forest products company and its investments are key to the survival and prosperity of the forest products industry in Thunder Bay and the Northwest.  There is also its relationship with CRIBE (Centre for Research and Innovation in the Bio-Economy) and FP Innovations, which will look at innovative ways of using forest biomass.

In Thunder Bay, Resolute is the only survivor of that economic storm with a mill complex that dates back to the 1920s.  The Resolute mill is the latest corporate incarnation of the Great Lakes Paper Company, which over time has been Great Lakes Forest Products, Canadian Pacific Forest Products, Avenor, and Abitibi-Bowater. A hallmark of the original Great Lakes Paper was that it was locally owned and an example of local Lakehead entrepreneurship.  Having our own locally owned head office meant substantial control over investment decisions and white-collar employment that deepened our local labour and professional opportunities.  Indeed, the fact that this is the only pulp mill that ultimately survived out of the four mills in Thunder Bay is a testament to the original good decision making in plant and equipment that made the company viable for resale and continued production in the long run.

Resolute is also correct in maintaining that it had to deal with economic events largely out of its control such as the appreciation of the Canadian dollar or the decline in demand for newsprint driven by the technological change of the computer age.  Indeed, taking out a one-page newspaper ad is a wonderful example of supplier- induced demand. However, Resolute has developed a selective historical memory and conveniently omits the effect of provincial government policies on the forest sector crisis.  Indeed, it was not too long ago that the North cried out in protest against provincial wood allocation and electricity price policies.  Moreover, there was the exceedingly slow response of the provincial government in realizing the extent of the crisis and finally offering some relief in areas such as electricity prices. 

Finally, it should be noted that even active management and being proactive cannot always save you from the realities of the market especially when combined with slow or ineffective government policy assistance or indeed detrimental trade policies such as the softwood lumber dispute.  Witness what has happened to the Buchanan mills even with all their energetic responses and efforts.  It is an important lesson we should not forget.

Wednesday 1 August 2012

The North's Economy and Births: Bad Times Lead to Fewer Babies

The link between the economy and the number of births is an important one in both demographic and economic analysis.  One view maintains that a poor economy breeds uncertainty about the future and in turn results in families postponing children and therefore a reduction in both the number of total births as well as the birth rate.  Another view maintains that a poor economy reduces the opportunity cost of having children – that is, if you do not have a job, why not use the time to start a family – and the result would be a higher birth rate.  A lot of recent evidence from the current recession suggests that a poor economy results in fewer births. For example, the Economist Magazine recently chronicled a recent drop in fertility rates amongst European countries hit hard by the recession.

Figure 1 

 

In Ontario, a comparison of Ontario with its North – the chronic poor economic performer – also suggests that a more buoyant economy results in more births (Figure 1).  Using birth data from Statistics Canada, it appears that after a period of decline in the 1990s, total births in Ontario have been rising since 2000.  Between 2000 and 2010, total births in Ontario rose by 13 percent.  Meanwhile, between 2000 and 2010, the total number of births in Northwestern Ontario declined by 9 percent while the number in the relatively more prosperous Northeast (which had robust mining activity and a less severe forest sector downturn) actually grew by about one-half of one percent. 

Figure 2

 

If one looks at total births in Northern Ontario by region (Figure 2), many regions have stayed relatively flat in terms of the total number of births, some have declined and one in particular – Greater Sudbury and Nipissing – have seen increases over the last decade.  Indeed, much of the growth in the number of births that has occurred in the Northeast has been over the last five years reversing the declines of the late 1990s.  Between 2005 and 2010 (Figure 3), with the exception of Manitoulin, all the regions of Northeastern Ontario have posted increases in the number of births with the largest percent age increases being in Nipissing and Greater Sudbury.  Meanwhile, the Northwest has seen declines in the number of births in Rainy River and Thunder Bay and an increase only in the Kenora District.

Figure 3

 

Based on the total number of births as an indicator of economic opportunity and optimism, it would appear that over the period 2005 to 2010, the economy performed reasonably well in much of Northeastern Ontario relative to the Northwest.  In the Northeast, the Timiskaming and Manitoulin regions seem the most depressed while in the Northwest, Rainy River is in particularly poor shape especially relative to the Kenora region.  Nevertheless, the economy of the Northwest has begun to move beyond the forest sector downturn.  Given the improvements in the economy as a result of growing mining activity in the Northwest that have been occurring over the last two years, one thing we can expect in the future in Northwestern Ontario is an uptick in the number of births. Who knows, maybe in Thunder Bay they may actually find they need more schools after the slew they closed over the last decade.